Archive for March, 2012

Servicers and FHA Payoffs: The Root of Foreclosure Evil

For years, I’ve been frustrated beyond belief at the common misperception that delays in foreclosure cases are a result of homeowners or their attorneys.  Any contention that homeowners are the cause of delay is a complete and utter farce, and, slowly but surely, I’m developing the evidence to prove it.  In fact, it’s becoming apparent that servicers are the root of all evil in the foreclosure context.

To begin, let’s recount a conversation I just had with a plaintiff’s attorney.  I presented what I thought was a very reasonable settlement proposal in a foreclosure case when he said he “doubted” that Bank of America would agree to what I was proposing.  I looked at the file and responded: “Who said anything about Bank of America?  The Plaintiff is Bank of New York Mellon, as Trustee.”  His response?  “Bank of America is the servicer, and Bank of America is our client.”


I’ve lamented this problem previously, coining servicers “the Wizard Behind the Curtain.”  Essentially, I’ve come to realize that servicers are the ones controlling the foreclosure arena, not the plaintiffs who are typically named in those cases (who often don’t even realize those cases are pending).  To illustrate, as in my conversation above, it’s clear the servicers are the ones pulling the strings, even when the owner of the Note is named as the plaintiff.

Servicers are the ones driving the foreclosure train, not Plaintiffs.   

I wish foreclosure judges started forcing plaintiffs’ lawyers who appear before them to identify their clients.  I’m certain, in most cases, they’d be forced to admit their “client” is a servicer, not the plaintiff identified in the lawsuit.

As you contemplate the significant role of servicers in the foreclosure arena, let me bring you back to my recent blog titled Banks Want Real Estate.  In it, I showed that nearly 90% of the purchasers at foreclosure sales aren’t third-party purchasers, but the “plaintiffs” who prosecuted the foreclosure.  In that blog, I openly wondered why that was so.  Why would plaintiffs routinely bid far in excess of a property’s fair market value at a foreclosure sale, essentially shutting out every possible third-party purchaser and ensuring title reverts back to the plaintiffs?

The answer is beginning to unfold, and it’s an awful, awful picture.

Apparently, the vast majority of mortgages entered during the heyday are insured by the Federal Housing Administration (FHA).  So when there’s a foreclosure, and the mortgage isn’t paid, the FHA cuts a check.  The bigger the judgment amount, the bigger the check.

Think about that dynamic.

The FHA insures these mortgages. 

The bigger the judgment amount, the bigger the check. 

With this in mind, is there really any doubt why servicers are happy to proceed so slowly with foreclosure cases?  The longer a case proceeds, the longer the servicer can tack on default interest at 18% to the judgment amount.  Of course, this increases the amount of the judgment and increases the amount of the FHA payoff.

Want to know why foreclosure cases so often have so many garbage fees and costs associated with them (service of process on unnamed tenants when the property is homestead or abandoned, forced place insurance at ridiculously high rates, etc., etc.)?  The more junk costs that get added into a file, the greater the judgment amount, the more that gets collected from FHA.

I’m going to dig more into these problems, and my analysis will start with the documentation from the AG settlement.  At this point, it seems that “robo-signing” was nothing more than a distraction and that the real issue in the AG settlement was the banks’ failure to provide clear title to the FHA in exchange for the monies FHA was paying these servicers after foreclosures were finished.

This is disgusting stuff, and I assure you that I’ll comment more when I can.

Mark Stopa

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Victory! Second District Rules Judge Should Have Held Hearing!

I blogged previously about how a Florida court denied my Motion to Quash Service in a foreclosure case, ex parte and without hearing.  I was confident the ruling was wrong, so I appealed, and I posted my Initial Brief in that appeal, here.

Today, Florida’s Second District Court of Appeal issued this written opinion, agreeing with my argument that the lower court should have conducted a hearing on my Motion to Quash Service (and should not have denied it summarily, without a hearing).

I’m thrilled at this outcome, and not just for this case.  I’ve been fighting to get fair hearings in foreclosure cases for a long time now (especially in those counties where it is routine to enter Orders without a hearing), so it’s wonderful to have an appellate court say that a hearing should have been granted on my motion before that motion was denied.

Mark Stopa

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The Holy Grail of Foreclosure Defense: A Free House

On many occasions, clients have asked me about a “free house.”  “The bank committed fraud,” they say.  ”My Assignment of Mortgage was robo-signed.  Can you get me a free house?”

I’d like to think I fight foreclosure as vigorously as anyone.  However, I can’t help but cringe at these inquiries.  It might not be what these clients want to hear, but it’s important that my clients know the truth (the whole truth, and nothing but the truth).

