ACLU Taking Aim at Florida’s Kangaroo Foreclosure Courts (Updated With Court Filing)

Per Lisa Epstein and April Charney, the ACLU has announced it is contesting the procedures used in Florida’s recently created foreclosure courts:

ACLU Challenges Lack of Due Process in Florida’s “Foreclosure Courts”

What has gone on there is too depressing and pervasive to chronicle on a consistent basis, but we’ve commented on what happens when a state tries to run its courts like a fast food franchise. Consider this discussion from last September:

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.

A minor correction: the new version of the UCC, which has been adopted by most states, does allow for allonges to be used when there is still room on the note. However, they are supposed to be firmly attached. And the idea that the sudden materialization of tons of allonges, when in the past they were almost never used, is a tipoff that they seldom are legitimate.

The irony is that robosigning has taken care of the Florida court docket; many cases have been withdrawn and not refiled as banks try to get a grip on their paperwork. So the ACLU’s might serve to get a now-pointless court system dissolved.

Update 4:30 PM. Here is the ACLU’s filing:

ACLU Florida Petition April 7. 2011

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  1. Wild Bill

    So you’re wrong about allonges being used ONLY when the space on a note is used up? How many times have you written that? And then when discovered, it’s a “minor correction,” noted only when you go to reproduce an incorrect posting? When you discovered you were wrong, you should have written a post informing us of that so we wouldn’t be repeating falsities. I’ll certainly be more careful repeating your assumptions from here on out, if I ever do again. I’m very disappointed.

    1. Pattie

      The New York version of the UCC, and the majority of these trusts are formed and governed by New York law, appears to require that an allonge can only be used if there is no space left on the note for endorsement. But the issue of the allonge being “firmly affixed” is required under both the new and old versions of the UCC. There is a great N.Y law review article on this issue. Nothing, however, addresses the miraculous appearances of allonges in contested foreclosure cases. Funny how these documents are never dated or notarized. Just hit the print button on the computer and there you go.

      1. Wild Bill

        I don’t need a New York law review article. How about this: “No, your honor, I have no idea how the allonge became separated from the note. It appears that the staple used has failed.” You think the judge is gonna throw out the allonge because it isn’t attached? You are tilting at windmills.

        1. alex

          ‘I never was permitted to even read the proposed judgment or to examine the “newly discovered” allonge’

          Sounds like a little more than a failed staple to me.

          There’s a big difference between a staple falling out and the allonges not having been initially delivered. You’re the one tilting at windmills.

        2. Patrick

          You’re assuming that the original and the allonge have holes made by the said failed staple. Bet they don’t. These people are not not good forgers.

        3. monday1929

          Wild Bill, do you doubt massive fraud by the banks and servicers? Do you believe anyone should go to jail for committing fraud upon the courts?

        4. Yves Smith Post author


          With all due respect, you don’t know what you are talking about. The allonges are all too often obvious forgeries: pixtillated when they are presented as wet ink originals, signatures Photoshopped to fit.

          Broke borrowers don’t have the money to hire document specialists as expert witnesses to contest them. The ease of using allonges to commit fraud was the reason the UCC is conservative on this issue. And the few decisions that address how the allonge is attached have been VERY VERY conservative on their legitimacy if not properly affixed. They’ve required a specific explanation as to why the allonge was not attached, or attached and reaffixed, and evidence supporting that explanation.

          And your snark is out of line since per Pattie, you refuse to read law journal articles, and instead make ungrounded assertions. Her comment earlier in the thread is correct and the fault (if any) is not belaboring the differences in the the earlier post v. this one. We’ve been writing on the so-called New York trust theory, and in that context, what I had written earlier was correct. New York has not adopted the new version of the UCC.

          Since I was using the same language in both posts when the fact set at hand was different, a clarification was reasonable since the matters at hand were not the same.

          Perhaps even more important, litigation related to securitizations is a cutting area of the law, hence unsettled. The interpretations from lawyers have been changing as cases are being tried and judges are ruling. Your attack further assumes that this is a settled area of the law when it isn’t.

          Other people have made chain of title arguments and questioned allonges not using the New York trust theory. I’m not aware of cases where this is the sole basis for opposing a foreclosure; you trying to attribute that to me that is pure straw man.

          Frankly, the speed of your response and your tone, and the fact that you appear never to have commented here before suggest you have an axe to grind.

