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Foreclosure bill narrowly passes last committee despite some Republican hesitation

TALLAHASSEE — Approval of a Naples lawmaker’s foreclosure bill Monday drew outbursts from a crowd of opponents gathered for a Senate meeting devoted to the legislation, aimed at hastening foreclosure proceedings.

The close affirmative from the Senate panel included hesitation from three Republicans, one of whom voted no. One Democrat voted for the measure.

The 6-4 vote at its last committee stop sends the Senate version of a bill propelled by state Rep. Kathleen Passidomo, R-Naples, to the chamber’s floor.

But it reaches the full Senate at the height of protests from consumer advocates from around the state, who have persistently decried the bill as it advanced through the Legislature. After Senate members asked questions in the 75-minute meeting Monday, little time was left for public testimony.

“They just don’t give the people time to speak,” said Susan Gabel, an Orange County member of PICO United Florida, an organization of religious activists.

When Banking and Insurance Committee Chair Garrett Richter, R-Naples, stopped public input at 5:58 p.m., one woman stormed out of the committee room sobbing and telling a Capitol staffer she was having a panic attack. Several people rushed the floor or shouted.

“We are not angry people,” said Woody S. Ryan, a member of Mortgage Justice, a Sarasota-based group of foreclosure defendants. “We are frustrated with the process. This is such an important issue.”

The legislation, sponsored in the Senate by Sen. Jack Latvala, R-St. Petersburg, would reduce the number of court hearings from two to one and allow anyone who holds a lien, including homeowners associations, to initiate a foreclosure. It would also outline steps for foreclosing on abandoned properties.

With two weeks left in the session, lawmakers who support the bill say Florida needs it to go through. They say the faster homes are returned to the market, the sooner the state’s economy can recover.

Opponents say the bill, which stalled last legislative session, lays the burden of proof on foreclosure defendants and fails to address the problem of lenders stalling the process.

With mortgage fraud rampant in the wake of the housing crisis, critics charge that streamlining foreclosures may hinder the borrower’s ability to make a strong defense and allow lenders to take homes on shaky evidence.

Some senators went along with those arguments. Sen. Steve Oelrich, a Gainesville Republican and former sheriff, voted yes but not before raising several questions about bank fraud.

“I don’t mind being the sheriff, but I don’t want to be the sheriff of Nottingham,” he said.

Sen. Mike Fasano, a St. Petersburg-area Republican who often clashes with his party, voted no. Incoming Senate Minority Leader Chris Smith of Ft. Lauderdale paused before casting the lone Democratic yes vote.

Passidomo repeatedly said her legislation requires lenders to bring documents with them when they initiate the process. She said homeowners with a substantial defense will have the chance to challenge the foreclosure action.

“The court will hear those meritorious defenses, but unfortunately it’s not a meritorious defense to say, ‘I just don’t want to pay,’” Passidomo said.

This was a bottom line for supporters of the measure on the Senate panel.

“It’s not the bank’s fault or the lender’s fault, if you will,” Richter said. “It’s not the lender’s fault when someone loses their job. The mortgage document basically says I promise to pay, it doesn’t say I promise to pay if I’m employed.”

The bill is a year in the making. Passidomo has added one measure intended to help consumers. The provision of the bill would reduce the length of time — from five years to one — that banks can seek payment for the remaining value of the mortgage if a foreclosure sale comes up short.

Though consumer advocates say this is a drastic improvement on current law, they still oppose the fundamental idea of the legislation. Tacit and expressed indications from some of the panel’s Republicans suggest the bill may see amendments on the floor.

“I will move this bill along today if that’s what it takes, but there’s certainly no indication that I would vote for it on the floor until we get some of these questions answered,” said Sen. Mike Bennett, R-Bradenton. “It really bothers me. We should have heard this bill two months ago.”

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