First off, no matter what I might think about it, judges aren’t in the business of giving free houses to delinquent homeowners for bank fraud, particularly when these homeowners are behind on their mortgage.  Sure, it’s possible with the right fact-pattern.  And sure, it’s happened a few times in published court cases across the nation.  But those results are few and far between, so much so that, in my view, the typical homeowner should not be looking at a “free house” as his/her primary objective when defending a foreclosure case (unless I’ve specifically told you differently, in which case you know to heed my specific instructions).  Something to keep in the back of your mind?  Okay.  The primary objective?  No way.

I know there are foreclosure defense attorneys who disagree with me on this point.  In fact, some such attorneys actively sell homeowners on the concept of trying to get a free house.  I can’t help but wonder, though, how much these attorneys are charging homeowners to pursue this approach.  Are the extra fees really worth it?  Personally, I just don’t see it.  If you disagree, show me Florida cases where a homeowner defending foreclosure got a free house.  Show me.  Frankly, I doubt I’ll see much.  Plus, bear in mind – under Florida law, even a dismissal “with prejudice” does not necessarily mean a bank in a foreclosure case cannot institute a new foreclosure lawsuit on the same note and mortgage.  I’ve studied this issue at length, and what I’m prepared to say at this point is this – sometimes a dismissal “with prejudice” precludes a subsequent foreclosure suit, but sometimes not.  Hence, not only is a dismissal with prejudice hard to get, it doesn’t necessarily mean (even in those cases where it is entered) that the bank can’t turn right around and file a new lawsuit.  How much extra should a homeowner pay in attorneys’ fees for what likely amounts to a Hail Mary?

All of that said, are there instances where a homeowner can or will be entitled to a “free house” (in a way that virtually any judge will acknowledge)?  Absolutely.  Let’s say that again:

Absolutely, there are instances where a homeowner should and will get a “free house.” 

Am I going to tell you what they are?  Heck no.  Frankly, this shouldn’t even be part of your thought process.  It’s sort of like planning to win the lottery – hoping is fine, planning is not.  Perhaps more importantly, I’m not about to tip off the enemy to my ideas on that issue.  Bankers and their lawyers read this blog, too – do I really want to tip them off?  Please.

Rest assured – if a case lends itself to me taking the position a client should get a “free house,” I will jump on it with both feet, like white on rice.  It’s rare, yes, but it can happen.  To illustrate, take a look at this Final Judgment.  Here, not only did the Court dismiss this case “with prejudice,” it made fact-findings that Plaintiff does not own the Note, does not hold the Note, and that Defendant does not owe Plaintiff any money (among others).

Think about those findings for a minute.  In my view, any subsequent lawsuit in which Plaintiff tries to claim Defendant owes it money will be barred by a legal doctrine called res judicata.  To put it in layman’s terms, how can a court rule my client owes this bank any money when a court has already ruled it owes this bank no money?  There aren’t do-overs in court cases – if you sue and lose, you don’t get to keep suing until you win (eventually).

My point, I guess, is this.  I may not be out there openly talking about a “free house,” but there are reasons for that.  I don’t think it’s terribly pragmatic for the typical homeowner, nor is it cost-effective.  That said, if I have the chance to help a client in this regard, I’m going to seize the opportunity.  After all, a “free house” is the holy grail of foreclosure defense, and everyone likes a trophy now and again.

Mark Stopa

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My Week of Foreclosure Cases

It’s Friday afternoon and whew, what a week.  I had hearings all across the state – Ocala, Jacksonville, Bartow, Bradenton, Viera, and Orlando – on a variety of foreclosure-related issues.  To give everyone a feel of the defenses/issues that come up in foreclosure cases, and to see what it’s like to defend these cases for a living, I thought it would be fun to share some of the issues that arose in my cases this week.

On Monday, I had a hearing in Ocala on plaintiff’s motion to vacate technical admissions.  (For those unfamiliar, take a look at Fla.R.Civ.P. 1.370.)  I served a Request for Admissions in early July, 2011, and the plaintiff did not respond to them until six months later, then sought to vacate the technical admissions that arose under Fla.R.Civ.P. 1.370. due to its failure to respond within 30 days.

At the hearing, plaintiff’s counsel seemed to think his motion would automatically be granted, as he was ill-prepared for my arguments in opposition.  I suppose his belief in that regard wasn’t totally misplaced, since there are a lot of cases which discuss how courts are loathe to enforce technical admissions and vastly prefer to litigate cases on the merits.  See Ramos v. Growing Together, Inc.,, 672 So. 2d 103 (Fla. 4th DCA 1996); Melody Tours, Inc. v. Granville Market Letter, Inc., 413 So. 2d 450 (Fla. 5th DCA 1982).  However, I cited a case which affirmed a lower court’s order which refused to vacate technical admissions, see Assset Mgmt. Consultants of Virginia, Inc. v. City of Tamarac, 913 So. 2d 1179 (Fla. 4th DCA 2005), and I argued the admissions should be enforced because plaintiff gave no good reason for its failure to timely respond, waited so long to vacate the technical admissions, and that my client had foregone other discovery efforts in reliance on the technical admissions.

