Special foreclosure courts would cost about $10 million but save timeby Dara Kam | February 10th, 2010
Foreclosures could be sped up if lawmakers give the court system about $9.8 million in an era when they’re looking to cut criminal and civil justice spending by up to $500 million this year.
Judge Belvin Perry of the Ninth Judicial Circuit and chairman of the state court system trial court budget committee, told a Senate committee this morning that the courts could set up an “economic default recovery” division staffed by senior judges and hourly workers to serve as case managers until the backlog of foreclosures now clogging the judicial branch is managed.
The new division could be broken up into three tracts for homesteaded, abandoned or commercial properties.
The $9.8 million for the new division would come from the court’s trust fund made up of court filing fees.
Lawmakers increased the foreclosure filing fees last year and they went from $295 to up to $1,900, depending on the value of the mortgage.
“This is a way to take the money that they’ve paid in filing fees to give them the services that they paid for.
About 80 percent of our trust fund is generated by the filing fees in mortgage foreclosures and they’ve gotten absolutely no additional services as a result in the increase in fees,” Perry said.
Perry said that a proposal floating in the legislature that would allow mortgage lenders or banks to foreclose on properties without going through the courts probably won’t have any impact on the cases clogging the courts now.
That’s because current mortgages – more than 500,000 in the foreclosure pipeline already – are based upon contract law and must be dealt with in the courts.
Mortgages would have to be written as trusts for foreclosures to avoid being processed by the courts, he said.
“I think it would be difficult to do,” Perry said.