Posts Tagged ‘foreclosure lawsuit’
Posted on December 6th, 2010 by Mark Stopa
Every time I think things can’t get more screwed up with how judges handle foreclosure lawsuits in Lee County, Florida, they do.
Today, I had the unfortunate displeasure to read an Order from a Lee County Judge that states, and I quote “Lee County is not requiring that Plaintiffs comply with Fla.R.Civ.P. 1.510(e).”
Respectfully, this is disgusting. It’s bad enough for the Lee County judges to intentionally and systematically disregard the law on a widespread basis, as I’ve reported on this blog on a number of occasions. It’s even worse to actually say, in a written Order, that they’ve decided that they don’t have to follow the law in foreclosure cases. The Order might as well say “Lee County Judges have decided the law doesn’t matter and banks can always foreclose when they file suit.”
If this is too hard to believe, read the Order – here
If this issue doesn’t make sense, let me explain.
When bank representatives who sign affidavits in support of a summary judgment lack personal knowledge of the content of those affidavits (as they invariably do), the law requires that any documents relied upon in the execution of that affidavit be attached to the affidavit. For instance, if the affiant reviewed a life of loan history to determine the amount owed, the life of loan history should be set forth in the affidavit. This requirement is codified (by the Florida Supreme Court) in Rule 1.510(e).
The robo-signer controversy became a national media story when a handful of foreclosure defense attorneys in Florida realized that the individuals signing these affidavits for the banks lacked personal knowledge of the content of these affidavits (and, in fact, basically had no clue what they were signing yet signed thousands of these affidavits every day, hence the term “robo-signer”), but the required documentation was not attached. Hence, a standard argument for homeowners’ attorneys is to argue that the affidavits cannot be used to support summary judgment because the required documents are not attached. Candidly, there are legions of controlling Florida cases which indicate this argument to be well-taken. This alone requires that summary judgment be denied.
Unfortunately, the Lee County judges have taken it upon themselves to ignore this rule of law (along with many others) so as to “push through” foreclosure cases faster. Essentially, this Order says “We don’t care what the law says – we’ve decided that the law does not apply in foreclosure cases.”
It’s past time that everyone in Lee County complain about these issues. I mean, when it gets to the point that judges blatantly disregard the law – so much so that they openly say as much in written orders – something must be done. Alert the press. Complain to the judges. Don’t let this procedure remain without a fight.
Mark Stopa
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Posted on November 21st, 2010 by Mark Stopa
Thank you to everyone who attended yesterday’s foreclosure seminar at the Tampa Convention Center. To Matt Weidner, thank you for your terrific presentation and leadership in the foreclosure fight. To my terrific staff, thanks for giving up your Saturday; it couldn’t have happened without you. And to the hundreds of Florida homeowners who attended, thank you for your interest, your passion, and your willingness to come out from the shadows and fight back.
Homeowners, please keep spreading the word about the issues we discussed. We’ve come a long way in the foreclosure fight, but most Floridians still don’t realize the rights they enjoy as homeowners or how the foreclosure process actually works. Worse yet, many are still hiding in shame. We just can’t let that happen any longer – if anything, the banks are the ones who should be hiding in shame. Please help educate your friends and neighbors – not just about the process, but to hold their heads high as they fight for their rights.
If you couldn’t attend, Stopa Law Firm will be sponsoring a similar seminar in the future, so be on the lookout for that. And thanks again to all involved.
Mark Stopa
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Posted on November 10th, 2010 by Mark Stopa
Earlier today, Florida’s Fourth District Court of Appeal issued a published decision in a foreclosure case. (Clarification: I was not involved in this case.) It seems unfavorable to homeowners and, candidly, it is. As a foreclosure defense and appellate attorney, I’m frustrated when I read decisions like this, particularly since it’s clear to me that this appeal never should have been filed. Remember, folks – bad facts create bad law, so if you have bad facts, don’t appeal! I don’t want to sound critical, so let’s put it this way – here are the lessons that all foreclosure defense attorneys should take from this ruling.
First, a brief synopsis of the facts. Homeowner is foreclosed. Homeowner moves to vacate the foreclosure judgment based on fraud. In support, homeowner alleges the bank representative who signed the affidavit supporting summary judgment lacked personal knowledge of the facts set forth in the affidavit. The trial court denied the motion, and the Fourth District affirmed, agreeing with the lower court, essentially for two reasons: (1) just because the bank representative lacked personal knowledge of the contents of the affidavit did not mean the facts in the affidavit were untrue, rendering the homeowner unable to satisfy the “fraud” requirement for a 1.540 motion; and (2) the homeowner waived (or, using the appellate term, did not “preserve”) the objection that the information in the affidavit did not satisfy the business records exception to the hearsay rule because the homeowner did not assert that objection before the foreclosure judgment was entered.