The judge took the motion under advisement, so I have yet to see what he thinks (and, admittedly, it’s probably a close call).  That said, the cases cited above are a good illustration of when technical admissions under Rule 1.370 should be vacated and when they should not.

On Tuesday, I hopped a plane to defend a motion for summary judgment in Jacksonville.  Unfortunately, the facts in that case lent themselves to fewer defenses than I often see in foreclosure cases.  The Plaintiff was the original mortgage holder (odd in today’s world of alphabet-soup securitized trusts), and the mortgage did not have the “notice and cure”provision that we typically see in paragraph 22.  But two interesting defenses carried the day, prompting the judge to deny summary judgment.

First, one of my clients died while the lawsuit was pending, prompting me to file a Notice of Suggestion of Death.  Under Fla.R.Civ.P. 1.260(a), it was thus incumbent upon the Plaintiff to substitute the proper parties into the case (which it didn’t do), failing which a foreclosure was impossible because all of the necessary parties had not been joined.  I’ll spare you the intracicies of probate law (which, frankly, aren’t my forte anyway), but just think about it logically.  If a defendant owns real estate, then dies, that real estate goes to his heirs, right?  Well, if those heirs aren’t joined in a foreclosure case, then how would the rights of those heirs be adjudicated if they aren’t joined in the case?  They aren’t, and that’s the point.  In fact, Rule 1.260 provides for dismissal of all claims as against those parties if they aren’t joined within 90 days of the suggestion of death.  This is a little-known rule of law but a good one to keep in mind whenever a defendant dies.  Defense counsel should file a Notice of Suggestion of Death, and it’s then up to Plaintiff’s counsel to add the necessary parties as defendants.

Second, the plaintiff admitted, in its affidavit in support of summary judgment, that even thought it was the original mortgage holder, it assigned the mortgage to a third-party as collateral for a loan in 2007, long before the lawsuit was filed.  Although that third-party issued a Power of Attorney in favor of that plaintiff, authorizing the plaintiff to proceed with foreclosure on its behalf, that Power of Attorney was executed after the lawsuit was filed.  Hence, on the day the plaintiff filed suit, it lacked standing.  The plaintiff’s attorney argued otherwise, basically contending it was still the plaintiff’s note and that plaintiff had merely given it as collateral for a loan.  However, controlling precedent from Florida’s Fourth District Court of Appeal is right on point and showed plaintiff’s lack of standing at the inception of the case:

An assignment of a promissory note or mortgage, or the right to enforce such, must pre-date the filing of a foreclosure action.  Jeff-Ray Corp. v. Jacobson, 556 So. 2d 885, 886 (Fla. 4th DCA 1990).  A party must have standing to file suit at its inception, and may not remedy this defect by subsequently obtaining standing.  Progressive Express Ins. Co. v. McGrath Cmty. Chiropractic, 913 So. 2d 1281 (Fla. 2d DCA 2005).  The assignee of a mortgage and note assigned as collateral security is the real party in interest, that he holds the legal title to the mortgage and note, and that he, not the assignor is the proper party to file a suit to foreclose the mortgage.

            Here, before A.I.M. filed any of the foreclosure actions below, A.I.M. assigned the promissory note and mortgage to a third party as collateral for a loan.  Thus, A.I.M. did not have standing to foreclose on any of the properties at the time it filed suit.

Venture Holdings & Acquisition Group, LLC v. A.I.M. Funding Group, LLC, 75 So. 3d 773, 776 (Fla. 4th DCA 2011).

As a result, I just prepared this Motion for Summary Judgment.  Quite frankly, I fully expect to prevail on that motion and to win this case.  Remember, my motion is predicated on an affidavit from the plaintiff, and under well-established law, a party cannot change its testimony to avoid entry of adverse summary judgment.

All of that said, five years from now, defeating summary judgment in that case is not what I will remember about Tuesday’s hearing.  After ruling that summary judgment of foreclosure could not be granted because of this issue, the senior judge started looking at my client’s affirmative defenses and started granting summary judgment on a few of them.  What really bothered me here was that he did so without leave to amend and, as for a few of them, without letting me say one word about the propriety of summary judgment on those defenses or why those defenses were viable defenses in the case.  So I made an ore tenus motion to disqualify him, asserting he was obviously biased because he was not letting me be heard.  When he ignored me, I then made an ore tenus motion for continuance so as to file a written motion to disqualify him (which is precisely what the case law says I’m supposed to do in a situation like that).  His response?  To threaten to hold me in criminal contempt of court for interrupting him, and to then give me a lecture about how I was not to talk at a hearing unless the judge said I could talk – if the judge decided it was necessary that I talk.

