Archive for May, 2013

Let’s Foreclose Faster, Blackstone Needs More Properties!

I’ve read and participated in many debates/discussions about the  pros and cons (alleged pros, I should say) of foreclosing faster.  Throughout these many blogs and news stories, one aspect of the debate is almost always missing …

What happens to the properties after they are foreclosed?

I’ve discussed this issue many times, including here, here, and here.  If you think I’m beating this issue to death, you tell me – what’s the point of foreclosing faster if those houses are going to a billion-dollar hedge fund like Blackstone?

This issue just drives me nuts.  Why do so many intelligent people – lawyers, judges, legislators, etc. (not all, but many) – spend so much time and money trying to develop a system that allows faster foreclosures simply so these properties can be transferred to billion-dollar hedge funds?

Here is the article in today’s Tampa Tribune.

Mark Stopa

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Obtaining Relief after a Final Judgment of Foreclosure

Many homeowners inquire about legal representation with my firm after a Final Judgment of Foreclosure has already been entered.  Often, these homeowners were in denial about the possibility of foreclosure and/or had their heads buried in the sand for too long, failing to ”wake up” and seek help until right before a foreclosure sale is about take place.  Unfortunately, regardless of what I may think about the merits of their position, the procedural problems with taking on a case at that stage of the case are often prohibitive.  Bankruptcy is always an option, but, frequently, there’s not a lot that else can be done.

That said, there have been instances where I have taken a case after trial is over and a Final Judgment of Foreclosure had already been entered.  You may recall the Initial Brief I posted on this blog, which has been pending in the Second District for quite some time now (probably a good sign, as the appellate courts typically takes longer on appeals that have merit).  Additionally, I just recently became counsel in another case for purposes of filing an appeal, and this is the Emergency Motion for Stay Pending Appeal that I filed in the Fourth District Court of Appeal.  My intent, as you can see, was to get the Fourth District to cancel the foreclosure sale set for May 29, 2013 and allow me to prosecute the appeal before the home was sold at a foreclosure auction.

Today, I received an Order from the Fourth District which granted the stay, cancelling the foreclosure sale and directing the bank to respond to my motion within seven days.  In writing this blog, I want everyone to see the arguments that I raised that caused the Fourth District to cancel the sale.  Read the motion.  Don’t the facts look compelling?  Perhaps more importantly, though, I wanted everyone to understand why I was willing to take on these two cases while I’ve had to turn down so many others.

One obvious similarity in these two files is that the homeowners brought a court reporter to trial.  If you have any thought whatsoever of pursuing an appeal of the court’s ruling at trial, a court reporter is a must.  After all, if you can’t show the appellate court what happened at trial, you can’t possibly show why the lower court ruled incorrectly.  (To clarify, court reporters are not necessary for every hearing.  For evidentiary hearings or trials, though, they are a must.)

If that doesn’t make sense, read the Initial Brief and the Emergency Motion for Stay Pending Appeal. Notice how I’m repeatedly citing a “record” in the former and an “Appendix” in the latter?  That is absolutely essential if you want to pursue relief in the appellate court after a foreclosure trial.  If you don’t have a trial transcript, then it’s nearly impossible to pursue an appeal based on what happened at trial.  Occasionally, an appeal is still possible, but you’re swimming in the middle of the Atlantic Ocean without a life vest at that point.  Sure, you might randomly encounter a buoy 100 miles offshore, but chances are huge that you’ll drown.

A second common theme in these two files is that both homeowners came to me right after trial was over.  They didn’t wait until the foreclosure sale was about to take place.  They didn’t wait until a sheriff was knocking on the door.  You might think that shouldn’t matter, but it does.  To even bring an appeal, the homeowner must file a Notice of Appeal within 30 days after the Final Judgment.  If you wait until day 31, it doesn’t matter how meritorious an appeal might have been – you are procedurally barred from pursuing an appeal.

It’s often frustrating to turn down prospective clients who waited too long to call me.  I’m frustrated, and so are the homeowners.  But don’t shoot the messenger, folks.  I didn’t create the rules, and I’m not going to take someone’s case and charge someone a fee if it’s too late to file the appeal.

