Over the past few years, I’ve been able to get many hundreds of foreclosure cases dismissed. I’d like to think I’ve had a successful foreclosure defense practice, and I feel like I’ve made a difference for homeowners. It hasn’t always been easy, but it’s been a rewarding, enjoyable career path. For many homeowners, though, it’s not enough. A dismissal without prejudice means the bank can re-file, and they want more. ”Quiet title.” “Eliminate my mortgage.”
Part of it is an unfortunate offshoot of the robo-signing fiasco and securitization debacle. “The banks committed fraud.” “The loan wasn’t securitized properly.” Many people mislead themselves into thinking this entitles them to a free house.
Part of this is natural. After all, who wouldn’t want a free house? I would, and I’ve heard judges admit they would in open court. I can’t even call this “greed,” really. Everyone likes free stuff.
What’s frustrating when I encounter these homeowners is their inability to be pragmatic. They’re not in court every day like I am. They don’t understand the climate of the judiciary. They don’t know how the law works. They don’t know how loathe judges are to ever rule this way.
Take a look at the Third District’s November 20, 2013 ruling in BAC Home Loans Servicing, Inc. v. Gamarra. In that case, the trial court entered an Order granting the homeowners a quiet title judgment. Free house … right? Wrong. The Third District did not mince words when it overruled the lower court’s decision. As if to give a warning shot to any attorney seeking such a result for homeowners, the court began the opinion with the following:
A lawyer shall not knowingly: (1) make a false statement of fact or law to a tribunal or fail to correct a false statement of material fact or law previously made to the tribunal by the lawyer”; or “(4) offer evidence that the lawyer knows to be false. . . .” R. Regulating Fla. Bar 4-3.3(a)(1), (4). Despite the clear and unambiguous directive of Rule 4-3.3(a), counsel representing the defendants, Mary Gamarra de Headley and Todd Headley (“the Headleys”) in this foreclosure action, made material misrepresentations in the Headleys’ motion for final judgment, resulting in the issuance of a final judgment that granted relief which was not pled.
This is why I don’t talk about quieting title. I don’t blog about it, and I’m loathe to ever discuss such relief with homeowners, much less seek it. No, I’m not afraid of getting my hand slapped. Quite simply, it’s almost always a complete waste of time and money, and it creates false hope/expectations for homeowners.
Let’s put it this way … don’t you think if there were a realistic way to quiet title for Florida homeowners that I’d be doing it regularly?
Quieting title is not impossible, but it’s close. So everyone reading this who perceives that as his/her goal needs to re-assess. “Quieting title” isn’t a goal in foreclosure defense. As for any lawyers trying this, you better be prepared. When the appellate court starts an opinion about quieting title and eliminating a mortgage by citing a Bar rule, this is a path upon which you must tread carefully.
There are a billion nuances to defending a homeowner at a foreclosure trial. Here’s a fun one – does the bank even have a “witness” who can testify? In my experience, often not.
Suppose the foreclosure plaintiff is Wells Fargo Bank, N.A. as trustee of some alphabet soup securitized trust. Whenever this happens, the witness at trial is almost never an employee of Wells Fargo Bank (or whatever corporate fraudster is standing in as the plaintiff). Rather, that witness purports to be a witness for the servicer – a totally different entity (Ocwen Financial Corp., for example).
When that bank lawyer calls the witness to the stand, one of the first things they try to establish, through testimony, is that Ocwen is the servicer of this loan for Wells Fargo.
Objection. Hearsay. There are no documents here establishing Ocwen is the servicer of this loan.
Often, at that point, the bank’s lawyer and witness have nothing to say – and no documents – in which event that objection should be sustained. That “witness” has no personal knowledge of Ocwen being a “servicer” for Wells Fargo for that loan – that testimony is hearsay, based off of a pooling and servicing agreement which is not before the court and not in evidence. That makes the testimony inadmissible hearsay.
In other cases, the bank’s lawyer will pull out some type of power of attorney, a document that purportedly gives the servicer, Ocwen, the authority to prosecute foreclosures on behalf of the plaintiff, Wells Fargo. If you look closely at these POAs, though, you’ll often notice they are limited – the term “limited” often being in the title of the document itself, i.e. “Limited Power of Attorney.” More significantly, in the body of the document, the servicer is given authority to prosecute the foreclosure only “to the extent authorized by the pooling and servicing agreement,” or words to that effect.
