Fla. 9th Circuit Concern Mounts That Prior Foreclosures Were Defective

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The question now put to the court system is a frightening one: Did the combination of senior judges charged with moving foreclosure cases rapidly along and the questionable paperwork concerns unfairly or improperly put people out of their homes?

OrlandoSentinel.com

Questions could slow foreclosures in Florida

By Anthony Colarossi, Orlando Sentinel

November 15, 2010

By the end of June, a towering backlog of foreclosure filings piled up on the court system in Orange and Osceola counties — the legal paperwork equivalent of a tidal wave.

Only three of Florida’s 20 judicial circuits had larger backlogs than Orange-Osceola’s 9th Judicial Circuit, according to state court data. Nearly 40,000 foreclosure filings log-jammed the system in those two Central Florida counties. The situation didn’t make anyone happy — from mortgage lenders to distressed and uncertain homeowners to the few judges assigned to hear the cases.

But then an infusion of state funding created the so-called “rocket docket,” a mechanism for retired, senior judges to get paid to chip away at the backlog. The mission was clear: Move the cases through the system quickly so the residential properties could be resold to borrowers capable of making their mortgage payments.

The program appeared to work here. The 9th Judicial Circuit reduced its backlog by 15 percent during the first quarter the special funding was made available, the numbers show. That reduction is in line with the decrease seen statewide between early July and Sept. 30. And it put this circuit on pace to meet the state court system’s “aspirational goal” of reducing the foreclosure backlog across Florida by 62 percent within a year.

However, several recent issues have further exacerbated the foreclosure crisis statewide and here in Central Florida — problems that are likely to slow the pace in disposing of these cases.

First, the state Attorney General’s Office started investigating a number of large law firms representing lenders and suspected of “fabricating and/or presenting false and misleading documents in foreclosure cases.” The AG’s office also started looking at individuals hired to notify homeowners when their cases go to court. Meanwhile, major lenders, like Bank of America, temporarily suspended foreclosures last month so they could review their documents.

Suddenly, the term “robo-signing” — the practice of signing foreclosure documents en masse without careful review — became part of the recession-era lexicon, a new vocabulary word to describe the latest wrinkle in Florida’s real-estate crisis.

The New York Times reported on the volume of foreclosure cases shooting through Florida’s “rocket docket,” citing, in particular, the 1,319 cases handled in July by senior judges in the 9th Circuit.

The question now put to the court system is a frightening one: Did the combination of senior judges charged with moving foreclosure cases rapidly along and the questionable paperwork concerns unfairly or improperly put people out of their homes?

“The paperwork issues have really thrown a monkey wrench into the whole plan,” said Craig Waters, a Florida Supreme Court spokesman, who commented on the numbers and concerns of the Office of State Courts Administrator. “We need a clearer idea of what is going on with this issue…”

The controversy could slow down the pace at which the foreclosure backlog gets addressed, Waters said. The senior-judge foreclosure program was envisioned to largely handle uncontested foreclosure cases, he explained.

But with questions being raised about whether some lenders have legitimate claims to certain properties, more homeowners may start contesting the proceedings.

If they do, Waters said, “They are entitled to full due process, and that means more time in court.”

Orange Circuit Judge Frederick Lauten oversees the foreclosure-court program. Lauten has heard and read about the concerns over the paperwork issues, but said he has yet to see any evidence that fraudulent documents were presented in court here.

“That’s easy to say and often times more difficult to prove,” Lauten said of the widespread fraud allegations. “We’re hearing things but nobody has established that in court yet.”

As for concerns about faulty documentation slowing down the process, Lauten said, “I don’t know that they [the senior judges] are slowing down. I’m hoping they were careful from the start.”

That is not to say Lauten lacks concern over the situation. He said this circuit has literally “thousands” of filings from the law office of David J. Stern in Plantation, one of four large firms representing lenders, that are subjects of the AG’s office investigations.

The allegation against Stern and the others is that they have presented mortgage documents in court before judges that were later “shown to be legally inadequate” or insufficient, according to the AG’s website.

The probe is also looking at whether lawyers for firms that represent lenders presented “faulty bank paperwork due to the mortgage crisis and thousands of foreclosures per month.”

“Lawyers have a duty of candor to the court,” Lauten said. “You cannot mislead the court.”

The 9th Circuit numbers show that judges here granted “summary judgment” — siding with lenders — 73 percent of the time in the 6,048 cases disposed of in foreclosure court from July through September. The total number of cases handled is actually higher but incomplete data for the month of September made it impossible to tell immediately by how many.

Lauten emphasized that he is unaware of any instance in which people had houses taken from them while they were current on their mortgage payments.

“That would be a gross injustice,” Lauten said.

