Northern Florida Judge To Consider Sanctions For Alleged F'closure Mill Racket Suspected Of Fabricating &/Or Presenting False Or Misleading Paperwork

In St. John's County, Florida, The Florida Times Union reports:

• A law firm under state investigation for its handling of foreclosure cases(1) could face court sanctions in St. Johns County for giving a judge false information about who owned a mortgage. Circuit Judge J. Michael Traynor threw out a foreclosure suit this month after concluding the plaintiff listed on a foreclosure filed by Florida Default Law Group never owned the note.

• Lawyers compounded that problem, the judge decided, by filing paperwork later that named the real mortgage holder, HSBC Bank, but falsely described the bank as a “successor” to the original plaintiff, U.S. Bank National Association. Because U.S. Bank really never held the note, what the lawyers were claiming wasn’t true, the judge said.

• “The court was misled,” Traynor wrote in an order dismissing the case. He added that judges “should be able to confidently rely on the statements made by counsel.” “As officers of the court, attorneys should ensure that the facts they represent as true … are correct and accurate,” Traynor wrote.(2)

• The ruling doesn’t stop the real mortgage holder from filing a new suit against homeowners William and Lauren McLeod, and the judge said the whole problem may have just been a matter of sloppy preparation for the case. But the case reflects a broader problem of faulty information being used in lawsuits where people’s homes are at stake, said Chip Parker, a Jacksonville attorney representing the McLeods. “This happens all the time in various forms,” Parker said, arguing that a number of South Florida law firms have become “foreclosure mills” designed to handle mass volumes of lawsuits with little regard to details.

• "They will do whatever they have to do … without regard to the truthfulness of what they’re filing,” said Parker, whose firm asked for the dismissal. Many people never challenge foreclosures, he said, so cases that couldn’t win at trial sail through anyway.

For the story, see Foreclosure foul-up could cause court penalties for lawyers (A judge says the firm gave false information; state also investigating).

(1) The Tampa-based Florida Default Law Group was identified last month by the Florida Attorney General’s Office as being the subject of a civil investigation by its economic crimes unit, the story states. A statement posted on the agency’s website said the law firm, described as one of the state’s biggest handling foreclosures, “appears to be fabricating and/or presenting false and misleading documents in foreclosure cases.”

(2) Traynor has scheduled a hearing in August to decide whether lawyers from Florida Default should face sanctions, acording to the story.