Lawyers who defend homeowners against foreclosures, even when their client has a good case, like servicing errors, often run into bank-friendly judges. The plaintiff’s argument typically boils down to, “We’re a bank, they are a deadbeat.”
It looks as if banks are increasingly hoist on their own petard. There has been so much coverage of what can most charitably be called “improprieties” that some judges are no longer accepting the bank case at face value.
We had linked to a Bloomberg story last week describing how Florida’s rocket docket had slowed down considerably. Although the main cause was banks delaying foreclosures to check documentation, the story also made clear that judges now felt compelled to take borrower allegations of fraud seriously, rather than zip through cases.
Some courts in formerly bank-friendly Florida are going further and demanding underlying documents, not just affidavits. From The Palm Beach Post:
Palm Beach County judges are going to be looking closer at foreclosure filings, asking for evidence to be attached to affidavits instead of taking them at face value.
The Florida Rules of Civil Procedure requires affidavits to not only include sworn knowledge as to the statements made in the affidavit, but also to have “sworn or certified copies of all papers or parts thereof referred to in an affidavit” attached.
Chief Judge Peter Blanc said with the volume of foreclosures judges were processing in the past, uncontested cases were not being questioned as to the attachment of documents.
But considering recent revelations that the affidavits were likely flawed, he thinks it’s a good idea to start requiring the supporting evidence.
“In the past, the judges weren’t requiring the attachments, now we’ve got something in the record saying there may be a problem, so now they should attach the documents,” Blanc said. “Dealing with the volume we are dealing with, we want to make sure all of our i’s are dotted and t’s crossed.”
So the bank overdoing on streamlining and cost cutting isn’t merely leading them to have to redo affidavits; if this court is a harbinger, other judges may starting to demand banks produce more documents. Small changes like that over thousands of cases will have an impact on servicer economics. I’m sure few readers will shed a tear.