Archive for October, 2010
Posted on October 20th, 2010 by Mark Stopa
Just as I was finishing my last blog about loan modifications, I received a comment on this blog from a homeowner. The homeowner’s story moved me, so much so that I felt compelled to post it (with her permission), below. As you read it, ask yourself “Does this sound like a deadbeat? Or does this sound like an honest, honorable, hard-working American who is trying to do right for her family and meet her financial obligations?”
What particularly irks me about this situation is that she was induced to default by a scam operation out of California that promised a loan modification but never delivered.
Dear Sir, I am writing to you as my last hope to save my home. My husband lost his job here in Tampa Fl. and had to move to Houston in order to keep his job at a lower rate. On March 8, 2010, we paid $2,500, up front, to a California company called National Relief Group to get a loan modification. They told us it would take 120 days to complete, not to contact our lender, and to stop paying our mortgage in order to get our home modified. Its been now 8 months and still no answer and we are now $14,000.00 behind including late fees and penalties. Since then my husband was cheating on me and left me right after life support and took off. I filed for divorce and got granted the house. However I was to refinance the house in my name and the kids. Since my divorce, my credit was ruined being so lengthy almost 18 months and costly. As the months went by I got a letter from the Attorneys for Bank of America. They filed a suit for foreclosure, I panic because that was not our intention. I want to keep my home – I just needed assistance to lower the modification in order to keep paying the house. I called the company that was supposed to modify the loan and for months they kept saying it was in negotiation process, and we kept getting deeper in the hole with no promises it would go through. So I called Bank of America. I was told that if I wanted to keep my house, I would have to come up with $14,000. I told them to please work with me by doing a repayment plan for the back paid fees and penalties, or to put the back pay towards the end of the loan and I would continue to pay the mortgage, as I do not want to lose my house. The lady I spoke to from BOA was rude, obnoxious and uncaring to my plea. She said to ask my family, friends, etc. to help bring my mortgage up to date in order to keep it from foreclosure. She also informed me that I would have to come up with $10,000 and they would do a six month plan which would take me from $1234 a month to $2700 a month. I told her I could not afford that payment and she told me that was the only way I could keep my house from foreclosure and she also said I would have to come up with the money soon because they move fast on foreclosures, within 30 to 60 days. I cried to her, I pleaded to her that this was not my fault, why I was in this position and it would be a win-win situation to keep the house out of foreclosure if I’m willing to pay my mortgage every month but I could not come up with the back payments thru no fault of my own, all we were trying to do was to get help by modifying the loan to make it affordable to us since my now ex had lost his job in Tampa.
Needless to say that I sat there in shock and confused as to how a person wants to keep their home and can find noone to help them. I recently got another letter from the court advising that the attorneys for BOA are also not only doing the foreclosure but also seeking attorney’s fees as well. This is insane. I am a disabled woman on a fixed income now receiving alimony, my sons have moved back into my home and between the 3 of us we can pay the mortgage. However, I am so disgusted that the banks will not work with me, I can’t refinance, I can’t seem to get any help from anyone in keeping my home. Its all I have left. I am turning to you for help, guidance and direction as to what I can do so I don’t lose my home. I am able to make my monthly mortgage payments, however I cannot cough up, nor do I have family left and/or friends who can help me with this kind of back pay. Something has to be done as I am not one to walk away from my responsibilities without giving my all. I am not a loser or a low life as people are calling us that now, just a disabled woman trying to keep a roof over her head.
Anything you can do to help us would be greatly appreciated as I feel you are my last hope. If you have any questions, please feel free to contact me at 727-XXX-XXXX.
Sadly, this story is not unusual. In fact, I hear stories like this every single day. Contrary to what many Americans think, most homeowners aren’t “deadbeats.” Most of my clients aren’t “taking advantage of the system.” These homeowners are good people who are trying to do the right thing. Can the banks say the same?
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Posted on October 20th, 2010 by Mark Stopa
I’ve repeatedly expressed my frustrations with the loan modification process, or lack thereof, on this blog. Honest, well-intentioned homeowners cannot get a bank representative to communicate with them. Many such homeowners were actively induced to default, purportedly to become eligible for a modification that, in my experience, never arrives. Even in those rare instances where a loan modification is offered, it’s typically not a meaningful modification – the homeowner is essentially making the same monthly payment that he/she was paying all along. What does that accomplish? What’s the point?
