Are Banks Abandoning Foreclosures in Florida?

If you sue someone in Florida but then stop pursuing your case for a year, the court can clear its case load by dismissing your suit for "failure to prosecute." Across Florida, courts are starting to clear their overwhelmed dockets by dismissing foreclosure cases the banks have failed to prosecute. In one division of one of Florida's 20 judicial districts, perhaps as many as 2,700 cases have been set for dismissal in one week.

When Allison Albert of the Jacksonville area Legal Aid went to foreclosure court in Duval County, part of the Fourth Judicial Circuit, on Tuesday, hundreds of "failure to prosecute" cases were on the docket. While waiting for her client's case to be called, she heard the court's staff talking about how the court had sent out notices, scheduling hearings for about 2,700 foreclosure actions -- and noting that if the bank didn't take action within 60 days of the notice, the case could be dismissed at the hearing for failure to prosecute. All of the cases were scheduled to be heard over the next eight court days.

Resetting the Legal Clock

Of course, not all those cases will be dismissed. After the notice went out, some banks responded by voluntarily dismissing the cases. But others took some action, like filing papers -- which is what happened in Albert's 2006 foreclosure case. Filing papers resets the legal clock, and on Tuesday morning four attorneys were present -- representing the banks and appearing in multiple cases; presumably to have the clocks on their cases reset, as well.

"I've never seen a case dismissed for failure to prosecute," says Todd Allen, an attorney practicing in Lee and Collier Counties. "So I wouldn't put too much faith in that 2,700 number. In my experience judges are very deferential to the banks, so if the banks' attorneys show and say that they intend to proceed -- even if they haven't filed any papers in the 60-day window after notice -- the judges will just let them continue the case."

The Reasons Behind the Delays

Regardless of how many of the 2,700 cases are ultimately dismissed for failure to prosecute, the point is the banks are still sitting on thousands of cases, and not moving them forward. As Lee Haworth, Chief Judge for the 12th Judicial District, noted, "the plaintiffs still largely control the process."

So why aren't these cases going forward? One reason is the foreclosure moratoriums that were put in place following the robo-signing scandal last year -- some of which have since been lifted; another is the banks' documents are a mess from robo-signing and the like; a third is the mass shifting of cases away from the Stern law firm and the delays that come as other firms get up to speed. But whatever the reason, filing cases and then not prosecuting them is a big waste of judicial resources. Voluntarily dismissing the cases after several months on the docket is only a little better, particularly if the court had to spend that time and money sending notices out to all parties involved, and telling the plaintiffs to take action or face dismissal.

Massive Case Backlog

As of December 31, Florida's courts had a backlog of some 350,000 foreclosure cases. Amazingly, that's down from 462,000 on July 1. But much of the reduction is from dismissals, and those are cases that surely will come back.

"I think they should start charging an upfront fee for the eventual failure to prosecute," says April Charney, an attorney with Jacksonville Legal Aid. "There needs to be some absorption of the cost burden these cases put on the courts."

Florida courts need to do something, surely -- and the banks shouldn't be coming to court unless they're actually ready to proceed.