Florida Kangaroo Foreclosure Courts Likely to Fold

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We reported from time to time on the special foreclosure courts created in Florida to clear up its foreclosure backlog, and this horribly implemented experiment looks as if it is moving to a well deserved death.

In concept, creating a specialized court system to provide extra capacity and judges who focused only on that issue was a sound move. In practice, it was an embarrassment and a disaster for many borrowers. As we recounted 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….

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….

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.

We reported several times on abuses in these courts (see here, here, and here). The ACLU challenged the lack of due process in April of this year.

Today, in reporting that the courts will stop operating in July as their funding expires, American Banker makes it sound as if these process-abusing courts were a plus. Well if you are a servicer looking to save money and grab houses, I’m sure they were. From the start of the article:

The special “rocket dockets” established by the state last year to help slog through the backlog of foreclosure filings will be gone as of July 1, potentially paralyzing the already overloaded court system with an influx of cases and delays.

Already there are signs of disruptions.

In one case in Palm Beach County, a court order was issued May 12 canceling a calendar call on July 22.

The order said that, “because of the lack of funding by the Florida Legislature, judges are unavailable to preside over foreclosure trials beginning July 1, 2011.”

A calendar call is when trials and other proceedings are scheduled.

Last July, the Florida Legislature allocated roughly $6 million to the state’s trial courts to help speed up the foreclosure process by establishing special foreclosure-only courts that were overseen by retired judges.

Though that funding was meant to last for only a year, there remained a chance it could be renewed, Craig Waters, spokesman for the Florida Supreme Court, said Wednesday.

“The idea was that one-year funding would help the courts clear most of the backlog,” he said. “Obviously due to circumstances that nobody foresaw, that really didn’t happen.”

Waters added, “The Legislature was aware of the situation, but obviously the state is in fiscal straits so the program expires at the time it was originally intended to expire.”

There was evidence that the special foreclosure courts had been working.

According to a study by the Office of the State Courts Administrator, the backlog of foreclosure cases dropped by more than 65,000 from July 1, 2010, when the program started, to Sept. 30.

For foreclosures completed during the first quarter in Florida, it took an average of 619 days to work through the process, up from 470 days in the first quarter of last year, and nearly four times the average of 169 days it took in the first quarter of 2007, according to a recent report from RealtyTrac.

This report is badly distorted. In fact, foreclosures are way down in Florida due to the fact that servicers are now having to be more attentive to doing them properly, which means no phony affidavits, among other things. And the evidence is there is plain sight, despite the article’s efforts to depict the courts as having helped clear the backlog. The average time for a foreclosure to be processed INCREASED while the courts were still in operation. That’s due to the freeze in foreclosures last fall and the slow restart as banks are finding it difficult to do things correctly. In fact, in January, banks were halting foreclosures in parts of Florida.

Zach Carter at Huffington Post provided a different take on this development:

Florida created its special foreclosure-only courts in order to prevent the enormous load of eviction cases from overwhelming other judicial functions. These courts earned their “rocket docket” label as judges began pushing through foreclosure cases as fast as possible, under circumstances that consumer advocates claim make it difficult for borrowers to receive a fair hearing. Judges routinely hear hundreds of cases in a day, with some hearings last as little as 20 seconds. Attorneys for homeowners say the courts do not receive sufficient funding to handle their caseloads….

“Those foreclosure courts are a joke,” says Matt Englett, a partner at the Florida law firm Kaufman Englett Lynd PLLC. “The judges just ran ’em through. And we could appeal them and win. But if you can’t afford to appeal them, you’re stuck.” Englett notes that rocket-docket judges often don’t even review documents or evidence in the cases, but simply ask a few questions before making a ruling — generally in favor of the bank. “A lot of this robo-signing — if they’re in front of a real judge, they would have to look at these things,” Englett says.

In March, Republican Governor Rick Scott approved a $14 million loan to foreclosure courts statewide that must be repaid by the end of the state’s fiscal year on June 30. And the governor’s office says no additional funding will be coming on July 1. Judges are already cancelling hearings in anticipation of the funding shortage.

If the the Florida’s foreclosure courts shutdown, which attorneys in the state currently expect, the result may well be a heavy burden on its overall judicial system. But homeowners battling the banks will likely benefit. Many claim lenders’ lawyers have served them with fraudulent documents that overstate their loan balances and misrepresent their cases.

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  1. indio007

    I have to disagree with one part. Lack of standing is not a procedural error when there are no cognizable facts to support a cause of action. It is a substantial one.

    It is also a complete lack of jurisdiction that eviscerates any qualified immunity these rocket docket judges may have.

    People have been too passive against the actors. If it can be demonstrated that the action was void ab initio or that the judge’s did not perform their ministerial duty they are civilly liable for whatever injury the homeowners suffer.

    The people exposed to these rocket dockets need to attack. Some lawyer could get quite wealthy by digging through the records for jurisdictionally defective cases and dropping the hammer on the judges and supposed plaintiff.