Unfortunately, it’s even worse than that. As this article illustrates, banks often want homeowners to enter a modification just so a subsequent foreclosure will be easier for them! I’ve seen this often enough that I feel comfortable opining:
Banks aren’t offering modifications to help homeowners – they’re offering modifications to help themselves!
Lest you disagree, consider the loan modification agreement that just came across my desk. Like most modifications I’ve seen, three aspects of this agreement are just brutal for homeowners:
1) All foreclosure defenses are waived. Under most loan modification agreements, if a homeowner signs, then defaults on the modification agreement, the homeowner agrees that all defenses to foreclosure are waived. Essentially, if the homeowner defaults on the modification agreement, the bank can dribble up to the basket and slam-dunk a foreclosure without opposition.
“But the bank doesn’t own and hold the Note,” you argue. Maybe so, but since the homeowner warrants otherwise in the modification agreement, the homeowner is barred from challenging the bank’s standing after defaulting on the modification agreement (or that’s what the bank will argue, anyway).
What does this mean? Essentially, the homeowner takes what may be a very defensible foreclosure case – one where the bank may be unable to prove it owns and holds the Note and Mortgage – and turns it into an easy case for the bank by signing a modification agreement. In my view, the banks are offering modifications to make it easier for themselves to foreclose! It’s a one-sided agreement – for the banks!
With this in mind, if the modification agreement doesn’t entail a significant reduction in payments, what’s the point? In my view, modification agreements generally aren’t a good idea (the way they’re currently set up) unless the homeowner is absolutely certain that he/she can make the requisite payments indefinitely into the future. After all, once you default on a modification agreement, chances are it’s “game over.”
2) The foreclosure lawsuit remains pending. In most lawsuits, when the parties enter a settlement agreement, the lawsuit is dismissed. Sometimes, the suit is dismissed with a court order that reserves jurisdiction to enforce the parties’ settlement agreement, but this is standard fare – lawsuits are dismissed when the parties settle. Unfortunately, that’s not how it works with loan modification agreements in foreclosure cases. To illustrate, the modification agreement in my hands says “The Lender agrees to suspend all foreclosure activities so long as I comply with the terms of the Loan Documents.” Hence, if the homeowner defaults – or if the Bank asserts the homeowner defaults – all the Bank has to do is resume prosecution of the existing foreclosure lawsuit, which remains pending. It doesn’t matter if the default occurred six months after the modification or two years – all the bank has to do is resume the existing foreclosure case. And since the homeowner has waived all defenses, obtaining a foreclosure judgment truly is the equivalent of Shaq dunking the ball on an 8-foot basket without any defense.
(Judges, I respectfully submit you should do something about this. How many pending cases are on your dockets where nothing has happened because the parties agreed to a loan modification but the bank refuses to dismiss? I’d suggest an Administrative Order that requires dismissals of foreclosure lawsuits where the parties enter a Loan Modification Agreement. There is no reason for cases to remain pending for months or even years when the parties have amicably resolved their dispute.)
3. The bank makes no representations whatsoever. You know what scares the heck out of me with these modification agreements, more than anything else? The bank that is receiving the money does not make any warranties or representations whatsoever – not even a representation that it is the rightful owner and holder of the Note and Mortgage! Lest you think that’s “no big deal,” consider this.
We all know that most Notes and Mortgages have been transferred or assigned from one bank to another, many times over. Often the banks don’t know who owns/holds the Note and Mortgage, much less prove it. If the Bank you’re entering a loan modification with does not represent, in writing, that it owns and holds your Note and Mortgage, then what’s to stop another bank from emerging, months down the road, and suing you for foreclosure on that same Note and Mortgage? Unfortunately, absolutely nothing. That’s why, if it were my client, I’d require the bank to sign the loan modification with a written representation that it owns and holds the Note and Mortgage and is the party entitled to collect mortgage payments. I’d also demand to see the original Note. Without these precautions, my clients may be handing out money to an absolute stranger – one with no right to collect – and with what I know, that’s not a risk I’d feel comfortable recommending.
But even that’s not good enough. In addition to this representation, I’d want the bank to indemnify my clients from any losses they incur as a result of another bank making a successful claim on that Note and Mortgage. In other words, if another bank sues my client for foreclosure, after the modification agreement, the bank that modified with us should bear the losses, not my clients. To ensure the bank would be able to foot this bill, I’d also want some financial disclosures, especially if the bank was one I’m not familiar with.
