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Posts Tagged ‘stay in my home’

Beware of title problems as foreclosure sales resume

Shannon Behnken of the Tampa Tribune covered the story about Fannie and Freddie resuming foreclosure sales the right way – by reminding everyone: (1) flooding the market with properties will further drive down real estate values; and (2) there are significant concerns about the validity of title being conveyed by properties in foreclosure sales.  

Here’s the article:

TAMPA – Mortgage giants Fannie Mae and Freddie Mac have lifted their ban on selling foreclosed homes, which could potentially double the number of these homes available for sale in the region.

That could be good news for home buyers who now have a lot more options. But flooding the fragile real estate market with distressed homes will further push down prices, some industry leaders say, and make it more difficult for traditional home sellers to compete.

Some question whether buyers will even want the foreclosed homes.  With allegations of foreclosure fraud still unsettled, can buyers trust they’re getting these homes free and clear? Do they have to worry that later – even years later – the previous homeowner could sue to get the house back?

“If you pick a random case, the chances are good that there won’t be a title problem,” said Mark Stopa, a Tampa foreclosure defense attorney. “But I wouldn’t be surprised if there are 50,000 cases in Florida where the previous homeowner would have a valid claim to void the foreclosure.”

Fannie and Freddie together hold about half of the foreclosed homes in Florida. Both of them halted sales of foreclosures in September, amid revelations that servicers were signing key foreclosure documents without reading them or verifying the information was true, as required by law.

There also are accusations that some firms hired to serve homeowners with lawsuits failed to notify them. Some homeowners say they thought they were working on loan modifications with their lenders only to find out later that the home was already sold in foreclosure.

In those cases, foreclosure defense attorneys say, judges could reverse foreclosures, causing title problems for buyers who purchased these homes.

Stopa is representing two former homeowners who are suing to get their homes back. In both cases, the plaintiffs say they weren’t given the chance to defend themselves in court.

In one case in Pinellas County, Michael D. Carlson has asked a judge to undo a foreclosure judgment against him from 2008. He says he didn’t know about the foreclosure proceeding on his Dunedin rental home until he went to check on the house and found the bank owned it.  Bank of America sold the home more than a year ago to another family, Stopa said, and they had every reason to believe they owned the foreclosed property free and clear.

The Carlson case represents “the perfect storm” and a home buyer’s worst nightmare, said, Peter Murphy, a consultant with Tampa-based Home Encounter, a real estate consulting firm and brokerage that tracks local real estate trends.  Buyers can never be sure there won’t be a challenge to the title, Murphy said, but title insurance should protect them from liability.  “Now that doesn’t mean they’ll get to keep the house if there’s a challenge to the title and, yeah, that’s unnerving,” he said.

Home sales in the Tampa-St. Petersburg-Clearwater area plummeted 25 percent in October, compared to a year ago. Real estate agents said the foreclosure moratorium was partly to blame because some pending deals fell through.

Putting the homes on the market all at once will cause home prices to drop, but Murphy said he thinks it’s better to get it over with now.  “If you wait, neighborhoods and homes will further deteriorate,” he said. “I don’t think homes will fly off the market, though, because people are fearful as to what will happen in the economy.”

Vernon Taylor, president of the Greater Tampa Association of Realtors, said he’d “be nervous to buy a foreclosed home.”  “Buyers don’t want to go through this hassle and find out later they have a problem,” he said.  Even so, Taylor agreed with Murphy that it’s best for the market to work through the inventory now, not later.

Mark Stopa

www.stayinmyhome.com

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The Ethics of Foreclosure Defense

I’ve been stewing about this article, wherein a retired judge questions whether foreclosure defense is “unethical,” for a few days now.  I think that assertion is totally absurd, but I see no need for a lengthy retort.  Instead, I’ll sum it up like this…

The justice system in the United States allows murderers to go free (in certain circumstances) when evidence is obtained pursuant to an illegal search.  The Defendant could have murdered someone – and everyone in the courtroom, including the judge, knows it – yet he walks free because of a violation of his constitutional rights. 

Let’s pause and think about the lawyer who files the motion to suppress the evidence based on the illegal search.  Is he acting unethically?  Personally, I could never file that motion.  However, I suspect every judge sitting on the bench would agree the answer is “no” – filing that motion is the defense lawyer’s job. 

With that in mind, how could anyone say that defending a foreclosure case is “unethical.”  I’m not putting murderers back on the streets – I’m helping homeowners who’ve been screwed over by the banking industry.  If vile criminals can exercise their right to counsel, then certainly homeowners can as well. 

I suppose I can see how the ”lack of standing” defense that foreclosure defense lawyers routinely assert in foreclosure lawsuits is similar to the motions to suppress filed by criminal lawyers, as one could argue that the defendant was “guilty” in both instances and “got away with it” on a technical violation.  The difference, though, is that if I win a foreclosure case based on a standing defense, a murderer doesn’t get to roam free – instead, a bank that’s screwed over homeowners for many years gets a dose of its own medicine.

