Archive for October, 2010

Wall Street Journal – the impact of foreclosure moratoriums

The Wall Street Journal called me last week, trying to gauge the uncertainty homeowners feel given the “moratoriums” in place by many banks.  I’m quoted in the article as telling clients there’s “some uncertainty about the impact,” and that’s true.  Foreclosure defense attorneys and homeowners alike really have no way to know for sure how long the moratorium(s) will last, what these banks are going to do next, or how the judiciary is going to respond to ever-increasing proof of foreclosure fraud.  This picture encapsulates the uncertainty pretty well:

That said, I agree with the overall tone of the article – these temporary moratoriums won’t have much impact, especially in the long-term.  Sure, a foreclosure sale will be cancelled here and there.  The problem, though, is that when nobody is policing the banks, there’s only so much they’ll do to police themselves.  As I’ve been saying for a long time, meaningful change will require action by the government and/or the judiciary.

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This cartoon sums things up nicely.

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Foreclosure mills emphasize speed over accuracy – the impact on homeowners

I’ve read lots of good articles about the foreclosure crisis, but this one really caught my attention.  I totally agree with one point in particular:

The main problem … was that banks were not paying lawyers and the other workers by the day or by the hour, but by the case.  Thus, the way to make money was not to do a good job, but simply to get the job done.  … One instance of unusual business was David J. Stern’s law firm in Florida. Instead of charging by the hour, 12 people took care of 12,000 cases for $1,300 per case. The one law firm alone took care of more than 70,000 cases in 2009, a large portion of the two million total cases. Much like many other firms, Stern’s had no organization and was essentially a factory line to get as many cases done as possible daily.”

I’ve seen this phenomenon at play in my foreclosure defense practice on a daily basis, and I assure you – this is a bigger deal than people realize.  After all, when you’re paid a flat amount per case, as the foreclosure mills are, you have a huge incentive to compromise accuracy for the sake of speed.  I’m not saying that’s right – if you’ve read this blog, you know I think it’s wrong – I’m saying I recognize the financial incentives for the foreclosure mills.  At $1,300 per case, speed matters; accuracy doesn’t.  As I see it, this is a huge reason for the foreclosure fraud that’s permeated our courts.  


If you’re a prospective homeowner and think the fee structure of the banks’ lawyers doesn’t impact you, then, respectfully, you’re mistaken.  Yes, it matters in the sense that it’s more likely there will be mistakes on your file, but there’s more to it than that.  Think about it.  If you have a foreclosure defense attorney such as myself defend a lawsuit, and the bank’s lawyers are getting paid a flat fee (the same fee they get if a case is uncontested), do you think those lawyers are going to be excited about getting into a big legal battle with me over your case?  Or do you think they’re more inclined to set your file aside and work on an uncontested case?  In my eyes, the answer is clear – if you hire an attorney to defend your case, and that attorney has a reputation for fighting vigorously for homeowners, the bank’s lawyers are more likely to set your file aside and pick up a different file.  After all, why spend hours of work for $1,300 when the foreclosure mills can “push through” an uncontested foreclosure with minimal or no opposition (then ask the bank for another file)?  As I see it, this dynamic is yet another compelling reason to retain a competent and well-respected foreclosure defense attorney.

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Strategic Default – the stigma is going away

According to a is recent study by the Chicago Tribune, half of all Americans deem it acceptable to stop paying a mortgage the homeowner can afford to pay, i.e. strategically default.  Clearly, the stigma with strategic foreclosure is going away.

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Florida – one state, two court systems

Today’s article in the Washington Post does a fantastic job of encapsulating the two vastly different ways that foreclosure cases are being handled in Florida courts.  In some circuits, like the Twelfth (Sarasota/Manatee) and Sixth (Pinellas/Pasco), most judges seem intent on ensuring fairness.  In others, though, like the Twentieth (Lee), Seventeenth (Broward), and Fifteenth (Palm Beach), the judges, well, as one foreclosure defense attorney quoted in the article put it – “they are the robo-signers!”  There are exceptions within each circuit (and I’ve seen some bad procedures in the “good” counties), but, generally speaking, the Washington Post is spot-on in its breakdown.  This disparate treatment of foreclosure cases is a trend that I’ve noticed for many months, so much so that it’s often hard for me to believe these counties are part of the same court system.  How can judges in the same state treat foreclosure cases so differently? 

I’ve already given several examples in this blog of what I perceive to be improper procedures utilized by judges, and I will be posting more such examples in the coming days.  As I continue on this process, I’d be remiss not to mention judges who are doing it correctly.  For instance, I’m pleased to read the quote from Pasco Judge Lynn Tepper, who says “I’m not there to grease it, to let anything slide.  We need to be making sure these are done right.” 