If the bank doesn’t have the pooling and servicing agreement with them in court, then guess what? The Power of Attorney is useless. After all, that POA only gives the servicer authority to act (and, essentially, be the servicer) to the extent authorized by a specific document … but that specific document isn’t even in court, so the bank has nothing showing the servicer has the authority to prosecute that case.
As a result, the “witness” who came to court to testify that the company he/she works for is the “servicer” for the plaintiff should not be able to even begin her testimony, as it’s all inadmissible hearsay.
This was one argument I made in a foreclosure trial yesterday, with success. The bank thought they were going to foreclose, but its witness wasn’t even allowed to testify.
Again, there are dozens of other, little tricks like this that I use to help homeowners (many I’m not willing to share for fear they be seen by evil eyes), particularly in a trial setting. If you’re a homeowner, but you don’t have counsel, did you know to assert this defense/objection? If not, how many other bona-fide defenses do you think you’re missing out on?
Banks often show up to trial without a true “witness.” Don’t let them get away with it.
When Florida’ Second District Court of Appeal issued a written opinion in Focht v. Wells Fargo Bank, N.A. on September 25, 2013, Florida homeowners, consumer advocates, and defense attorneys were concerned. After all, there was potential for the Florida Supreme Court to change the law and take away one of the biggest defenses homeowners can raise in a foreclosure case, the bank’s standing at the inception of the suit.
Fortunately, that issue is now dead. Wells Fargo decided not to appeal to the Florida Supreme Court, and even though the Second District certified the issue, the Florida Supreme Court lacks jurisdiction to rule when an appeal is not filed. mI’d like to think Wells Fargo realized it had no chance of prevailing after reading my motion for rehearing, but whatever the reason, there is no imminent risk of the law being changed on this issue. “Standing at inception” remains a requirement in all foreclosure cases in Florida, and that’s great news for homeowners, obviously.
Meanwhile, though, some bank lawyers and even some judges are pointing to the Focht ruling as proof of a changing of the guard in the foreclosure arena. They see Focht as proof that judges are tiring of defense arguments and should just rule in favor of banks. In support, they point not only to the certified question and, in particular, Judge Altenbernd’s concurring opinion.
I suppose I can understand this logic. After all, three appellate court judges openly campaigned that the Florida Supreme Court change the law to prevent homeowners from raising “standing at inception” as a defense in foreclosure cases. Judge Altenbernd is so troubled at the equities of foreclosure defense that he openly lamented something that is totally lawful, homeowners collecting rents while a foreclosure suit is pending.
Hence, it might seem easy to argue Focht as proof that the tide is turning. It might be easy, but it’s wrong.
Focht doesn’t help banks. Focht helps homeowners! Just look at who won the appeal – not Wells Fargo, but Focht! Yes, the judges didn’t want to have to rule in Focht’s favor. Yes, Judge Altenbernd finds it inequitable. The point, though, is that despite their personal feelings on the matter, these judges still ruled in favor of the homeowner!
This is the essence of foreclosure defense. Frankly, I don’t care if judges want to rule in my favor. I don’t care about their personal feelings on the matter. All I ask, as defense counsel, is that they follow the law. In that sense, Focht is the poster-child for foreclosure defense. Quite simply:
Judges’ personal feelings on foreclosures are irrelevant. All that matters is that they continue to follow the law.
So if any bank lawyer tries to say Focht somehow proves a trial court judge should rule in favor of a homeowner, that it proves the tide is turning, make sure you argue otherwise. Focht doesn’t help banks – it helps us.
It happens nearly every day. A homeowner comes to my office with a tear-jerking story, explaining how he/she has been foreclosed. A Final Judgment of Foreclosure was entered, but the homeowner is now ready and willing to pay Stopa Law Firm to defend the case. “Work your magic, Mark. We’re ready.”
There’s just one problem. The homeowner waited too long. There’s no magic to work – the case is over. You see, once a Final Judgment is entered, the time to assert defenses has passed. As a matter of procedure, those defenses are barred. Short of a bankruptcy consultation, there’s little that can be done to stop that foreclosure. Defenses that could have carried the day can no longer be raised.
“I’m sorry, you’re too late.”
Sometimes I fear that I perpetuate this problem by providing information on this blog. Homeowners may think they can take the information provided here and defend a case on their own.
Please … don’t make this mistake, folks.
I could spend years educating you on how to defend your case. It’s called law school – and that’s just the start of it. The nuances of what to argue and how to argue it are never-ending. Candidly, the biggest problem for pro se homeowners, in my experience, is they might know what to argue, but they have no idea when or how to argue it.
You think the bank lacked standing when it filed suit, so you bring a motion to dismiss. Wrong.
