Lenders Lawyers' Failure To Return Phone Calls Forces Already-Strained Florida Court To Impose Formal Conciliation Process In Home Foreclosure Actions

In Sarasota, Florida, the Herald Tribune reports:

• As more and more Florida homeowners slip into foreclosure, the law firms handling the cases for the banks have become harder to reach, those familiar with the system say. Homeowners and their attorneys, and even judges, cannot get a call back, making it impossible to dispute a debt or work out deals other than foreclosure until the case is in front of a judge. "The lenders are just not talking to them," Chief Circuit Judge Lee Haworth said.

• Now, Haworth and other 12th Judicial Circuit court judges are going to force those law firms to meet with the homeowner within 45 days for a frank discussion on alternatives to foreclosure. Those discussions could center around refinancing, forgiving part of the debt or clarifying the amount required to reinstate or pay off the loan.

• The Homestead Foreclosure Conciliation Program will start in December. It aims to keep people in their homes and reduce the strain on the court system from foreclosure cases, which are on pace to double this year compared with 2007. The program applies only to property registered as a primary residence under the homestead exemption. Local bar associations and legal aid organizations agreed to provide some attorneys to assist those homeowners during the meeting at no cost.

• The law firms representing lenders are also required to notify any homeowner of the program, contact them and invite them to participate. The large increase in foreclosures has strained almost every part of the foreclosure process, from serving legal papers to finding courtroom time. Coming to a solution within 45 days would avoid protracted legal battles and reduce the number of cases going through the system.

• Those long legal battles seem to be the only way to get law firms representing banks to return calls, Miami-based foreclosure attorney Rick Neustein said. "Most of the time they don't want to talk to us until they see this thing is being hotly contested," Neustein said. "They don't get serious until we're defending the foreclosure for nine months."

• Haworth said the main issue is only a small number of law firms handle the foreclosure cases for the banks for small legal fees, so they want to put as little time as possible into a case.(1) If the law firms do not comply with the new order, they will face courtroom sanctions that would cost them money, since it would take their attorneys more time to handle the cases.(2)

For the story, see Lenders told they can't hide (if there's a problem with this link, try here).

For more on the new foreclosure procedural rules in Florida's 12th Judicial Circuit, see:

• Administrative Order Establishing Circuit-Wide Homestead Foreclosure Conciliation Program.
• Attorney's Certificate of Compliance With Twelfth Circuit Homestead Foreclosure Conciliation Program.
• Chief Judge's Letter Summarizing New Foreclosure Procedures & Administrative Orders.

Go here for Notice To Attorneys Filing Foreclosure Actions in Florida's 12th Judicial Circuit.

Go here for other posts on the foreclosure mediation program in Florida's 12th Judicial Circuit (Manatee, Sarasota, and Desoto Counties).

(1) Go here for more on so-called Assembly Line, Foreclosure Mill Lawyering in foreclosure actions.

(2) According to the story, the law firms for lenders would not be able to settle the case through a summary judgment, a quick resolution to cases. The lender attorneys would no longer be able to appear at hearings over the telephone. And that lender's cases would be assigned the lowest priority for court hearing times, which may delay the case for an extended period. ForeclosureMillAttorneysAlpha

Assembly Line Foreclosure Mills Dominate Fla. Law Market For Home Repo Suits; Judge Exoriates Law Firm, Wells For Mindlessly Cranking Out Legal Papers

In Tampa, Florida, the The Tampa Tribune reports:

• Few areas of the legal field are so dominated by a handful of players as foreclosure law. Florida Default Law Group is one of four foreclosure mills operating in Florida that appear to be winning the lion's share of business from lenders or their representatives. Along with Florida Default, other big firms include the law offices of David J. Stern in Plantation, the law offices of Marshall C. Watson in Fort Lauderdale and Shapiro & Fishman in Boca Raton.

