Posts Tagged ‘Stopa Law Firm’

Motions to Dismiss in Foreclosure Cases

In the foreclosure-world in which we now live, motions to dismiss are widely viewed with disdain.  They’re a pest.  An annoyance.  They accomplish nothing but delay.  I don’t feel that way, of course.  I think motions to dismiss are an important aspect of foreclosure defense, as they, when used properly, ensure a plaintiff has stated a cause of action in its complaint and otherwise done what it’s supposed to do upon filing suit.

Unfortunately, many plaintiffs and, yes, judges, see motions to dismiss purely as a stall.  You see, so long as the motion to dismiss is pending, the homeowner need not file an Answer, and without an Answer in place, the case isn’t “at issue” under Fla.R.Civ.P. 1.440 and can’t be set for trial.  Hence, a motion to dismiss prevents a trial from being set.

Those pesky motions to dismiss.  We need to get rid of those.  There are trials to set and dockets to clear! 

I’m glad the good judges in Hillsborough and Pinellas don’t share this mindset, as it has annoyed and frustrated me for a long time.  Unfortunately, there has been little opportunity to do anything about it, either, as there is virtually no case law from Florida’s appellate courts on the circumstances in which a motion to dismiss in a foreclosure case should be granted.  The problem is procedural.  You see, when a motion to dismiss is denied, that ruling cannot be appealed until the end of the case.  But once the case reaches its end, the homeowner isn’t concerned with appealing whether the foreclosure plaintiff stated a cause of action as much as whether the plaintiff was entitled to foreclosure.  So if/when the appeal is ultimately brought, nobody talks about whether the plaintiff stated a cause of action, but whether foreclosure was permitted.  As a result, case law on the circumstances in which a motion to dismiss is warranted in a foreclosure case is virtually non-existent.

That changed a bit recently, and I think it should change the way motions to dismiss are viewed throughout Florida.

On April 22, 2013, Florida’s First District Court of Appeal issued a written opinion in Wells Fargo Bank, N.A. v. Bokatka, Case No. 1D11-3356 (Fla. 1st DCA 2013).  At first blush, the opinion seems unfavorable to homeowners, as the lower court dismissed the foreclosure suit with prejudice and the First District reversed that ruling.  Dismissal with prejudice was wrong.  Ugh.

If you look closer, however, the court made it clear that the motion to dismiss was properly granted, it just shouldn’t have been granted with prejudice.  Take a look at this language from the opinion:

In this case, we do not fault the trial judge for dismissing the bank’s initial complaint, which facially created a contradiction between who the bank alleged was the owner of the note (the bank) and whom the attached note and mortgage identified as the owner (Option One). Putting aside (for the moment) the parties’ attempts to interject or examine materials outside the pleadings, dismissal without prejudice was appropriate simply to allow the bank an opportunity to amend its initial complaint to address this discrepancy and to fortify its allegations and attachments (perhaps with the allonge and some of the items the bank presented in support of its motion to vacate and set aside).

Mortgage foreclosure cases have many factual permutations—such as the many ways that ownership of notes can be established—that do not lead to simplistic judicial resolution at the frontend of litigation.

This language is important.  Every plaintiff’s attorney and every judge who thinks a motion to dismiss is just something that gets denied so a case can be set for trial should re-read that last sentence:

Mortgage foreclosure cases have many factual permutations – such as the many ways that ownership of notes can be established – that do not lead to simplistic judicial resolution at the frontend of litigation.

I want every foreclosure defense attorney and every pro se homeowner to bring this case to every motion to dismiss hearing.  That sentence needs to be shown to every single judge who adjudicates motions to dismiss.  Every one.

When a foreclosure plaintiff alleges in its Complaint it is “entitled to enforce” the Note and Mortgage, point to that sentence.

When a foreclosure plaintiff alleges in its Complaint it is the “holder” of the Note, but the Note attached to the Complaint is payable to a different entity and does not contain an endorsement, point to that sentence.

When a foreclosure plaintiff asserts it has authority to prosecute the case on behalf of the owner of the Note, but does not specify who the owner is, point to that sentence.

These are the types of issues that motions to dismiss are supposed to resolve.  Foreclosure plaintiffs should have to clarify these ”factual permutations” in their complaints, as the “judicial resolution” of such issues is not “simplistic.”

Legalese aside, I hope the First District’s opinion will make everyone realize motions to dismiss in foreclosure cases should be treated the same way as all homeowners should be treated – with respect.

Mark Stopa

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What Makes It All Worthwhile

Foreclosure defense is not always easy.  Sometimes, it’s downright maddening.  Emails like the following make it all worthwhile.  This is what it’s all about … knowing people’s lives are changed by the work we do.  This isn’t a solo effort, either – my staff joins in this …

Dear Mark,
I just want to thank you again for all of your hard work and dedication in getting our foreclosure case dismissed.  Your entire staff,  from the first meeting in your office,  to your paralegals, receptionists,  and to speaking with you yesterday, has been a godsend  during a very difficult time for us.  Words cannot express our gratitude.    If you ever need a reference, please feel free to give our name and number, we will help in any way we can.   Again sir, thank you so, so much.  We wish you much success in the future.  God Bless you and your family.   You are a good man.
Sincerely, [Jane and Joe Homeowner]

Do you think the banks ever take a minute to think about the homeowners whose lives they impact with their conduct? I fear not.

