Legal News

Plunge in Florida Foreclosures Renders $72 Million Shortfall in Courts

By Vanessa O'Connell

In Florida, a steep drop in mortgage foreclosure filings is delivering a wallop to the courts.

The state collects filing fees of $400 to $1,905 for each foreclosure claim, according to this story in today's St. Petersburg Times.

Foreclosure lawsuits in Florida peaked at 39,114 in March 2009. But after reports surfaced of robo-signers and questionable paperwork, several mortgage servicers pulled back on foreclosure claims last year. In February, Florida saw only 8,205 foreclosure lawsuits, the lowest number in about five years.

Now, Florida's Supreme Court Chief Justice Charles T. Canady, in letters to the governor and legislative budget leaders, has had to ask to borrow $72.3 million from other state funds to keep courts operating through the current budget year that ends June 30.

Sounds to us like there could be a confrontation between the state supreme court and the state legislature over funding. The crisis is unfolding "amid some of the worst relations ever between the three branches of state government," the story said.

In Florida, until 2009, the state courts were financed primarily with general revenue dollars, but state lawmakers shifted the funding source to a trust fund in an effort to make those using the court system pay for it, the story said.

Why has the relationship between state lawmakers and the court been going downhill?

The story cites two issues: the fact that the supreme court removed constitutional amendments proposed by the legislature from the 2010 ballot, as well as questions that arose over a new $50 million courthouse in Tallahassee. Click here for a Miami Herald story on that courthouse.

Full post as published by Law Blog - WSJ.com on March 23, 2011 (boomark / email).