• The Tribune looked at 1,994 initial foreclosure documents filed in October to see which firms were handling the most foreclosures. Combined, those four industry heavyweights filed 1,049 foreclosure cases in October, or 53 percent of all new foreclosures filed in Hillsborough County that month. Florida Default filed 323 new foreclosure cases in October, second only to the 352 cases filed by David J. Stern. Florida Default operates in Florida's 66 other counties, the firm's managing partner testified in a court deposition.

• To handle the workload, foreclosure mills have developed a common model: use lower-paid paralegals and support staff for much of the routine legwork, and hire young lawyers to sign off on the lawsuits and handle complications.

***

• John Olson, a U.S. Bankruptcy Court judge in Fort Lauderdale, had no problem taking Florida Default and a big client, Wells Fargo, to task. After the firm made errors in up to 50 cases in court, Olson called out the firm in October 2008 in a strongly worded opinion. Florida Default made the errors when an employee pulled information from the wrong computer screen, according to court documents. Florida Default and Wells Fargo "have engaged in the systematic process of churning out unrefined and unexamined form pleadings, instead of producing and filing carefully considered legal papers," Olson wrote.(1)

For more, see Law firm gorges on home defaults (Florida Default and Wells Fargo "have engaged in the systematic process of churning out unrefined and unexamined form pleadings, instead of producing and filing carefully considered legal papers," a bankruptcy judge wrote).

(1) In Sarasota County, Lee Haworth, chief judge in the state's 12th Judicial Circuit, started noticing a trend in foreclosure filings: Foreclosure law firms would start a foreclosure lawsuit against a homeowner but push it to the back burner if complications arose. Meanwhile, the stalled cases began to languish in Sarasota and Bradenton courts, the story states. Foreclosure mills seemed to think pursuing such cases was too much trouble for the $1,200 fee, he reportedly said.

Central Florida Chief Judge Revokes "Phone Privileges" For Foreclosure Attorneys Due To Actions Of Sloppy "Foreclosure Mills"

In Bradenton, Florida, the Bradenton Herald reports:

• The area’s top judge has lost patience with so-called foreclosure mills so he’s ordering them to appear in court. Non-local law firms that specialize in mass foreclosure filings have ignored local court procedures, filed incomplete or inaccurate court documents and “widely abused” the privilege of appearing at court hearings by telephone, 12th Judicial Circuit Chief Judge Lee Haworth said. He’s cracking down, requiring lawyers in foreclosure cases filed in Manatee, Sarasota and DeSoto counties to attend all foreclosure-related hearings in person.

***

• While the order affects all lawyers in foreclosure cases within the district, it’s pointed directly at so-called foreclosure mills that file the bulk of local cases. Those firms’ heavy workloads often result in incomplete court files and missed court hearings, causing delays and wasting court resources, Haworth said.(1)

***

• He declined to name the firms that have drawn his ire. But court records show the biggest filers of foreclosure actions in Manatee include Florida Default Law Group in Tampa; the David J. Stern law firm in Plantation; and the Marshall C. Watson law firm in Fort Lauderdale.

For more, see Area's top judge cracks down on foreclosure mills.

See also, Sarasota Herald Tribune: Judge requires lawyers to show up for foreclosure hearings.

For an earlier report on this story and links to the local court procedures established for foreclosure actions filed in Florida's 12th Judicial Circuit, see The Sloppiness Continues For Attorneys Representing Foreclosing Lenders; "They Are Totally Disorganized!" Says Florida's 12th Judicial Circuit Chief.

Go here for other posts on the foreclosure mediation program in Florida's 12th Judicial Circuit (Manatee, Sarasota, and Desoto Counties).

(1) For posts that reference the failure of mortgage lenders and their attorneys to file the proper paperwork when bringing foreclosure actions, Go Here, Go Here, Go Here, Go Here, and Go Here. KappaMtgDocsMissing

Media Coverage On Alleged Fraudulent Court Filings By Florida Foreclosure Mills Continues

In Central Florida, the Bradenton Herald Tribune recently weighed in with their report on the ongoing probe by the Florida Attorney General's office into what it says "appears to be [the] fabricating and/or presenting false and misleading documents in foreclosure cases."