In sum, if you’re a homeowner facing foreclosure and the bank is offering you a loan modification, I’d be very careful about what you’re getting. Read the fine print closely. If your payments aren’t going down significantly, you’re waiving defenses, the foreclosure lawsuit remains pending, and the bank isn’t making any written representations, chances are the modification agreement is designed to help the bank, not the homeowner.
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Posted on October 20th, 2010 by Mark Stopa
Maryland’s highest court has adopted an emergency rule, effective immediately, designed to identify and weed out irregularities in foreclosure cases.
Consider this another illustration of how, little by little, courts are doing more than rubber-stamping foreclosure judgments (in the wake of widespread proof of foreclosure fraud throughout our courts). Are you paying attention, Florida Supreme Court? As I blogged previously, you have the authority to do something similar.
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Posted on October 19th, 2010 by Mark Stopa
I love today’s article by David Streitfeld of the New York Times:
Intermission, at Best, in Battle Over Foreclosures
Aside from appropriately acknowleding that Foreclosure-Gate is far from over, the article reflects the point I’ve been emphasizing for many months – Florida judges are starting to realize that just because the banks want things to return to ”business as usual” doesn’t mean our courts should. We’ve all seen and learned far too much to let banks keep pushing through foreclosure cases like they’re in front of a conveyor belt at a factory.
Also, notice how the New York Times continues to discuss foreclosures on a national level by talking to lawyers and judges right here in Florida? Tampa, West Palm Beach, Sarasota … this is the ground zero of the foreclosure crisis. Lawyers such as myself, Matt Weidner, and a handful of others, along with websites like www.foreclosurehamlet.com and www.4closurefraud.com … we are making a difference. So if you’re a homeowner facing foreclosure, don’t give up. We are making headway, and the nation is watching us.
Here’s the article:
Bank of America may be trying to bring down the curtain on the foreclosure furor, but there were numerous indications Tuesday that the problems would not move off-stage so quickly. A day after the bank said it would once again pursue defaulting borrowers in the 23 states where foreclosures were overseen by the courts, judges in Florida said they were expecting even more challenges from defaulting homeowners.
The White House is convening a meeting of regulators and administration officials on Wednesday to review federal investigations into the foreclosure crisis, while state law enforcement officials emphasized their inquiry into flawed foreclosures was continuing. “There has been an attempt by some of the major servicers to indicate there are no problems,” said Patrick Madigan, an assistant attorney general in Iowa. “We’re not at the end of this process. We’re at the beginning.”
All 50 state attorneys general have joined in an investigation into lenders’ foreclosure processes, which in at least some cases appear to have been so sloppy that legal requirements went by the wayside.
The lenders maintain the errors involved mere technicalities, while lawyers for defaulting homeowners say they are symptomatic of a foreclosure system out of control.
The Obama administration, which declined last week to push for a national freeze on foreclosures, emphasized Tuesday that it was committed to holding accountable any bank that had violated the law. Robert Gibbs, the White House press secretary, said that the administration was “strongly supporting the investigation by the state attorneys general” while noting that the Federal Housing Administration and Financial Fraud Enforcement Task Force have undertaken their own investigation.
Federal regulators have been looking into loan servicing problems for some months before the recent freezes by the big lenders. The meeting at the White House on Wednesday, which will be attended by the housing and urban development secretary, Shaun Donovan, among others, will focus in part on concerns about the foreclosure crisis’s effect on the housing market and the larger economy.
In remarks at a quarterly news briefing Tuesday, William C. Dudley, president of the Federal Reserve Bank of New York, said the Fed was “seeking to establish the facts” in conjunction with the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency.
“We want to ensure that the housing finance business is supported by robust back office operations,” he said. He gave no timetable for when such a review might be completed. Whatever the outcome of the various investigations, the era when the vast majority of foreclosures were unopposed and easily granted may be waning. Some judges in Florida, the state whose courtrooms are the most overwhelmed by foreclosures, said they were likely to scrutinize the papers submitted by the big lenders with extra care.
“If we get information that there was a problem with a prior affidavit, maybe we look more carefully at the next one,” said Peter D. Blanc, chief judge of the 15th Judicial Circuit in West Palm Beach, Fla.
Thomas McGrady, chief judge of the Sixth Judicial Circuit in Clearwater, said it was still an open question for him and other judges whether they would accept amended documents from Bank of America or force the lender to refile its cases. “All of the courts are struggling with this,” Mr. McGrady said.