What about the Congressmen considering HB87 … do you think they’re thinking about these homeowners?  Gosh, I hope so.

Mark Stopa

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Summary Judgment … for a Homeowner

I’m sorry I haven’t posted much in recent days.  You see, I’ve been really busy procuring summary judgments for some of my clients.  No, not summary judgments of foreclosure (against my clients) … summary judgments in my clients’ favor.  Summary judgments as in … case over … case dismissed … you lose, bank – do not pass go, do not foreclose, and do not collect any money.  Obviously this doesn’t work every time, but as the Orders below reflect, it certainly works sometimes.

What are the arguments?  How have I been able to do this?  Well, take a look at the Orders, all of which are also accessible via public records:

Order Granting Summary Judgment

Order Granting Summary Judgment

Order Granting Summary Judgment

Order Granting Summary Judgment

Order Granting Summary Judgment

Order Granting Summary Judgment

Order Granting Summary Judgment

Essentially, there are two arguments … two ways (at least) I believe homeowners can argue they’re entitled to summary judgment and the outright dismissal of a foreclosure case.

The first is predicated on a topic I’ve posted about many times – a plaintiff’s obligation to prove not just its standing to foreclose, but its standing to foreclose as of the time it filed suit.  There are many recent cases which have illustrated this proposition of law, reversing summary judgments of foreclosure entered for the banks when they failed to prove the requisite standing at inception.  My favorite, though, is McLean v. J.P. Morgan Chase Bank, N.A., 79 So. 3d 170 (Fla. 4th DCA 2012).  The reason I like McLean so much is because that case makes it clear that the remedy when a foreclosure plaintiff cannot prove standing at the inception of its lawsuit is the outright dismissal of the case – without prejudice and without leave to amend.  In other words, it’s not just that a plaintiff can’t win a foreclosure lawsuit without proving standing at inception; where the plaintiff cannot meet this burden, the defendant must prevail.  In the McLean court’s words:

 if the evidence shows that the note was endorsed to Chase after the lawsuit was filed, then Chase had no standing at the time the complaint was filed, in which case the trial court should dismiss the instant lawsuit and Chase must file a new complaint.

Following McLean, the argument for summary judgment is rather simple.  If the Note attached to the Complaint was not endorsed, and there is no assignment of mortgage in the court file, but an original note with an endorsement and/or an assignment of mortgage shows up later, then the homeowner files a motion for summary judgment asserting this chronology.  If the bank goes to the summary judgment hearing without evidence that it had an endorsed note or an assignment of mortgage before suit was filed, then summary judgment for the homeowner is proper.

But wait, one might argue.  Isn’t it the moving party’s burden at summary judgment to conclusively disprove the non-existence of factual disputes, i.e. to conclusively prove the bank lacked standing when it filed suit?  And isn’t that a high burden?  Yes and yes.  However, if a homeowner proves that the note attached to the Complaint lacked an endorsement, and that there was no assignment of mortgage before the suit was filed, then the homeowner has done just that.  The burden would then shift to the foreclosure plaintiff to present some evidence that it had an endorsed note and/or an assignment at the time the lawsuit was filed.  If it cannot, then the homeowner should prevail.

Sound too good to be true?  Read this and this.  So you’re aware when you’re making these arguments, among the local judges who have granted summary judgment in my clients’ favor on this argument:  Honorable Amy Williams (St. Petersburg), Honorable Lynn Tepper (Dade City) and Honorable Robert Foster (Tampa).  Obviously the facts of each case can vary, but it’s worth noting that these good judges were willing to look beyond the fact that a homeowner was alleged to be in default and strove to uphold the law.


The second basis for summary judgment is predicated on the bank’s failure to comply with a condition precedent to the filing of the lawsuit.  A condition precedent is just what it sounds like – something a bank must do prior to filing a lawsuit.  You see, many mortgages in the cases with which I deal (and the majority of mortgages in Florida) have a provision in them, typically in paragraph 22 of the mortgage, which requires the lender provide written notice to the homeowner of any alleged default and an opportunity to cure that default prior to filing suit – what I call a “notice and cure letter.”  This paragraph typically spells out certain provisions which must be set forth in the letter, often like such:

22.  Acceleration; Remedies.  Lender shall give notice to Borrower prior to acceleration following Borrower’s breach of any covenant or agreement in this Security Instrument (but not prior to acceleration under Section 18 unless Applicable Law provides otherwise).  The notice shall specify: (a) the default; (b) the action required to cure the default; (c) a date, not less than 30 days from the date the notice is given to Borrower, by which the default must be cured; and (d) that failure to cure the default on or before the date specified in the notice may result in acceleration of the sums secured by this Security Instrument, foreclosure by judicial proceeding and sale of the property.  The notice shall further inform the Borrower of the right to reinstate after acceleration and the right to assert in the foreclosure proceeding the non-existence of a default or any other defense of Borrower to acceleration and foreclosure.