Mark Stopa

www.stayinmyhome.com

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Phone Appearances in Foreclosure Cases

As a foreclosure defense attorney, I overwhelmingly prefer to attend hearings in person.  There’s something to be said for getting to look the judge in the eye as I make my argument, and I like being able to hand the judge copies of documents and case law when necessary.  Basically, all else equal, I prefer attending hearings in person rather than by phone.  

That said, there are instances when phone appearances make sense.  Some hearings, quite candidly, are less significant than others, and for such hearings, it often makes sense to appear by phone.  For one, it’s certainly more convenient.  More importantly, the unfortunate reality is that, as a foreclosure defense attorney, many of my clients don’t have a lot of money.  When clients are operating with a limited budget, I try to make that budget stretch as far as possible, and sometimes that means attending less significant hearings by phone. 

Fortunately, the Florida Supreme Court has envoked a Rule of Judicial Administration – Rule 2.530(c) – that facilitates phone appearances.  The rule says, essentially, that for all hearings of 15 minutes or less, the judge “shall” allow phone attendance “absent good cause.”  In my experience, requests to appear by phone are routinely granted in most Florida counties.  Essentially, there is almost never “good cause” to preclude a phone appearance, particularly if a hearing is brief and does not require the presentation of evidence. 

Unfortunately, a few counties in Florida, including Orange and Lee, have issued administrative orders that preclude phone appearances in all foreclosure cases.  Respectfully, I find this procedure out of line.  As I see it, the chief judges of Orange and Lee (and any other counties that have issued such an administrative order) cannot create a rule that contravenes Rule 2.530.  The Florida Supreme Court has created Rule 2.530 pursuant to its exclusive authority to envoke rules of practice and procedure in all Florida courts, an authority expressly granted to it by Article V, Section II of the Florida Constitution.  It’s not within the powers of a circuit court judge, even a chief judge, to apply a blanket rule that contravenes Rule 2.530. 

In a recent case, I decided to push this argument.  I filed a motion to attend a hearing by phone in Orange County, which, in light of the administrative order, the judge denied.  However, I then filed a motion to stay the hearing pending appellate review, which the judge granted.  I then filed this Petition for Writ of Certiorari or Mandamus, laying out the argument I just made, above, with some legal authority in support. 

You may not think this is earth-shattering news, but check out footnote three of the Petition.  Candidly, I’m concerned that some judges issue administrative orders precluding phone appearances with the specific intent of making it harder for foreclosure defense attorneys to represent clients, making it easier for them to “push through” foreclosure cases.  That sounds harsh, but some of these judges actually set hearings on their own, without clearing the date, and order me to personally attend, even knowing I’m out of town.  With all due respect, that’s wrong.  And respectfully, I’m not going to be bullied into foregoing legal representation of clients who need my help.  Hence, I consider this Petition for Writ of Certiorari or Mandamus my most recent attempt at curbing the perverse judicial procedures that permeate foreclosure cases in Florida.  For me, it’s not just an issue of appearing by phone – it’s forcing judges to follow the law and ensuring my ability to represent homeowners in all foreclosure cases.

Mark Stopa

www.stayinmyhome.com

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Living for Free – the Unintended Stimulus Package

One of the under-reported stories of Foreclosure-Gate is the ability of homeowners facing foreclosure to retain a foreclosure defense attorney, live in their homes without paying their mortgage, and either save their money or spend their money on something besides their mortgage.  In some states, such as Florida, the period of time where such homeowners can live for free could be many months or even years.  I’ve seen this phenomenon in place for quite some time, hence the name of this website – www.stayinmyhome.com

Reasonable people can argue about the morality of living in one’s home without paying.  That said, with each new story of foreclosure fraud by banks, there is less and less of a stigma for homeowners employing such an approach.  To illustrate, here is today’s article in the Wall Street Journal: 

The mortgage-foreclosure mess could prove expensive for banks and investors. But in some states, it will also prolong an unintended economic stimulus: free housing for millions of defaulters.

Across the U.S., banks are running into problems foreclosing on homes because of flaws in their paperwork. Their main transgression involves the use of so-called robo-signers, bank employees who signed foreclosure affidavits without properly checking the required loan documentation. Major loan servicers—including Bank of America Corp., J.P. Morgan Chase & Co. and Ally Financial Inc.’s GMAC Mortgage—have at least temporarily stopped some foreclosure sales as state attorneys general probe their practices and loan servicers check to make sure their papers are in order.

The problems will be expensive for banks, and for investors in mortgage bonds, in terms of added processing costs and lost interest income. But for the millions of U.S. homeowners who have stopped making mortgage payments or who are already in the foreclosure process, the upshot is that they’ll get to stay in their homes a bit longer. Given that they’re not paying rent, that time has value.

Defaulters living in their homes are getting a subsidy worth about $2.6 billion a month, according to a Wall Street Journal analysis based on mortgage data from LPS Applied Analytics and rent data from the Commerce Department. That’s 0.25% of U.S. personal income, roughly equivalent to the benefit top earners receive from Bush-era tax breaks.