I’ll refrain from too much commentary about this situation except to say this – don’t ever doubt how lawyers like myself, and a few of my colleagues, aren’t putting our necks on the line every single day to represent homeowners in what are sometimes very hostile courtrooms.

On Wednesday, I was off to Orlando for a hearing on a Motion to Dismiss for Lack of Prosecution.  The issue, in my view, was quite clear.  There was nothing filed in that case in the 10 months prior to my Notice of Intent to Dismiss for Lack of Prosecution and nothing filed in the 60 days thereafter.  As such, there was no “record activity” under Rule 1.420(e) and plaintiff could avoid dismissal only by showing “good cause,” in writing and under oath, at least five days before the hearing.

Not surprisingly, Plaintiff failed to show the required good cause.  Instead, a “coverage counsel” showed up at the hearing and argued that the plaintiff’s attorneys did not receive the Notice of Intent to Dismiss because it was sent to the wrong address.  Having seen this argument many times, I was prepared for it.  I had an affidavit from my staff showing the document was mailed correctly.  Plaintiff, of course, had no affidavit, and the “coverage counsel” was in no position to show the Notice of Intent to Dismiss was not received.  As a result, the judge granted the motion and entered this Order of Dismissal.

On Thursday, I had a hearing in Viera on my client’s Motion for Sanctions and Contempt.  My argument, basically, was that the case should be dismissed, or some other sanction imposed, as a result of the plaintiff’s failure to comply with an order from a year prior requiring it to file the original Note within 90 days.  The judge granted that motion, not with a dismissal, but with an award of attorneys’ fees coupled with an Order that the case “will” be dismissed if plaintiff doesn’t file the Note within 60 days.  Anyone want to place wagers on whether the plaintiff violates that Order, too?  Of course, dismissal is an entirely proper remedy when a party violates a court Order.  See Fla.R.Civ.P. 1.420.

After that hearing, I came to my office to find a judge had issued an Order sua sponte (which means on the court’s own motion, without motion from any party) which vacated an Order entered by a different judge ten months prior which dismissed the case.  What really troubled me was that the judge did so 2011 sua sponte, ex parte, without notice, without a hearing, without evidence, and without reviewing the court file (which is lost somewhere in storage).  As such, I filed this Emergency Motion to Vacate Order.

In the motion, I spoke at length about the unfairness of issuing a ruling like this ex parte, without notice, and without hearing – especially when that ruling is based on fact-findings.  Respectfully, fact-findings are based on evidence, and if there is no evidence presented, and no hearing, then there can’t be any fact-findings.  That said, I’ve spoken about such issues previously, so instead let’s concentrate on the other part of the motion – the court’s jurisdiction to enter that Order.

After a Final Judgment or an Order of Dismissal (without leave to amend) is entered, the court’s jurisdiction to act is limited.  A party can move for rehearing within 10 days, or the court can reconsider its ruling within this same time period.  See Fla.R.Civ.P. 1.530.  A party can file a Notice of Appeal within thirty days and seek review in the appellate court.  Both such deadlines had plainly passed in my case, so the only possible source of jurisdiction was Fla.R.Civ.P. 1.540.

Subsection (b) of Rule 1.540 clearly requires a “motion” be filed, which means a court cannot enter an Order under Rule 1.540(b) on its own initiative.  Hence, the only way the could have issued the Order vacating an Order of Dismissal from 10 months prior was under Rule 1.540(a).  However, subsection (a) of the rule is limited to “clerical errors.”  In my case, the Court had vacated an entire Order, somehow finding (sua sponte, ex parte, without notice, without hearing, and without evidence) that the entire Order was entered “in error.”  However, as the Fourth District has explained, this is not the type of “error” that justifies sua sponte action under 1.540(a):

If the court mistakenly entered the modification order, this is a judicial mistake.  This is not the type of mistake that may form the basis for relief under subsection (b) of Florida Rule of Civil Procedure 1.540.  Subsection (a) of rule 1.540 allows the trial court to correct errors “arising from oversight or omission … on its own initiative or on the motion of any party … The clerical mistakes referred to by subsection (a) are only “errors or mistakes arising from accidental slip or omission, and not errors or mistakes in the substance of what is decided by the judgment or order.

Moforis v. Moforis, 977 So. 2d 786 (Fla. 4th DCA 2008) (citing several cases).

As such, it seems pretty clear to me that the court was not authorized to vacate the Order of Dismissal from April, 2011 and that it will be required to reverse its ruling.  Of course, should it not, I’ll be filing an appeal in Florida’s Second District Court of Appeal.

