Does The Florida Bankers Association Think You're Stupid?

Posted by Joe Manausa on Friday, February 5th, 2010 at 8:33am.

Florida Bankers Association Bill: The Florida Consumer Protection and Homeowner Credit Rehabilitation Act has nothing to do with protecting consumers.

Image of The Florida Consumer Protection and Homeowner Credit Rehabilitation ActA very hot potato is coming to town over the next several weeks, and you really need to pay attention. Who am I talking to? I'm talking to anybody who cares about property values in the State of Florida, but most importantly I'm talking to people who own their homes free and clear as well as those who are current on their mortgages.

You now have a target on your back, and the Florida Bankers Association has decided to spend a lot of money lobbying for your support on changing the laws in the State of Florida. And they don't mind being a little sneaky about it.

The Florida Consumer Protection and Homeowner Credit Rehabilitation Act

The Florida Bankers Association BillThis is what they want to name their bill. Ironically, it has nothing to do with protecting consumers or helping homeowners rehabilitate their credit.

They just felt if they gave it a spiffy name, and told you that it would protect your home value against all of those foreclosures that they've been stalling on, then you would be all for it.

But I would recommend that you read up on it a bit before you fire-off a letter to your nearest and dearest politician asking for them to support it.

For our readers who would like to actually read the document that they have prepared, you can download the The Florida Consumer Protection and Homeowner Credit Rehabilitation Act right here. For those of you who don't have time to read 55 pages of "legalese" then I'll do my best to give you the broader picture in a much shorter summary.

The Bankers' Basis Of Deceit

The Florida Bankers Association says they want to help

"neighbors annoyed by abandoned houses next door; condo associations pursuing dues from properties in legal limbo; cities grappling with urban blight; and judges overloaded with thousands of foreclosure cases."

So why don't they? The current laws allow for them to push to foreclosure. The current laws allow them to settle short sales. But the fact is, most banks have been very slow in responding to this crisis. If they really wanted to "speed up foreclosures," they could have easily done so by pursuing the current, lawful, foreclosure process.

What they really want is to have total control over the ability to foreclose on a home. Here's one example they do not cite in their bill:

Let's say there is a homeowner who plans on living in his home for a long, long, time. And let's say that this homeowner is current on his payments, taxes, and insurance.

During this current downward housing cycle, this homeowner's house might have lost all of its equity ... it might even be "upside down." No big deal right, he is paying his mortgage on time. Right?

Wrong. Unfortunately for the banks, this becomes a troubled loan. The 20% equity he had in his house with his down payment has been consumed by the drop in market value. So guess what this Bill could allow the banks to do?

Under the very vague terms of most mortgages, the banks could require this home owner to pay off part of the loan so that the bank's position would be reduced to the beginning loan to value (imagine a $40,000 margin call on your $200,000 home!). If the home owner does not have a large amount of money lying around, the bank could start the foreclosure process! Yep, never miss a payment and still lose your home to foreclosure.

The Florida Bankers Association says

"We don't want the property. We're not into the property management business," Sanchez said of bankers. "We want to get a property out of the courts and sold to a productive Florida family."

The Florida Bankers Association Hopes You Don't See The Truth

Here is how you know there is not one bit of truth about their intent to change this law. The previous quote says they want to get the home sold to a productive family. Hmmmm, is this bill going to create jobs?

You see, Florida is in an economic crisis right now. There is no productive family to take that home! The rental market is flooded with homes and the "for sale" market is flooded with homes. The population of Florida has shrunk! They are misleading us to believe that they will do things differently because of this bill, but the truth of the matter is there are too many homes in Florida for the number of people who are here.

It is this very reason that the banks have been slow to foreclose. They don't want these houses, nobody does! Until Florida's population starts growing again, there will be plenty of vacancies around the State of Florida. The banks are happy to keep these properties in the hands of somebody else.

What they really want is the ability to FORECLOSE ON ANY PROPERTY AT THEIR OWN DISCRETION. They don't want some judge standing in the way of them foreclosing on a loan that is "current," they want to mitigate their risks and force families to pre-pay loans in homes that are over-leveraged. So don't think for a second that this bill is about Homeowner Protection, it is about Bank Asset Protection!