You think the bank lacked standing when it filed suit, so when the bank moves for summary judgment, you don’t file anything, but you show up at the hearing to argue. Wrong.
I’ve created an entire business model predicated on helping as many homeowners as possible as inexpensively as possible. It’s called Stopa Law Firm. If you’re waiting to retain us, please – don’t be penny wise and pound foolish. Get an experienced foreclosure defense attorney on your side before it’s too late. Otherwise, you’ll be one of the many prospective clients calling our office only to be told:
In the foreclosure universe that exists in Florida courts in 2013, judges often take it upon themselves to set foreclosure cases for trial. Case Management Conferences (CMCs) are the precursor for trial, a hearing for the purpose of setting a case for trial. Many homeowners want to avoid these trials and the CMCs which precede them. With Florida judges loathe to grant continuances, it may feel impossible to do so. This is one instance where bankruptcy can be so valuable – not as a substitute for foreclosure defense, but in addition to it.
If a homeowner files bankruptcy right before a trial, CMC, or whatever hearing is scheduled in the pending foreclosure case, that court proceeding must be cancelled under the “automatic stay” provisions of the bankruptcy code. This “stay” typically lasts weeks, sometimes months, occasionally more. As a result, nothing can take place in the state court foreclosure lawsuit (for so long as the bankruptcy stay is in effect). No matter how much the bank or the judge may want the case to proceed, federal law prohibits it.
In recent months, I’ve seen Florida judges react to bankruptcy filings by scheduling CMCs. The judges’ rationale is clear … “if the homeowner is going to file bankruptcy to prevent/delay trial, then I want a CMC to take place in 60 days to see if the stay is still in effect and, if not, set trial.” As a result, homeowners and/or their counsel are forced to come to state court and attend a CMC, often when a bankruptcy stay is in place.
The state court judge may think this is innocent, but I’m convinced this is wrong. Even if the judge’s intent is simply to inquire if a bankruptcy stay is still in effect, that CMC should not take place. Such CMCs happen frequently in state courts throughout Florida, but they shouldn’t. But don’t take my word for it – check out the ruling of this Tampa bankruptcy judge. This language from the Order is particularly interesting:
By operation of 11 U.S.C. § 362(a), the automatic stay came into effect on September 28, 2012, when Mr. Hanna filed a petition for Chapter 13 relief. A suggestion of bankruptcy was filed in the pending state court foreclosure case. Notwithstanding this notice, matters continued to be set in the foreclosure case, including what is denominated as a case management or status conference.
The automatic stay prohibits the continuation of any judicial proceeding against the debtor that was commenced prior to the bankruptcy filing. The fact that the state court plans to conduct a “Case Management Conference” or a “Status Conference,” as opposed to the adjudication of a substantive motion, does not change this Court’s ruling. When the automatic stay under 11 U.S.C. § 362(a) is in place, even administrative matters cannot take place.
Debtor and his counsel cannot be required to attend hearings in the face of the stay, as that creates a burden the statute is designed to prevent. While this Court appreciates the desire of the state court to be informed as to matters that effect the administration of that court, nonetheless, such proceedings place an additional burden on the debtor and his counsel to attend hearings that should be suspended by operation of the automatic stay.
If you’re a homeowner, an attorney for a homeowner, or a judge, please be aware of this issue. It might feel innocent to schedule a CMC in a foreclosure lawsuit when a bankruptcy stay is in effect, but at least one bankruptcy judge shares my view that it’s wrong.
A Florida judge has recommended the disbarment of David Stern. This is a good thing, I suppose, and a long time coming. But if this is how the Stern story ends, then color me disappointed.
David Stern made hundreds of millions of dollars representing banks in foreclosure lawsuits throughout Florida. Not a decent living. Not hundreds of thousands of dollars. Hundreds of MILLIONS of dollars.
As business got good (for him – awful for everyone else), he systematically thumbed his nose at the courts, as the Report explains. Basically, it was too inconvenient for Stern to do things like notarize documents correctly, return phone calls of homeowners trying to save their homes, or be honest with our courts. Now, The Florida Bar has spoken, and it seems clear Stern will never practice law again.
This might sound like justice for some – and many of my colleagues in the foreclosure defense arena are characterizing it as such. For me, though, this rings hollow.
Take a look at the Report. For all of these misgivings, Stern is looking at paying less than $60,000. For you or me, that’s a lot of money, but when you’ve just made hundreds of millions of dollars, as Stern did, it’s pocket change. Where’s the justice in that?