As a nice touch, paragraph 22 of most mortgages is written in bold, creating a good argument that the parties obviously intended for that provision to carry great weight in the scope of the contract.

So how can a homeowner use this to obtain summary judgment?  Read paragraph 22 closely; there are a variety of ways.  The simplest is when the homeowner shows the “notice and cure” letter required by paragraph 22 was not sent, and the bank can’t prove otherwise.  When that happens, then summary judgment is proper.  Also, if the letter was sent, but it did not say what paragraph 22 required it to say, then summary judgment would also be proper.

To illustrate, take a look at this Order Granting Summary Judgment, where the Court explained that the “notice and cure” letter did not specify what was necessary to cure the default (as the letter indicated that additional monies in unspecified amounts were owed above and beyond that set forth in the letter, leaving the homeowners guessing as to the amounts necessary to cure the default) and the letter did not indicate that failure to cure the default would result in a “foreclosure by judicial proceeding.”  Mind you, those are just a few of the ways a letter could be deficient.  Just off the top of my head, here are a few things I look for when I’m evaluating if a letter complies with paragraph 22:

– Was the letter sent to the homeowner’s correct address?

– Was at least 30 days’ notice provided (bearing in mind that if the notice is sent by mail, the homeowner obviously didn’t receive the letter on the day it was dated, though that may not matter depending on how “notice” is defined in the mortgage)?

– Is there some admissible evidence from the Plaintiff that the letter was actually sent (as opposed to merely being filed in the court file by plaintiff’s counsel)?

– Does the letter specify the amount necessary to cure the default, or does it make reference to additional, unspecified charges as to the amounts owed, leaving the homeowner in the dark as to the total amount he must pay to cure the default?

– Does the letter apprise the homeowner that a “foreclosure by judicial proceeding” may result if the default is not cured, or does it tell the homeowner that it may initiate a legal action?  Many of the letters I’ve seen do the latter, and not the former, and several judges in Florida have found the letter deficient on this basis.  In fact, Judge Amy Williams granted a summary judgment in one of my cases based on this distinction earlier today.

– Does the letter inform the homeowner of the right to reinstate after acceleration?

– Does the letter inform the homeowner of the right to assert in the foreclosure proceeding the non-existence of a default or any other defense to acceleration and foreclosure?

In my view, even if the bank satisfied some or most of these obligations, a homeowner should still prevail in a foreclosure lawsuit if the bank didn’t comply with all of them.  Yes, all of them.

But that’s crazy, you say.  The homeowner is in default, so the bank should win.  This paragraph 22 stuff is so technical – would a judge really care about this?  Fortunately, yes.  This argument may be technical, especially if a letter was sent but it did not contain all of the requisite language.  However, this is what the homeowner and the bank negotiated in their contract when the mortgage was entered.  The fact that the banks drafted these mortgages, and paragraph 22 is usually bolded, make it all the more appropriate to hold the banks to the terms of their own contracts.

Though homeowners need not prove prejudice to prevail on this issue, there was/is a good reason for judges to enforce the terms of paragraph 22.  Quite simply, under the terms of these mortgages, every homeowner is entitled to an opportunity to cure any default before facing foreclosure on his/her home.  That’s the point of the letter, and the point of paragraph 22 – to ensure the homeowner knows about the alleged default and can fix it before facing foreclosure.  Where the letter didn’t comply, the homeowner is deprived of that chance, and that’s simply not fair.

If you feel bad about making this argument, don’t.  Frankly, one of the reasons I love making this argument is because insurance companies have been using it to screw honest homeowners for many years.  You see, when homeowners make a claim for money under an insurance policy, insurance companies often deny coverage – not because there’s no coverage, but because that’s what they do to make money – deny coverage and force the homeowners to go to court.  Then, once facing a lawsuit, insurance companies love to defend that suit by complaining that the homeowner failed to comply with the conditions precedent set forth in the policy, namely submitting to a proof of loss or an EUO (examination under oath).  There are many cases where courts have ruled against homeowners, and in favor of insurance companies, not because insurance company was correct in denying coverage, but because the homeowners didn’t do what they were supposed to do before filing suit.  See Goldman v. State Farm Fire Gen. Ins. Co., 660 So. 2d 300 (Fla. 4th DCA 1995); Edwards v. State Farm Fla. Ins. Co., 64 So. 3d 730 (Fla. 3d DCA 2011).  While I hate how insurance companies have been able to do this, I love being able to use this case law in support of my arguments in foreclosure cases.  After all, Florida courts have been requiring parties to comply with conditions precedent in a contract for many years, and have consistently granted summary judgments where they failed to do so.  Though some might argue otherwise, there is no reason to treat foreclosure cases any differently.  Hence, where a bank didn’t comply with the terms of paragraph 22, the court should dismiss the lawsuit for failure to comply with conditions precedent.