What Wise Homeowners Can Do About The Florida Bankers Association Bill

Contact your State of Florida Representative and tell them not to be fooled by the misleading name of this Bill. Ask them to first read the Florida Bankers Association Bill, and then to tell the Florida Banking Lobby to solve the problem, not pass the buck! Ask them to VOTE NO for the (choose new name) Bill:

  • The Florida Bankers Association Bill
  • The Florida Bankers Want To Remove Judges From Making Sure The Laws Are Enforced Fairly Bill
  • The We Aren't Enforcing The Current Laws So Changing Them Will Make Everything All Better Bill
  • The Banks Should Be Able To Foreclose If They Feel Like It Bill
  • Save the Banks Bill (from Nic)
  • Too Numerous to Fail Bill (from Nic)
  • Bank Cashflow Bill (from Nic)
  • The Refi Now and Send All Mortagage Payments Out of the State Bill (from Nic)
  • The “Bend Over!!! Your Assets are Mine!!!” Bill (from 4closurefraud)
  • Securing Credit Rehabilitation Even When You're Obviously Underwater (from Jeremy)
  • The Florida Homeowners’ Mortgage Persecution Act (from C Wilson)

Picture Of Florida Bankers Association LobbyIf you can think of a better name for this Bill, leave it below in a comment. Anybody that comes up with a good new name, I will modify the list above and credit them with the new name. As you can see, a few goods have already started rolling in ...

Please contact your State Rep and tell them to "just say No." A few extra voices from concerned homeowners could be all the difference in this issue!

UPDATE 4/20/2010

Florida HB 1523 dies?

HB 1523, a bill allowing banks to foreclose on Florida homes without going to court, died in a House committee yesterday when the House's Criminal and Civil Justice Policy Council ended its Monday session without hearing it. It was the final committee stop for the bill, which is similar to the Senate's proposal in SB 2270. "We knew this was a big change in Florida law and we were asking a lot for it to happen in one session," said Anthony DiMarco, executive vice president for government affairs for the Florida Bankers Association. "When you have this kind of policy change, it can take more than one year." Under the House plan, the lender would be required to meet with a borrower, if requested, and the borrower would not be liable for the unpaid portion of the loan if he or she acts in good faith during the nonjudicial foreclosure.

House sponsor Rep. Tom Grady, R-Naples says there is a small chance the proposal could still be heard if the house speaker pulls it out of committee and brings it to a full House vote, or if the Senate's version is approved by the House. "It would require some procedural work," Pewitt said. "But there is a small potential for life."

Joe Manausa, MBA is a 26 year veteran of real estate brokerage in Tallahassee, Florida and has owned and managed his own company since 1992. He is a daily blogger with content that focuses on real estate analytics and providing his clients with a tactical advantage in today's challenging market.

9 Responses to "Does The Florida Bankers Association Think You're Stupid?"

Tired of Unprincipled Politicians wrote: I wonder what my State Representative, Michelle R. Vasilinda, thinks about this fraudulent bill? Michelle, are you listening to your constituents' concerns?

Posted on Friday, February 5th, 2010 at 3:00pm.

Joe Manausa, MBA wrote: Hey Toup,

That is not the "Michelle" to whom you were referring...otherwise, quick response!

I hope she hears us, we're getting louder...

Posted on Friday, February 5th, 2010 at 3:33pm.

Michelle wrote: What is the House Bill Number? I didn't see it on your download. I want to track it in the bill tracking system on the House website. Citizens who contact their representative about this bill would also need to reference the bill number.

Posted on Friday, February 5th, 2010 at 3:34pm.

Joe Manausa, MBA wrote: Michelle, it is not yet a Bill. The Florida Bankers Association has yet to find somebody to sponsor it, that is why we all need to call our State Reps and say "don't you dare!" And I bet they have all heard about this by now, as hard as the Florida Bankers Association is selling it.

Posted on Friday, February 5th, 2010 at 3:35pm.

Jeremy wrote: I think the bankers will probably rename it as a message directly to homeowners and consumers to show their caring side:

Securing
Credit
Rehabilitation
Even
When
You're
Obviously
Underwater

Posted on Friday, February 5th, 2010 at 10:41pm.

Joe Manausa, MBA wrote: Thanks Jeremy,

It took me a while ... I've been up since 5:00 a.m. :)

Posted on Friday, February 5th, 2010 at 10:46pm.