The longer defaulters stay in their homes, the longer the stimulus lasts. The average borrower whose home is in the foreclosure process hasn’t made a payment in nearly 16 months, according to LPS.

In most places, the foreclosure delays are unlikely to amount to more than a couple more months of free rent, says Ivy Zelman, chief executive of housing-market consultancy Zelman & Associates. But she says it could be six or more months in states such as Florida and New York, where the legal bottlenecks are most severe.

“In places where people get an extra month or two, it probably doesn’t have much effect,” Ms. Zelman says. “But in states where it lasts longer, it’s probably stimulative.”

It’s hard to know how much of that money will find its way into the economy through consumer spending. Some defaulters sock away their mortgage payments, in hopes that they’ll strike a modification agreement with their bank and get current again. Others have lost their jobs and hence most of their income, though the free housing might allow them to make purchases they otherwise would have to forgo.

Yolande Walker, who lived for two and a half years in her three-bedroom home in the Las Vegas suburb of Henderson, Nev., after defaulting on her $1,700-a-month mortgage payments in 2008, said the free housing helped her make ends meet after she lost her job as a commercial-loan processor. “I was able to make my car payment and keep from losing my car, and I was able to pay the utilities,” said the 50-year-old Ms. Walker, who finally lost the home to foreclosure last month. She is still looking for work, and says her unemployment benefits are scheduled to run out in December.

Some homeowners who have defaulted on their mortgage payments are cashing in by renting out their homes. Joe Mayol, a real-estate agent in Palmdale, Calif., estimates that in his area about two-thirds of houses with defaulted mortgages are occupied, and half of those by renters. “People are getting money out of these houses,” he said.

Ms. Zelman says her research suggests defaulters do spend much of the money on consumer services and goods. “People are taking what they would have been spending on a mortgage and spending it somewhere else,” she says.

To be sure, while the free rent might help some people through periods of unemployment, it’s not particularly encouraging to people who keep paying their mortgages, and it’s not going to drive a recovery. It’s also painful for local governments and school districts, which typically can’t collect property taxes from defaulters. The foreclosure troubles can also add to uncertainty in the housing market and delay its return to healthy growth.

“I don’t think that’s the kind of consumer recovery we want, if the only reason they’re spending a bit more is that they’re not paying their other bills,” said Joseph Carson, director of global economic research at AllianceBernstein in New York.

Another question is what might happen in the housing market if banks caught up in robo-signing controversy can’t put as many foreclosed homes up for sale. By taking some supply off the market, it could help support prices at a time when demand has been exceedingly weak.

Given the number of foreclosed homes that have already piled up in their inventory, though, banks already have more ready-for-sale houses than the market can bear. As of September, banks owned nearly a million homes, up 21% from a year earlier. That alone would take 17 months to unload at the most recent pace of sales, and doesn’t include the 5.2 million homes still in the foreclosure process or those whose owners have already missed at least two payments.

Meanwhile, banks and investors suffer. It’s hard to estimate how much it will cost to fix the paperwork problems. But the interest they could earn on the money from selling all the homes they own, together with the ones attached to delinquent mortgages, amounts to more than $10 billion a month.

Still, at least some of the banks’ loss is the borrowers’ gain.

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Foreclosure Mills Pad the Bills

Have you ever wondered why banks sue “unknown tenant 1, unknown tenant 2, unknown spouse of John Doe, and unknown spouse of Jane Doe,” in addition to the homeowners?  Sometimes, these individuals are necessary in a foreclosure case.  For instance, if the property in foreclosure is a rental property, then the tenants must be sued and served with process.  

Often, though, as the Tampa Tribune explains, banks and their lawyers know there is no need to sue these parties, but they do so anyway – just to pad the bill.  And who receives that bill?  The homeowner, of course.  Incurring expenses that don’t need to be incurred just to pass on an expense to homeowners – ya gotta love the foreclosure mills.

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The right way for judges to clear foreclosure cases

With so many judges pushing foreclosure cases towards judgment at alarming rates, it’s refreshing to see judges in Manatee and Sarasota clearing their dockets in a way that the law allows, via dismissals for lack of prosecution.  According to the Bradenton Herald, Judge Paul E. Logan dismissed 357 cases that remained idle for more than a year, as permitted by Rule 1.420(e).  Granted, dismissing 357 cases is like scooping a bucket of water out of the ocean, but it’s a start. 

Judges, the next time you want to clear your dockets, I respectfully suggest that you dismiss cases for lack of prosecution.  And if you feel like the rule is too rigid, i.e. a lot of cases aren’t being prosecuted but can’t be dismissed under the language of the rule, get on the phone with the Florida Supreme Court and suggest a rule amendment.  Rule 1.420(e) has been changed a handful of times over the years, and another amendment seems appropriate. 

Yesterday I suggested an amendment to Fla.R.Civ.P. 1.420(e), making it easier to dismiss foreclosure cases for lack of prosecution.