The lessons to be taken from this:
1. It’s much easier to defend a foreclosure lawsuit before the foreclosure judgment is entered rather than afterwards. Here, for instance, the homeowner had to prove “fraud” post-foreclosure, and the appellate court ruled the homeowner failed to meet this burden. Had this same argument about the bank representative’s lack of personal knowledge been made prior to the foreclosure, the homeowner would not have had to prove fraud, but could have simply argued that the affidavit was inadmissible. Under well-established law, such an argument would have been well-taken, summary judgment would have been denied, and the foreclosure judgment would not have been entered.
2. You cannot expect an appellate court to reverse a lower court ruling based on an argument that you did not make in the lower court. There is a long line of cases that stand for this proposition and the rationale is clear. Generally speaking, no party in a lawsuit can go to an appellate court, and argue “the lower court got it wrong,” when that party did not make that argument to the lower court. Look at it this way – the purpose of an appeal is to correct an erroneous legal ruling of a lower court. If you don’t make an argument in the lower court, then, generally, the lower court can’t possibly get it wrong, as the judge can’t rule on an issue that you didn’t raise. This is called failing to preserve error, or preservation, and it’s one of the most common ways that appellate judges deny appeals with otherwise well-taken arguments.
In this case, for instance, the homeowner never argued, prior to the foreclosure judgment being entered, that the affidavit in support of summary judgment could not be admitted under the business records exception to the hearsay rule. As such, even though such an argument is well-taken, the appellate court is not going to reverse on this basis. Think of it this way – the appellate court isn’t going to tell the lower court judge “you got it wrong, judge, and we’re reversing the foreclosure judgment” when the party bringing that appeal did not even assert that argument to the judge. The judge can’t get it wrong when he/she was never asked to rule on that issue.
3. Undoubtedly, the biggest lesson of all – retain a competent foreclosure defense attorney from the outset. Not to toot my own horn, but Stopa Law Firm routinely files written objections to the admissibility of affidavits upon which banks rely in support of summary judgment. This way, there is never a question whether my clients have preserved arguments pertaining to the admissibility of these affidavits. As a result, when I attend a hearing on a motion for summary judgment, the judge will know that if he/she grants summary judgment, I’m going to have a good argument to reverse that ruling on appeal, and the error will have been preserved. That may sound harsh, but the threat of reversal is one of the best ways to get judges to rule in a homeowner’s favor and deny summary judgment. At the end of the day, that’s all we have as foreclosure defense attorneys – we constantly present case law to the judge and do everything we can to get the judge to follow the law in each case.
Mark Stopa
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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 September 25th, 2010 by Mark Stopa
Form 1.944, Fla.R.Civ.P., contains the elements that the Florida Supreme Court requires in a mortgage foreclosure complaint. The elements are very simple, yet they’re often not pled properly, creating bona-fide arguments for dismissal. I’ve argued this successfully on numerous occasions in recent weeks, including this morning before Judge Karla F. Wright in Bartow, so I think it’s time I share.
Fla.R.Civ.P. Form 1.944 requires the plaintiff to allege it “owns and holds the Note and Mortgage.” Instead of including this allegation in foreclosure complaints, I regularly see plaintiffs (especially in cases handled by Florida Default Law Group) allege something like this: “Plaintiff is the holder of the Note and/or is entitled to enforce the Note and Mortgage.” I haven’t kept track, but I suspect I’ve read more foreclosure complaints with that language than I do with the “owns and holds” language required by the Florida Supreme Court.
This may sound like a minor difference. It’s not. By alleging it is the “holder and/or is entitled to enforce the Note,” the plaintiff is making a much, much broader allegation than the Florida Supreme Court permits. The key is in the definition of the term “entitled to enforce.”
Florida Statute 673.3011 sets forth the different ways a plaintiff can be “entitled to enforce” a Note. As the statute reflects, the plaintiff can be (1) the “holder” of the Note; (2) a nonholder in possession of the Note who has the rights of a holder, or (3) a person entitled to enforce the Note pursuant to Fla. Stat. 673.3091 or 673.4181(4).