Speaking of the Second District, Thursday also found me drafting this Emergency Motion to Stay Pending Appeal or Strike Order Setting Trial.  In that motion, I explained how the Court could not proceed with trial in light of my pending appeal to the Second District, where I’m challenging the propriety of the Court’s Order vacating an Order of Dismissal.  As the Second District has explained previously:

Pursuant to Florida Rule of Appellate Procedure 9.130(f), a nonfinal appeal does not act as an automatic stay of proceedings in the trial court, but it divests the trial court of the power to “render a final order disposing of the cause pending such review.”  … Here, this court never authorized the trial court to enter a final order disposing of the Wife’s petition while the Husband’s nonfinal appeal was pending.  Thus, while the trial court had jurisdiction to proceed with pending matters pertaining to the Wife’s petition for support while the Husband’s appeal was pending, the trial court had no authority to enter a final order disposing of the case until the Husband’s appeal of the prior nonfinal order was no longer pending.

Cooper v. Cooper, 69 So. 3d 977 (Fla. 2d DCA 2011).

In addition to normal file maintenance and day-to-day stuff, that was my week defending Florida homeowners from foreclosure.  Well, actually, that was just Monday through Thursday.  It was tiring, but I’m reminded of what Marv Levy (former head coach of the Buffalo Bills) was known for saying on game day – “where would you rather be than right here, right now?”  Helping homeowners in foreclosure cases – there’s no other way I’d rather make my living.

Mark Stopa

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Banks Want Real Estate

Every foreclosure defense attorney has heard it.  Every plaintiff’s attorney has said it.  Virtually every judge has said it.

“Banks don’t want more homes.”  “Banks don’t want to foreclose.” 

Such statements are made, of course, to try to justify foreclosure after foreclosure on Florida homeowners.  Banks and their lawyers want to appear reasonable … they want to appear willing to settle cases without foreclosing.  Likewise, judges want to soften the blow for homeowners, as if to say “the bank doesn’t want to take your house, but it has no alternative.”

But do the banks have an alternative?  Do they really want to avoid foreclosures?  Or do they want more real estate?  For me, the answer is clear – banks want real estate.

I can hear the naysayers already … “Stopa doesn’t know what he’s talking about.  Banks have enough real estate; they don’t want more.”

Okay, then, Mr. Naysayer.  Kindly answer some questions for me.

There were 788 foreclosure sales in Pinellas County between January 1, 2012 and March 8, 2012.  See  Of these, the plaintiff the winning bidder in 679 of them.  679 out of 788; 86.1%.  If the banks don’t want more real estate, why are they taking title to the properties upon which they’re foreclosing rather than letting third-parties purchase these properties at the foreclosure sales?  Let’s ask that again:

 If banks don’t want real estate, why don’t they let third parties purchase foreclosed properties at foreclosure sales?

“It’s a public auction,” retorts Mr. Naysayer.  “The banks can’t stop third-parties from bidding.”

I suppose that’s true, but it’s terribly misleading.  After all, in the vast majority of foreclosures, the amount of the bank’s final judgment far exceeds the current value of the home being foreclosed.  We all know the real estate market has declined in recent years, so combine declining home values with 2-3 years of default interest (typically 18%), attorneys’ fees, forced-placed insurance, real estate taxes, filing fees, and service of process costs (all of which are included in the final judgment amount), and it’s not uncommon for the bank’s judgment amount to exceed the property value two-fold or even three-fold.

For third-party purchasers, the amount of the bank’s final judgment is irrelevant in their evaluation process – they’re going to bid based on the current market value of the home.  This isn’t rocket science – nobody is going to pay more than a house is worth.

Banks, though, can bid up to the final judgment amount, as a credit bid, without coming out of pocket.  Hence, banks can shut out all of the investors/third-party purchasers merely by bidding up to their judgment amount on the foreclosure sales.  Sure, these third-parties could technically overbid the banks, but, again, who would be so foolish as to pay more than current market value?

This is the dynamic transpiring in thousands upon thousands of foreclosure cases throughout Florida.

This is why the plaintiff that foreclosed is the winning bidder at foreclosure sales nearly 90% of the time.

Don’t believe me?  Go see for yourself.

Pinellas County:

Pasco County:

Duval County:

Orange County:

Polk County:

Sarasota County:

Manatee County:

Broward County:

Miami-Dade County:

Lee County:

Pick a county, any county.  It doesn’t matter which; the dynamic is the same everywhere.  In nearly 90% of foreclosure sales, the banks bid up to their judgment amount, far in excess of what the property is currently worth, effectively shutting out all third party purchasers and ensuring they procure title to the homes.

I would love to have a cogent explanation on why banks do this.

Why do banks do this?  Why do they bid more than the house is worth?  Why don’t they let the house be sold to a third-party for something resembling fair market value?