• Foreclosure defense attorneys who have long complained about false documents in Florida foreclosure cases said judges should pursue claims of possible wrongdoing. "You see all these documents time and time again which on their face are not possible," Tampa attorney Matthew Weidner said. "The judges cannot just ignore this. They cannot ignore blatant fraud in front of their faces." The Attorney General's office opened its investigation into Florida Default in October, but it only became public after the target of the investigation was told about it.

***

• Twelfth Judicial Circuit Chief Judge Lee Haworth said news of the investigation could prompt judges in Sarasota and Manatee counties to look more closely at filings. But Haworth said the judges do not have the ability to check documents as thoroughly as they would like.(1) "I would be very skeptical they're the only ones," Haworth said of the Florida Default Law Group investigation. "Our anecdotal experience are it's pretty widespread."

For the story, see Paperwork puts foreclosure firm in hot seat (Group suspected of falsifying records to retake homes).

(1) It appears that, at this point, the national and local media coverage on this issue has placed the entire State of Florida on notice of this problem. I wonder how long it will take for Judge Haworth (and other chief judges of the lower courts throughout Florida) to recognize that they really have no choice but to thoroughly scrutinize the court filings by any attorney filing a foreclosure action. Anything less would appear to demonstrate a reckless indifference for the truth on the part of the judiciary, to put it nicely.

Sloppy Lender Lawyers Making False Statements Running Rampant In C. Florida Foreclosures? Chief Judge To Recruit Law Students To Review Court Files

In Central Florida, the Sarasota Herald Tribune reports:

• Foreclosure lawyers want to take back property as fast as possible, and sometimes they do not let the facts slow them down. In case after case, lawyers representing banks are giving false statements in court about who owns mortgages, or whether the homeowner is willing to negotiate, or whether they have completed all the legal steps to put a foreclosed house back on the market.

• The errors and fabrications in the court files are seldom caught by judges with hundreds of foreclosure cases before them.(1) The judges say they can only hope to catch a few of the offending lawyers in hopes of keeping the rest honest. The courts usually rely on defendants to point out problems in the cases against them.

***

• Nobody knows how common it is for foreclosure cases to be based on untrue statements or incomplete proof. More than half of all foreclosure defendants simply walk away, and never show up in court to defend themselves.

• A Sarasota attorney, Richard Kessler, enlisted a few friends to go through 180 foreclosure cases in Sarasota County looking for errors. They found three out of four cases proceeded with incomplete or improper documentation. For instance, the survey found that only one in 12 cases had the documents to prove the company foreclosing on the property was also the company holding the mortgage note. In half of the cases reviewed, the plaintiff said the mortgage note had been lost.

• Kessler contacted [Florida's 12th Judicial Circuit Chief Judge Lee] Haworth and offered to have his business double check the paperwork for the courts, proposing that his fee could be charged to the company filing the case. Haworth declined, saying he cannot add such a filing fee, and the courts have no money to pay for the service.

• Instead, Haworth is recruiting volunteer law students to review all the cases for foreclosure judges this summer to verify documents. "We think having cops on the beat will help," Haworth said.

***

• A judge in Miami fined Wells Fargo bank $95,000 late last year because of sloppy paperwork filed by Florida Default Law Group, one of a handful of companies that handle the majority of foreclosures in the state. Judge John K. Olson blasted Florida Default, saying the firm seemed to believe that "filing any old pleading without undertaking any investigation into its accuracy is perfectly acceptable practice."

For more, see Lies a new tool in foreclosure (Lawyers, in rush to regain properties, can exploit judges' workload).

Go here for other posts on sloppy foreclosures and assembly line lawyering.