Orlando lawyer Matt Englett, whose firm handles tens of thousands of foreclosures, says he has not seen a case like that either, but he insists he has represented clients who were eligible for loan modifications and improperly denied. He is starting to see some cases come back on appeal, but by that time people have already lost their homes, he said.

“In the rocket docket, these judges routinely…rule in favor of the bank,” Englett said. “You’re not there to engineer outcomes.”

He anticipates that the sheer volume of these problematic foreclosure cases will ultimately generate class-action lawsuits.

He also claims judges “have been lied to” by firms “inventing paperwork.” The pressure to move the cases through the system coupled with the bad paperwork practices, he said, resulted in people losing homes who should not have been put out.

He blames lenders for creating the problem in the first place by offering low initial interest rates that were hard for many to resist and then being unwilling to modify those loans. Those factors and the rapid pace of the foreclosure filings, which became a big business for some law firms, generated the foreclosure backlog the court system is grappling with now, Englett said

“People don’t realize the disaster banks are going to have for doing this stuff,” he said.

Anthony Colarossi can be reached at acolarossi@orlandosentinel.com or 407-420-5447.

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17 Responses

  1. [...] Fla. 9th Circuit Concern Mounts That Prior Foreclosures Were … That reduction is in line with the decrease seen statewide between early July and Sept. 30. And it put this circuit on pace to meet the state court system's “aspirational goal” of reducing the foreclosure backlog across Florida by 62 2 Give robo-judges a rubber stamp Case dismissed with prejudice and cost. Case dismissed with prejudice and cost. Case dismissed with prejudice and cost. Case dismissed with prejudice and cost. Case dismissed with prejudice and cost. [...]

  2. Fine delete and moderate my comments now, but with Israel starting cyber warfare in Iran with that worm virus that’s spreading uncontrollably, Stuxnet has infected about 100,000 hosts and about 50% of those are in Iran, although the worm has spread to China, India and Indonesia as well. So chances are good certain Americans will be targeted too.

  3. I’m sick of them saying there is no evidence of fraud and it’s just messed up paperwork. Representing something was witnessed by a notary and it wasn’t is fraud. It’s concealment of a material fact done for the purpose of inducing the court’s to act. That is text book fraud.

    It’s not an oops. A notaries job is a state sanctioned professional WITNESS. That is their only job. If they don’t do that one function but pretend they did it’s simply fraud.

  4. Here is an equitable way to clear the foreclosure backlog within days.

    1 Make judges READ defendants motions to dismiss the case for plaintiff’s lack of capacity to sue.

    2 Give robo-judges a rubber stamp:

    Case dismissed with prejudice and cost.
    Case dismissed with prejudice and cost.
    Case dismissed with prejudice and cost.
    Case dismissed with prejudice and cost.
    Case dismissed with prejudice and cost.
    Case dismissed with prejudice and cost.
    Case dismissed with prejudice and cost.
    Case dismissed with prejudice and cost.
    etc
    … until all foreclosure cases are cleared and no more confiscated homes enter the counterfeit market.

    The predatory part of the economy will collapse and parasites will have to look for proper jobs and the productive part of the economy will flourish creating PRODUCTIVE jobs for all.

    Even a caveman can understand that. Will the judges?

    It’s for plaintiffs to prove their case and not for defendants to prove plaintiffs lies. Since the congressional hearings the whole world knows about them – when will our judges?
    .

  5. Quote:

    “Larry Fleckinger, on November 16, 2010 at 1:02 pm said:

    If we do not let the foreclosures continue this market will take many years to get cleared up…I believe the answer is to fine the banks for wrong doing but continue with the foreclosure process. We have to get them off the market before this mess will ever turn around…”

    WTF??? Who let the banksters comment on our blog! LMAO

  6. If we do not let the foreclosures continue this market will take many years to get cleared up…I believe the answer is to fine the banks for wrong doing but continue with the foreclosure process. We have to get them off the market before this mess will ever turn around…

  7. I am still look for a classaction against ZILLOW and
    foremost of CORELOGIC.I have a lot of printed proof .
    Corelogic dropped prices from the morning to the evening 12 % ( $ 21,000.00 ) Where the hell the get this numbers.This AVM are faulty ,and prevent every refinancing. That Link is like DELTA-AIR , if I go in the morning and in the evening for a flight ,from the same computer is already $ 100 more.
    Can the really proof it ? Almost everybody incl banks and realty look it up the price on the web , and believe that is the correct price .That is what kill the home prices.
    CHASE wrote to me ; the county prices is the problem,that is why Corelogic drop . The county drop on my home from
    2008 to 2010 only 37 % but Corelogic dropped
    59 % .On a House with $ 300,000.00 the price drop
    on County web would go down $ 111,000.00 and by Corelogic-Chase-link it would go down $ 177,000.00 . You will not get any answer : How come so different ?
    The AVM work only for the banks and of course Realtors perfect,that has to be stopped , to raise the home prices to normal value.The FTC know about it , but ???