Think about what happens when a bank takes title.  It has to maintain the home.  Pay more real estate taxes.  Pay more association dues.  Pay for insurance on the home.  Pay a realtor a commission to sell the REO.  Pay, pay, pay.

Why are banks choosing to pay more?  Why are they choosing to take title and pay more when they can let the properties be sold to third-party purchasers at foreclosure sales?

Why?  For me, there’s only one answer:


“Nonsense,” says Mr. Naysayer.  “Banks have enough real estate.”

Okay, I retort, then answer my question.  Why don’t banks let third parties purchase these properties at foreclosure sales?  Actions speak louder than words, and the banks’ actions at foreclosure sales – where they take back nearly 90% of foreclosed homes – speak volumes.

I’d love to hear some theories on why banks want more real estate.  Obviously it’s money-driven, but how?

Whatever the reason, one thing is clear – banks want more real estate, and their actions at foreclosure sales prove it.


Mark Stopa

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Political Corruption in America

Want to know what’s wrong with America right now?

Take a look at this video, which shows how the Fed is handing out trillions of dollars and has no idea where it’s going.  Disgusting stuff.

Then read this article, which explains how Congress just passed a bill (almost unamimously, in fact) criminalizing free speech in very broad ways, essentially to prevent peaceful protests against government officials.

So let me get this straight … our government is constantly screwing over the average American for the benefit of banks and corporate America and Congress is passing laws to prevent anyone from complaining about it.  Gotcha.

I doubt I will be able to post a blog like this again … I’ll probably be arrested for “occupying” the internet with a protest about “our” corrupt government.

Mark Stopa

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Telephone “Glitch” Prompts New Hearing, Disappointment

Have you ever felt a certain way and wished you didn’t but you just can’t help it?  That’s how I feel right now.  I’m disappointed.  Disappointed because a judge just told me something but, for a variety of reasons (mostly because of how this particular judge has acted in foreclosure cases, both towards me and my clients and in general), I just don’t believe it.  999 times out of 1,000, I’d believe a judge in a situation like this.  Even here, I want to believe this judge, and I suppose I should believe the judge.  Unfortunately, in this situation, I just don’t, making today perhaps the most disappointing day in my entire legal career.

Here’s what happened…

I recently had a hearing in a foreclosure case on a Motion for Summary Judgment or to Dismiss.  My argument was two-fold: (1) the bank, a foreign corporation, failed to post the cost bond required by Fla. Stat. 57.011, requiring dismissal of the lawsuit; and (2) the bank failed to give the homeowner notice of the alleged default and a 30-day opportunity to cure it, as required by paragraph 22 of his mortgage.

These arguments were simple, straightforward, and, quite frankly, dead winners.

The hearing was odd from the outset.  Nobody showed up for the bank, via telephone or otherwise (the judge even clarified no attorneys were “on hold”), so it was just me and the judge in chambers.  The judge was visibly uncomfortable from the outset, but asked me to start my argument.  About half way through my argument, the Court’s phone rang.  The judge excitedly took the call, thinking it was opposing counsel calling in for my hearing.  But it was a different lawyer from a different case, totally unrelated to mine.  Oddly, the judge conducted the hearing in that case, unopposed, granting a summary judgment of foreclosure in that case.  (It was weird and uncomfortable, frankly, because it felt like the judge was trying to “buy time” to give opposing counsel in my case a chance to show up.)  Then, with that hearing over, the judge told me to resume my argument.

When I finished the argument, unopposed, explaining why the case should be dismissed for failure to post cost bond and/or summary judgment entered for failure to comply with conditions precedent, the judge told me the Court would take the matter under advisement.

This was exceptionally rare.  Banks get summary judgments entered when cases are unopposed as a matter of course.  Why not here?  Why not for a homeowner?  I’m all for judges taking matters under advisement and giving careful consideration before ruling – that’s a good thing.  But what was there to think about here?

I then asked the judge if I should provide the Court with a proposed Order.  The judge said “no,” that the Court would prepare its own Order.

Again, very odd.  With all of the Orders that the Court signs in uncontested cases or at uncontested hearings, why did the Court want to prepare its own Order here?  To put that in perspective, that’s the first time in 10 years of practicing law where I’ve seen a judge take a ruling under advisement at a hearing where one side did not even show up, then refuse a proposed Order from counsel who appeared, insisting on preparing its own Order.  Even at the time, I was wondering … why?

The situation only got stranger from there.

I just received the Order, and the judge denied the motion to dismiss (the cost bond argument), without explanation, ordering my client to file an Answer within 10 days.  As for the summary judgment part of the motion (the bank’s failure to give notice and cure), the judge ruled the hearing had to be rescheduled because the judge’s assistant informed the Court, when the hearing was over, that the bank’s attorney was “on hold” for the hearing but due to some unknown telephone “glitch” with the Court’s phone system, the judge did not see that the lawyer was on hold.

