Florida is ground zero of the foreclosure crisis. In addition to being one of the epicenters of the housing meltdown, it has also become the jurisdiction where local lawyers have been the most effective overall in unearthing how servicers and foreclosure mills have engaged in widespread document fabrications and use of improper affidavits to foreclose.
This abuse of contracts and legal procedures matters because the courts are the last bastion of defense of the individual. Even libertarians, who keenly oppose government mission creep, give courts an elevated role as a protector of rights.
Given the success that local attorneys are having (it has reached the point where the state attorney general’s office has opened an investigation into three so-called foreclosure mills operating in the state), pushback by the mortgage industrial complex was inevitable. The old saw about “best government money can buy” now looks to apply to the courts, the one area most people assume to be relatively free from tampering by well funded interests.
The New York Times did report on this development, but its account was such a pale version of what is happening on the ground as to give readers a distorted picture.
These new foreclosure-only courts are special creations of the Florida legislature, funded separately from the usual court system. They are manned by retired judges, which means in many cases they are not familiar with real estate law.
But perhaps most important, the explicit objective of these courts is to clear up the backlog. And that is coming to pass not by the Legislature having thrown enough resources at the problem (that is, having greatly enlarged court capacity to process more cases in parallel) but by pushing for faster resolution. The problem is that an accelerated process runs roughshod over due process and allows banks to foreclose when they may not be the right party, or worse, when the foreclosure is the result of servicing error.
Let’s look at one example of banana republic faux justice in the US, via a speech by foreclosure court Judge Roger Colton to his court on how the day was going to go. It’s simply breathtaking. He says that if the bank is foreclosing, he’s not going to consider any evidence that the foreclosure is in error (servicing errors, plaintiff can’t provide proof it owns the note, which means it might not be the right party and procedurally, means it lacks standing to take action). He says he has already heard everything, there is a lot of unemployment in the area; he is going to schedule a court date, but that is merely a deadline for negotiation. In other words, he makes it abundantly clear he has no interest in hearing evidence. When he gets to seeing a defendant after his speech to the court (p. 13), he rubber stamps what the bank wants without even considering the evidence. And apparently his entire day went like that. The summary from an attorney who was representing a client before him that day:
On 8/30, I had a Summary Judgment Foreclosure hearing on Palm Beach County’s “Rocket Docket”. The judge spoke for 14 minutes to the crowd, of mostly pro se defendants, about how they should just agree to the summary judgment and the plaintiffs, (whose attorneys (Shapiro & Fishman had a dedicated courtroom and to whom he referred to as “my attorneys”) would be gracious (Ha!) enough to allow them to stay in their homes for 120 days if needed (even though the statute says he only has to give them 30). When it came to hearing arguments which were fully briefed and provided to the court (pursuant to the instructions of the Divisions head judge) he only allowed 30-60 seconds for argument, failed to read any of the papers, failed to review the plaintiff’s foreclosure package,flatly ignored the Affidavit filed in Opposition, ignored my plea for a trial, signed the judgment and dismissed me. I never was permitted to even read the proposed judgment or to examine the “newly discovered” allonge which Shapiro’s counsel said I had no right to see.
Newly discovered allonges (separate documents with endorsements on them) are fakes; this is the new preferred method of document fabrication. Per the UCC (Uniform Commercial Code), an allonge is to be used ONLY when all the space that could be used for endorsement of a note has been used up. That means margins and the reverse side. And when an allonge is employed, it has to be so firmly attached to the original as to constitute a single document. Hence, no way can it travel separately and suddenly be discovered if it were legitimate.
If you think this case is isolated, here are some reports via e-mail courtesy Lisa Epstein, who runs ForclosureHamlet. The first is from Miami-Dade (emphasis theirs):
I went with a family member to court in attempts to stop a foreclosure sale….we were there sitting in court waiting….I heard this judge take on other cases….Regardless of their issue this judge just kept on denying every motion that he was hearing. Not even taking the time not even a minute or a second to even glance at the documents these poor homeowners were bringing to him.
People were telling him that they have been approved and/or were being considered for a modification under HAMP and that they were there to ask to have the sale of their home stopped because apparently the plaintiffs attorneys were not aware of this information. As you may all know, most of these attorneys DO NOT maintain constant contact with their clients, therefore servicers even though they may place in their system for a sale to be postponed based on loss mitigation approval, still, it doesn’t reach their attorneys in time to actually stop the sale. So homeowners are being told by the servicers to actually try and contact the attorneys because they are not able to. Unbelievable but true….
