Bank of America, which services more distressed loans in Florida than any other lender, hired 10,000 new employees nationwide last year to assist homeowners like Taime, but it still faces an uphill battle in the Sunshine State. About 20 percent of the banking giants non-performing mortgage loans are in Florida.
The probability that those loans might be modified into more affordable packages for borrowers is low. Bank of Americas success rate in the federal governments Home Affordable Modification Program, or HAMP, is 28 percent, third worst among HAMP participants.
HAMP, and other foreclosure prevention efforts, have fallen short of expectations, as lenders have struggled to keep up with the demand for mortgage modifications.
Testifying before the U.S. Senate Banking Committee in November, Bank of America home loan chief Barbara DeSoer said the banking system was never designed to handle the current wave of defaulting mortgages.
These are not normal times, and the traditional solutions of the refinance of debt, or the sale of a home at sufficient value to repay the debt, do not exist for many, she said. [Economic conditions] have dramatically increased the volume of modifications and foreclosures, severely straining industry systems and resources designed around much lower volumes of activity.
The final stage of the default process has been particularly chaotic, as banks have ramped up their home repossession machines to record-high levels recently. A faster-moving foreclosure court system made that possible, as retired judges came aboard to help deal with the slow pace of cases.
Florida, which is one of 23 states where foreclosures must first be approved in court, has specific rules that govern foreclosure legal proceedings, and recent reports, testimony and court records show that many of those rules have been breached regularly by banks and their affiliates.
Thousands of homeowners have been caught in the middle, as banks have admitted to regularly foreclosing on people who were in line for a mortgage modification.
It did not take long for the effects of the housing collapse to spill over to the judicial system, flooding local courts with four times the normal number of foreclosure cases.
South Floridas courthouses have amassed a backlog of more than 100,000 pending foreclosure cases, and hundreds of fresh filings are coming each week.
Jorge J. Perez, a former Miami-Dade County judge, said the crisis hit the courts without warning, overwhelming an already understaffed judiciary.
The sudden rush of foreclosures came as a total shock to court systems all over the country, he said. [Floridas] state court system prior to this crisis was already stretched thin each judge had thousands of cases on their docket. And then this tsunami of new cases hit.
As civil judges caseloads have quadrupled over the past three years, local chief judges have pitched a number of different remedies, launching a mandatory foreclosure mediation program and creating a separate division for handling foreclosure cases.
Hoping to stem the rash of defaults, lawmakers and judges have joined forces to speed along the foreclosure process, but the methods for doing this have recently come into question.
The Florida Legislature gave circuit courts a $9.6 million grant last year with a goal of cutting the backlog by 62 percent within a year but critics say it has created a rocket docket that favors lenders and neglects homeowners rights.