For posts that reference the failure of mortgage lenders and their attorneys to file the proper paperwork when bringing foreclosure actions, Go Here, Go Here, Go Here, Go Here, Go Here, Go Here, and Go Here.

(1) In one case cited in the article, minutes after a foreclosure attorney told her everything was in order in a recent case, Circuit Judge Donna Berlin was ready to sign off. Then she happened to glance at the file, and realized that the two properties were in Miami, a few hundred miles outside her jurisdiction. "I didn't have time to go through and read it," Berlin told a group of attorneys at a meeting last weekend. "And it was not something that I normally look at." SloppyForeclosuresAlpha EpsilonMissingDocsMtg

The Sloppiness Continues For Attorneys Representing Foreclosing Lenders; "They Are Totally Disorganized!" Says Florida's 12th Judicial Circuit Chief

In Sarasota, Florida, the Sarasota Herald Tribune reports:

• [T]he foreclosure glut is so bad that the law firms that specialize in handling the court cases in bulk for lenders are now too busy. They even let many foreclosure cases stall and remain inactive for months or years, if resident homeowners put up any sort of legal fight.

• [Florida's 12th Judicial Circuit Chief Judge Lee] Haworth says those law firms are apparently even failing to read [his] official written notifications [...]. Notices about local courtroom rules changes, like Haworth's requirement that there be a mediation meeting with a homeowner before a foreclosure can proceed, seem to go unread.

• "They are totally disorganized," Haworth said. They seek court hearing dates that the new rules say they are not entitled to, and seem clueless about it all.

For the story, see Troubled mortgages burdening the courts.

For Chief Judge Haworth's official notifications and links to the forms now required to be filed by attorneys representing foreclosing lenders within Florida's 12th Judicial Circuit (Sarasota, Manatee, and Desoto Counties), see:

• Chief Judge's Letter To Attorneys Summarizing New Foreclosure Procedures And Administrative Orders,
• Administrative Order Establishing Circuit-Wide Homestead Foreclosure Conciliation Program,
• 12th Judicial Circuit's Foreclosure Forms Section (links to required forms and procedures for 12th Circuit foreclosure actions),
• Go here for the 12th Judicial Court's website.

Go here for other posts on the foreclosure mediation program in Florida's 12th Judicial Circuit (Manatee, Sarasota, and Desoto Counties).

For posts that reference the failure of mortgage lenders and their attorneys to file the proper paperwork when bringing foreclosure actions, Go Here, Go Here, Go Here, Go Here, and Go Here. KappaMtgDocsMissing

Mess Caused By Sloppy Lenders, Foreclosure Mills Deepens In Florida As Ambiguity In Recent State High Court Ruling Adds Confusion To Legal Process

In Central Florida, the Sarasota Herald Tribune reports:

• An attempt to fix the sloppy legal work plaguing thousands of foreclosure cases in Florida has been ineffective, and has now caused a legal mess of its own. The Florida Supreme Court got tough on attorneys for banks and lenders in February, responding to stories of homeowners losing their property based on shoddy or incomplete paperwork. The incomplete filings also wasted judicial resources and clogged up the courts.

• To combat that, a new rule enacted by the high court requires the attorney or bank filing a foreclosure to verify -- under penalty of perjury -- that the allegations and paperwork are accurate when a residential property is at stake. But attorneys have not followed the rule. Some contend they do not have to, arguing that the Supreme Court said the rule was not in effect yet.

***

• A court-sanctioned review of hundreds of residential foreclosure filings in Sarasota and Manatee counties -- unofficially dubbed "Stop the Slop" -- found that nearly all the lawsuits lacked basic documentation. Of the 52 cases in the first round of review in Sarasota, all lacked the new verification requirement or other proof the bank is entitled to take the property, an attorney who reviewed the cases says. Backed by local Chief Judge Lee Haworth, who served on the state task force that recommended the new rule, judges in Manatee and Sarasota counties used the new rule to throw out dozens of foreclosure complaints in the past month.