Third, the facts in these two cases were particularly compelling.  In the second case, for example, the homeowner paid a second mortgage in full and was making normal monthly mortgage payments until the bank put her payments into an account and stopped applying them towards her mortgage.  That shouldn’t matter, and technically it doesn’t matter on an issue such as whether the plaintiff had standing at the inception of the case, but that’s the sort of fact that really gets an appellate judge’s attention.  If that doesn’t make sense, think of it this way … to win an appeal, it’s sometimes not enough to show the appellate judges they have to reverse – you have to make them want to reverse.  Showing that my client made these payments does that (as would, say, making loan modification payments under a dual-track process).  To the greatest extent possible, you want to appear as if you’re wearing the white hat.

Of course, it’s almost always best to retain competent counsel before your foreclosure case is over, not after.  My win today doesn’t change that.  This blog is merely intended to shed some insight onto the types of facts I’m looking for when taking cases after a Final Judgment has already been entered.  And by posting this Initial Brief and Emergency Motion for Stay Pending Appeal, I hope to shed some light on the way in which these arguments should be presented.

Mark Stopa

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Humorous, yet Real. Who wins? You be the Judge

This is a real motion that actually exists in a pending case.  It’s not my file – my staff just happened across it today.

Read the motion and tell me – who wins?  You be the judge.  Should a party who was ordered to pay sanctions to his opponent in court be permitted to pay … in pennies?  Should the party receiving the pennies be able to force the sanctions to be paid in some other denomination?  That’s what the motion is seeking to accomplish.

Check out the photos attached to the motion – yes, it’s piles and piles of pennies.

I realize this isn’t foreclosure related, but we all need a laugh every so often.  I doubt the judge is laughing, though.

Mark Stopa

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What is a Judge’s Job?

I had a fascinating hearing recently, one that left me asking “What is a judge’s job?”  First, a little background …

I was not counsel for this homeowner at trial, but she had a great defense.  She argued the bank lacked standing when it filed the lawsuit, as it did not have possession of the original Note at the inception of the case.  See McLean v. J.P. Morgan Chase Bank, N.A., 79 So. 3d 170 (Fla. 4th DCA 2012).  Lots of homeowners make that argument, but the facts here were particularly good.  After all, the argument in this case did not turn on whether the bank’s witness was credible or what the business records may have shown.  Rather, it was undisputed that the original note was sitting in a court file in a totally different case filed by a totally different plaintiff for six months after this bank filed its lawsuit.

Follow the timeline.  Bank A filed suit in 2008, the case was dismissed, and the original Note was returned to that plaintiff on August 31, 2010.  Bank B filed suit in March of 2010.  Do you think Bank B had possession of the original Note in March of 2010 when the Note was sitting in the court file?  I sure don’t.  It’s necessarily impossible to be the “holder” when you lack possession of the original Note.  See Fla. Stat. 671.201(21) (defining “holder” as one in possession of an original, endorsed note).

In my opinion, this argument should have prompted a dismissal of the case, but the judge entered a Final Judgment for the bank.  I entered the case and asked for a stay pending appeal.  I thought that motion was well-taken.  After all, the judge herself had said (at trial) that my client’s position was a good argument, so why should a foreclosure sale take place before she could pursue an appeal?

Unfortunately, the judge denied the stay and set the first available sale date.

I was surprised, so I pushed the judge to explain her ruling.  The explanation surprised me.  Here’s what the transcript reflects (starting on page 16):

Mr. Stopa:  Judge, you acknowledged yourself, on multiple occasions, on the record, that, you know — Initially, you had multiple times where you said you were ruling for the defendant, and then you said if you didn’t, it would be reversed.  I’m not arguing with you, but my point is that I think there are legitimate grounds to go to the Appellate Court, and before my client is divested of the property and a third party purchaser tries to buy it and, potentially, take possession, ultimately to potentially be removed, then a stay should be entered so that we can pursue our right on an appeal.  We’d be happy to have a condition in the stay being that my client will continue to maintain the property, as she has.  There won’t be any harm to the bank, if we were to lose the appeal.  It simply will have the foreclosure sale rescheduled, once the appeal is over.  The collateral is not going anywhere.  So I think a stay is a fair result here, under the circumstances, so that we can pursue an appeal on these issues.

The Court:  You’re welcome to do that.

Mr. Stopa:  Can I submit you an Order that grants a stay?

The Court:  No.  Your stay is denied.  …

Mr. Stopa:  On the issue of stay, can I ask for an explanation, or what have you, because, you know –

The Court:  My job is to move cases.

Mr. Stopa:  I’m sorry?

The Court:  My job is to move cases and that’s what I’m doing.