Sound too good to be true?  Read this, this, this, this, this, and this.  Among the judges who have granted summary judgment, and/or dismissed a foreclosure lawsuit based on this argument, are Honorable Lynn Tepper (Dade City), Honorable Amy Williams (St. Petersburg), Honorable Robert Foster (Tampa), Honorable James Barton (Tampa), Honorable Donald Evans (Tampa), Honorable John Schaefer (Clearwater), Honorable Walter Schafer (New Port Richey), and Honorable J. Rodgers Padgett (Tampa).  Again, the facts of each case may vary, but you should rest assured that there are good judges in Florida willing to follow the law even if some would argue that dismissing a foreclosure lawsuit where the homeowner hasn’t paid his mortgage is inequitable.

Mark Stopa

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Thankful for Loan Modifications?

I’ve had many clients come into my office recently, having paid tens of thousands of dollars pursuant to loan modification agreements with banks.  This Memorial Day, I’m so thankful for the honest bankers who cared enough to work out agreements with these homeowners so as to avoid foreclosure, enabling these allow hard-working homeowners to make monthly mortgage payments and remain in their homes.  OH, WAIT.

These hard-working homeowners paid tens of thousands of dollars, diligently made all monthly mortgage payments, and did everything the banks asked them to do to stay in their homes and avoid foreclosures.  But the bankers weren’t honest and, and these loan modifications were nothing to be thankful for.  It was all a fraud.  A farce.  You see, these homeowners entered a loan modification agreement and made all of the monthly payments required thereunder, but they got sued for foreclosure anyway, often waiving all defenses to that foreclosure as part of the loan modification!

Please, please don’t make this mistake.  Please, please don’t fall into this trap.   Please, please, please read these articles:

Tempoary loan modifications are the ultimate scam!

Loan Modifications can CAUSE foreclosure!

Banks Offer Loan Modifications to Dupe Homeowners!

I’m not trying to say homeowners should never do a loan modification.  My point, simply, is this … banks know how desperate many homeowners are for a loan modification, and bankers prey on that desperation, resulting in agreements that are terribly one-sided and, yes, even fraudulent.  If you’re going to enter an agreement like this, you have to do so with both eyes open.

I could write pages and pages of terms that I think a loan modification should include.  I could give horror story after horror story of homeowners who made tens of thousands of dollars in payments yet got sued for foreclosure anyway.  Instead, I’ll put it like this … if you’re adamant about entering a mortgage modification, and you have a bank willing to do so, I’d make sure, at worst, of the following:

1.  The loan modification is in writing, signed by you and the bank.  A bankster telling you over the phone that you have a deal is about as trustworthy as an email from Nigeria telling you that you’ve won $10,000,000  and that you need to mail them a $10,000 check to claim your prize.

2.  The loan modification specifically says, in writing, that the bank will not sue you if you make the monthly payments, or, if a suit is already pending, that the suit will be dismissed (upon your entry into that agreement).  That might sound obvious, but what good is a loan modification – and what purpose does it serve to mke monthly payments – if the bank can still sue you for foreclosure anyway?

3.  The loan modification has some type of written representation from the bank that it is the owner/holder of the Note and Mortgage.  Incredibly, I often see loan modifications where the bank asks the homeowner to represent that it is the owner/holder of the Note and Mortgage.  This is bass ackwards.  The typical homeowner has no idea whatsoever which bank owns that Note/Mortgage – that’s something the bank should have to represent, to the homeowner, so the homeowner has some recourse if it turns out to be false.

4.  The mortgage modification is recorded in the Official Records of the county where the property is located.  If it’s not recorded (or not in a format that it can be recorded), chances are pretty good that it’s not real.

5.  The loan modification agreement does not require you to waive all defenses to foreclosure.  If I’ve seen this once, I’ve seen it 100 times.  A homeowner is desperate for a modification, so he/she will sign anything, even something that says all defenses to foreclosure are waived upon any default in the modified agreement.  This might be kosher for homeowners who know they won’t re-default, but few are in that boat.  Even if you really want a loan modification, do you really want to be in a position of not being able to defend a foreclosure because you’ve waived all defenses?

If we all stand up, and insist on these basic terms, then perhaps we can collectively force banks to enter loan modifications that aren’t so one-sided.

Mark Stopa

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The Zombie Files

Below is a well-written, informative article by Kim Miller of the Palm Beach Post, illustrating how 7,000 foreclosure cases lie dormant in Palm Beach County alone.  Make sure you comment on Kim’s article, and be sure to let her know you particularly like the quotes from me.  ;)

The zombie files: Nearly 7,000 stagnating foreclosure cases lie dormant in Palm Beach County’s courts

Nearly 7,000 stagnating foreclosure cases lie dormant in Palm Beach County’s courts, creating a payment-free limbo for some homeowners but a stain of vacant and abandoned homes in deteriorating neighborhoods.