• But Miami attorney [Gerald] Richman, who represents banks and lenders, contacted Haworth last week and told him he and the other judges were jumping the gun. The confusion results from the wording of the Supreme Court's ruling. [...] The confusion sent Haworth backpedaling last week, after Richman said his client would appeal the tossing of the cases. Haworth temporarily suspended that part of the "Stop the Slop" program Friday, saying he was not alone in having questions.

***

• Foreclosure defense attorneys had already pointed to Haworth's "Stop the Slop" program as an example that should be followed across the state. Haworth said he will continue policing foreclosure documents aside from the Supreme Court verification requirements.

For the story, see Legal mess over foreclosures deepening.

Central Florida Foreclosure Conciliation Program Begins In December

In Central Florida, the Bradenton Herald reports:

• With foreclosure cases swamping local courts, the area’s top judge is planning a novel approach: Forcing lenders to talk with borrowers. Saying he wants to break “the wall of silence” between lenders and homeowners, 12th Circuit Chief Judge Lee Haworth soon will require them to discuss possible ways of avoiding foreclosure before it actually happens.

• “Forcing the parties to slow down and discuss possible solutions is a good thing,” he said Monday. The new Homestead Foreclosure Conciliation Program likely is the first of its kind in Florida, Haworth said. The program applies to foreclosure suits filed on or after Dec. 1 against homesteaded residential properties in Manatee, Sarasota and DeSoto counties.

For more, see Local judge says borrowers, lenders must see eye to eye.

Go here for more on Florida's 12th Circuit Homestead Foreclosure Conciliation Program:

• Attorney's Certificate of Compliance With Twelfth Circuit Homestead Foreclosure Conciliation Program,
• Chief Judge's Letter Summarizing New Foreclosure Procedures & Administrative Orders.

Go here for other posts on the foreclosure mediation program in Florida's 12th Judicial Circuit (Manatee, Sarasota, and Desoto Counties).

Florida Bar Maintains 100% 'Success' Rate When Clearing Foreclosure Mill Attorneys Accused Of Ethical Misconduct

The Sarasota Herald Tribune reports:

• Florida courthouses are rife with evidence of errors and fabrications made by attorneys handling foreclosure cases, and yet so far no lawyers have been disciplined. With pressure mounting to police its own members, the Florida Bar established a special category of complaints listed as "foreclosure fraud."

• But in 20 complaints investigated in that category, the Bar has not found cause to discipline anyone -- even lawyers who admitted to breaking ethical rules. Some observers say that early track record of ignoring misdeeds by its members raises questions about whether the system of self-policing for lawyers can handle the depth of wrongdoing in the foreclosure crisis.

• The complaints have been filed by judges, lawyers, homeowners and the Florida Bar itself, and reflect the issues seen in courtrooms almost daily for the past two years, including forged signatures and backdated documents used to improperly seize homes in foreclosures. In addition, attorneys for lenders have filed false motions, left out important information that would hurt their case, or skipped mandatory mediations and court hearings.

***

• The convoluted way foreclosure cases are handled by attorneys makes placing blame difficult. At the largest foreclosure firms, dubbed "foreclosure mills," several lawyers work on different parts of a case and other non-lawyers prepare many of the documents.

• Some complaints against lawyers in foreclosure cases were closed without discipline because a homeowner complained about the wrong lawyer in a case where several did work. Even judges have trouble figuring out which attorney is responsible for the bad behavior.

• Circuit Judge Lee Haworth, chief judge of the judicial district that includes Sarasota and Manatee counties, says he only reports lawyers after he sees a pattern of egregious violations in cases. "I think one of the problems we have is identifying exactly who it is at fault here," Haworth said. "Lawyer A will file the pleadings, but Lawyer B will show up."

• Law firms from across the state also hire local lawyers to represent them at hearings. "The judges are not always face to face with the people who are causing the most problems," Haworth said.