The investigation by the state attorneys general is so new — it was formed last week — that its scope is still being settled. Behind the question of improper foreclosure documentation lies a more important issue of whether lenders even have legal standing to foreclose because they lack the original mortgage note as required by law.
“The problems are not over, but their extent remains to be seen,” said Mr. Madigan, the Iowa assistant attorney general.
Bank of America, the country’s largest lender, announced it was unfreezing foreclosures in the 23 states less than three weeks after it froze them. A process that many expected to take months was completed in days.
In its statement, the bank said that it had “reviewed our process” and found it satisfactory enough to file new affidavits in 102,000 pending cases starting next week. Documents in those cases were presumably improperly done before. A bank spokesman declined Tuesday to explain more fully the lender’s review process.
GMAC Mortgage, another large lender that had announced a freeze, also said it was refiling cases. “We have more training, more people, a more robust policy now,” Gina Proia, a spokeswoman said.
Four years ago, in a case that foreshadowed the current uproar, a Florida court censured GMAC for false testimony. An employee said in a deposition that she had neither reviewed the record of the mortgage in the case nor known how it was created, which contradicted her sworn affidavit.
GMAC promised at the time to clean up its procedures, reminding employees not to sign court pleadings unless they had independently reviewed and checked the facts. Despite GMAC and Bank of America’s proclamations that everything is now being done by the book, some legal and financial experts are disbelieving.
“The banks have dragged their feet and taken forever to do loan modifications, yet within less than two weeks they have managed to review hundreds of thousands of foreclosure cases,” said Adam J. Levitin, an associate professor of law at the Georgetown University Law Center. “It is simply not credible.” Mr. Levitin is convinced that the lenders will suffer for what he sees as their attempt to put themselves above the rules. “The genie is out of the bottle,” he said.
While most cases in Florida are still unopposed, the judges there are already starting to see an increase in defendants with counsel, even if they are simply acting as their own lawyer. “The largest impact has been from the publicity,” said Lee E. Haworth, chief justice of the 12th Judicial Circuit in Sarasota. ”A lot more borrowers are coming forward to oppose summary judgment. More hearings are going to be contested.”
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Posted on October 19th, 2010 by Mark Stopa
In the past few years, I’ve spoken to hundreds if not thousands of homeowners who were not behind in their mortgage payments but wanted a modification. When these homeowners inquired with their banks, you know what the banks told them:
“Stop paying. Only then will you be eligible for a loan modification.”
Guess what invariably happened next? The homeowners stopped paying, as instructed, but instead of giving them a loan modification, the banks gave these homeowners a foreclosure lawsuit.
As I see it, banks who did this should not be permitted to foreclose. In my view, this fact pattern gives rise to a legal defense called unclean hands. My argument, essentially, is this – the bank cannot come into a court of equity and seek foreclosure when the bank induced that homeowner to go into default.
Apparently, I’m not the only one who feels this way. The National Mortgage Complaint Center is seeking homeowners who fit this description. If this is what happened to you, call them. And call me, too. 888-450-1549. I strongly believe you should not be foreclosed if you were induced to go into default by your bank.
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Posted on October 18th, 2010 by Mark Stopa
In response to my post about the perverse judicial procedures in Lee County, a fellow foreclosure defense attorney commented about how the foreclosure mills have “fill-in” attorneys, who are not counsel of record, argue at hearings. This happens a lot in counties like Lee and Orange, where judges don’t allow phone appearances (and the foreclosure mills don’t have offices, so, instead of driving, they have local counsel from other firms “fill in”). I replied to the comment, but this issue is worth a separate blog.
I’ve had “fill-in” or “coverage” attorneys try to argue at my hearings. Respectfully, it shouldn’t happen. In fact, it’s never happened in a case where I’m counsel. Here’s why.
Florida Rule of Judicial Administration 2.505(e) lists the ways in which a lawyer can make an appearance in a case for a client. There are just three: (1) the attorney files the party’s first pleading; (2) the attorney stipulates to the substitution with opposing counsel, the client consents in writing, and the Court approves the stipulation via Order, or (3) the attorney files and serves a Notice of Appearance.
If you’re a lawyer, and want to argue at a hearing, you must do one of these three things. If you don’t, then guess what? You’re not counsel and you don’t get to talk/argue at a hearing! This may sound harsh or overly technical, but this is what the Second District ruled in Pasco County v. Quail Hollow Props., Inc., 693 So. 2d 82 (Fla. 2d DCA 1997). The court’s rationale in Quail Hollow was clear (and makes sense if you think about it):
“The court must be able to rely on representations of attorneys because such representations bind the client.”
