The mediation process in Florida’s foreclosure lawsuits – why it’s flawed and what must be done to fix it
Foreclosure defense attorney Mark Stopa attended a hearing last week on a Motion to Dismiss before a Pinellas County judge. The hearing was, unfortunately, like all too many other hearings in foreclosure cases – the judge denied the motion to dismiss (without reading or even looking at the case law and statutes provided). This hearing stood out, though, for two reasons: (1) the judge, upon seeing the case had been pending since 2008, actually said it was his/her (no reason to reveal the gender of the judge) ”job” to move cases towards judgment; and (2) the judge ordered the parties to mediation even though both parties said they did not want to go, then acted like he/she had done my client a favor. The tone and demeanor of the judge was as if he/she was saying ”I denied your motion to dismiss, but I’m ordering mediation, and now you can work something out there.”
In my view, the judge was totally missing the boat. Respectfully, how is a mediation going to accomplish anything when the bank has already indicated it’s not going to settle? More importantly, how are mediations ever going to keep homeowners in their homes when judges are systematically pushing through foreclosure lawsuits, entering final judgments for the banks for all of the relief requested? The incident got me thinking, and, ultimately, writing a letter to the Honorable Thomas McGrady, Chief Judge of Florida’s Sixth Judicial Circuit, which can be found here –
Mediations have settled lawsuits throughout Florida for many decades, primarily for two reasons: (1) parties want to avoid expenses (attorneys’ fees) associated with litigation; and (2) parties want to eliminate their risk of losing the case. The problem with mediating foreclosure cases is that banks perceive no risk of loss because judges so rarely, if ever, rule in the homeowner’s favor. Why should a bank settle when it knows the judge will enter judgment in its favor for all of the relief requested?
Contrary to what banks and their lawyers (and even some judges) may believe, Florida homeowners have valid defenses to foreclosure in many cases – and I’m not just talking about the fraudulent assignments with which we’ve become so familiar. For instance, in recent weeks I’ve seen several cases where the bank attached a Note to a Complaint that contains an indorsement to a different company (not the plaintiff), I move to dismiss on the basis the bank is not the “holder” under Section 671.201(21), and magically, the bank then files the same Note, only this time it has two more indorsements on it, including one to the bank that is suing. When this happens, it’s clear that the indorsements were done after the suit was filed – after all, if they were done beforehand, the Note attached to the Complaint would have contained all three indorsements. This is a fatal impediment to forelosure because standing cannot be acquired post-filing. In cases like this, final judgments should be entered for homeowners, yet that never happens. Why? There have been hundreds of thousands of foreclosure cases filed in Florida, yet I don’t know that I’ve ever seen a case where a final judgment was entered in the homeowner’s favor on a standing defense. With respect to our learned judges, how is that possible?
I get that judges want us to mediate these cases. I get that judges want to reduce the backlog of cases on their dockets. But until judges start ruling for homeowners in some of these cases, banks will never perceive that they have a risk of losing, and they’ll never settle, no matter how many mediations they’re ordered to attend.
If judges want cases to settle, it’s incumbent upon them to start listening to the arguments of the many bright foreclosure defense attorneys in Florida, applying the law, and, when appropriate, entering orders and judgments in favor of homeowners, even if they haven’t paid their mortgage. Until the banks start perceiving that they can lose a case, the mediation process, no matter how well-intentioned, just won’t work.
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