Once the homeowner left the court room the judge asked… “what is this HAMP that these people keep claiming they are approved for?” mannnnn I said to myself… “this judge must have been pulled from retirement from another part of this world, and to get put on the stand to make these decisions… the courts must really be desperate for not even taking the time to even educate them about the huge issue at hand with these foreclosures and modifications and fraudulent documents etc…. then after denying a few more cases in less than 2 minutes he said… “WOW… and i got paid to do this everyday 5 days a week?… this is easy.”
There’s is actually much more of the same, multiple instances with particulars, with the judge clearly operating from the presumption that the borrowers were all deadbeats and the sale would go forward.
This message comes from Hillsborough County:
As I previously noted, when I attended court, many many cases were missing the note and mortgage. Many of these were located later but they definately did not meet the deadline for 20 days ahead and the question is–is anyone reviewing these for fraud? My assessment is that court staff are too buried and have no training in this. I literally saw pile after pile of cases moving through the system like a Burger King window. Legitimately, the court staff can say they are overwhelmed….One could ask, how do you have a summary judgment without the note and mortgage????? I do not feel that what I witnessed was something done on purpose to hurt the homeowner. instead, I feel that the judges believe that the homeowners have not met their obligations and they still haven’t “gotten it” that lawyers could blatantly lie to the court and present false documents. But I honestly did not feel as I observed that there is some horrible conspiracy taking place. It’s more like the judges are bending over too much to assist their “work partners”, i.e., the attorneys handling the cases, to pull their cases together.
Further confirmation of the e-mailed reports comes from Mark Stopa, a Florida attorney:
When do judges decide who wins a foreclosure case? Do they evaluate each case on the merits? Or do judges see “foreclosure case” and automatically decide, in their minds, that the bank is going to win (but refrain from announcing such until entry of final judgment)? In other words, is the outcome of these cases predetermined by some judges? …
My experience yesterday, though, as outlined in this Motion to DQ Judge, makes me wonder, not about myself, but about the thousands of cases in Florida where homeowners don’t have an attorney. I strongly encourage you to read the entire Motion to DQ Judge, as it’s a matter of public record, but here’s the cliff notes version.
On August 19, 2010 at 9:30, a summary judgment hearing was set on a mass-motion calendar. My clients were pro se until just a few days prior, so the documents I filed in opposition to summary judgment had not yet made it into the Court file yet. As such, the Judge thought my clients were pro se. At or before 8:15 a.m. on August 19, 2010, the Judge entered conformed copies of a Final Judgment of foreclosure even though the summary judgment hearing was not scheduled until 9:30 a.m. that day. That’s worth repeating:
The judge entered a Final Judgment of foreclosure more than an hour BEFORE the scheduled hearing.….
At 9:30, when the hearing began, I voiced my concern about this to the Judge. She was obviously caught off guard, but it quickly became apparent to me that her “procedure” is to make conformed copies of the Final Judgment, to be mailed to the parties, prior to the hearing (and to send out those copies to all parties immediately upon conclusion of the hearing). Essentially, she’s already made up her mind before the hearing, is holding the gavel in the air, and is ready to throw it down as soon as the hearing starts.
Moreover in Florida, the public is being barred from observing these trials. In Duval County, Palm Beach County, and Hillsborough County (and this is not a full list), police are refusing entry, claiming safety issues (overcrowding) when lawyers and defendants report there are plenty of open seats. The First Amendment Foundation has urged concerned parties to write letters of protest to judges denying access, including camera access. That battle has not yet been escalated.
Contrast this rubber-stamping of these cases with the statement of the Florida attorney general: ““We’ve had so many complaints that I am confident there is a great deal of fraud here.” Representative Alan Grayson has asked the Florida to halt all foreclosures in the state pending the outcome of the investigation of the state attorney general, since 80% of the foreclosures are undertaken by three of the four foreclosure mills under scrutiny.
But don’t hold your breath. Even though the Supreme Court is preparing a response to Grayson’s, the Chief Justice, Charles Canady, is very much a corporate Republican. In other words, doing the right thing will no doubt be deemed to be too inconvenient.