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Judges Cannot Prosecute Foreclosure Cases; My Solution

Several days ago, I blogged about the flawed procedures being utilized in foreclosure cases in Brevard County, precipitating this Motion to Disqualify Judge.  Since filing that motion, I’ve continued to reflect on the issues addressed therein, and I remain comfortable with my position.  In my eyes, the issue boils down to one inescapable conclusion:

Judges cannot prosecute foreclosure cases!

Today, the Brevard judge agreed with my argument and issued this Order Granting Motion to Disqualify.  The Order is quite vanilla, but it contains a phrase that I find telling.  The judge notes that “from Defendant’s perspective,” the Motion to Disqualify is legally sufficient and requires disqualification.  The key phrase, of course, is ”the Defendant’s perspective.” 

From the Defendant’s perspective, when a judge takes it upon him or herself to set a hearing in a case that the Plaintiff has chosen, for whatever reason, to let stagnate, the judge is siding with the Plaintiff.  A judge may argue (and may truly believe), that all he/she is doing is advancing the case forward, without bias towards one party or the other with regard to the hearing being scheduled.  Particularly in foreclosure cases, though, it’s the mere advancement of the case, at the judge’s initiative, that reflects the bias.  After all, the Plaintiff is seeking relief in the case; the Defendant is not.  Hence, when the judge is advancing the case, sua sponte, the judge is necessarily helping one party to the detriment of the other. 

Let’s put it this way … If a case is languishing, whose job is it to advance the case forward, towards judgment?  The Plaintiff.  Undoubtedly, the Defendant has no obligation in this regard.  I’m not saying the Defendant can stall; I’m saying the Defendant has no obligation to accelerate the case if the Plaintiff lets it stagnate.   

Some people reading this may argue I’m a slimy foreclosure defense attorney who’s just trying to delay foreclosure lawsuits.  Not so.  My concern is ensuring the system is fair for my clients.  Lest you doubt that a judge setting a hearing on his/her own initiative is unfair, consider this:

I’ve represented Plaintiffs and Defendants in hundreds if not thousands of lawsuits throughout my career – all types of lawsuits, not just foreclosure cases.  Other than recently (in the context of foreclosure cases), I can’t ever recall a judge setting a hearing on his/her own.  It’s just not done.  For example, I’ve filed dozens of lawsuits for Plaintiffs against insurance companies, seeking monetary relief.  I think most of my litigation clients would tell you that I litigate those cases aggressively, but, on occasion, for one reason or another, some of those lawsuits have languished a bit.  When that happens, do you think there’s ever been a time when a judge took it upon him or herself to set a hearing?  Of course not.  Do you think the judge ever tells the insurance company or its lawyer that they need to accelerate the case?  Yeah, right.  Never happens.  As the Plaintiff’s lawyer, if I don’t set a hearing, the hearing never gets set, and the case stagnates.  That’s just how it works.  The insurance company has no obligation to advance the case forward (and risk entry of an adverse judgment sooner), nor would I expect them to.  My client wants affirmative relief through the court system; it’s my duty to move the case forward to obtain that relief. 

My point, essentially, is this – when this is how it works in litigation files, why should foreclosure cases be any different?  Because the homeowner (allegedly) has not paid?  Because the judge perceives the Plaintiff will win?  Because the Judge has a lot of cases on his/her docket and wants to remove the backlog?  Respectfully, that’s the rub.  If a judge is setting a hearing on his/her own initiative, for any of those reasons, it reflects a bias that should not be present among the judiciary.  Judges should treat my clients just like they treat insurance companies when I represent Plaintiffs – without any preconceived notions of who is going to win the case and without any agenda as to how quickly the case moves forward.

I can totally understand the judges’ desire to eliminate the high volume of cases with which they are dealing.  The answer, though, isn’t for judges to exceed their role as neutral arbiter and act as prosecutor.  The solution is to change to the rule on lack of prosecution. 

Fla.R.Civ.P. 1.420(e) is currently set up in such a way that it’s virtually impossible, as a practical matter, for a case to be dismissed for lack of prosecution.  For such a dismissal to be entered, (1) there can be no activity in the court file at all for 10 consecutive months; (2) the Plaintiff must be notified of the lack of record activity; (3) there must be no record activity in the ensuing 60 days; (4) an interested party must seek dismissal; and (5) there can be no “good cause” to prevent dismissal.  Under this standard, cases can languish forever.  I can file a Notice that I’m going on vacation for Christmas, and the 10-month clock starts all over again.  Respectfully,that’s crazy, particularly vis a vis foreclosure cases. 

If the judiciary wants cases to move quicker, it’s time for the Florida Supreme Court to implement an amendment to this rule.  How about something like … if six months have passed with no record activity in a foreclosure case, then, boom – automatic dismissal.  If that sounds too harsh, then give the Plaintiff a chance to prove good cause after six months.  The point isn’t how the rule is amended; the point is that some amendment is necessary to ensure that foreclosure cases progress at the pace the judiciary desires.  In other words, what I’m suggesting is this:

Judges, don’t prosecute foreclosure cases just because the bank has let those cases languish.  Instead, convince the Florida Supreme Court to amend Rule 1.420 so it’s not so impossible to dismiss a foreclosure lawsuit for lack of prosecution. 