Mr. Stopa: Okay, and you moved the case by entering a judgment.  A stay doesn’t stop you from moving the case, because the judgment will have been entered.  It won’t appear as a pending case on the docket, but it allows us to pursue an appeal.

The Court:  May 29.

Mr. Stopa:  Why are we having a sale date scheduled so quickly?  Can’t we get –

The Court:  Because if you practiced in front of me in this division, you will have known that 35 days is the most I give, unless there’s extenuating circumstances.

Mr. Stopa:  I think the extenuating circumstances here are that we have the issue of the note in the other file, which I know you didn’t agree with, ultimately, and the amount issue.  I mean, Judge, those are two very legitimate things to be appealing about.  So I think — Think about it from a third party perspective.  Do we really want a third party purchaser to buy this house, when we have an appeal pending, then they would be divested, when they have done nothing wrong?  That’s the point of a stay, is it prevents harm to third parties, as well as these parties.

The Court:  Okay.  I’ve ruled. …

I realize the judge wears the robe, and it’s not my place to criticize.  That said, I’m bothered by the judge’s statement that her “job is to move cases.”  Listening to that really made me ponder …

What is a judge’s job?

Here’s how Wikipedia defines a judge.  And with respect to this judge, I note the definition does not include “moving cases.”

A judge is an official who presides over court proceedings, either alone or as part of a panel of judges. The powers, functions, method of appointment, discipline, and training of judges vary widely across different jurisdictions. The judge is supposed to conduct the trial impartially and in an open court. The judge hears all the witnesses and any other evidence presented by the parties of the case, assesses the credibility and arguments of the parties, and then issues a ruling on the matter at hand based on his or her interpretation of the law and his or her own personal judgment.

These are tough times for our judiciary.  There’s a backlog of cases, and all judges face pressure from many angles to eliminate the backlog.  I sincerely hope, however, that all judges don’t allow these pressures to distort their perspective on what a judge’s “job” is.

Mark Stopa

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Is a Foreclosure Plaintiff Likely to Prevail Merely by Filing Suit? NO! Second District Changes its Ruling!

On March 13, 2013, I posted this blog, where I voiced my concern about portions of the Second District’s ruling in Deutsche Bank v. Prevratil, a case in which I was not counsel that the Second District ruled upon a few days earlier.  That was the case, you may recall, where the Second District ruled that an entity other than the Plaintiff could verify a mortgage foreclosure complaint under Rule 1.110(b) in some circumstances.  My concerns with the opinion were twofold: (1) the court’s statement that a foreclosure plaintiff was “likely” to prevail merely by filing suit, and (2) the lack of discussion about Fla. Stat. 709.2105, which requires a power of attorney to be a natural person or a financial institution with trust powers.

This is the opinion the Second District issued at the time, and this was the Motion for Leave to File Amicus and Motion for Rehearing that I filed in the Second District in response, explaining my two concerns.

Today, the Second District quashed its initial decision in Prevratil and issued this revised opinion.  Wow.  We won!  On a case I wasn’t even counsel!

Although the opinion makes no mention of me or my amicus, the Second District addressed both of the issues I raised in my motion, changing its initial ruling!

The first change is a fantastic one.  Now, instead of saying a foreclosure plaintiff is “likely” to prevail merely by filing suit, the Prevratil decision says a foreclosure plaintiff “could” prevail.  Beautiful.  That’s exactly right.  Foreclosure plaintiffs aren’t “likely” to prevail by filing suit – they “could” prevail.  Major kudos to the Second District for clarifying that point on rehearing.  For reasons I will explain in a future blog, that distinction might make an enormous difference in how foreclosure cases are litigated throughout Florida.  Yes, that was a ground-breaking change, even if nobody realizes why just yet.

The second change is more subtle. In its revised opinion, the Second District provides four footnotes which explain why the court relied upon versions of the statutes in effect at the time.  This was my second concern in the motion, to wonder why the court did not mention Fla. Stat. 709.2105, which requires a power of attorney to be a natural person or a financial institution with trust powers, and to invite the Second District to explain why the statute did not apply.  These footnotes answer that question.  The POA statutes were revised in October of 2011.  The Prevratil complaint was filed before those statutes came into effect, so the court relied on the prior version of the statutes.  However, for any lawsuits filed after October of 2011, the requirements of Fla. Stat. 709.2015 would be in effect.  That means, to be a valid power of attorney and sign a verification under Rule 1.110(b) on any complaints filed after October of 2011, the person/company verifying must be a natural person or a financial institution with trust powers.

