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Fannie, Freddie suffer Florida foreclosure woes

Florida lawmakers never voted on a chance to speed up the foreclosure process for Fannie Mae, Freddie Mac and the taxpayers who support the mortgage giants.

The Florida House approved a bill in February that would have accelerated the foreclosure process, especially for homes already deemed vacant. But the bill died in the state senate before the legislative session ended last week.

More than 166,000 mortgages guaranteed by Fannie Mae and Freddie Mac spent more than one year without a payment in Florida, according to Federal Housing Finance Agency data released Monday.

The next closest state, Illinois, totals 41,000 GSE-backed home loans more than 365 days delinquent.

The Florida share represents about 30% of the more than 568,000 year-long delinquent loans on Fannie and Freddie books as of Dec. 31.

Another 1.1 million GSE mortgages were delinquent more than 90 days. Of these roughly 230,000 were in Florida.

The court system in the Sunshine State is overrun with a backlog of cases. There are 368,000 pending cases statewide.

The bill was controversial. Homeowner advocates claimed the bill shrank the amount of time a homeowner could build a defense in a foreclosure case. Economists liked it because the bill could have reduced the 676-day average foreclosure timeline in the state. HousingWire broke down the pros and cons of the package earlier in the month.

Meanwhile, still struggling home prices are heaping losses onto Fannie and Freddie. The GSEs owe the Treasury Department more than $150 billion in bailouts.

Alfred Pollard, general counsel for the FHFA, said policies states and municipalities pass that delay the foreclosure process either through extended mediation or other procedures only cost neighbors in the end.

"It would be very valuable for states and localities to pause in their passage of rules that may create impediments to smooth foreclosures and to review the balance between homeowner protections and the movement to efficient and professionally-undertaken foreclosures," Pollard said at a House panel Monday. "Simply permitting homeowners to stay in their homes for five or six hundred days or longer while not paying their mortgages, costs neighborhoods, costs lenders and, ultimately, costs taxpayers and future borrowers."

jprior@housingwire.com

@JonAPrior

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