These sleeper files, which have remained inactive for a year or longer, date as far back as 1997, according to documents provided to The Palm Beach Post by the clerk of courts.

But most are from the early years of the housing crash when lenders feverishly sought to repossess homes, unaware that the frenetic pace would cause a second crisis based on faulty documents and unlawful corner-cutting.

While an unknown number of dormant files are mistakes, such as one party forgetting to request a dismissal after an agreement is reached, others remain open but unmoving because of homeowner bankruptcy, loan modification negotiations or bank neglect.

“I have no idea what’s going on and I’m not pushing it,” said Robert Feinson, a Jupiter resident whose case has sat idle since November 2010, more than two years after his lender initially filed for foreclosure against him. “Right now, we’re just waiting to see who is going to make the next move.”

The 6,927 zombie files make up about 17 percent of Palm Beach County’s 39,252 foreclosure cases.

The banks with the largest number of dormant cases include Bank of America (670), JPMorgan Chase (602) and Deutsche Bank (546).

After 10 months of inaction, a homeowner, or the court itself, can seek a dismissal of the foreclosure based on non-prosecution . If the bank fails to react within 60 days, the case can be thrown out and the bank forced to start over.

It’s a move Palm Beach County Chief Judge Peter Blanc said might begin in earnest this summer after a one-time bump in state funding allows him to hire additional judges to tackle foreclosures and get rid of “deadwood.”

The last court-initiated weeding-out occurred two years ago when Blanc received $640,000 to add judges, he said.

“There’s a whole variety of reasons why cases were dismissed, which is sort of consistent with how the practice was all over the place in the early years,” Blanc said.

The frustration over stalled and prolonged cases can be heard in Palm Beach County Judge John Hoy’s foreclosure court.

This month, Hoy waved a calendar at bank attorneys who had missed deadlines or sought to cancel foreclosure sales for reasons such as a failure to publish the auction announcement or belief that a loan modification was in the works.

Often the claim that a short sale or loan modification is pending comes after a final foreclosure judgment is made as banks backpedal on rulings.

“This is a 2009 case,” Hoy said to one lender attorney who was seeking an extension of time. “If you can’t take care of your old cases, don’t file new ones. ”

On another foreclosure, which was filed in January 2008, Hoy was equally nonplussed.

“There are 111 docket entries in this case and we’re still screwing around on a motion to dismiss?” he asked the attorneys. “What’s going on around here?”

When the lender’s attorney couldn’t produce an endorsed note proving ownership, Hoy dismissed the case.

“I kicked them back just now to January 2008,” said foreclosure defense attorney Malcolm Harrison after Hoy’s decision. “You’ll find a lot more errors on these older cases because they didn’t know what they were doing.”

Harrison hopes the “fatal flaw” in the bank’s case will force it to modify his client’s mortgage instead of refiling the foreclosure. The homeowners have been living in their Olympia home in Wellington without making a payment for about four years.

The reasons cases may be delayed are myriad, said Guy Cecala, publisher of the trade publication Inside Mortgage Finance. They include:

  • Fear of flooding the market with distressed properties that will crash prices.
  • Concern over getting a clear chain of title.
  • Unwillingness to take on maintenance and liability for a property.
  • Negotiating a loan modification or short sale.
  • A homeowner files for bankruptcy, putting the case on hold.
  • Problems with paperwork or how a previous law firm handled a file.

After the collapse of the Plantation-based Law Offices of David J. Stern in March 2011, about 100,000 foreclosure cases statewide needed to be transferred to new attorneys.

Tampa-area defense attorney Mark Stopa said he didn’t have a hearing or trial set by a bank on any of his foreclosure cases in a year.

Stopa said he was able to get between 30 and 40 cases dismissed in the past six months because of lack of prosecution.

“That’s something I love to take advantage of, and in years past, the courts would do it on their own,” he said. “It’s a good way to clear dockets that is favorable to homeowners.”

Feinson, the Jupiter homeowner, said he tried to get a loan modification after losing his business, but found himself dealing with a revolving door of lenders and servicers. His loan traveled from LIME Financial Services to La Salle Bank to Wilshire and finally to Bank of America, he said.

The last action on his case was an unsuccessful mediation in late 2010, just when the problems with robo-signing were revealed.

“We don’t know who has the mortgage and no one seems to have any answers,” Feinson said.

Forgotten foreclosures may see a reanimation of activity following the $25 billion settlement between the nation’s largest banks and the states’ attorneys general, Stopa said.

The agreement, announced in February, requires banks to modify more home loans and outlines a standardized way to process foreclosures.

