Glut Of Foreclosures Clogs Courts

For homeowners who haven't paid their mortgage in Lee County Florida, the end of the line is a courtroom where a judge whips through more than 400 cases in a single morning, reports CBS News correspondent Kelly Cobiella.

They call it the "rocket docket." Most proceedings go something like this:

Judge John Carlin: "Are you current with your mortgage?"

Homeowner: "No, sir."

Carlin: "Ok, are you living in the property?"

Homeowner: "Yes, sir"

Carlin: "Ok, I've reviewed the file. It is appropriate to grant the summary judgment. I'm going to make you a copy of this. And I'm also going to give you that extra time that we talked about - 60 days until the property is sold. Ok? Thank you for coming in today."

In 18 seconds, the homeowner's day in court is over. The outcome is almost always the same: Pay up or move out within 60 days.

Rachelle Hanleck got a full minute in court. She's a year behind on her mortgage and was hoping for a sympathetic ear.

"I'm a teacher in a migrant community," she said, sobbing. "I am putting back, I am, but all they hear… What did they hear today? Nothing. I was a number."

Lee County is overwhelmed with stories like hers. The civil courts are clogged with a backlog of more than 24,000 foreclosure cases.

'"We need to clean it up," said Charlie Green, the county's civil court clerk. "And that's what we're doing."

Of the 450 cases heard this morning, only 47 homeowners showed. Almost all of the homes will be foreclosed and auctioned off in two months.

As for Rachelle Hanleck, her lender has already told her she can't refinance. She's resigned to moving out and moving on.

The city of Philadelphia is taking a different approach to adjudicating the foreclosure crisis, reports CBS News correspondent Michelle Miller.

In Philly's courtroom 676, every Thursday traditional courthouse rules are set aside in a drastic new approach to reducing foreclosures.

Instead of squaring off, homeowners and lenders try to work out a deal together. Often they have more in common than they think, says Lisa Lee, an attorney who represents mortgage companies.

"Foreclosures are really not what lenders want to do they," Lee said. "They don't want to have properties in their real estate owned inventory. That results in a loss to them."

That's what many borrowers want to hear.

"I'm a single mom and I'm fighting for child support," said homeowner Michelle Homan.

After being disabled on the job, Homan fell behind in her monthly mortgage payments. They nearly doubled within a year.

"We'll get through this," her attorney promised.

The Philadelphia program is the brainchild of Judge Annette Rizzo. She began the project last June.

"The other day I was involved in a discussion and the lender attorney actually took the hand of the borrower and said, 'You know what, its going to be alright, it's going to be alright,'" Rizzo said.

You won't find Rizzo on the bench: She roams the room, often to nudge the process along.

"The judge is making them work with me like it or not," Homan said. "The judge is awesome."

Negotiations don't always work out. But out of 3,600 cases, more than 700 deals have been struck.

"If this wasn't here, I'd be out on the street, me and my two children," Homan said.

Now five cities and the state of New Jersey say they'll duplicate the program to stem the tide to rising foreclosures.
By Kelly Cobiella and Michelle Miller