          1. Francois T

            THis guy has commented here before.
            And No! he almost never knows what he’s talking about.

  2. jake chase

    Well, this is certainly an advance over representing marching Nazis. Those of us who have labored in the legal system will recognize that this kind of judicial rubber stamping is not unique to foreclosures. I experienced it twenty odd years ago in New York in all kinds of cases. Although corporate and securities disputes are quite dismal, matrimonials were the worst. The judges simply don’t consider evidence. They transfer assets from the propertied spouse to the non propertied spouse. The non propertied spouse is usually (but not always) female. The non propertied spouse lies about everything. The propertied spouse lies too but is generally done in by the existence of assets impossible to hide. Those who believe any of these kabuki performances are connected somehow to justice probably also believe that GWB was not a moron, that BHO must be a superior alternative because he is only partly white, that WJC and HRC are progressives because if they were not progressives they would be Republicans. Americans rarely look at evidence in deciding any important question, and it is probably naive to expect a subspecies called judges to do otherwise, particularly if one has gotten to know a few personally. Sooner or later virtually all of these foreclosure cases will be resolved in favor of the creditor class. It is not in the nature of things for thousands (millions?) of individuals to be relieved of debts just because the paper work was screwed up. All this caterwalling about the details of foreclosure law might be relevant if the number of cases was insignificant. Yves might be entirely right about the virtues of principal modification. Unfortunately, law doesn’t work this way. Law grinds individuals into dust, judges write opaque nonsense which molds away in unread books and the whole game continues with the same winners and the same losers, until the day comes when enough people turn out into the streets and frighten enough politicians into doing the equivalent of ending the draft. What this could possibly be in the financial arena I have absolutely no idea.

  3. DownSouth

    The problem is the same in the United States as it is in Mexico, and that is that judges, as well as police and prosecutors, operate with immunity. And Immunity = Impunity. It always works that way. No exceptions. Because corporations took what little bit of democracy we once had in America and wrecked it, like some plaything destroyed by a spoiled child, these people live in a anarchic world where accountability doesn’t exist. They are above the law. They are the law.

    What never ceases to amaze me is, in the face of such grotesque miscarriages of justice, how utterly sheepish Americans have proven to be. Maybe these things just take time, but here in Mexico judges, prosecutors and police get murdered every day. The authorities of course blame all these murders on the narcos. What a wonderful scapegoat the narcos are for an officialdom whose depravity knows no bounds.

    There used to be people in the United States who understood this relationship between justice and violence. I worked on the campaign of a judicial candidate in San Antonio once and I’ll always remember how he put it: “When you don’t get justice in the courts, what you get is street justice.”

    1. Externality

      What never ceases to amaze me is, in the face of such grotesque miscarriages of justice, how utterly sheepish Americans have proven to be.

      I can think of six possibilities:

      1. There is a large propaganda industry intended to prevent dissent by convincing the population that everything is wonderful and that Wall Street is helping the American people get rich.

      2. Security theater such as the TSA and constant articles about Homeland Security and the FBI’s tactics makes Americans think twice before engaging in even peaceful dissent. A person whose job requires travel will, after reading of peace protesters being put on the “no-fly list,” hesitate to speak out against wars, ‘interventions’, and ‘kinetic military actions’.

      3. An all-volunteer military has the effect of removing the poorer, more aggressive males of military age from society. Dispossessed young men spend their time fighting somewhere else, get maimed or killed, or come back shattered wrecks. Modern vets are diagnosed with PTSD upon their return and are placed on a mind-destroying, ever changing mixture of anti-psychotics, mood stabilizers, anti-depressants, sleeping medications, narcotics, etc. As the veterans themselves note, they are too drugged up to think straight and discouraged from pursuing other treatment strategies such as psychotherapy. Others are discharged from the Army with no care at all, and join the homeless population.

      The UK used this method to pacify Scotland. British Army regiments raised in Scotland were sent to the most violent parts of British Empire, usually getting the young Scotsmen killed. If they somehow survived their term of service, they were encouraged/forced to settle in the colonies. While the soldiers were often denied decent food and water during the service, alcohol was always freely available, helping to turn the vets into broken alcoholics. Over time, the remaining population acquiesced to English rule.