Hence, when a plaintiff alleges it is the “holder and/or entitled to enforce the Note” (instead of alleging it “owns and holds” the Note), this begs the question – is the Plaintiff the holder? A nonholder in possession with the rights of the holder? Entitled to enforce pursuant to Fla. Stat. 673.3091? Entitled to enforce pursuant to Fla. Stat. 673.4181(4)? The way many plaintiffs are pleading it, the Complaint isn’t clear, so a Defendant cannot tell. (For that matter, the Court can’t tell, either.) In my view, that’s not just a technical oversight – it’s unduly prejudicial to the Defendant. And that’s precisely what I tell judges when I argue it.
“Judge, if you don’t dismiss the Complaint, and force the Plaintiff to allege the basis in which it is entitled to enforce the Note, the grounds for its standing will become a moving target as this case proceeds forward. I’ve seen it happen before. We prove the Plaintiff is not the holder, so the Plaintiff tries to say it’s a nonholder. My client shouldn’t be made to guess the grounds for the plaintiff’s standing to sue. As this case goes forward towards trial, there shouldn’t be any ambiguity if the Plaintiff alleges itself to be the holder, a nonholder in possession with the rights of the holder, or something else. Avoiding this uncertainty is why the Florida Supreme Court created Form 1.944. ”
Like anything else in foreclosure defense, this argument isn’t always going to work. That said, many judges have agreed with it (appropriately so, in my view) in recent weeks. As I see it, this is a perfectly legitimate basis in which to seek dismissal of a foreclosure complaint.
(As an aside, the reason the foreclosure mills plead it this way is obvious to me. They don’t want to take the time to figure out if the plaintiff is the holder, a nonholder in possession with the rights of a holder, or something else, so they bring this broad allegation of “entitled to enforce,” copying that onto every foreclosure complaint. Essentially, they’re admitting “We aren’t sure of the basis of our standing to foreclose, so we’re going to allege it as broadly as possible and figure it out later.” Consider this yet another example of sloppiness by the foreclosure mills.)
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Posted on August 20th, 2010 by Mark Stopa
Yesterday, I had an experience in court that has absolutely rocked my world, causing me to wonder:
When do judges decide who wins a foreclosure case?
Do they evaluate each case on the merits? Or do judges see “foreclosure case” and automatically decide, in their minds, that the bank is going to win (but refrain from announcing such until entry of final judgment)? In other words, is the outcome of these cases predetermined by some judges? As a zealous advocate for homeowners, I’d certainly like to think not – particularly in cases where judges see my name. After all, I’ve been in courtrooms throughout Florida for a long time now, fighting to help homeowners avoid foreclosure, and I’d like to think I’ve developed a good reputation as an aggressive foreclosure defense attorney.
My experience yesterday, though, as outlined in this Motion to DQ Judge, makes me wonder, not about myself, but about the thousands of cases in Florida where homeowners don’t have an attorney. I strongly encourage you to read the entire Motion to DQ Judge, as it’s a matter of public record, but here’s the cliff notes version.
On August 19, 2010 at 9:30, a summary judgment hearing was set on a mass-motion calendar. My clients were pro se until just a few days prior, so the documents I filed in opposition to summary judgment had not yet made it into the Court file yet. As such, the Judge thought my clients were pro se. At or before 8:15 a.m. on August 19, 2010, the Judge entered conformed copies of a Final Judgment of foreclosure even though the summary judgment hearing was not scheduled until 9:30 a.m. that day. That’s worth repeating:
The judge entered a Final Judgment of foreclosure more than an hour BEFORE the scheduled hearing.
Sounds impossible to believe, but it’s true. I learned about this, in fact, only by happenstance – my associate went to the courthouse to review the court file before the hearing, and, upon review of the court file, saw conformed copies of the Final Judgment in the file. The hearing was not set to begin for more than an hour, yet the Judge had already made copies of the executed Final Judgment, to be mailed to all parties.
If that sounds too hard to believe, click here – you’ll see the judge’s stamp on a Final Judgment of foreclosure, dated August 19, 2010. The pictures aren’t great (as they were taken by my associate via his cellphone at 8:15 a.m.), but they clearly show the judge’s stamp on a Final Judgment of foreclosure on August 19, 2010, before the summary judgment hearing had begun.
At 9:30, when the hearing began, I voiced my concern about this to the Judge. She was obviously caught off guard, but it quickly became apparent to me that her “procedure” is to make conformed copies of the Final Judgment, to be mailed to the parties, prior to the hearing (and to send out those copies to all parties immediately upon conclusion of the hearing). Essentially, she’s already made up her mind before the hearing, is holding the gavel in the air, and is ready to throw it down as soon as the hearing starts.