If an attorney is “filling in,” but is not counsel of record, then he cannot bind the client, so he shouldn’t be permitted to speak/argue at a hearing. It’s really that simple.
For what it’s worth, I’ve made this argument many times and, up until this point, I’ve always prevailed. If you haven’t made the argument before, it may feel awkward (to try to prevent a fellow attorney from arguing at a hearing), but you can easily flip it around and make the “fill-in” attorney feel awkward. All you have to do is tell him to file a Notice of Appearance. For instance, after citing Rule 2.505 and Quail Hollow, I’d say something like this:
“Judge, I have no problem with this lawyer arguing at this hearing. All he has to do is file a Notice of Appearance. If he’s not willing to do that, then obviously he’s not counsel of record for the Plaintiff, and if he’s not counsel of record, then he shouldn’t be able to speak.”
Once you say this, you know what invariably happens? The lawyer declines to file a Notice of Appearance. At that point, you’re the only one at the hearing, so the Judge basically has two choices – let the hearing proceed without Plaintiff’s counsel or re-set the hearing.
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Posted on October 18th, 2010 by Mark Stopa
When B of A announced a self-imposed, temporary moratorium on foreclosures, I predicted (below) the moratorium would last “a few weeks,” followed by an announcement that everything was being done properly, and that B of A would attempt to return to “business as usual.”
Today, that’s just what happened, as B of A announced it has resumed foreclosures in all states that require judicial oversight, including Florida. (Notice, by the way, how the announcement about the halt in foreclosures was made after 5pm on a Friday but the resumption was made on a Monday? Don’t think for one second that’s a coincidence.)
Anyway, as I’ve been saying for quite some time, it’s up to the government and/or the judiciary to do something to change the pervasive foreclosure fraud and outright refusal of banks to enter reasonable loan modifications with homeowners.
What say you, Judges?
With all that we now know, are you really going to let things return to “business as usual?”
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Posted on October 18th, 2010 by Mark Stopa
As a foreclosure defense attorney who has defended hundreds of cases throughout Florida over the past few years, I’ve seen an indescribable number of unusual procedures envoked by Florida courts to accelerate the adjudication of foreclosure cases. Senior Judges. Rocket dockets. Ex parte Orders on contested matters, granted without a hearing. Unilaterally scheduled hearings. Judges denying Motions to Dismiss without a hearing. Judges granting summary judgment without a hearing. Judges granting summary judgment before a hearing. These procedures may not seem all that unusual to non-lawyers or even some lawyers who aren’t litigators, but as a lawyer who has litigated cases his entire career, these procedures are, respectfully, offensive.
In recent days, I encountered two more “procedures” being employed on a widespread basis that really got my gander up.
LEE COUNTY: PERVERSE JUDICIAL PROCEDURE
Judge Carlin in Lee County (Fort Myers) routinely enters an Order Setting Case for Docket Sounding, sua sponte, right after a case is filed, requiring the personal attendance of all lawyers (on a date selected by the Judge) for a docket sounding, at which the Court “will” enter summary judgment or set a trial date. Such Orders include the following language:
THE COURT ON ITS OWN MOTION DETERMINES THIS CAUSE IS AT ISSUE AND READY TO BE SET FOR TRIAL. …
If this case is appropriate for a Motion for Summary Judgment, either party may Notice the Summary Judgment to be heard at the Docket Sounding. Otherwise, the day and time certain for the start of trial will be determined at docket sounding. …
All discovery shall be completed prior to the docket sounding. The conduct of discovery subsequent to the docket sounding shall be permitted only on the order of the Court for good cause shown and which will not delay the trial of this cause.