As I said at the outset, I really want to believe the judge in this situation.  I do.  I want to think the opposing attorney was actually on hold and didn’t get through to the hearing (in which event rescheduling the hearing is the fair thing to do).

Unfortunately, I can’t say I believe it.  I don’t believe the opposing attorney was on hold.  Heck, the judge took a phone call (for another hearing) right in front of me and the phone was working just fine.  Plus, the judge clarified at the start of the hearing that no attorneys were on hold.  I want to believe the opposing attorney was “on hold” and that a “glitch” in the Court’s phone system prevented the judge from realizing it, but I don’t.

In fairness, I suppose there’s no way to know for sure, but, at worst, I’m very skeptical.

You might think I’m a conspiracy theorist, but I disagree.  999 times out of 1,000, I’d believe the judge in a situation like this.  Unfortunately, I think my skepticism here is reasonable and, frankly, unavoidable.  Bear in mind, this is the same judge who regularly gives 5-day turnaround times for homeowners to file an Answer or take some other act even as banks are given 60 or 90-day extensions ex parte.  This is the same judge who interrupts defense lawyers, cuts off their arguments, rules against them without hearings, regularly defaults them out of court ex parte and without notice, etc., etc.    The best way to describe the dynamic is this … imagine you are an out-of-state lawyer going into court for the first time in a small western town in the 1960s.  All the small-town cronies are sitting in the audience, smiling and joking, as the judge approaches the bench.  You lose, and you know you got home-towned, but there’s nothing you can do about it.  That’s how it feels before this judge in every foreclosure case, and I know I’m not the only one who feels that way.

Please don’t misunderstand – the vast majority of judges before whom I appear are terrific and fair.  If this sort of thing happened before almost any other judge, I’d have shrugged my shoulders and moved on.  It’s sad that I can’t do so here.  It’s sad that the temperament and demeanor of this judge has been such that I’m left questioning whether the opposing attorney was actually “on hold” and the Court didn’t realize it due to a phone “glitch” or whether something different is going on.

Maybe my skepticism is well-founded and maybe not.  Perhaps I’m right, perhaps not.  Either way, it’s sad when I can’t just accept what the Court has said at face value.  It’s sad when I’m left wondering, rightly or wrongly, what really happened here.

More than anything, this is why I’m a foreclosure defense attorney.  If/when homeowners lose their home, they should always – always – feel like that was the lawful result, if not the just one.  Any judge should be able to look that homeowner in the eye and say “[t]his is what the law requires,” and the homeowner, as upset as he/she may be, has to be able to accept that.  We might not like it, and I’ll fight like hell to avoid it, but if that’s what the law requires, we have to move forward.  That said, I need – need – to feel like it’s a fair fight.  I need to feel like the law requires a foreclosure in a given case – not that the system was set up or slanted in a way to facilitate that foreclosure.

That’s why I’m disappointed today.  I’m disappointed because I’m left wondering what our court system is all about.  Does the system allow a fair adjudication of cases?  Or is it set up/slanted (at least in some courtrooms) in a way that merely facilitates foreclosure?

The fact that I have to ask that question is sad, and it’s what drives me to keep fighting for homeowners.

Mark Stopa

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Good Lawyering, Bad Lawyering, and Basic Fairness

I had a hearing yesterday and the Court was running a little late, so I had the opportunity to observe hearings in other cases.  Geez, what a fiasco.  The defendant/homeowner in the hearing before mine was pacing the halls, visibly upset.  I’m friendly with the JA, so I inquired what was happening.  She told me her attorney decided not to attend the hearing.  Not that he got a flat tire on the way to court, not that he was moving to withdraw, and not that his staff inadvertently didn’t calendar the hearing … he just decided not to attend.  Worse yet, it was a summary judgment hearing.

This is just absolutely inexcusable.  Appalling.  An embarrassment to the profession.  A summary judgment hearing is the most important hearing in a foreclosure case.  For the homeowner’s attorney simply not to attend – to choose not to attend – is disgraceful.  I think the homeowner said it best when she muttered under her breath “I guess having the best lawyer possible really does matter.”  Or perhaps Judge Rondolino summed it up best when he called this lawyer at the start of the hearing and said something to the effect of “I have your appearance as counsel in the file, you haven’t moved to withdraw … what do you expect me to do here?  Rule in your client’s favor just to protect you from your own malpractice?”

That, ladies and gentlemen, is the basic problem with many foreclosure defense attorneys.  A lot of them don’t know how to defend cases, don’t care, or both … they just file papers just to collect a fee, then when they lose tell the client “well, you were going to lose anyway.”  My clients realize I may lose their case, but they know (at least I hope they know) they won’t lose without a knock-down, drag-out fight.