This was a fight that, candidly, I wasn’t sure I could win.  Suffice it to say I’m elated to help change the law on these two issues, even if my motion wasn’t mentioned in the opinion.


Mark Stopa

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Donations for Homeless in Oklahoma

We use the term “homeless” a lot in the foreclosure industry but that has a whole new meaning after today’s events in Oklahoma.  Heart-wrenching.

Stopa Law Firm will donate $100 to that relief effort for every client who signs up with my firm between now and the end of May.

Lets help that relief effort.  Spread the word.

Mark Stopa

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5DCA Issues Order to Show Cause to KEL Attorneys

I’m sad as I write this.  Today, Florida’s Fifth District Court of Appeal issued a written opinion in a foreclosure case that affirmed a Final Judgment of Foreclosure.  I’m sad because it didn’t have to be this way.  It shouldn’t have been this way.

Here are the unfortunate facts …

A bank filed suit for mortgage foreclosure against a homeowner, who retained KEL Attorneys as counsel.  The bank set a hearing on its motion for summary judgment, as often happens in these cases.  When KEL Attorneys did not attend the hearing, the court entered a Final Judgment of Foreclosure without opposition.  KEL moved to vacate that judgment, asserting it acted with “excusable neglect” by not attending the hearing, having inadvertently failed to calendar it.  The court denied that motion, so KEL appealed.

At that point, KEL had a pretty good chance of winning on appeal in the Fifth District.  After all, there are many cases which hold it is excusable neglect to not attend a hearing where the hearing was inadvertently not calendared.  To the surprise and dismay of the Fifth District, however, KEL did not frame the issue on appeal in this manner in its Initial Brief.  Instead, KEL asserted that it received no notice of the hearing.  In its Answer Brief, the bank showed that was plainly not true.  By its own admission, KEL had received notice of the hearing – it just failed to calendar it and failed to attend.  KEL tried to fix the problem, and set forth the issue correctly in its Reply Brief, but by that point it was too late.  When an issue is not raised in the Initial Brief in an appeal, it is waived.

On these facts, the Fifth District issued this opinion, which included an Order to Show Cause why KEL Attorneys should not be sanctioned.

The saddest part, meanwhile, is the innocent homeowner who lost this appeal – the foreclosure judgment on her home being affirmed – to no fault of her own.

I’m not going to disparage KEL Attorneys.  That’s not ethical, and it’s not my place.  That said, this opinion is a great illustration of how a homeowner’s choice of counsel can make a huge difference.  Choose wisely, folks.

Mark Stopa

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Pro Se Homeowner Beats Bank of America in 2DCA

First, the usual caveat.  Representing yourself in a foreclosure case is probably not a good idea.  After all, pro se homeowners often don’t know the correct procedural ways to bring their arguments.  And if you don’t bring your arguments in the correct fashion, you may waive them forever.

Ok, I know.  You’ve heard that before.  Yada, yada, yada.  Let’s get to the story.

In Hillsborough County Case No. 10-CA-20354, Bank of America declared a homeowner in default, then sued for foreclosure.  The homeowner represented himself in court, arguing, essentially, that he was not in default and that BOA had applied payments to his account improperly.  The issue?  In 2005, the homeowner made a lump-sum payment of $22,000, intending that this sum be applied against future recurring monthly payments.   But Bank of America didn’t apply the payments that way.  Instead, BOA applied the $22,000 payment towards principal, then later asserted the homeowner was in default for not making normal monthly payments.

The issue before Hillsborough Judge William Levens was a narrow one.  Was the homeowner in default, or did Bank of America apply the payments incorrectly and wrongly declare him in default?  Judge Levens ruled in favor of the homeowner, dismissing the foreclosure lawsuit.  Also, remember my recent blog on bank-induced default, where I explained that when a bank wrongly declares a homeowner in default, the remedy is to reinstate the loan, eliminating all default interest, late charges, and interest since the bank improperly declared the default?  That’s the same thing Judge Levens did here, directing the “debt be recalculated” and the “resulting/remaining loan balance [be returned] to the contracted-for monthly payment amount.”

Bank of America didn’t like this result, so it appealed to Florida’s Second District Court of Appeal.  In March, the Second District issued a PCA, affirming Judge Levens ruling.  You might not have noticed that ruling, but that’s only because the Second District did not see the need to explain itself.  Yes, the pro se homeowner wins and Bank of America loses.