For more, see Foreclosure lawyers' misdeeds ignored in Florida? (Despite complaints, ethics breaches slip past discipline system).

Improper Invocation Of Court Jurisdiction, Grant Of Void Judgments Of No Concern To Some Judges In Unchallenged Foreclosure Actions

In Central Florida, Sarasota Herald Tribune columnist Tom Lyons writes:

• Circuit Judge Lee Haworth says a judge has to be neutral in foreclosure cases, and can't act as a defense attorney when there isn't one. But does being neutral really mean a judge must be gullible when there is no one in court to point out obvious problems with documents filed by a bank?(1)

• I'm not convinced neutrality forces judges to ignore major and possibly fraudulent errors in mortgage transfer documents, especially when foreclosure mills have become infamous for filing them.

***

• Aside from it being impractical to scour documents in every foreclosure case, [Haworth] says it's improper for judges to question such evidence [of dubious documents] even when they notice it, unless a defense lawyer or defendant raises the issue. Haworth knows some judges -- ones he describes as more activist than he is -- disagree. "Each judge makes their own call," he said.(2)

For more, see Being neutral doesn't mean being gullible.

(1) See The Tampa Tribune: Judges fulfill proper role in state's foreclosure crisis for a similar position expressed by another Florida chief judge, J. Thomas McGrady, the chief judge of the Sixth Judicial Circuit of Pasco and Pinellas counties.

(2) Said another way, Judge Haworth's position is that trial judges have absolutely no obligation to determine whether:

• a plaintiff in a lawsuit has properly invoked the jurisdiction of the court,
• a controversy between the parties named in the lawsuit does, in fact, exist, and
• the necessary parties to the alleged controversy have been brought before the court

unless those issues have been specifically raised by a defendant.

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 (plaintiffs in foreclosure actions, for example) who had no right, title or interest in the real estate, nor any duty to perform with reference thereto, is without jurisdiction, and 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.

--------------------------------

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.

C. Fla. Circuit Court Chief: Foreclosure Mill Law Firms' "License Could Be On The Line" Regarding State "Supremes" Directive To File Proper Paperwork

In Sarasota, Florida, Sarasota Herald Tribune columnist Tom Lyons writes:

• Law firms that some call "foreclosure mills" handle loan default cases by the thousands for financial institutions that were not the original lenders. Some have filed odd documents in their court cases. Many claim loan documents are lost, but that ownership of the note was transferred, perhaps multiple times, and that the foreclosing bank is now the owner or trustee.

• Problem is, they rarely show a clear chain of transfers back to the original lender. Often, the documents are not only vague but also of fresh vintage. Some are only created, signed and notarized after the foreclosure is filed. And signatures authorizing the transfers make fun reading. Some people listed as vice presidents and the like often are not, and were never even employees of the companies named. They work for companies that are hired to create the documents.

• When accused of using sham documents, the response has sometimes been that the signers were somehow authorized to sign, a claim some judges have rejected.(1)

***

• In uncontested cases, most still slip by, and [Sarasota County Circuit Court Chief Judge Lee] Haworth says judges have too many cases to do the checking that a defense lawyer would do. But there is bigger news that should help, Haworth says.

• Last month, Florida's Supreme Court decided that attorneys filing foreclosure cases will no longer be presumed blameless when they claim a right to foreclose based on faulty documents.(2) The foreclosure mills normally rely on an army of assistants and clerical workers, and lawyers claiming that an assistant's error led to a faulty filing have rarely been called to task. That's about to change, Haworth says.

• Some may still gamble in cases where they expect no opposition lawyer will be checking the documents. But if they take the time and effort, most should be able to do things right and establish their claims, Haworth said. If not, he said, they'll have a problem. "I'm looking forward to see how they do comply," Haworth said. "Their license could be on the line."

For the story, see Documents insufficient in foreclosure case.

(1) Go here for more on fabricated mortgage assignments.

