West Palm Beach Attorney Representing "A Dozen" Foreclosure Rescue Victims

Today's South Florida Sun-Sentinel reports of home equity theft cases involving foreclosure rescue arrangements that two South Florida homeowners found themselves in and are fighting back.

Reportedly, the attorney for one of the homeowners, West Palm Beach-area attorney James Bonfiglio, is handling a dozen such cases on behalf of financially strapped homeowners, including three against one South Florida real estate operator.

I found the following interesting quote in the story:

• "What's more, such [foreclosure rescue] cases are difficult to win in Florida, real estate lawyers say, because judges in the state tend to enforce what's written in a contract."

While I'm sure that there may be real estate lawyers who "say" this, readers of this blog and savvy consumer protection and real estate attorneys know that, when invoking the "equitable mortgage" doctrine in order to treat a foreclosure rescue arrangement simply as a secured (& possibly usurious) loan, courts are not limited to reviewing the written documents. They are to listen to the testimony of the parties and look to all of the surrounding facts and circumstances when determining whether a deed transfer with a simultaneous lease back / buy back arrangement is an equitable mortgage.

(Florida has codified the equitable mortgage doctrine at Chapter 697.01 of the Florida Statutes.)

Further, in a prior blog post, I referred to the recent Florida appellate court case, Guest v. Claycomb, 932 So. 2d 567 (Fla. App. Ct. 5th Dist., 2006), which reminds us that Florida courts (and I'm sure non-Florida courts as well) have long held that when someone brings legal action in a case involving a written contract and specifically requests some form of "equitable relief", the court will not limit their review solely to the written documents. They are duty bound to listen to and consider the oral testimony of all witnesses in the transaction as well as to look to all of the surrounding facts and circumstances in determining what actually happened (unfortunately for the homeowner in this case, the trial judge apparently disregarded this legal principle and ruled incorrectly against him; fortunately for the homeowner, however, he had an attorney who was prepared to appeal the incorrect decision to a state appeals court which did, in fact, reverse the lower court decision).

To read the entire Sun-Sentinel article by Ian Katz, see:

Facing foreclosure? Beware of 'rescue firms' offering to help you

Click here for the prior post referencing Guest v. Claycomb.

Click here for a prior post of a foreclosure rescue operator who violated Federal Truth In Lending and state usury law.

Click here to search for other blog posts on equitable mortgages on this blog.

(revised 1-26-07)