Whether the settlement is good news for home­owner Kathryn Siddons, also of Jupiter, remains to be seen. Her home has been in foreclosure since 2008 with the last action on her file taken in the fall of 2010.

But she’s also been working on a loan modification, she said.

“We got a letter two years ago saying they couldn’t find our original note and we could work on other options,” Siddons said. “I just keep reapplying (for a loan modification). I’m afraid not to because then you’re just giving up.”

Mark Stopa

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When to Retain a Foreclosure Defense Lawyer

I talked to two prospective clients this week, and both conversations broke my heart.  In both cases, it was clear to me that I really could have helped these homeowners, but they waited too long to consult me.

In the first case, the homeowner failed to defend and was defaulted by the clerk.  A default, of course, is like a forfeit in sports.  It’s the court’s way of saying a defendant does not get to participate in a lawsuit or assert any defenses in opposition to foreclosure.  It is possible to vacate a default (and, hence, defend a case), but the longer one fails to act after having been defaulted, the harder it is to defend a case.

In this particular case, the bank was so slow to prosecute (even after getting a default against the homeowner) that the clerk issued a notice of intent to dismiss for lack of prosecution.  Incredibly, even after receiving that, the bank still failed to do anything for 60 days.  If this homeowner had consulted me at that point, I would have filed a motion to dismiss for lack of prosecution.  While I can’t “guarantee” anything, I am virtually certain I would have gotten that motion granted and the case would have been dismissed.  Alas, the homeowner did not consult with me, and about 120 days after the notice was issued, the bank finally woke up and filed something, precluding a dismissal.

An opportunity for a great result presented itself, but the homeowner didn’t have a lawyer, so the opportunity was lost.

In the second case, an elderly homeowner suffered a final judgment of foreclosure while trying to defend his foreclosure case himself.  He was desperate to file an appeal and willing to pay me to do so.  Sounds good, right?  Well, for me, it doesn’t matter if a client is willing to pay; if I don’t think I can help, I’m not going to take somone’s money.  Don’t get me wrong; I’m more than happy to take on an appeal.  The problem is that if a homeowner doesn’t make the appropriate arguments (in a procedurally proper way) before the foreclosure judgment was entered, then there is little any foreclosure defense lawyer can do about it on appeal.  After all, the purpose of an appeal is to ask the higher court to rule that the lower court made a legal error.  If the homeowner didn’t argue something correctly (or at all), then the appeal won’t be successful.

What really frustrated me about this case was that, prior to suffering the final judgment of foreclosure, the homeowner actually got the judge to dismiss the case with prejudice!  Unfortunately, the judge later vacated that order of dismissal upon a motion from the bank.  When I reviewed the transcript from the hearing on that motion, I was pulling my hair out with frustration, feeling confident that the judge would not have vacated his order of dismissal if I was involved in the case at that stage of the case.  Alas, I was not involved, so the motion was granted, the order of dismissal was vacated, and, ultimately, the homeowner was foreclosed.

What’s perhaps more frustrating about that is that the homeowner had enough money to pay for a court reporter and order a transcript of the hearing, but he tried to handle the hearing himself.  I’m sorry, but that’s ass backwards.

Look, I know that many homeowners think they know a lot about foreclosure law.  Some of them, quite frankly, have taken advantage of their unemployment (to the extent that’s even possible) by studying foreclosure laws.  That’s all fine and good, but I’d bet anything that I know far, far more about the arguments to make in opposition to a bank seeking to vacate an order of dismissal  under Rule 1.540.  As I read the transcript, it was clear this homeowner had no idea what to argue or what to say.  The bank brought witnesses to testify and the homeowner had no idea what to do.

This was a huge hearing, mind you.  If he won, then the order dismissing his foreclosure lawsuit with prejudice would have remained in place.  It was important enough for him to hire a court reporter, and he had the financial means to do so, yet he decided to handle this hearing without a lawyer.  Sigh.

By no means are lawyers perfect, and that includes foreclosure defense lawyers.  However, these were two examples, just from this week, where it was very apparent to me that I could have helped homeowners avoid foreclosure if only those homeowners had consulted with me sooner.

So if you’re wondering when to retain a foreclosure defense attorney, learn from the mistakes of these two homeowners.  Hire a lawyer to defend your case from the outset.  If you don’t, you risk missing out on viable arguments and defenses that may well help you avoid foreclosure.

Mark Stopa

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Is the SEC Covering Up Wall Street Crimes?

A handful of reporters in this country have done a fantastic job bringing to light various travesties of justice on foreclosure-related issues – Shannon Behnken of the Tampa Tribune, Kim Miller of the Palm Beach Post, multiple reporters from the St. Pete Times, and David Streitfeld of the New York Times, to name a few.  

One of my personal favorites is from what could be deemed a pretty odd source – Rolling Stone Magazine.  Matt Taibbi of Rolling Stone has written several articles now that should make every American wonder: 

What the hell is going on in the U.S. Government?