Think about it this way …
How many lawyers do you think, right now, would gladly give up their license to practice law for $100 million? $50 million? Perhaps a better question - how many lawyers would turn that down? If this is all that happens to Stern – disbarment, and a $60,000 fee, then who’s the winner here? Call me crazy, but I say it’s David Stern.
It doesn’t have to be this way. The report reflects Stern committed crimes, not just Bar violations. And the Bar proved it by clear and convincing evidence. Here’s hoping this Report gets the attention of law enforcement officials and that Stern faces stiffer punishment than losing a law license that he didn’t need any more anyway.
Here’s an email I received from a prospective client last night, which I’m re-posting here with that person’s consent (editing slightly to preserve confidentiality). No need to elaborate, really – just read it.
(Sadly, this is the type of stuff I see every day.)
Dear Mr. Stopa,
I just came home from Active Duty 3 months ago. Here are the events – minus administrative details - according to the docket:
1. Chase Bank filed Lis Pendens in 2008
2. Chase Bank received Final Judgment of Foreclosure in 2010 (I was away on Active Duty and not present during any of the process since 3/2009)
3. Chase Bank CANCELLED the scheduled sale shortly before the sale date
4. Chase Bank Voluntarily Dismissed the Foreclosure / Dissolved Lis Pendens and Vacated Final Judgment 2012 (again – I was never notified / serviced on any of this – but evidently I still own the house??) – there has been absolutely NO further action on the docket for this house by Chase since 2012.
5. I came home to a house that has been abandoned, ruined, stripped of everything including wiring and all personal items, and has a $30k code enforcement lien on it (welcome home). I filed a detailed police report with photos, etc.
6. Chase Bank filed an affidavit of Non-Military while I was on active duty overseas.
My questions are:
1. The house is insured – can I file a claim?
2. Is the house still mine? I haven’t had possession in over 5 years??
3. Can I prevent further foreclosure proceedings?
4. Wasn’t the first final foreclosure a violation of the SSCRA? After they foreclosed, then abandoned the property, it has been absolutely destroyed and is uninhabitable. What type of recourse do I have, if any?
I have more questions….but it this seems like a good place to start.
On September 25, 2013, Florida’s Second District Court of Appeal issued a written opinion in Focht v. Wells Fargo Bank, N.A., where it reversed a Final Judgment of Foreclosure based on the plaintiff’s failure to introduce any evidence that it had standing when it filed the lawsuit.
The bank’s obligation to prove its standing to foreclose at the time it filed suit (as opposed to at the time of trial or the summary judgment hearing) is well-established in Florida law. It’s a concept I’ve discussed many times on this blog, including here, here, here and here. As such, the Focht decision might seem uneventful, as it merely upheld established precedent – one of many cases to do so.
However, the Second District didn’t stop there. Instead of simply following the prior case law and ruling the homeowner prevailed in the appeal, the Second District went on to rule, in layman’s terms, that it didn’t think the homeowner should prevail on that type of fact pattern any more and that the Florida Supreme Court should change the law regarding “standing at inception.” In legal terms, the Second District certified the following question of “great public importance” to the Florida Supreme Court:
Can a plaintiff in a foreclosure action cure the inability to prove standing at the inception of suit by proof that the plaintiff has since acquired standing?
The concurring opinion is particularly alarming. I’ll let you read it for yourself, but one judge essentially explains why he believes the law should be changed on this issue.
My reaction? Wow.
I’m very surprised to see the Second District – which has always, in my view, been fair and even-handed in the foreclosure context – propose to change established law for the sake of expediency. I’m particularly surprised to see it do so without mentioning stare decisis, any case law about the circumstances in which the law is changed for expediency’s sake, Fla. Stat. 702.015, or Rule 1.110(b). As a result, though I was not counsel up until this point, I’m pleased to file this Motion for Rehearing in the Second District.
I’m optimistic the Second District will reconsider the certification of this question to the Florida Supreme Court and will retract that portion of its ruling from the written opinion. Otherwise, I look forward to fighting this issue, on behalf of Ms. Focht and, frankly, all Florida homeowners, in the Florida Supreme Court.
Trial courts are under constant pressure to move cases through the [justice system]. All judges are fully aware that unless cases are efficiently processed, the burden of backlog begins to choke, and unwanted delays multiply exponentially. One of our primary functions, however, is to make sure that trials are fair. We cannot lose sight of that laudable goal in the name of expediency.
These were the words of Florida’s First District Court of Appeal earlier this year in Madison v. State, 38 Fla. L. Weekly D 531 (Fla. 1st DCA 2013). No, it was not a foreclosure case.