    2. Externality

      4. Well-funded groups such as the Southern Poverty Law Center defend the banks, and deride even legitimate, factually accurate criticism of the banks or the Fed as “hate speech,” “anti-Semitic,” or “conspiracy theories.” Since most Americans have been conditioned to avoid “racist” behavior, they hesitate to speak out. The SPLC, in particular, seems to believe that virtually any discussion of the Fed is “hate speech” or a “right-wing conspiracy.”

      5. More than the Right, the Left has bought into the idea that strong emotions of any type are a form of mental illness. Most of the firebrand activists of the 1960s would be labeled today as having Bipolar II, and medicated into quiescence. Even during the 1960s, Martin Luther King spoke out against the way that modern psychology was used to tell Blacks unhappy with Jim Crow laws that they were simply “maladjusted.”

      Psychiatry has replaced religion as the opiate of the masses. Big Pharma has aggressively pushed the idea that anyone who is depressed, angry, or agitated about current events needs psychotropic medication(s).

      After 9/11, television was flooded with ads claiming that anyone who was angry or depressed about the attacks should take Paxil, an antidepressant known for causing apathy and indifference to others.

      Beginning shortly before the 2003 invasion of Iraq, television was flooded with ads claiming that brief bouts of anger and agitation were a sign that one suffered from Bipolar II disorder, and needed anti-psychotic medications in addition to SSRIs. (”Ask your doctor if Abilify is right for you.”) These medications basically gave patients a chemical lobotomy and they stopped caring about our illegal war (or anything else).

      During the 2008 crash, online mental health journals discussed the need to aggressively treat patients who were depressed or anxious about losing their life savings with cocktails of anti-psychotic, anti-depressant, and anti-anxiety drugs.

      If Martin Luther King were an activist today, would be welcomed by the Black community, or told by members of his congregation that his dreams and agitation were a sign that the needed to see a “mental health provider?” Big Pharma and the media would hope that the “enlightened” among his parish would do the second. (For the record, I am not stating that he was mentally ill, just that the corporatocracy has attempted to discredit his style of activism in that way. )

      6. A widespread network of private “security” contractors that tracks dissent and harasses dissenters. Defense contractor HB Gary Federal, for example, planned to infiltrate the computers of, harass, and drive from journalism prominent writers such as Glenn Greenwald. An Israeli company, the Institute of Terrorism Research and Response, was contracted by the Pennsylvania Department of Homeland Security to conduct surveillance on Tea Party and constitutional rights groups, a gay pride parade, education and environmental groups, a pro-Second Amendment group, antiwar groups, etc. They even tracked attendance at a movie, “Gaslands,” that criticized gas drillers in Pennsylvania. The Israeli company justified this as necessary to protect “critical infrastructure” against terrorists.

        1. Externality

          4,5,6, were redundant anyway. They were just more detailed, documented versions of 1,2,3.

  4. aletheia33

    well put externaiity.

    however about the psychotherapy–that’s pretty much fallen by the wayside as a substantive “treatment” for PTSD for people whose care is funded by the state. “therapists” are only allowed/paid (poorly) to supervise and keep track of people’s medications and level of sobriety and provide some modicum of emotional support. the treatment system for mental illness in americda is a sham and a shame. there are many well-meaning workers in it who are incredibly frustrated by how little they can do, and a new generation of clueless “professionals” who are basically trained to perform as keepers, not as healers. only the upper middle class can afford to buy “psychotherapy” for more than several weeks in the now old-fashioned sense, as this can only be obtained out of pocket.

    nonetheless, focusing on the further disabling of PTSD sufferers by medications dispensed seems a bit simplistic to me. one should be aware that there really is no established effective treatment for PTSD or for drug and/or alcohol addiction. the outrage is not so much the side effects of the medications people are given (though yes these can be quite debilitating when the mental illness is severe) as the fact that in the face of their situation–no employment, no education, social isolation, perhaps physical disability–medication, virtually on its own, is regarded as an effective intervention.

  5. aletheia33

    p.s. my source is informal conversations with my partner, and with friends, serving as professionals (over age 50) in the mental illness field and currently working with the traumatized and oppressed population under discussion.

  6. Michael

    The unfolding fraud-fest moot the issues surrounding foreclosure court? Hundreds of thousands of families have lost their homes in kangaroo courts.

    It’s long past time for the judiciary to address and rule on the question of whether, when lobbyists deem real court inconvenient for their too-big-to-fail clients, they can have friends in government create a rigged, phony court system that always rules in their favor.

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