Crappy Real Estate Titles, Void Foreclosure Judgments Arising From Unchallenged Faulty Legal Process Not A Concern For One Central Florida Chief Judge

In Central Florida, a recent story in the Sarasota Herald Tribune brings more attention to the issue of "crappy titles" that are resulting by reason of judges' 'hands-off' policy of allowing unchallenged foreclosure actions to proceed, despite the mounting evidence of problems in the legal process:

• The vast majority of errors involve homeowners who fell behind or stopped making payments, not people whose homes were seized by mistake. Because of that, problems with foreclosure documents have often been dismissed as technicalities. But experts say a greater threat looms.

• An orderly real estate market depends on the legal transfer of property. Someone who bought a home from a bank that used questionable paperwork might have trouble selling the property. In addition, previous owners may be able to sue to get their house back. Experts expect a flood of legal challenges based on inaccurate documents.(1)

• "Every one of them is suspect. Some of them are clearly criminal. All of them need to be investigated by law enforcement," said Sarasota real estate attorney Michael Belle, who reviews foreclosure filings as part of a court-sponsored program.

The attitude of the chief judge of one Central Florida jurisdiction about the whole paperwork mess as it specifically relates to unchallenged foreclosure cases is described in this excerpt from the story:

• Judges do not question the documents unless homeowners question them first, so they continue to rule in favor of lenders. Twelfth Circuit Chief Judge Lee Haworth said judges must remain neutral in court, and cannot raise possible defenses -- such as bad paperwork -- on behalf of homeowners who choose not to fight, or don't know how to fight, their foreclosure.(2) "The judges will accept, as they do in every case, pleadings that are represented by counsel as legitimate," said Haworth. "It's the defendant's case. ... If they don't want to hire an attorney, that's their business."

For the story, see Shortcuts on the foreclosure paper trail.

(1) The foreclosing lenders' failure to properly establish that it had the right to bring the foreclosure action appears to lead to the conclusion that such an action lacks subject matter jurisdiction, and the judgment rendered therein is null, void, and with no effect.

See Cone v. Benjamin, 157 Fla. 800; 27 So. 2d 90 (Fla. 1946) for one example of legal precedent in Florida supporting the proposition that, with respect to the effect it may have on real estate, a judgment in favor of a party invoking the jurisdiction of the court (ie. the plaintiffs in foreclosure actions) who had no right, title or interest in the real estate, nor any duty to perform with reference thereto, is without jurisdiction, is null and void, and wholly without effect. The relevant excerpts from the Florida Supreme Court ruling in this case follow (bold text is my emphasis, not in the original text):

• Our view is that the decree in the chancery suit, in so far as it directly affected the real estate, or any right or title therein, was void, because the complainant administrator, who invoked the jurisdiction of the court, had no right, title or interest in the real estate, nor any duty to perform with reference thereto. See 39 Am. Jur. 858-863; Lovett v. Lovett, 93 Fla. 611, 112 So. 768.

***

• For the reason above pointed out, we hold that, under Section 4898 C.G.L. of 1927, the said chancery decree was ineffective as against these appellants insofar as it authorized the administrator, under the supervisor and director of the County Judge, to distribute the personal property to the known heirs of the husband, and that it was wholly without effect on the title to the real estate.

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In the above-referenced case, Lovett v. Lovett, 93 Fla. 611, 112 So. 768 (Fla. 1927), the Florida Supreme Court discusses what it is for a court to have "subject matter jurisdiction" in a particular case, and concludes its discussion with this summary (bold text is my emphasis, not in the original text):

• So that, when it is said that a Court has jurisdiction of the subject-matter of any given cause, if these words are to be given their full meaning, they imply, generally speaking, (1) that the Court has jurisdictional power to adjudicate the class of cases to which such case belongs; and (2) that its jurisdiction has been invoked in the particular case by lawfully bringing before it the necessary parties to the controversy, and (3) the controversy itself by pleading of some sort sufficient to that end; and (4) when the cause is one in rem, the Court must have judicial power or control over the res, the thing which is the subject of the controversy. This, is a general way, is what we mean when we say that a Court has "jurisdiction of the subject-matter and the parties" to a cause.

Where the party invoking the jurisdiction of the court by filing the foreclosure action fails to establish that it had any right, title or interest in the real estate, or any duty to perform with reference thereto, it seems clear that neither:

• the necessary parties to the controversy have been lawfully brought before the court, nor
• the Court has "judicial power or control over the res, the thing which is the subject of the controversy".

two of the prerequisites for having subject matter jurisdiction over the case that are necessary for rendering valid judgments.

(2) See LYONS: Being neutral doesn't mean being gullible.