Think about that for a moment.  There’s nothing “over the top” about that statement.  This judge isn’t saying “I feel sympathy for homeowners – I want them to get to stay in their homes.”  She’s not saying “the banks are crooked and need to be punished.”  She’s saying:

“we need to [make] sure these [foreclosure cases] are done right.” 

That’s all that most homeowners and foreclosure defense attorneys are asking – do it right.  Isn’t that reasonable?  Why am I not reading quotes like that from every judge?  All too often, the judges are saying, essentially, ”you can’t expect me to review the court file before I finalize a foreclosure.”  I wish such judges realized, when they say such things, they’re encouraging the foreclosure mills to perpetuate the same abuses that got us into this mess.  After all, do you think the mills are going to take the time to do cases the right way if judges don’t make them (and don’t even review the files)?

I sincerely hope the Judges in Lee, Palm Beach, Broward, Hillsborough, and other such counties take a hard look at how things are being done in the Twelfth and Sixth Circuits.  There’s a right way and a wrong way, and spending “a few seconds” per file is wrong.

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Wrongful Foreclosure – are you a victim?

I received a call today from a prospective client who read this article on Yahoo! Finance.  He lost his home to foreclosure in 2008 even though BofA admitted, in writing, both before the foreclosure and after, that the foreclosure was wrongful and that his home would be returned (which never happened).  Additionally, he was never served with a Summons and Complaint, so service upon him was improper.  Unfortunately, he didn’t know how to exercise his rights until he read the article. 

Anyway, this got me thinking … there must be thousands of Floridians who have been foreclosed upon wrongfully but don’t know what to do about it.  If you think you’re in that boat, please read on. 

First off, a caveat.  The circumstances in which a foreclosure judgment can be vacated in Florida are limited.  If you defended your case (either with an attorney or on your own) and lost, it’s quite possible there is nothing that Stopa Law Firm – or anyone else – can do anything about it.  That said, I’m interested in speaking with you, even if you’ve already lost your home to foreclosure, if you fit one or more of the following criteria:

1)  You lost your home to foreclosure but were never served by a process server or sheriff and never defended the case (either on your own or with an attorney).  I’m particularly interested in homeowners who were served by publication.

2)  Your bank assured you that your foreclosure case was “on hold” – or there would be no foreclosure case at all – (perhaps because you were in the middle of a loan modification or short sale agreement), yet the bank obtained a foreclosure anyway.  If you have documentation confirming the case was “on hold,” that’s even better (and though that sounds impossible to believe, I have cases fitting that description).  

3) You never received copies of any court filings in your foreclosure case, particularly the notice of the hearing at which a Final Judgment of Foreclosure was entered and/or the Final Judgment itself.

4)  The affidavit filed by the bank in support of summary judgment was signed by one of the “robo-signers” who has been in the news in recent weeks, e.g. Jeffrey Stephan. 

It’s important to me that I not get anyone’s hopes up unjustifiably.  Hence, I need to say – even if you fit these criteria, that does not necessarily mean you have a case.  In other words, I can’t possibly give legal advice without knowing the specifics of your case.  That said, if you meet one or more of the above criteria, please feel free to give us a call for a free consultation.  888-450-1549.  You may have a claim for wrongful foreclosure and may even be able to inhabit – and own – your home again.

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Willful blindness by judges

It’s a bit awkward to openly criticize judges’ handling of foreclosure cases, especially since I appear before these judges on a regular basis.  That said, unless someone is willing to tell these judges, respectfully but firmly, their decisions are wrong (with an intelligent explanation why), meaningful change in foreclosure cases is just a pipe dream.

For instance, I’ve been quite perturbed by this recent quote from W. Douglas Baird, a judge in Clearwater:

“We’re processing thousands of cases where no one is really contesting them, and in those instances, something like that just would not be brought to our attention.  It’s not a situation where the courts have the ability to go through every document that’s filed and challenge and question those documents.”

I’ve been before you enough, Judge, that you know I respect you.  That said, on this issue, you are mistaken.  Even in a case that is uncontested, it is the judge’s obligation to ensure that the Plaintiff met its burden of proof.  To illustrate, let’s remove ourselves from the foreclosure arena for a moment.  Suppose you’re presiding over a trial in a negligence action.  Suppose the Defendant, for whatever reason, does not attend trial, via counsel or otherwise, and puts up no opposition.  Are you going to sign a Final Judgment without making the Plaintiff put on evidence?  Of course not (or, at least I’d hope not).  The Plaintiff’s obligation to prove its case is not eliminated simply because the Defendant is not present.  Now suppose the Plaintiff puts on evidence of duty and breach but no evidence of damages, then rests its case.  Are you going to sign a Final Judgment for $100,000 in damages merely because Plaintiff’s counsel asks for it in closing?  Again, of course not.  If there is no evidence of $100,000 in damages, you can’t award that relief – even if the relief sought is uncontested.  Respectfully, these principles are not reasonably in dispute. 

