Miami Judge Discovers 15,000+ Unserved Foreclosure Cases; Could Lead To Title Disputes Down The Road If Courthouse Sales Are Allowed To Go Forward

In Miami, Florida, the Daily Business Review reports:

• A Miami-Dade Circuit Court judge discovered more than 15,000 foreclosure cases filed this year haven’t been served. It’s the latest shoe to drop in a foreclosure crisis garnering nationwide attention, and an unwelcome discovery in the face of state budget cuts that produced layoffs for courts and clerks. The backlog is critical because cases where homeowners haven’t been served [with foreclosure papers] within four months are subject to dismissal.

• Civil Division Administrative Judge Jennifer D. Bailey made the discovery last month as she was taking stock of the circuit’s foreclosure load. She noticed 15,219 cases with no letters of correspondence, no answers and no motions to dismiss. “In other words, no service,” she said.

• The circuit is scrambling to find the root of the problem, which could jeopardize most of this year’s 17,000 foreclosure filings. Most of the cases still fall within the four-month window, but no program is in place to speed things up. If a foreclosure proceeds to a default judgment with no service on the defendants, it could lead to a title dispute down the road. Bailey said there is no sign that has happened so far but recognizes the potential for problems.

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• Bailey said she still is trying to interpret the data to determine the source of the problem and chart a new course. But whoever is at fault, Bailey quickly notes the problem threatens to overwhelm a court system that already is strapped. “The question I now face is what do I do with this?” she asked. The cases “would potentially be subject to dismissal,” but she noted many cases are recent enough that service within the four-month window is still possible. “Let’s assume a third of these are subject to dismissal. In my spare time, I’ve got to figure out ways to generate orders in 5,000 cases and pay for 5,000 stamps and serve everyone,” Bailey said. “Are we going to do that? Yes. Am I trying to figure it out? Yes.”

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• "It all starts with service [of foreclosure papers to initiate the lawsuit]. If people don’t get served, all we’re doing is buying ourselves a bunch of title cases in six years,” the judge said.(1)

For the rest of the story, see Judge grapples with her discovery of 15,000 unserved foreclosure cases.

(1) To the extent courts are allowing mortgage companies to bring foreclosure actions where the foreclosing entities either fail to produce the promissory notes and other required paperwork, or otherwise lack standing to bring these lawsuits, the courts may already be buying themselves a bunch of title cases. SloppyForeclosuresAlpha SewerServiceAlpha