In my view, the obvious problem here is that the Judge is pre-judging the outcome of the case even before she’s heard what the homeowner has to say. Apparently, she’s unwilling to wait to see what happens at the hearing – she’s so convinced the bank is going to win, she’s made copies of the Final Judgment and envelopes to mail the judgment to the parties. Essentially, the axe is in the air and she’s ready to drop it as soon as the hearing begins.
I’ll let you draw your own conclusions about this. I’ve set forth mine in the Motion to DQ Judge. Suffice it to say I’m very troubled. What’s really scary is that, prior to this hearing, I had thought this Judge was one of the more friendly judges as far as foreclosure defense goes, which begs the question – if a friendly judge is doing this, what are the other judges doing?
If there are any judges reading this, particularly in Florida, then let me say this. I know the volume of cases with which you’re dealing is frustrating. But you owe it to the people whose homes you are foreclosing upon to give them all a fair chance, whether they’re pro se, represented by Stopa Law Firm, or represented by some other lawyer. Everyone is entitled to a neutral and detached judge. Respectfully, if you’re making conformed copies of a Final Judgment before a hearing even begins, that’s just not fair.
Mark Stopa
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Posted on July 15th, 2010 by Mark Stopa
As a foreclosure defense attorney for hundreds of homeowners throughout Florida, we at Stopa Law Firm see fraud committed by banks in foreclosure lawsuits on a daily basis. Let me say that again –
Every day, throughout Florida, banks commit fraud against unsuspecting homeowners
I know that’s hard for some people to believe. Candidly, before I started handling these cases, it would have been hard for me to believe, too. In a way, I feel like Jose Canseco, when he first made those steroid allegations (against prominent baseball players) – he knew what he was saying was true, but it took a while for everyone to believe him. So if you’re a skeptic, I’m going to do everything I can to show you how things work on the front lines of foreclosure defense in Florida.
Anyway, one of the frauds that I see banks commit on a daily basis is when they tell homeowners – “Don’t worry about that foreclosure suit we just filed; we are evaluating your loan modification.”
If you’ve been sued for foreclosure, and the bank is telling you not to worry about the lawsuit, DON’T BELIEVE IT. It’s not true. At worst, it’s a lie, and at best, it’s a low-level employee of the bank who is woefully uninformed. Either way, it’s not true. If you’ve been sued for foreclosure, and were served with a Summons and Complaint, you have 20 days after service in which to file a written response to the Complaint. Nothing the bank tells you on the phone changes that. The fact that you’re in negotiations with the bank for a loan modification doesn’t change that, either. If you’ve been sued, you must respond to the lawsuit or you risk losing your home to foreclosure (long before any decision about a loan modification).
Time and time again, I’ve seen homeowners fall into this trap. If I’ve seen it once, I’ve seen it 100 times. Homeowners don’t respond to the lawsuit, thinking a loan modification is coming, but then they lose the lawsuit, and get foreclosed, before any decision about a modification is ever made … then they’re left wondering “what happened?” What’s particularly egregious about these situations is that banks aren’t giving modifications anyway, especially when they believe they can foreclose easily – so homeowners are choosing not to respond to a lawsuit because they’re waiting for something that’s never going to happen. It’s like getting fired from a job and choosing not to look for a new job because you’re planning on winning the lottery – or banking on Santa Claus bringing you a bag of cash. Loan modifications aren’t happening – don’t ignore your lawsuit because you’re waiting for one. If your bank tells you otherwise, don’t believe it. Don’t be the next victim of the bank’s fraud. Remember:
Your bank is suing you; you can’t trust them.
You’d think, when banks actively mislead homeowners like this, that the homeowner would get to defend the foreclosure suit. But the law isn’t that simple. If the bank has already won the case, and the homeowner chose not to defend – even if it’s because the homeowner believed he/she did not need to, or even if the bank lied – the homeowner has to file a motion to vacate the final judgment, then convince the judge to grant it. From a lawyer’s perspective, I assure you – this is a far, far worse situation to be in than to be defending a foreclosure lawsuit from the outset. Sure, you could win that motion, and get to defend the case, but instead of starting out on a level playing field, you’re coming into the game in the fourth quarter and your team is losing by two touchdowns. And it will probably cost you more in fees than it would have had you retained counsel from the beginning. Don’t fall into this trap –
fight your foreclosure case from the start!
What’s the moral here? I’d say there are two – protect your rights, and don’t believe what the banks are telling you, especially if they’ve sued you.
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