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.

A Florida Supreme Court panel recommended court-ordered mediation for all residential home foreclosures except in cases where banks and homeowners come to an agreement on their own.

The high court appointed the Task Force on Residential Mortgage Foreclosure Cases earlier this year to make suggestions on how to deal with the influx of foreclosures in the state’s courts. Florida has the second highest foreclosure rate in the nation.

The panel released its final report today, likening the impact of the increase in foreclosures on the courts to a car-jammed evacuation route during a hurricane.

The recommendations include expediting foreclosures on abandoned properties and dividing foreclosures into three categories: mortgages on homesteaded properties, abandoned properties and rental properties.

The 15-member panel of judges, lawyers and financiers acknowledged that the state’s budget crisis makes appointing more judges and clerks an unreasonable option while addressing the urgency of the situation.

“Instead, their recommendations include “the least of evils that can work on an emergency basis to immediately begin to meet the challenge of these cases. We believe it is imperative that the Florida Supreme Court address the explosion of mortgage foreclosure filings as soon as possible for the welfare of our courts, our communities, our businesses, and our state,” the panel wrote.