Please remember the concept of bank-induced default.  It might not apply in every case, but the remedy when it does – dismissing the foreclosure case and reinstating the loan to the point in time before the default – is a good one.


Mark Stopa

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Non-Judges May Decide Foreclosure Cases; My Filing in the Florida Supreme Court

The Florida Supreme Court just issued this opinion, which amended Fla.R.Civ.P. 1.490 to authorize the use of magistrates (i.e. lawyers who are not judges) to preside over foreclosure hearings.  This sounds like a big change in foreclosure-world, and in some ways I suppose it is.  The prospect of a non-judge deciding a mortgage foreclosure case is certainly a big change for many consumers.

However, if anyone does not like the prospect of their foreclosure case being decided by a non-judge, all they have to do is interpose an objection.  Under the new version of Fla.R.Civ.P. 1.490, if an objection is filed within 10 days after the Order of Referral to Magistrate is entered, then the case is heard like the judge, like normal.  The “objection” need not have legal grounds, either.  The homeowner can simply say “I prefer the case to be heard by a judge,” and that’s what will happen.  Conversely, the homeowner can not object, choosing to let the case be heard by the magistrate, and if the plaintiff does not object, either, then a magistrate may adjudicate the case.

Essentially, the purpose of the Rule is to allow non-judges to adjudicate those cases where homeowners don’t care enough to defend the case (or, hence, to object to the magistrate).  It’s a way to help the courts through a backlog of cases.

The Court issued this opinion rather suddenly.  As a result, it welcomed the opportunity for anyone to submit a comment in response to the new Rule.  I see a problem with the Rule, as drafted, so I took the opportunity to draft a written comment, interposing my concern and suggested change.  Yes, I filed a Comment in the Florida Supreme Court, suggesting a change to the Rules.  Pretty cool.  Here it is:  Stopa Comment to Rule 1.490.

Mark Stopa

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Is it Too Late to Defend Your Foreclosure Case? Probably Not.

I had a foreclosure trial today.  Ho, hum, right?  Just another foreclosure trial?  Well, this case was filed in 2010, and I was just retained in the case a few days ago.  As a result, there wasn’t time for me to do anything except file a Notice of Appearance and attend the trial.  You might wonder …

Can a foreclosure defense lawyer really help when retained right before trial?

Without filing any paperwork?

Why yes!  Yes I can!

This is far from ideal, don’t get me wrong.  If I’m retained at the outset of a foreclosure case, I can file the homeowner’s pleadings and ensure all defenses are preserved.  By waiting to retain counsel, many homeowners waive defenses by not asserting them soon enough.  That said, it’s certainly possible to defend a case at trial, even when retained at the last minute.  How can that be?  Simple.  Bank incompetence is pervasive in foreclosure cases.

We all know banks and their lawyers often fail to file the required paperwork.  There’s more to it than that.  You see, if you haven’t been putting up a big fight in your foreclosure case, and the case gets set for trial, then the plaintiff will probably treat the trial as an “uncontested” case.  That means they’ve prepared for trial (I use the term “prepared” very loosely here) as if nobody is going to attend trial in opposition.  When somebody shows up, it throws a big wrench in their plans.  It’s like going to a sporting event expecting the opposing team was going to forfeit because they didn’t have enough players, then realizing not only is the opposing team at the game, but they’ve recruited a handful of athletes who are bigger, faster, and stronger than anyone on your team.

I’m going to save the specific argument that I made as trial began.  (Some things have to stay a secret from the evil banksters and their lawyers (who, yes, read this blog)).  Suffice it to say that just a few minutes into trial, the issue was no longer whether a foreclosure judgment would be entered, but whether the case would be dismissed or the trial continued.  Yes, I appeared in the case just a few days ago and filed nothing, yet it was the plaintiff who was begging for a continuance to prevent the case from being dismissed.

After about 30 minutes of argument, the judge decided to continue the trial.  While I certainly would have preferred a dismissal, this homeowner went from getting a judgment entered against him (in all probability) to getting the trial continued.  Also, the judge agreed the bank’s case was such a mess that a new trial date wasn’t even scheduled, and the homeowner can continue living in the house in the meantime.

Foreclosure trials won’t always happen this way, of course.  Sometimes, if you wait to hire a foreclosure defense attorney until right before trial, you’re going to lose.  Sometimes, the failure to plead the necessary defenses makes it impossible for a homeowner to win, no matter how unprepared/sloppy the banks are.  Many times, however, hiring counsel, even at the last minute, can prevent foreclosure.


Mark Stopa

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