Respectfully, I find this Order so offensive that I felt compelled to file a Motion to Disqualify Judge. I encourage you to read the entire motion, but here’s the Cliff Notes’ version:
First off, this case is not “at issue,” as defined by Fla.R.Civ.P. 1.440, as Defendants’ Motion to Dismiss has yet to be heard and Defendants have yet to file an Answer. See Precision Constructors, Inc. v. Valtec Constr. Corp., 825 So. 2d 1062 (Fla. 3d DCA 2002); Bennett v. Continental Chemicals, Inc., 492 So. 2d 724 (Fla. 1st DCA 1986) (en banc). It is highly inappropriate for the Judge to predetermine that he “will” enter summary judgment or set a trial date when my clients take the position that the Complaint does not even state a cause of action. For instance, how does the Judge know that the Complaint won’t be dismissed altogether, as we request? By saying he “will” set a trial date or enter summary judgment, the Judge has, in my view, predetermined that he will not dismiss the case even though the Motion to Dismiss is outstanding. Similarly, the Judge has predetermined that he “will” set a trial date or grant summary judgment irrespective of what my clients have to say about the matter. Predetermining a legal ruling without letting the parties be heard is the epitome of unfairness and requires disqualification. See Marvin v. State, 804 So. 2d 360 (Fla. 4th DCA 2001); Barnett v. Barnett, 727 So. 2d 311 (Fla. 2d DCA 1999); Wargo v. Wargo, 669 So. 2d 1123 (Fla. 4th DCA 1996). That may sound harsh, but if the Judge were open-minded about granting the Motion to Dismiss, then he wouldn’t be setting a trial at a docket sounding on December 8, 2010.
There is a standard procedure for the setting of trial – motions to dismiss are adjudicated, an Answer is filed, all motions directed to the pleadings are disposed of, the case is “at issue,” and then trial is set. It disappoints me greatly that this Judge is so intent on “pushing through” foreclosure cases that he would require cases be set for trial at a time when it is clearly premature to do so.
Second, the Judge bent over backwards to provide a hearing date for a motion for summary judgment for Plaintiff. If Plaintiff wishes to prosecute its foreclosure lawsuit, that should be Plaintiff’s obligation – not the Judge’s. By putting his own desires to prosecute this case above all else, essentially injecting himself as a participant in the proceedings by causing the case to be prosecuted, the Judge has shown he is not neutral and detached.
Third, the Judge set the docket sounding sua sponte, without clearing the date with the undersigned, refuses to allow phone appearances, and threatens sanctions for non-attendance. This is highly irregular and grossly prejudicial, particularly since I’m an out-of-town attorney. It’s as if the Judge is trying to make it hard for attorneys to defend foreclosure cases. Respectfully, I should be able to take cases in Lee County without worrying that the Judge will sua sponte order me to attend a hearing, in person, without clearing the date with my calendar. Also, Fla.R.Jud.Admin. 2.530 requires that phone appearances be granted for hearings of 15 minutes or less absent “good cause.” At minimum, the Judge should permit me to argue the absence of good cause to preclude a phone appearance. (The Judge may argue the existence of an Administrative Order precluding phone appearances, but, respectfully, such an Order is trumped by Rule 2.530, as the Florida Supreme Court has the exclusive authority to create rules of practice and procedure in all courts.) (Worth noting – I prefer to appear for most hearings in person, but if I so choose, I should certainly have the option to appear by phone.)
Fourth, the Judge has set a hearing to adjudicate summary judgment motions even though Plaintiff has not even filed such a motion. It seems the Judge is suggesting to Plaitiff’s counsel to file such a motion in this case. Perhaps Plaintiff would not have done so. Perhaps Plaintiff does not believe this to be a case where summary judgment is appropriate. By suggesting otherwise, and encouraging Plaintiff to set a hearing on a yet-to-be filed summary judgment motion, the Judge has given “tips” or “suggestions” to Plaintiff which are legally impermissible and mandate disqualification. See Shore Mariner Condo. Ass’n, Inc. v. Antonious, 722 So. 2d 247 (Fla. 2d DCA 1998); Blackpool Associates, Ltd. v. SM-106, Ltd., 839 So. 2d 837 (Fla. 4th DCA 2003); Cammarata v. Jones, 763 So. 2d 552 (Fla. 4th DCA 2000).
Fifth, the Judge set a discovery cutoff of December 8, 2010, giving Defendants grossly inadequate time to conduct discovery. As a litigator, let me be eliminate any doubt – two months is a grossly inadequate period of time to conduct discovery. Typically, discovery lasts at least a year – in an extremely unusual situation, six months. By giving just two months for discovery, it’s as if the Judge is saying “this is just another foreclosure case – there’s nothing Defendants can say that will matter; there’s nothing they will find in discovery that will matter.” Respectfully, my clients are facing a foreclosure on their home. They deserve a fair chance to defend, just like any other party.
In sum, I don’t know that I’ve ever seen a standard procedure like that being employed in Lee County foreclosure cases. The Judge sua sponte sets a docket sounding in a case the Plaintiff was not prosecuting (at a time when the Motion to Dismiss was still outstanding), refuses to let out-of-town counsel appear by phone, gives two months to complete discovery, and announced summary judgment will be entered or trial set without giving Defendants a chance to be heard. Respectfully, I think it’s time that the Lee County judges set aside their agendas and preconceived notions about foreclosure cases and restore some semblance of normal procedure to these cases.