(2) See:

• Fla. High Court Enacts Procedural Rules To Apply In Residential F'closre Mediations; Seeks To Tamp Down Use Of "Lost Note" Affidavits, "Sewer Service"
• The Tampa Tribune: Court makes it more difficult for lenders to foreclose (The Florida Supreme Court says lenders are now required to verify they own loans before they file a foreclosure lawsuit).

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.

--------------------------------

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.

Role Played By Unlicensed "Broker" In Foreclosure Rescue Ripoff Violated State R/E License Law, Enough To Sink Sale Leaseback, Says C. Fla. Civil Jury

In Sarasota, Florida, the St. Petersburg Times reports:

• In 2005, Thomas Cook told 68-year-old Yolanda Rodriguez that the St. Petersburg company he worked for could help save her home from foreclosure. Instead, Garco Inc. got the deed to the house, and Rodriguez, who was evicted, lost as much as $200,000 in equity.(1) But on Thursday, a Sarasota County jury found that the transaction that cost Rodriguez her home was invalid because Cook, acting as a broker on the deal, did not have a Florida real estate license.

• The verdict paves the way for Rodriguez to get back her 2,300-square-foot Englewood pool home. It could also provide legal ammunition for others who have lost their houses to "foreclosure rescue" companies like Garco and its owner, Gideon Rechnitz,(2) whose real estate license was revoked for alleged fraud in 1990. "A licensed real estate agent would not have been allowed to do anything Thomas Cook did," says Elizabeth Boyle, a Gulfcoast Legal Services(3) attorney who represented Rodriguez.

***

• Rodriguez's case is thought to be the first in which a jury verdict hinged on whether someone involved in property transactions for a foreclosure rescue company is subject to the Florida Real Estate License Act.(4) But it is not the first case against Rechnitz and Cook to go to trial. In October, another Sarasota jury awarded $93,467 to Wanda Costa, who claimed the men scammed her out of her Port Charlotte home in violation of Florida's Deceptive and Unfair Trade Practices Act. That verdict is under appeal.

For more, see Second jury finds fault with controversial foreclosure rescue deals.

(1) Reportedly, Rodriguez, now 72, said she stopped paying rent because foreclosure rescue operator Gideon Rechnitz failed to make promised repairs. He evicted her and her deaf brother in 2006 and had all of their possessions, including family photos, loaded into portable storage units, the story states. Rodriguez reportedly said she was unable to retrieve the items because they were stored in Rechnitz's name. Everything was sold at public auction, and brother and sister spent weeks in a Salvation Army shelter and cheap hotels before landing in a small apartment with donated furniture, according to the report.

(2) Rechnitz, not unknown to the reporters at the St.Petersburg Times, has been the subject of several Times articles.

(3) Gulfcoast Legal Services is a non-profit law firm providing free legal aid to income eligible residents of the greater Tampa Bay, Florida area, having offices in Pinellas, Manatee, Sarasota and Hillsborough counties; and is dedicated to providing comprehensive, personal legal advocacy, counseling and education to vulnerable individuals and families.

(4) Florida law defines a broker as someone paid for acting on behalf of another person in real estate transactions. Reportedly, in a sworn deposition before trial, Cook called himself "a broker" and acknowledged he had been paid $1,975 for his dealings with Rodriguez. By finding for Rodriguez on the licensing issue, the verdict voided the entire transaction and set the stage for a March hearing in which Circuit Judge Lee Haworth could return the deed to her.

Central Florida Chief Judge Gives "First Responder" Training To Local Attorneys Assisting Homeowners Facing Foreclosure

In Central Florida, the Sarasota Herald Tribune reports:

• The chief judge in Manatee and Sarasota counties spent his lunch [Friday] training what he called the "first responders" for home rescue -- about 80 private attorneys willing to help homeowners in foreclosure on the cheap.(1) The attorneys will represent homeowners who don't qualify for free legal representation. They will help homeowners during a meeting with lenders to try to settle foreclosure cases outside of the court system.

