Legal Gridlock Contributing to or Healing Florida's Foreclosure Woes?

Florida recently surpassed Nevada to achieve the unhappy distinction of being the state with the most foreclosures for the first time in five years. As NPR journalist Robin Sussingham reports, 1 out of every 32 Floridian homes received a foreclosure notice during 2012, more than double the national average. While new defaults have undoubtedly contributed to this staggering rate, many angry fingers are pointing to Florida's protracted legal process as an impediment to getting rid of the state's backlog of foreclosed properties. Judges and defense lawyers representing clients in default have been criticized by lenders for allowing clients to stay in their homes for more than 2 1/2 years after their last payment. While sympathetic to the plight of small banks and credit unions, many in the Sunshine State's legal community point to disorganized practices of larger lenders who have misplaced paperwork outside of Florida as the real cause of the housing market's troubles. Lawyers claim that  their representation allows people to stay in their homes when lenders would otherwise forget about the properties and allow them to sit empty, distressed or open to squatters.

Image Credit: Sunny Isles Miami Real Estate 

Though the blame game between the bankers and lawyers may seem to be a showdown between the most unsympathetic players on the stage, it seems that cumbersome legal mechanisms may serve a noble purpose to protect defaulting owners from banks reclaiming the properties quickly. These lenders would then sell the homes to investors at auction before defaulting owners have exhausted all opportunities to retake their home and exercise their right of redemption under Florida statute. With certain real estate markets in Florida, particularly Miami, appreciating rapidly as the housing market recovers, the need for a drawn-out foreclosure process might be even more necessary. Perhaps there are other parties worthy of pointed fingers?