Now let’s evaluate this in the foreclosure context.  Suppose you’re at a hearing on a Motion for Summary Judgment.   The Defendant has been defaulted, did not try to defend the case, and is not present at the hearing.  Judge, you’d have the public believe you essentially have no obligation to review the file before signing a Final Judgment of Foreclosure.  I’m sorry, Judge, but you’re mistaken.  It’s still your obligation, even in an uncontested case, to make sure the Plaintiff has met its burden of proof.  The volume of cases before you does not change the Plaintiff’s burden.

Now – does anyone expect you to review the file as closely as you would if the case is contested?  Of course not.  But it’s still your job, as presiding judge, to ensure the Plaintiff has done what needs to be done for summary judgment to be entered. 

In my view, the most obvious shortcoming in foreclosure cases – even those that are uncontested – is with respect to the affidavits the foreclosure mills use in support of summary judgment.  Fla.R.Civ.P. 1.510 clearly provides:

Sworn or certified copies of all papers or parts thereof referred to in an affidavit shall be attached thereto or served therewith.

I don’t know that I have ever seen a plaintiff comply with this rule in a single foreclosure case, yet judges such as yourself repeatedly enter summary judgment anyway.  Why?  The rule is clear – when the affiant references documents in an affidavit, those papers must be attached.  In foreclosure cases, the affiant always references documents (because the affiant never has personal knowledge of the amounts owed and has to rely on a life of loan history), yet these documents are never attached.  This is a fatal flaw under the plain language of the rule.  In fact, there are many appellate court decisions that reverse summary judgment on these facts.  (If you disagree, Judge, then please talk to your colleague, Judge Rondolino.  He routinely cites these cases at hearings.) 

Judge, I don’t expect you to pore over every page in the court file before entering summary judgment in an uncontested case.  But it takes two seconds to look at the Plaintiff’s Affidavit in Support of Summary Judgment and see if any documents are attached.  Heck, that’s something an intern or judicial assistant could do.  If no documents are attached, and the affidavit references such documents (as they invariably all do), then summary judgment should not be entered, even in an uncontested case. 

Despite all of this, you told the media “[w]e’re processing thousands of cases where no one is really contesting them, and in those instances, something like that just would not be brought to our attention.  It’s not a situation where the courts have the ability to go through every document that’s filed and challenge and question those documents.”

I respectfully but firmly disagree, Judge.  You don’t have to look at “every document that’s filed” to realize summary judgment is improper.  All you had to do was look at the only document the Plaintiffs rely upon – the affidavit.  If you had, and you followed the plain language of Rule 1.510, you’d deny summary judgment, even in uncontested cases.  To act otherwise – and to tell the media otherwise – is to close your eyes to the glaring problems in foreclosure cases and to enter final judgment anyway (what the law calls “willful blindness,” hence the title of this blog). 

The unfortunate irony here, Judge, is that the foreclosure crisis has spun out of control in recent weeks because of these affidavits.  Robo-signers executed these affidavits by the thousands without having personal knowledge of their contents, as required.  What’s most unfortunate about this, in my view, is this could have – and should have – been prevented.  After all, the very purpose of the rule requiring the documents be attached is to restore credibility to the filings when the affiant lacks personal knowledge.  Unfortunately, too many judges allowed foreclosures without this required credibility, and now the situation has blown up in our faces.  (A question worth pondering – would the fraudulent affidavits be as big of a controversy if the requisite documents were attached?)

I’m not saying this is your fault.  However, I firmly believe that if judges applied the law and stopped bending over backwards to help the foreclosure mills “push through” cases the problems we’re now facing would be far less pervasive.  Even if you disagree, it’s time for you to stop acting like you have no obligation to review files.  You do, even in uncontested cases.  Also, it’s also time for you to stop systematically denying motions to dimiss without a hearing.  This causes reasonable people, including myself (and, yes, even other judges with whom I’ve spoken) to question whether you are fair and impartial.  After all, when you’re openly telling the media that you don’t review files, it’s not unfair for me to wonder (as in this Motion to DQ Judge) whether you’re reviewing my clients’ files before you deny their motions to dismiss, via a form Order, without a hearing.

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Problems with foreclosure sales – the impact is pervasive

The Associated Press just wrote a terrific story that highlights the extent of the foreclosure problems we’re facing, but from a  little different perspective.   

So You Bought a Foreclosed Home – Now What?

If you’re facing foreclosure, you may think this issue doesn’t pertain to you, as you’re in no position to go out and buy a foreclosed property.  I totally disagree.  This issue impacts all of us.  As the article reflects, and as I’ve been saying for months:

purchasers of properties at a foreclosure sale have legitimate reasons to be concerned about the legitimacy of the title they’re obtaining. 

