Drop in Foreclosures Plunges Florida Courts into Crisis

The drop in foreclosure filings has been good news for homeowners but it's had the unintended effect of pushing Florida's court system to the brink. According to the St. Petersburg Times , the state's court system has declared a financial emergency and asked to borrow $72.3 million from other state funds to see it through the end of the fiscal year in June.

Courts collect fees varying from $400 to $1,905 for every foreclosure claim, a practice that helps fund their operations. When lenders agreed at the end of last year to pull back on foreclosures after reports had surfaced of error-prone filings, Florida courts found themselves in a bind. Filings peaked at 39,114 in March 2009 but started dropping off last year. Last month brought only 8,205, the lowest number of foreclosure claims since 2006. About $370 million of the system's annual $462 million budget comes from filing fees. Of those fees, $293 million were expected to come from foreclosure filings this year.

Courts need roughly $8 million to get through the end of March. Without a new appropriation, courts will have to start furloughing employees, according to Charles T. Canady, chief justice of the Florida Supreme Court. "Such furloughs would cause a severe disruption in the functioning of the courts," he wrote in a letter to Gov. Rick Scott.

The relationship between the courts and lawmakers has been icy lately after the Supreme Court removed ballot language this year that the Legislature had approved. Lawmakers have also questioned $50 million spent on a building to house the 1st District Court of Appeals in Tallahassee. 

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