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Aggressive Foreclosure Defense Can Prompt Changes in the Judiciary

One of my goals, both as a foreclosure defense attorney and the author of this blog, is to make everyone – the public, homeowners, and judges – aware of the many pitfalls with the way foreclosure cases are handled by our courts.  I realize not everyone agrees with my positions on all of these issues, and that’s okay.  I also realize I’m not well-liked in some circles for being so vocal in my views, and that’s okay, too.  My job isn’t to be well-liked – it’s to represent homeowners as well as I possibly can (consistent with the law and my ethical obligations).  Besides, meaningful change in how foreclosure lawsuits are handled is nothing but a pipe dream unless someone such as myself is willing to stand up and say “this is wrong.”  Not everyone will agree 100% of the time, but I stand no chance if I don’t try.

For example, a few weeks ago, I started receiving Orders from Honorable Douglas Baird in Clearwater which systematically denied my clients’ Motions to Dismiss, without a hearing.  I found this troubling, particularly since Judge Baird had not even placed me on notice that he might be ruling on such motions without a hearing.   Given my overwhelming belief that this disregarded the most basic notions of due process, I felt compelled to file a Motion to Disqualify the judge. 

As I’ve said before in this blog, I don’t want this to appear as if I disrespect Judge Baird.  I respect him plenty.  The issue is that I strongly disagree with him on these issues and, candidly, felt compelled to tell him so.  As I see it, if I can’t express respectful disagreement (especially on issues for which there is no clear “right” answer), what’s the point of being a lawyer? 

Anyway, Judge Baird granted the Motions to Disqualify, and in so doing, wrote me a letter.  The letter said, in essence, ”I figured foreclosure defense attorneys such as yourself realized that it was my procedure to deny motions to dismiss without a hearing, but since you didn’t realize that, I’m granting the Motions to Disqualify.” 

Judge Baird and I are never going to agree on some of these issues.  What I respect, though, is that even though he disagrees with me, Judge Baird realized how his procedure could be construed to others as unfair, particularly when I didn’t know about it beforehand.  In fact, since that happened, I have yet to receive an Order denying a Motion to Dismiss without a hearing from Judge Baird.  Is that a coincidence?  Maybe.  That said, I just received an Order (in a different case) from Judge Baird directing me to file a written memorandum to the bank’s response to my Motion to Dismiss within five days, after which he may rule on the Motion to Dismiss without a hearing.

Respectfully, I still find this new procedure patently unfair, and I said as much in another Motion to Disqualify.  As I see it, the judge should not be taking it upon himself to prosecute a lawsuit that the Plaintiff has chosen, for whatever reason, to let stagnate.  In other words, it’s not a judge’s role to say “I see the Plaintiff has stopped prosecuting this case.  It’s time for me to help advance the case towards judgment.”  My concern about this conduct is heightened by the fact that the Plaintiff is seeking relief in the case and the Defendant is not.  Where only one party is seeking relief, the judge’s attempts to advance a dormant case towards judgment, sua sponte, reveal bias. 

Also, I find it unfair to be given five days “from the date of the Order to file a written response.”  By the time I received the Order, that gave me three business days to respond.  Respectfully, that’s unreasonable.  There is no emergency here; this case has been languishing for months.  For the judge to suddenly, out of the blue, require me to file a written response within three business days, failing which my client’s argument may be denied without a hearing … I find that inappropriate.  What if I were on vacation?  What if I were in trial?  What if I were busy with other files?  I have handled all types of lawsuits, from inception through trial and appeal, and I can’t ever recall being given such a short deadline.  Respectfully, why should I have to drop everything to file a written memo (in three days)?  Simply because the judge decided, on his own, to start prosecuting this case towards judgment?  

All of that said, I can’t help but feel a bit encouraged.  After all, even though I suspect he still disagrees with me, it appears that Judge Baird has changed his procedure, if only a little.  Instead of denying a Motion to Dismiss outright, without a hearing (and without any warning that a ruling may be coming), he’s at least giving me a chance to file a written memorandum before he rules.  I still think this is insufficient, but at least it shows that the judges are receptive to opposing viewpoints.  It’s a baby step, yes, but Rome wasn’t built in a day. 

Candidly, I’m don’t know how Judge Baird is going to react to this most recent Motion to Disqualify.  I’m sure no judge likes receiving such a motion, and I suspect he still disagrees with my belief that his procedures are flawed.  That said, I remain hopeful that he will continue to re-evaluate his stance on these issues.  After all, I’ll argue all day long, as I have several times now, that it’s not a judge’s role to set a foreclosure case for hearing when the plaintiff has decided, for whatever reason, not to push the case towards judgment. 