Taibbi’s lastest masterpiece, titled Is the SEC Covering Up Wall Street Crimes?, is a must-read.  Yes, it’s lengthy, but it is very insightful, shedding light on the question many of us have wondered for a long time:

Why has nobody been punished for financial crimes that ruined the U.S. economy?

The incestuous relationships between the big banks and the regulatory agencies that enforce them is laid out again in this article.  It’s so disgusting, in my view, that I think a Presidential candidate for 2012 could emerge with just one platform:

Eradicating the corrpution in Wall Street and the incest between the big banks and the agencies charged with enforcing them.

If that sounds crazy, think about how much money our country would save if banks didn’t have free reign to commit financial crimes without penalty.  When I read Taibbi’s article, it made me wonder why the SEC even exists.  If that sounds harsh, you tell me – why are SEC officials terminating criminal investigations into big banks, then leaving their SEC jobs for high-paying positions with those very banks?  Does that sound like justice to you, or a horribly perverted, incestuous mockery of justice? (For details, please, read the article.)

Our financial system has run amuck, and it’s past time somebody stood up to do something about it.  And that somebody should be someone other than a reporter for a rock-and-roll magazine.  Presidential candidates … Congressmen … the floor is yours.

Mark Stopa

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What is the Downside of Strategic Default

Below is a great question I just received on this blog and my response.


I am up to date on my mortgage. Under the water +60K
Got divorced, things are getting more difficult to pay but still making it
Credit score is excellent
I am approved to a buy a primary residence much cheaper than what I owe now and I will rent the one I am living by doing this will save like 40% of mortgage
If I rent the one I am living and don’t pay the bank I will eventually foreclose but will have saved some $
My credit will be affected for 7 years.
Crunching the numbers it makes sense to me.

My assets will be all on retirement savings 401k and IRA
What is the downside of this? Thanks.


This is a great question, and I suspect many people are in this type of situation. 

If you’re all set to purchase a similar home for less than you owe on your current home, the downside to defaulting on the home you currently have is that the bank forecloses (eventually), obtains a deficiency judgment against you, and collects on that judgment because/if you have assets.  The younger you are, and the more assets you have, the greater the risk.  The older you are, and the fewer assets you have, the less the risk. 

For instance, if you’re 60, and your only assets are the new home you’re buying (your homestead) and your retirement accounts, then the downside here is quite minimal – the bank probably won’t ever collect on the deficiency even if it gets one. 

If you’re 35 and have assets, the risk is greater.  In that scenario, you’d have 30 years left in the work force, so the risk of garnishing wages is higher (since judgments are good for 20 years in Florida, and you’ll undoubtedly be earning wages for many years to come).  However, even in that scenario, it’s quite possible the bank won’t pursue a deficiency, that you can settle the case without a deficiency, or that you could reduce or eliminate the deficiency through a bankrupcy. 

There is no right or wrong answer in this type of scenario – it depends on each person’s situation.  Hopefully, these generalities give you a good idea on how to proceed.

Mark Stopa

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Are You a Robo-Signer?

You may not think you’re a robo-signer, and, hopefully, you’re not.  But in today’s climate of foreclosure chaos, you may be a robo-signer and not even know it!  That’s what West Palm Beach resident Liz Mills realized when she googled her name on-line, as the Palm Beach Post describes here.

Is this what it’s come to nowadays?  The fraud is so rampant that people have their signatures forged and don’t even know it? 

Here’s the article, another in a series of fine reporting by Kimberly Miller. 

West Palm Beach resident Liz Mills learned she was a robo-signer when a friend suggested she search her own name online.  On foreclosure blogs and in at least one newspaper article, the 51-year-old process server was singled out for the numerous and varying styles of her signatures on summons paperwork used to prove her efforts in locating home­owners in foreclosure.

Now Mills is coming forward in affidavits filed in three foreclosure cases, saying she didn’t sign the paperwork and never signed in front of a notary despite notary stamps affixed to the documents.

In one case, Mills allegedly signed a return of non-service, meaning the homeowner could not be found, for a foreclosure in Lehigh Acres near Florida’s west coast – a town where Mills said she has never been.

“I’m not really sure what’s going on with all of this or what could happen, but it’s upsetting because if you read the articles it’s like they are trying to make the individual process servers the fall guy,” said Mills, who became a process server 12 years ago. “I think they just wanted to move the paperwork along faster.”

Service of process is sometimes the first notice a homeowner has that the bank has filed for foreclosure .  Sloppy service or “sewer service,” as some defense attorneys call bad service of process, can leave a homeowner in the dark and defenseless until after the final judgment and a notice of sale is sent out.

Defense attorney Tom Ice, of Royal Palm Beach-based Ice Legal, believes Mills’ testimony in the three cases could force them to be re-served, sending the banks back to square one in the proceedings.  “It’s always bothered me that a high number of my clients come in and say they didn’t know there was a lawsuit,” said Ice, who is defending the homeowners in the cases.