Johnson wrote: This is funny. It's amazing that you realtors have not received any blame for driving up home prices to only see them fall! Didn't you all help encourage flippers to make a quick buck and buyers to buy homes out of thier price range? I don't see any of you returning your commissions to the people you help encourage to buy homes they couldn't afford. Everytime I ever bought a house, I've always been encouraged to look at homes that were greater than the range I covyed to my realtor. Your blog has no merit. Why on earth would banks move to foreclose on paying customers at a time when they don't exactly have the best PR? The banks are filing for foreclosure. The courts are inundated and taking more than a year to get to each case. While you are up in Tallahassee, why don't you come down here to SW FL and see the ghost towns that people now live in. These homes need to be put back into the market as fast as possible. Our county clerk said of theire is a 23,000 case backload theat our courts can't get through. 20,000 of the properties "have made no effort" to fight foreclosure see article: <link missing or broken>
Looks like the banks filed foreclosure here. Where is your back-up? This is the law of the land in 37 other states. Don't hear about banks foreclosing on people who are paying their loans even though their homes are valued less.
Your just trying to drum up fear because you can't make a short sale bc most banks don't accept them because it's hard to actually find out who owns the mortgage (Wall Street have cut them every which way into mortgage backed securities and derivatives, thank Lehman, AIG, and Bear Stearns for that); and if all these properties that are now filed cases of foreclosure suddenly came on the market, it would make it harder on you to sell the properties that you now are trying to sell at greater prices. Your argument is so transparent.

Posted on Saturday, February 6th, 2010 at 2:38am.

Joe Manausa, MBA wrote: Thanks for stopping by Johnson, I wish you could have read the article.

<blockquote>
This is funny. It's amazing that you realtors have not received any blame for driving up home prices to only see them fall! Didn't you all help encourage flippers to make a quick buck and buyers to buy homes out of thier price range? </blockquote>

yes. We've discussed blame a lot several years ago, including blame on REALTORS. But we're talking about solutions to the problem that we are in, and this article is about a "solution" that the Florida Bankers Association is trying to bring NOW.

<blockquote>Your blog has no merit. Why on earth would banks move to foreclose on paying customers at a time when they don't exactly have the best PR?</blockquote>

I wish you had read the blog before you made this ignorant comment.

<blockquote>The banks are filing for foreclosure. The courts are inundated and taking more than a year to get to each case. While you are up in Tallahassee, why don't you come down here to SW FL and see the ghost towns that people now live in. These homes need to be put back into the market as fast as possible. </blockquote>

Again, I wish you had read the article. Do you think they will be purchased? Who is going to buy them? Do you think people are waiting to move to Florida because there are no homes available and unleashing the hoards of shadow inventory is going to spur growth?

The fact is, we have a glut of homes on the market. We have a large glut of homes in the Shadow Inventory. Banks are filing lis pendens but not seeking foreclosure because they do not want to own these homes. This proposed bill, if passed will have no impact on the homes that you describe.

The real issue is giving the banks the ability to force margin calls on people current with their loans. While the banks are allowed to do so now, they would have to get a judge to agree in our current system. If this proposed Bill becomes law, they can bypass the courts. Is that what you want?

<blockquote>Our county clerk said of theire is a 23,000 case backload theat our courts can't get through. 20,000 of the properties "have made no effort" to fight foreclosure</blockquote>

So, just as I said in the article, this is not about filing foreclosure. This is about allowing the banks to do what they want without the courts being able to intervene. These people are not making an effort to file foreclosure, all the banks have to do is send them "deed in leiu" paperwork for most of them and the banks would get the property without having to go to court. Hmmmm, I guess the banks don't really want the properties. Did you ever wonder what they do want?


<blockquote>This is the law of the land in 37 other states. </blockquote>

Like in Georgia? Their problem is worse than ours. Your point is moot.


<blockquote>Don't hear about banks foreclosing on people who are paying their loans even though their homes are valued less.</blockquote>

Of course you don't. That is the point of the entire article. In our system, a bank could do this, the borrower could take it to court, and then a judge would rule on it. Right now, banks fear that the judges would think this is unfair business practices.

If you want to see this happen, make sure this becomes a bill, and then a law. Then you can have the banks decide whether or not your loan is a good business asset of theirs, regardless of your history of payment.

<blockquote>Your argument is so transparent.</blockquote>

My arguments are always transparent, sometimes first-time visitors just don't read them.

Posted on Saturday, February 6th, 2010 at 12:31pm.

C Wilson wrote: Thank you Joe for the heads-up! How about The Florida Homeowners’ Mortgage Persecutory Act?

This is just as unbelievable as the credit companies changing their Customer Agreements without the agreement of the customer. With over 10 years of paying on time and under the credit limit, I am now paying hundreds of dollars in additional interest a month. What’s in your wallet?

C Wilson

Posted on Monday, February 8th, 2010 at 8:24am.

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