Part of my willingness to express these views in an open forum, other than my stern conviction that I’m right, is that judges are all over the map on issues such as these.  To illustrate, consider the procedures of Judge Anthony Rondolino.  Like Judge Baird, Judge Rondolino is a Pinellas County judge.  The rules are the same for both judges, the law is the same, and the cases are generally the same.  Nonetheless, Judge Rondolino often grants Motions to Dismiss, most recently via this seven-page Order (entered after a 45-minute hearing), yet Judge Baird routinely denies Motions to Dismiss, often without a hearing.  When one Pinellas County judge is regularly granting well-taken Motions to Dismiss, after duly-noticed hearings, and another is regularly denying them without a hearing, there is clearly room for reasonable people – even reasonable judges – to disagree.  As such, it’s up to us, as foreclosure defense attorneys, to assert our views as respectfully but persuasively as possible.  Be respectful, but don’t back down, and don’t give up.  Judges are paying attention, and your efforts may make a difference.

As for homeowners out there, I strongly encourage you to evaluate which foreclosure defense lawyers are willing to fight, respectfully but forcefully, and which are just “going through the motions” of a foreclosure case.

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Defending a Foreclosure Case – Re-Visiting the Basics

With foreclosure-related stories dominating national headlines on a daily basis, many lawyers, judges, and reporters have gotten knee-deep, if not neck-deep, in the foreclosure crisis.  Sometimes, we’re so immersed in the battle, so deep in the forest, it’s easy to forget that many Floridians are unaware of the basics when it comes to foreclosure defense.  Let’s take a step back, dispel some myths, and re-visit the basics:

1.  As a Florida homeowner, you don’t need to leave your home unless and until the bank *wins* a foreclosure lawsuit.  As such, even if you’re hopelessly behind on your mortgage, you don’t have to leave your home.  Even if the bank writes you a default letter and sends it by certified mail, files suit against you, and threatens you on the phone, you don’t have to leave your home.  You don’t need to leave your home unless and until the bank wins a foreclosure lawsuit against you

To put it differently, there’s a reason I chose the name of this website – www.stayinmyhome.com.   

Repeat after me:  “I have the right to ‘stay in my home’ unless and until the bank wins a foreclosure lawsuit against me.”

2.  As a Florida homeowner, you are entitled to have a foreclosure defense attorney represent you until the conclusion of your foreclosure lawsuit.  In my view, my job as a foreclosure defense attorney is quite simple – to do whatever I can, within the law and consistent with my ethical obligations as an attorney, to try to prevent banks from winning foreclosure lawsuits against my clients.  In any given case, my hope is that I can do a good enough job that the bank will offer my client a reasonable settlement offer and/or loan modifications that it otherwise would not offer.  I’ve said this when I started practicing foreclosure defense and I still believe it – if you give up, you’re going to get foreclosed, but if you fight your foreclosure case, you at least give yourself a chance to avoid foreclosure

3.  Many non-lawyers think it’s easy for a bank to win a foreclosure lawsuit.  That’s not necessarily so.  When foreclosure defense attorneys such as myself force lawyers to prove their entitlement to foreclose in court, banks sometimes struggle to meet their burden of proof.  Every case is different, and there’s no way to know for sure how any particular case will play out in court.  That said, it’s possible the bank’s lawsuit will get dismissed.  It’s possible, once you retain a competent and reputable foreclosure defense attorney, that the bank will be hesitant to go to court altogether.  It’s possible the court will deny the bank’s motion for summary judgment and force the bank to prove its entitlement to foreclosure at trial (which would extend the duration of the foreclosure lawsuit and, hence, your time in your home).  The court process, candidly, can be a bit uncertain.  In my view, though, uncertainty is better than giving up and accepting foreclosure on your home. 

As we’ve seen with the huge, national stories in recent weeks, nobody knows for sure what the future will bring.  If you give up, foreclosure is all but set in stone.  But if you defend your foreclosure lawsuit, you just may be able to stay in your home, perhaps for a long time, or even avoid foreclosure altogether.

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Who is harming the economy – BANKS, not my clients

With all the recent media attention that Stopa Law Firm has received, I’ve gotten a TON of positive feedback from clients and prospective clients in Florida and many other states.  Thank you to everyone who has encouraged the fight against the systemic fraud being perpetuated by banks every day. 

I’ve also gotten some criticism, too, allegedly because what I’m doing by defending homeowners facing foreclosure is ”harming the economy.”  The criticism typically goes something like this: “Your clients are living for free, dragging down the value of my property, and you’re helping them do it.” 

Respectfully, people who say things like this are wrong.  It’s not a matter of opinion – they’re wrong.  And I can prove it. 

First off, my clients care about their homes.  Whether they’re living in them or renting them out, my clients haven’t abandoned their homes – they’re maintaining them.  My clients’ homes aren’t the vacant houses you see with foot-high grass that haven’t been inhabited in a year.  My clients are living in their houses (or, in some instances, renting them out), and actively trying to keep their houses via a loan modification.  I dare anyone to explain, in any intelligent way, how the economy is harmed when people live in their homes, maintain their homes, and try to enter a loan modification.  Who is harmed here?  Some CEO at a bank who gets an $800,000 bonus instead of $850,000?  Please.   