    It boggles the mind why so many have taken this laying down.

    Then there are due process issues which the Federal Courts can take care of too.

    There are remedies here but people have been brainwashed into thinking these judge’s have some type of unlimited immunity , they don’t.

  2. ebear

    Maybe they should outsource these cases to China? You’d have a better shot at a fair hearing.


    1. ambrit

      Considering that you could actually be shot as the result of Chineese justice, it’s not such a bad idea. Renditions for Banksters. What a wonderful idea.

  3. Crazy Horse

    What is truly amazing in this crime scene is the level of passivity among the victims. Tens of thousands of red necked Americans stand before judges only long enough to be spit upon while they have their life savings ripped from them. In nearly every one of their houses there is an AK47 or at least a 38 special, and not a single one had the nerve to bring it with them and extract justice from their tormentor.

    Americans truly deserve the label sheeple. Can you think of another country in the world where the little people are so well behaved? Revolution to overthrow the Banksters and send them to the guillotine , or at least put them in jail? I don’t think so.

    1. Susan Truxes

      It speaks well for us that we do not bring our AK47s into the court room. There was nothing they could do but stare in disbelief at that moment. But Florida has been ground zero of this fight and they all deserve a medal. Thanks to all the people in Florida, things are turning around.

    2. Dean Sayers

      Perhaps it says more about you that you are so willing to buy into a stereotype that divides the American people along illusory cultural lines. I can tell you from my own personal experience that rural American apathy is generated by conditions of subjugation, petty bribery and economic mysticism. This probably applies well to people all over the nation.

      There have been a slew of people’s uprisings recently. The tea partiers are a part of this, even if it seems unlikely. Specific questions comparing the TPers to prominent republican policy proposals (such as privatization of medicare) show a deep divide with them. The simple fact is that they are not being represented, and their pop-economic viewpoints are emphasized to provide a springboard for Republican talking points. And what about when the “sheeple” occupied the Wisconsin capitol?

      The media seems to want us to think we are alone. Disappointing posts like this one of yours only solidify that attitude…

  4. Steve

    If you really take a look at the process in Florida you will see that banks delay the process and cause the backup. The judge will set a date for sale and th bank will come back and cancel the the sale again and again. They ar up to something?

    1. Goin' South

      The same thing is happening where I live in the Rust Belt. On one particular sale day, fourteen of eighteen properties were pulled from a sale, and only two of those were because the defendant had declared BK.

      Upping servicer fees? I don’t know. Most of these houses are already vacant, so it’s not helping the homeowner. It’s terrible for the neighborhoods since these properties continue to be trashed and damaged by the weather. And the investors can’t be benefiting.

      I think I’ve found the answer to another mystery. Fannie ends up with nearly 50% of the houses that actually do go to sale. This would amount to around 15 per week in one jurisdiction. Only three or four of these houses, however, ever end up for public sale on Fannie’s Homepath site or listed on the MLS. What happens to the rest? Bulk sales for pennies to insider “investors,” mostly out of state.

      The whole system is rotten from beginning to end. It must be shut down.

  5. indio007

    Judge’s have a ministerial duty to inquire as to their jurisdiction. If it’s not there, they have a duty to transfer the case to the appropriate forum or dismiss – depending on the jurisdictional deficiency.

    All it would take is one suit getting past the plea of immunity.This crap would end fast.

    I know there is, at the very least, one case out there that is deficient on it’s face. That is all it would take. That is not a big hurdle in Florida.

  6. 2cents

    Is it the judge’s folksy manner that’s throwing a lot of you off? I read the whole speech, beginning to end, and seems his core message is cold hard truth. Ain’t a lot that can be done for 90%+ of those in the building. Very sorry, but that’s how it is.

    1. Francois T

      “Ain’t a lot that can be done for 90%+ of those in the building.”

      Yeah Einstein! We’re sure you came to this erudite conclusion after analyzing a representative sample of at least 3,000 cases segregated by geography, income, family types and all that jazz…right?

      1. 2cents

        Don’t need to segregate by “geography, income, family types and all that jazz” because it has nothing to do with any of that (as the judge rightly states). The only segregatin’ is by who’s paying their mortgage and who ain’t and then who can start paying again and who can’t. I guess that’s too folksy as well?

  7. Francois T

    The fear of overloading the judicial system with foreclosure cases can kiss my kingaling!!

    If legislators had been willing to perform their goddamned jobs by attending first and foremost to what favors the common good, we wouldn’t be in this pickle, would we?

    The two main reasons why the powers that be want to brush this colossal failure of regulation under the carpet are easy to fathom:
    1) It is boggling down the economic recovery; of course, they forget that refusal to address the real problems does that too TYVM, and much worse.

    2) Letting all these cases be decided with full due process and respect fro the Rule of Law would make it inescapable (but for the most imbeciles) to conclude that the political and financial elites decided to screw the pooch on the back of the ordinary people. Allowing this idea to entrench itself in the mind of the masses would be very deleterious to their electoral health.

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