The bad lawyering is hardly limited to the defense side of foreclosure cases, but I’m not about to complain there.  I have no aversion whatsoever to running roughshod over newbie attorneys who have no idea how to handle a contested foreclosure case.

Is there any good lawyering out there?  Well, I had a client today say that she was referred to Stopa Law Firm by her bank.  Apparently, GMAC told her my firm is “the best in the business” at defending foreclosure cases.  A referral from the opposing bank – weird, but that one made my day.  I don’t want this to be a brag-fest, though, so enough about me.  Instead, I’ll do something rare – I’ll throw a compliment to an opposing attorney.

I’ve been litigating a case against Attorney Gary Gassel out of Sarasota.  He’s pushed the case aggressively and competently (certainly compared to most foreclosure lawyers I see).  However, my client was just diagnosed with Stage 4 lung cancer and is not expected to live much longer.  So I filed an Emergency Motion to continue the summary judgment hearing, arguing the rather obvious unfairness of foreclosing a homeowner on his death-bed and the impropriety of letting a case proceed when my client is incapable of participating in his own defense.

To my surprise and pleasure, Mr. Gassel cancelled the hearing.  I was expecting some sort of “my client won’t approve” or “I can’t reach my client for approval” excuse (and that I’d feel compelled to talk to my friend Shannon Behnken at the Tampa Tribune about how U.S. Bank wanted to foreclose on a homeowner with Stage 4 lung cancer) but nope – this lawyer did the right thing, acknowledging the hearing should be cancelled.  That’s good lawyering.

With so much frustration and outrage in this industry, it made my day to see some basic fairness in a foreclosure case.  Now, if everyone could exhibit the same compassion to all homeowners all of the time …

Mark Stopa

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Help the Economy, Support Local Business – Free Rays Tickets at Ferg’s

I’m so friggin’ tired of hearing people say the way to improve the economy is to accelerate the foreclosure process.  You know what happens when there’s a foreclosure?  People get thrown out of their homes.  Guess what happens next?  They look for somewhere else to live, and not necessarily in Florida.  This is why we have thousands of homes vacant in Florida.  This is why there are tens of thousands of cases in Florida where a bank has obtained a Final Judgment of Foreclosure but won’t set the foreclosure sale.  Banks can take title very easily – all they have to do is set the sale – but they don’t want to because they know the demand for housing doesn’t meet the supply.

Accelerating foreclosures won’t help the economy, but I know one thing that will – SUPPORT LOCAL BUSINESS!

Right here in Tampa we have a terrific example of this with our Tampa Bay Rays.  I’ve talked about the Rays in this blog in the context of strategic default and even compared the Rays to homeowners and the Red Sox to banks.  Sure, I suppose I’m biased because I like sports, but there’s more to it than that.  The Rays create an enormous opportunity for businesses in the Tampa/St. Pete area to thrive, particularly if attendance is up and the team remains local.  For instance, anyone who’s ever been to a Rays’ game knows about Ferg’s Sports Bar and Grill.  It’s right across the street from Tropicana Field and it’s a fun and popular hangout on game days.  When people go to Rays games, Ferg’s does well, and it can continue to employ more people.  Local business thriving = more employees = more people living in Florida = the Rays stay in St. Pete, and the upward cycle continues, on and on.

I’m tired of the misperception that foreclosure defense attorneys are harming the economy.  If anything, I think I help the economy.  My clients are still living in Florida, maintaining their homes, and trying to prosper in our great state.  If I (or some other, capable foreclosure defense attorney) weren’t helping them, who knows where they’d be, and who knows what condition their house would be in.

I think I’m helping, but I want to do more.  I want to help support our local economy in other ways as well.  That’s why Stopa Law Firm will be giving away at least two tickets to every single Rays home game in the 2012 regular season.  Let’s say that again:

Stopa Law Firm will be giving away at least two tickets to every single Rays’ home game.

I’m not handling the raffles myself.  Instead, Ferg’s will handle the raffles on designated dates and times, to be announced (probably a designated Friday or Saturday night).  All you have to do is go to Ferg’s, help support local business, and enter the free raffle (on the designated date) for a chance to win free tickets to upcoming Rays home games.

(In the interests of full disclosure, Stopa Law Firm and I have no ownership or financial interest in Ferg’s.  I just see it as a fun place to go before a game and a good example of how we can support local business.)

Hopefully you’ll agree with my belief that everyone here wins.  The Rays win with more attendance (which everyone wants, as we need them here).  Local businesses like Ferg’s (and its employees) wins with more business.  Stopa Law Firm wins with increased awareness of foreclosure defense.  And local homeowners win with free Rays tickets.  Perhaps most importantly, I hope this give-away of mine will help everyone realize the way to help our economy is to support local businesses, and the jobs they create, not by throwing homeowners out of their homes faster.


Mark Stopa

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