Nothing my clients are doing reduces the value of their neighbors’ houses.  You know what affects that value of these homes?  Abandoned houses.  And why are houses abandoned?  Because banks scare people into leaving their homes, making it easy for them to obtain a foreclosure judgment, but then banks don’t schedule a foreclosure sale because they don’t actually want the home.  What results is the property sits in limbo – the homeowner stopped paying and abandoned it long ago, but the bank won’t set the foreclosure sale, so nobody else can buy the property, either.  The homeowner is not living in it, and the bank doesn’t own it … the property just sits, empty, abandoned, for months, even years.    

Don’t believe me?  Go check the public records.  I’ve been doing that recently in Pinellas County, and it’s scary what I’ve found.  

For instance, there was a foreclosure sale scheduled tomorrow, July 13, 2010, in Case No. 08-2426-CI-08.  But the sale isn’t going forward because the bank cancelled the sale – for the third time.  In fact, the Court entered final judgment in September, 2009, yet the foreclosure sale has still not taken place.  It’s not because the homeowner has put up a fight, either – the homeowner never appeared in the case and lost by default – the bank just refuses to proceed with the foreclosure sale.  Sound impossible to believe?  Don’t take my word for it – here’s a cut-and-paste of the docket, from the clerk’s website: 

Reset Original Sort Link To Activity Code Date P/D Docket Entry Ver
1 Link to Case-related Persons DUMB 07/07/2010 CLERK FORECLOSURE SALE CANCELLED: PER FAX(KENB) N
2 Link to Case-related Persons FAXC 07/07/2010 PLAINTIFF FAX COPY OF CORRESPONDENCE: REQUEST CANCEL SALE F
3 Link to Case-related Persons DATC 06/15/2010 PLAINTIFF ORD RESCHED SALE CLW FOR: 071310 OR16947PG2397-002 F
4 Link to Case-related Persons MOTN 06/15/2010 PLAINTIFF MOTION FOR NEW SALE DATE F
5 Link to Case-related Persons MOTN 06/14/2010 PLAINTIFF MOTION FOR NEW SALE DATE F
6 Link to Case-related Persons DUMB 03/04/2010 CLERK FORECLOSURE SALE CANCELLED: NO REP AT SALE N
7 Link to Case-related Persons ORGR 03/03/2010 PLAINTIFF ORDER GRANTING MOITON TO SUBSTITUTE PARTY PLAINTIFF F
8 Link to Case-related Persons NOTH 02/01/2010 PLAINTIFF NOTICE OF HEARING 030210 9:00 (TELEPHONIC) F
9 Link to Case-related Persons DATC 02/01/2010 PLAINTIFF ORD RESCHED SALE CLW FOR: 030410 OR16822PG1961-001 F
10 Link to Case-related Persons REFE 01/27/2010 PLAINTIFF RE-OPEN FEE PAID – $50.00 N
11 Link to Case-related Persons MOTN 01/25/2010 PLAINTIFF MOTION FOR NEW SALE DATE F
12 Link to Case-related Persons REOP 01/25/2010 PLAINTIFF REOPEN CASE/OTHER N
13 Link to Case-related Persons MOTN 01/15/2010 PLAINTIFF MOTION SUBSTITUTE PARTY F
14 Link to Case-related Persons ASIG 10/28/2009 PLAINTIFF ASSIGNMENT OF JUDGMENT OR16739PG1512-001 R
15 Link to Case-related Persons DUMB 10/23/2009 CLERK FORECLOSURE SALE CANCELLED: PER FAX(KENB) N
16 Link to Case-related Persons FAXC 10/23/2009 PLAINTIFF FAX COPY OF CORRESPONDENCE: REQUEST CANCEL SALE F
17 Link to Case-related Persons PBNS 10/09/2009 PLAINTIFF PUBLISHERS AFFIDAVIT NOTICE OF SALE F
18 Link to Case-related Persons NSGC 09/28/2009 CLERK NOTICE OF SALE/COPY TO GULF COAST BUS REV F
19 Link to Case-related Persons HOMC 09/17/2009 PLAINTIFF SALE SCHEDULED IN CLEARWATER FOR: 102309 OR16705PG0007-006 F
20 Link to Case-related Persons HOME 09/17/2009 PLAINTIFF FINAL JUDGMENT OF FORECLOSURE/JDMT AMOUNT $ 112143.45 F
21 Link to Case-related Persons DEJD 09/17/2009 PLAINTIFF DEFAULT JUDGMENT N
22 Link to Case-related Persons ATTY 09/17/2009 PLAINTIFF ATTORNEY COVER LETTER RCVD BY COURT 091009 F
23 Link to Case-related Persons NOTH 08/13/2009 PLAINTIFF NOTICE OF HEARING 091709 9:30 F
24 Link to Case-related Persons CCOU 05/01/2009 PLAINTIFF CORRESPONDENCE TO COURT RE: FROM COURT-RESET HEARING F
25 Link to Case-related Persons CCFP 05/01/2009 PLAINTIFF CERTIFICATION-COMPLIANCE W/FORECLOSURE PROC F
26 Link to Case-related Persons NOTH 02/20/2009 PLAINTIFF NOTICE OF HEARING 043009 9:30 (TELEPHONIC) F
27 Link to Case-related Persons NOTH 12/22/2008 PLAINTIFF NOTICE OF HEARING 043009 9:30 (TELEPHONIC) F
28 Link to Case-related Persons DEBT 09/15/2008 PLAINTIFF AFFIDAVIT OF INDEBTEDNESS F
29 Link to Case-related Persons FEES 07/10/2008 PLAINTIFF AFFIDAVIT OF ATTORNEY FEES F
30 Link to Case-related Persons FILE 06/30/2008 PLAINTIFF NOTICE OF FILING ORIGINAL NOTE AND MORTGAGE F
31 Link to Case-related Persons TEXT 05/08/2008 CLERK KALANI UHATAFE F
32 Link to Case-related Persons DEFA 05/08/2008 CLERK DEFAULT ENTERED /NAVITALAI UHATAFE/UNKNOWN SPOUSE NKA N
33 Link to Case-related Persons MODE 05/07/2008 PLAINTIFF MOTION FOR DEFAULT F
34 Link to Case-related Persons ARMY 05/07/2008 PLAINTIFF AFFIDAVIT AS TO MILITARY SERVICE F
35 Link to Case-related Persons DUPE 05/02/2008 PLAINTIFF UNKNOWN TENANTS IN POSSESSION F
36 Link to Case-related Persons DUPE 05/02/2008 PLAINTIFF JANE DOE F
37 Link to Case-related Persons DUPE 05/02/2008 PLAINTIFF JOHN DOE F
38 Link to Case-related Persons DROP 05/02/2008 PLAINTIFF NOTICE OF DROPPING : F
39 Link to Case-related Persons SURN 03/10/2008 CLERK SUMMONS RETD NOT SERVED JOHN DOE F
40 Link to Case-related Persons SURN 03/10/2008 CLERK SUMMONS RETD NOT SERVED JANE DOE F
41 Link to Case-related Persons SURS 03/10/2008 CLERK SUMMONS RETD SERVED NAVITALAI UHATAFE 022108 F
42 Link to Case-related Persons DUPE 03/10/2008 CLERK 022108 N/K/A KALANI UHATAFE F
43 Link to Case-related Persons SURS 03/10/2008 CLERK SUMMONS RETD SERVED UNKNOWN SPOUSE OF NAVITALAI UHATAFE N
44 Link to Case-related Persons NOTC 03/06/2008 PLAINTIFF NOTICE OF SCRIVENERS ERROR RE: PARTY PLTFF F
45 Link to Case-related Persons SUPP 02/20/2008 CLERK SUMMONS TO PROCESS SERVER – PICK UP HEAVEN SENT (4) N
46 Link to Case-related Persons LPRF 02/20/2008 PLAINTIFF LIS PENDENS RECORDING FEE PAID – $5.00 N
47 Link to Case-related Persons 02CI 02/20/2008 PLAINTIFF CIRCUIT CIVIL FILING FEE PAID $255.00 N
48 Link to Case-related Persons NOLP 02/19/2008 PLAINTIFF NOTICE OF LIS PENDENS OR16157PG0506-001 F
49 Link to Case-related Persons CCST 02/19/2008 PLAINTIFF CIVIL COVER SHEET F
50 Link to Case-related Persons COCS 02/19/2008 PLAINTIFF COMPLAINT AND COPY(S) F
51 Link to Case-related Persons SECT 02/19/2008 PLAINTIFF THIS CASE ASSIGNED BY CLERK TO SECTION 008 BY 3777 – RANDOM MF N