With the crush of foreclosures statewide, process service has become big business. Once entrusted only to sheriff’s deputies, summonses may now be handled by special process servers certified by the court. The servers often work for larger companies that dole out the legwork.

Mills worked for several process service companies, including Miami­-based Gissen & Zawyer Process Service Inc.

The Florida Attorney General’s Office is investigating the company after allegations of backdating returns of service, improper billing practices and filing questionable affidavits with the courts.

Mills said she believes her signatures were forged on documents because she has a short name that’s easy to sign.

But Alan Rosenthal, an attorney defending Gissen & Zawyer, said the company believes the documents in question in the Mills cases bear her true signature.

“Gissen & Zawyer does not have any of its personnel sign affidavits of service other than the process server whose name is on the signature line, and does not condone such behavior by anyone who works for them,” Rosenthal said. “Gissen & Zawyer believes the signatures on the Liz Mills affidavits are hers.”

Process service company Caplan, Caplan and Caplan, which Mills also worked for and is involved in one of the cases, had no comment.

While Mills’ affidavits attesting to forged documents directly affect three foreclosures, there could be an impact on other cases that bear her name.

Judges have recently dismissed foreclosures based on bad service of process, although the cases can usually be refiled.

A 4th District Court of Appeal decision in December sided with the homeowner, based on paperwork that contained an illegible grouping of numbers – either the server’s identification number or the time of service. Both are required by state statute.

Mills, a former waitress, said she became a process server because she was a single mom and it offered a flexible schedule.

The typical charge for process service is $45, about $10 of which goes to pay Mills, who may have to make several visits to a home.

When Gissen & Zawyer didn’t think she was working fast enough, she said, she was called to Miami for a conference.

“They stood there and screamed at me that I was not serving their work fast enough,” said Mills, who worked for the company about 10 months.

Ice said the reprimand shows speed was valued over thoroughness.  “These were processed like an assembly line,” said Ice, whose firm handled the 4th DCA case. “The pressure was not just on Mills. It’s on all of the process servers to do whatever it takes to get the job done quickly.”

Mark Stopa

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Foreclosure Judgment after Service by Publication – VACATED

All defendants, even homeowners facing foreclosure, are entitled to due process of law before their property can be taken.  (Many people even know the phrase in the constitution – “cannot be deprived of life, liberty, or property … without due process of law.”). 

One of the most basic elements of due process is ensuring a defendant is aware of a lawsuit, and given the chance to defend, before that lawsuit is adjudicated.  This is accomplished, of course, by ensuring valid service of process.  Specifically, all plaintiffs are required to ensure defendants are served by a process server or sheriff with a Summons and Complaint.  There are exceptions to this, i.e. service by publication, but its requirements are technical and, hence, are strictly construed.

I currently have a client who owns a home in Jacksonville.  He was sued for foreclosure but he lives in New York.  Instead of serving him in New York, as required, the bank’s lawyers served him by publication.  Unaware of the lawsuit, he did not defend it, resulting in a Final Judgment of Foreclosure and a foreclosure sale (at which the bank was the high bidder). 

This homeowner retained Stopa Law Firm, and I moved to vacate the Final Judgment, cancel the Foreclosure Sale, and Quash Service.  Initially, the bank’s lawyers opposed the motion, arguing at a brief, 15-minute hearing that service was appropriate and the Final Judgment should stand.  The Jacksonville court ruled, however, that my client was entitled to an evidentiary hearing on whether service was valid.  That hearing was supposed to take place on Monday.  However, I got a call this week, out of the blue, whereby opposing counsel stipulated to Vacate the Foreclosure Judgment and to the entry of this Order Vacating Foreclosure Judgment, Cancelling the Foreclosure Sale, and Quashing Service – all we had to do was cancel the hearing and accept service. 

This is quite a good result, obviously.  The client gets the foreclosure judgment vacated and the bank has to, essentially, start the case from scratch.  And we essentially give up nothing in return.  This raises the question, of course – why would the bank do this? 

As I see it, there is only one explanation – the bank feared the evidentiary hearing, specifically the evidence that would have been presented if the hearing had gone forward.  In particular, it seems clear to me that the bank knows there are many cases where service of process has been done improperly and it doesn’t want to shed a spotlight on that fact any more than necessary. 

Let this serve as a reminder – if you’re being sued for foreclosure (or anything else, for that matter), you are absolutely entitled to force the plaintiff to serve you, with a process server, with a Summons and Complaint.  Service of process by publication is possible, but the banks often do it incorrectly, meaning you could, like in this case, get a foreclosure judgment vacated (even months or years after the fact) if you were not served properly. 

The banks’ failure/refusal to effectuate service properly is just one example of how they cut corners and violate the law in their ongoing attempt to push through foreclosures as quickly as possible.  Don’t let them get away with it!  Make sure you and your family and friends are aware of the requirement to effectuate service of process properly.

Mark Stopa

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