BREVARD COUNTY: PERVERSE JUDICIAL PROCEDURE
The case I’m about to write about started out like many others. My client was sued, I filed a Motion to Dismiss, and the Plaintiff made no attempt to prosecute the case in the ensuing months. Then, out of the blue, I received a Notice of Hearing from a Senior Judge, sua sponte, setting a hearing on the Motion to Dismiss less than 30 days out. In my eyes, everything about the Notice of Hearing was inappropriate. (Read it and you’ll see what I mean.) It was as if the Judge was saying “don’t bother attending the hearing – I’m going to deny the Motion to Dismiss.” I found the Notice of Hearing so offensive that I felt compelled to file this Motion to Disqualify Judge.
I don’t want anyone to think I like filing motions to disqualify judges. I don’t. But sometimes, I feel like I have no choice.
Here, for example, the Judge acted on his own to set a hearing in a case the Plaintiff was not prosecuting. Why? The Plaintiff had done nothing to advance this case towards judgment, choosing, for whatever reason, to keep the case dormant. Nonetheless, the Judge took it upon himself to set a hearing. Why? From the perspective of a defense attorney, this is grossly unfair. After all, my clients aren’t seeking any relief, so if the Judge is actively trying to prosecute the case, then it seems clear he’s aligned with the Plaintiff. It was as if the Judge injected his own interests into the case, giving them priority above all else.
Perhaps worse yet, the content of the Notice of Hearing made it clear the Judge had predetermined his ruling on the Motion to Dismiss. What I found most egregious, even moreso than the Judge basically instructing me to withdraw the Motion to Dismiss, was the Judge’s announced intention to consider facts outside the four corners of the Complaint (not just in this case, but, apparently, on a systematic basis). To illustrate, the Judge notes:
…the fact that an endorsement is not shown on the copy of the Note does not create a standing issue as the note copy is usually taken from the closing file before it is transferred to another lender, etc.
Respectfully, the Judge’s statement in this regard, in a Notice of Hearing, is way out of line. There is nothing in the Complaint that in any way supports this factual assertion (in this case or any other), and only the facts in the Complaint can be considered in a Motion to Dismiss. Given his experience as a judge, the Judge knows this very well, yet he’s obviously willing to disregard the law on a systematic basis so as to “push through” foreclosure cases. This may sound harsh, but if there is a legitimate reason why the Note attached to the Complaint does not contain the requisite indorsement, then Plaintiff should be required to plead that fact, with some explanation. Absent such an explanation, the absence of an indorsement means Plaintiff is not the “holder” as a matter of law.
Even if the Judge disagrees with this legal assertion, for him to assume the copy of the Note attached to the Complaint is from the closing file, based on his experience with other cases, shows he has prejudged this case. Here, for example, perhaps the note attached to the Complaint is a copy of the original, meaning the original lacks the requisite indorsement. That being the case, dismissal should be required, but the Judge has already predetermined otherwise, without reviewing the file and without giving the parties a chance to be heard.
I’m also taken aback at how the Judge gave advice to Plaintiff’s counsel via the Notice of Hearing. Essentially, the Judge told counsel “if Defendant argues for dismissal based on the lack of an indorsement on the note attached to the Complaint, then make sure you argue that the Note attached to the Complaint is not the original Note and was from the origination file and the original Note contains an indorsement.” It is axiomatic that “tips” of this type are not permitted. See Antonious, Blackpool, and Cammarata, supra.
Compounding these concerns, the Judge set the Motion to Dismiss for hearing sua sponte, without making any attempt to coordinate a hearing date with the undersigned, and requires me to appear in person. This is unduly prejudicial, particularly since: (i) the hearing was set just 30 days out; and (ii) I practice out of town. (Again, I don’t want to make it appear like I am adverse to attending hearings. My concern is that I should be given a chance to appear in person, especially when a judge takes it upon himself to set a hearing on his own, without clearing the date on my calendar.)
