Central Florida Judge Blasts Foreclosure Mill Law Firm For Filing "Fraudulently Backdated" Document "In A Purposeful, Intentional Effort To Mislead"

In Central Florida, The Wall Street Journal reports:

• A Florida state-court judge, in a rare ruling, said a major national bank perpetrated a "fraud" in a foreclosure lawsuit, raising questions about how banks are attempting to claim homes from borrowers in default. The ruling, made last month in Pasco County, Fla., comes amid increased scrutiny of foreclosures by the prosecutors and judges in regions hurt by the recession. Judges have said in hearings they are increasingly concerned that banks are attempting to seize properties they don't own.

• The Florida case began in December 2007 when U.S. Bank N.A. sued a homeowner, Ernest E. Harpster, after he defaulted on a $190,000 loan he received in January of that year. The Law Offices of David J. Stern, which represented the bank, prepared a document called an "assignment of mortgage" showing that the bank received ownership of the mortgage in December 2007. The document was dated December 2007.

• But after investigating the matter, Circuit Court Judge Lynn Tepper ruled that the document couldn't have been prepared until 2008. Thus, she ruled, the bank couldn't prove it owned the mortgage at the time the suit was filed. The document filed by the plaintiff, Judge Tepper wrote last month, "did not exist at the time of the filing of this action…was subsequently created and…fraudulently backdated, in a purposeful, intentional effort to mislead." She dismissed the case.

• Forrest McSurdy, a lawyer at the David Stern firm that handled the U.S. Bank case, said the mistake was due to "carelessness." The mortgage document was initially prepared and signed in 2007 but wasn't notarized until months later, he said. After discovering similar problems in other foreclosure cases, he said, the firm voluntarily withdrew the suits and later re-filed them using appropriate documents.

• "Judges get in a whirl about technicalities because the courts are overwhelmed," he said. "The merits of the cases are the same: people aren't paying their mortgages."(1)

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• At an unrelated hearing in a separate matter last week, Anthony Rondolino, a state-court judge in St. Petersburg, Fla., said that an affidavit submitted by the David Stern law firm on behalf of GMAC Mortgage LLC in a foreclosure case wasn't necessarily sufficient to establish that GMAC was the owner of the mortgage. "I don't have any confidence that any of the documents the Court's receiving on these mass foreclosures are valid," the judge said at the hearing.(2)

For the story, see Judge Bashes Bank in Foreclosure Case.

For Judge Tepper's dismissal and the "fraudulently backdated" (Judge Tepper's words, not mine) document in question, see U.S. Bank v. Harpster.

(Note: In paragraph 13 of the Judge Tepper's dismissal, the court also declared that the Defendant/homeowner was the prevailing party in this litigation and, accordingly, is entitled to an award of attorney's fees and costs, to be imposed against the Plaintiff/lender, and to be determined in a future evidentiary hearing before the Court).

(1) What foreclosure mill attorney McSurdy conveniently seems to ignore (when reportedly making these ridiculous statements) is that when a plaintiff files a lawsuit, the merits of the case (whatever they may be) are irrelevant and remain irrelevant unless and until the plaintiff can first overcome the procedural hurdles of establishing that it has a right to file the case in the first place. For example, in a recent ruling [see Wells Fargo Bank, N.A. v Hunte, 2010 NY Slip Op 50637 (Sup. Ct. Kings County, April 14, 2010)], Brooklyn, NY Justice Arthur M. Schack reminds us of this basic tenet with this excerpt (bold text is my emphasis, not in the original text):

• The Court of Appeals (Saratoga County Chamber of Commerce, Inc. v Pataki, 100 NY2d 801, 812 [2003], cert denied 540 US 1017 [2003]) declared that "[s]tanding to sue is critical to the proper functioning of the judicial system. It is a threshold issue. If standing is denied, the pathway to the courthouse is blocked. The plaintiff who has standing, however, may cross the threshold and seek judicial redress."

(2) For the transcript of this hearing, see GMAC Mortgage LLC v. Visicaro.