Everyone is realizing this, and it’s undoubtedly causing would-be purchasers not to go to courthouse auctions and buy.  Well, guess what?  If people aren’t buying properties at a foreclosure sale, what’s the point of the sale?  Essentially, there is none – and there’s the rub.  A sale is supposed to be more than just a rubber-stamp on a title to a bank.  A sale is supposed to be a way to gauge the fair market value of a property, so as to: (1) ensure the homeowner collects the surplus (the difference between the sale price and the amount of the final judgment; or (2) ensure the extent of the homeowner’s deficiency (the difference between the amount of the final judgment and the sale price) is minimized. 

The more I think about it, the more I’m convinced that all of these sales that are being conducted where there are title problems, the homeowners have legitimate grounds to object to the sale.  After all, their chances of having anyone bid fair market value for a home (and getting a surplus or minimizing their exposure for a deficiency judgment) are reduced when everyone questions the legitimacy of title acquired by a foreclosure sale.

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Foreclosure Fraud – in retrospect, it’s all so clear.

Several months ago, the Florida Bankers Association tried to convince our legislature to change Florida law by adopting a bill that would allow “non-judicial” foreclosures.  Remember that?  If not, here’s a refresher:

Bankers want non-judicial foreclosure

Even back then, I was very passionate about this issue, and, obviously, the bill failed.  As a result, lawyers such as myself have been able to defend homeowners facing foreclosure, forcing banks to prevail in a court of law before they can foreclose on a Floridian’s home.     

In recent days, mainstream America has begun to realize the pervasive nature of fraud in foreclosure cases.  Terms like ”robo-signer” and “foreclosure mill” have become household terms.  Hence, I thought it was worth taking a moment to reflect on the bankers’ failed attempts to create non-judicial foreclosures. 

Think about it for a moment. 

The banks wanted to foreclose without filing a lawsuit. 

They wanted it so badly they tried to get the legislature to change the law.

In retrospect, isn’t it clear what happened? 

The bankers knew they were committing fraud in foreclosure cases. 

To prevent their fraud from being uncovered, they tried to change the law so homeowners could not fight their foreclosures in court.

The bankers’ efforts didn’t work, and now their frauds have been exposed for everyone to see.   I don’t know about you, but this makes me wonder:

What else are the banks hiding?

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Real Change Requires Action from the Judiciary

As a foreclosure defense attorney for hundreds of homeowners throughout Florida, I’m constantly being asked:

“What do recent reports of a ‘foreclosure moratorium’ mean for my case?”

This is a perfectly legitimate question.  After all, with the flood of media attention on foreclosure fraud in recent days, and the ever-increasing number of banks halting their foreclosure proceedings, you’d think there would be a drastic impact on foreclosure cases.  Unfortunately, that’s simply not the case.  Generally speaking, it’s “business as usual” in Florida courtrooms. 

It seems hard to believe, I know.  Numerous high-ranking politicians, Congressman, and Attorney Generals (not to mention many of the best reporters in the country) have voiced their displeasure at the foreclosure fraud that is permeating our courtrooms.  Mainstream America is getting more and more angry at the manner in which banks have fraudulently “pushed through” foreclosure cases.  So what’s the problem? 

Amidst it all, the judiciary remains silent.

I’ve seen no changes in procedures, no announcements about taking a closer look at files, no elimination of “rocket dockets” – essentially, it’s business as usual for judges in Florida courtrooms.  Respectfully, I find this bitterly disappointing.  Some of the highest-ranking officials in the country are crying for change, banks have admitted pervasive fraud throughout our courts, yet our judges remain silent.  With all of the outcry from Congress, AGs, and the media:

The silence from the judiciary is deafening.


Here’s the sad reality, folks.  The media, Congressman, AGs, foreclosure defense attorneys – we can all agree that widespread change is necessary.  But until judges start to act differently in our courtrooms, nothing will change. 

You may think the banks have changed, as evidenced by their self-imposed moratoriums.  I couldn’t disagree more.  All the banks are doing is giving lip service to Congressman and title insurance companies.  Soon, they’ll all be saying “See?  We changed our procedures.  Everything is fine now.”   

Eliminating the foreclosure fraud that has become commonplace in our courts requires our judges to acknowledge the fraud and take appropriate action.  At this point, that hasn’t happened (certainly not on a widspread level).  That makes it all the more important that homeowners facing foreclosure retain a competent foreclosure defense attorney to defend their foreclosure case.  After all, from what I’ve seen so far, unless a lawyer is pointing out the flaws in the bank’s paperwork, nobody else involved in the case seems to care. 

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