In support of his refusal to grant telephone appearances, the Judge notes “the telephone system will not accommodate the volume of cases scheduled.” Respectfully, this explanation is woefully inadequate in my book. Fla.R.Jud.Admin. 2.530 requires that phone appearances be permitted for hearings of 15 minutes or less absent “good cause.” Here, it seems the Judge believes “the volume of cases scheduled” constitutes good cause. However, that’s a grossly unfair assertion when the Judge is the one who scheduled this (unspecified) volume of cases, all at once. Clearly, the Judge should not be permitted to schedule numerous cases at once, sua sponte, via a form Notice of Hearing, and then refuse telephone appearances because he scheduled so many hearings. Moreover, the fact that the Judge scheduled so many hearings, all at once, shows that he does not intend to evaluate Defendants’ position on the merits but wants to deny numerous motions to dismiss, at all once, as if he is sitting in front of a conveyor belt at a factory. Respectfully, my clients deserve better.
Again, I don’t want anyone to think that I enjoy filing Motions to Disqualify the judges in my foreclosure cases. However, when I encounter actions that I perceive to be grossly unfair, reflecting some predisposition against my clients or foreclosure defense cases in general (and, of course, legally sufficient to require disqualification), I won’t hesitate to take all appropriate action. As we saw with Judge Blanc’s announcement to the press earlier today, if you respectfully advise these judges that their procedures are flawed, you never know when they may realize you’re right, change their conduct, and institute procedures that comport with basic notions of due process and fair play.
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Posted on October 18th, 2010 by Mark Stopa
I’ve been talking about the banks’ obligation to attach documents to the affidavits upon which they rely for summary judgments in foreclosure cases for many months. My blog entry titled “Willful Blindness by Judges,” below, explains this issue in detail. To recap, Fla.R.Civ.P. 1.510(e) plainly requires “Sworn or certified copies of all papers or parts thereof referred to in an affidavit shall be attached thereto or served therewith,” yet Florida judges have been systematically ignoring this principle of law in foreclosure cases.
Today, it seems that these cries for change may be making an impact where it matters most – the judiciary. Kimberly Miller of the Palm Beach Post reports that Chief Judge Blanc, who oversees Palm Beach County, agrees with the need to enforce this principle of law in foreclosure cases:
“In the past, the judges weren’t requiring the attachments, now we’ve got something in the record saying there may be a problem, so now they should attach the documents. Dealing with the volume we are dealing with, we want to make sure all of our i’s are dotted and t’s crossed.”
Is it a coincidence that this report came out just days after my blog about it? Maybe. Either way, it’s nice to see that Chief Judge Blanc now recognizes this well-established principle of law. That said, I must ask – what about the tens of thousands of foreclosure cases that were “pushed through” in Palm Beach County and other counties throughout Florida with total disregard for the bank’s obligation to attach documents to their summary judgment affidavit? And what about the other counties in Florida – are all judges going to follow this principle of law from this point forward?
At this point, it’s clear that judges can’t fix this error in cases where a Final Judgment of Foreclosure has already been entered. Basically, even though judges have committed legal error in tens of thousands (if not hundreds of thousands) of foreclosure cases throughout Florida, those rulings stand, absent a timely appeal.
I am hopeful, though, that all judges throughout Florida will now recognize this principle of law and force banks to comply with it in all foreclosure cases – even uncontested cases. Respectfully, the law is the law, and it shouldn’t have taken a national foreclosure epidemic for judges to announce, via the press, that they’d start enforcing the law in all foreclosure cases.
Finally, it’s worth noting that foreclosure defense attorneys such as myself have been arguing this issue in Florida courtrooms for many months. Now that these judges are openly agreeing with the argument, perhaps they’ll learn a valuable lesson. Judges, next time a foreclosure defense attorney is arguing something at a hearing during a “rocket docket,” give him/her a chance to be heard. Respectfully, we’ve been all over this issue with attaching documents to affidavits for many months, and it’s a shame that only now are judges starting to catch on.
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Posted on October 18th, 2010 by Mark Stopa
David Stern’s lawyer tried to explain away the eye-opening testimony of Tammie Lou Kapusta as that of a former, disgruntled employee. I wonder what he’d say now that two more individuals have testified similarly. If you haven’t seen the transcripts yet, check them out. Be forewarned – you’re going to read uncomfortable facts proving assignment fraud, notary fraud, forged signatures, ex parte Orders, prosecuting foreclosures knowing it was the wrong plaintiff, lying to Fannie and Freddie about the status of existing cases, etc., etc.
Kelly Scott – Stern Employee – Depo Transcript
Mary Cordova – G&Z Employee – Depo Transcript
Tammie Lou Kapusta – Stern Employee – Depo Transcript
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