Lest you think this is an aberration, it’s not.  Check for yourselves.  Every day, whether it’s in Tampa, Orlando, Jacksonville, Miami, or anywhere in between, banks are obtaining foreclosure judgments throughout Florida, then refusing to set the foreclosure sales.  This is what causes houses to remain abandoned and not maintained.  This is what drags down property values and harms the economy, not my clients.  The banks are causing houses to be abandoned, not my clients.   So next time you see a house that’s abandoned, don’t blame me.  And certainly don’t blame my clients.  Chances are, the bank owns the property – or scared the owner into moving out, got a foreclosure judgment, but doesn’t want to set a foreclosure sale, so the remains abandoned indefinitely. 

Am I the only one who thinks this is absurd?  How can banks get away with this?  Why are judges so quick to enter foreclosure judgments, and throw their neighbors on the streets, when banks are so slow to set foreclosure sales?  Why do my clients get cricitized in the media (which refuses to report about banks’ refusals to enter loan modifications), yet banks cause properties to be abandoned all over Florida and get off scot-free?  This is yet another illustration of how banks are harming the economy to help themselves.  Banks don’t care if the property is abandoned – if they don’t want to pay the insurance or property taxes, they won’t set the foreclosure sale.  

Here’s an idea for you, banks:  if you don’t want the properties, I’ve got 400(+) clients who will take them, maintain them, and make good use of them.  Better yet, if you’re not going to set the foreclosure sale, don’t scare away the homeowner.  Let the homeowner continue living in the home, maintaining the home, taking care of the home – just as my clients are doing.

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