  8. You
    know people need a place to live as in shelter but I need as most of us need a place of peace I want to live in a place of peace that’s my biggest fear to not have a home that feels like peace

  9. http://www.scribd.com/doc/42793453/Congressional-Oversight-Panel-on-Mortgages-and-Foreclosure-Gate-11-16-10

    CONGRESSIONAL REPORT IS ACCURATE. BIG PROBLEMS FOR THE FINANCIAL STOCKS

  10. The Judges have been exposed. The Politicians lost their jobs. The banks are finished

    Humpty dumpty had a great fall ……..All the kings men coulnt put humpty dumpty back together.

    Who is buying the houses? Their is a ten year real inventory. Plus people dont have the money to rent these houses. So the judges loose.

  11. Unfortunately, I do not think that this situation in Florida is the only place in the US where it is happening. Up to recent times, most of the foreclosures went unopposed. Also, up to recently, the media was not paying attention. I am gratified to see that the media is becoming much more involved. It hurts all Americans to have courts behaving in a way that does not honor the Constitution. If you have been paying your mortgage through all of this, you should consider yourself lucky. We need to clean up this foreclosure mess in an equitable manner. Predatory lending is predatory lending. Well, just take this adjustable rate mortgage. You can always refinance. Guess what? No refinancing for anybody, because us MegaBanks are not going to lend you any money. For the rest of us who cannot pay our mortgages and went into default, surely everyone must know no one wants to default on their mortgage. On the other hand, the rampant extortion of Americans by loan servicing companies is criminal and needs to be stopped. http://www.challengingforeclosure.com Sirak@challengingforeclosure.com

  12. http://www.scribd.com/doc/42780121/Assignments-in-Blank-the-Chart-and-Ucc

    THIS IS THE SIMPLE CHARTING BY JAMES MCGUIRE. IT WILL MAKE THESE CONFUSING ISSUES CLEARER.

  13. Like I told 4closure Fraud, these judges would be the ones who are coming out of retirement and seemingly don’t give a FU&# about homeowner’s rights and only want to “Move the cases through the system quickly so the residential properties could be resold to borrowers capable of making their mortgage payments” so their pensions go back up and they can go back to the fat cat parasitical sorry excuse for holding the title of ‘honor’ life. Why else would they care who got the houses and that it should only be as they intend to “borrowers capable of making their mortgage payments”. You cannot honestly still believe that judges are impartial and have no motivation whatever as to the court’s practices of the “rocket docket”.

    Neil I know that you’ve known about these issues for quite some time (alot attorneys etc. have to), I remember when you’d talk about how to solve things you’d always say that investors ‘need’ a steady flow of monthly income (even though we all knew that they were entitled to nadda). But why would they ‘need’ that (and why should it even matter) if they were obviously wealthy enough to gamble on an investment that showed no certainty of securred assets to rely on? Wouldn’t poor people finally striking a lucky day by escaping slavery, gaining leverage in society and serving the will of karma’s long awaited ‘lesson’ be good thing that should go untamperred? Because you still think that WE, US (the homeowners) who have been screwed, taken advantage of the most and have always got the short end of the stick should give a damn about whether investors have a long term flow of steady income, just looking back on your misplaced ‘hope’ in obama shows that you actually thought/think that the Government, LLC actually does its job (when they clearly don’t). So of course you would be concerned whether or not they were getting their returns on those ‘investments’ (secretly investing in the property of the People who put you in office, expect you to be trustworthy and to who you owe a fiduciary duty bound by oath then taking their property because youy greed sucked them dry is like tripping someone from behind, acting like it wasn’t them, pretending to catch them in their fall, then stabbing them in the back when they do, having that person arrested for assault and then suing for the inconvenience caused demanding damages).

    If you help, contribute to or even keep quiet about certain factors to the problem, YOU ARE NOT PART OF THE SOLUTION. People may think so, but when factors are omitted from the problem that omission becomes the greatest obstruction the solution.

    People ‘NEED’ places to live and judges(investors), sherriffs(investors), banks etc.. have exploited this fact so perversely that it’s obvious that People do not ‘need’ them

  14. Great article Thanx Eule
    Batten down the Hatches

    http://www.huffingtonpost.com/2010/11/16/robosigners-foreclosures_n_784098.html

    They are talking about the losses of the poor banks. What about us? We have been in gridlock for over 2 years with our properties. Instead of being productive we are dealing with this mess. We cant invest People dont have money to purchase? People lost jobs because businesses are broke busy paying overinflated mortgages or leases. etc……….

    NEVER AGAIN

  15. Now is the time , to send the Senior Judges back in the retirement , even the foreclosure take 5 years.
    I believe $ 9 Mill was set aside for this.Return the money to the budget and spend the money for tents.

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