For more, see Legal-Ease: 911 for those facing foreclosure.

Go here for other posts on the foreclosure mediation program in Florida's 12th Judicial Circuit (Manatee, Sarasota, and Desoto Counties).

(1) Contrast this approach to handling foreclosures by Manatee/Sarasota/Desoto County (Florida's 12th Judicial Circuit) Chief Judge Lee Haworth, who also already requires mandatory mediation, with that of Lee County Chief Judge G. Keith Cary, whose "Rocket Docket" approach to blasting through foreclosure cases recently drew attention in a recent Wall Street Journal story as well as in a recent CBS Evening News report (here and here).

Central Florida Judge Admits Foreclosure Ruling Subsequently Reversed On Appeal Wasn't His Best Work

In Central Florida, Sarasota Herald Tribune columnist Tom Lyons writes:

• When a ruling is reversed by an appellate court, the judge faulted sometimes grumbles. So I didn't know what to expect when I asked Circuit Court Judge Robert Bennett about an appellate court ruling that overturned a house foreclosure he had granted.(1) The three-judge panel said a bank that was not the original lender had not proven it had the right to foreclose, because the documents filed did not show how, or if, mortgage ownership had ever been transferred to the bank.

• Bennett's reaction? The higher court was totally right, he said. "I'm willing to fall on my sword on this one," Bennett said. "It wasn't a very good piece of judge work."(2)

• To be fair, many judges have done much the same thing in similar cases, partly because most foreclosures had long been so routine. If contested at all, it was rare that anyone claimed a major financial institution had not proven any link to the mortgage. Now, just a couple of years since Bennett's ruling on a foreclosure case he cannot even recall, that sort of claim has become commonplace. Of the dozen or so lawyers I've heard from who fight foreclosures -- a common specialty these days -- all mentioned that issue. "This issue of standing, it's common throughout the state," said circuit Chief Judge Lee Haworth.

***

• Bennett's ruling happened before all this became as ordinary in Southwest Florida as sunshine. Few judges then thought to doubt that a bank had standing to foreclose.

For the story, see Documents insufficient in foreclosure case.

(1) See BAC Funding Consortium Inc. v. Jean-Jacques, et ano., Case #2D08-3553 (February 12, 2010). Go here for BAC Funding's appellate brief, describing the sloppy, careless conduct of the lender and its assembly line, foreclosure mill attorney in prosecuting this case (available online courtesy of MattWeidnerLaw.com).

See also, Florida Appeals Court "Deep-Sixes" Rubber-Stamped Foreclosure Judgment; Kicks Case Back To Trial Court For Further Proceedings.

(2) Hopefully, Judge Bennett's reversed ruling was attributable to him simply having an off day. After all, even Babe Ruth struck out from time to time.

Lender Compliance With Central Florida Foreclosure Court Mediation Unknown As Understaffing Impedes Effective Monitoring

In Central Florida, the Bradenton Herald reports:

• Three months after lenders were first required to offer meetings with local borrowers before foreclosing on their primary homes, no one — not even the judge who mandated it — knows how well lenders are complying. That’s because no one is checking, the area’s top judge acknowledged Tuesday. “Ideally, we’d be verifying it, but we and the clerks are so short-handed that we’re not monitoring it to the degree I’d like,” 12th Judicial Circuit Chief Judge Lee Haworth said.(1)

For more, see No one watching circuit judge’s foreclosure mandate.

Go here for other posts on the foreclosure mediation program in Florida's 12th Judicial Circuit (Manatee, Sarasota, and Desoto Counties).

(1) According to the story, since Dec. 1, Haworth has required lenders filing foreclosure suits against homesteaded property in Manatee, Sarasota and DeSoto counties to offer “conciliation conferences” to homeowners. The conferences, which are voluntary and optional for homeowners, are designed to explore possible ways of avoiding foreclosure such as refinancing or modifying the loan.

Foreclosure Law 'Reading List' To Be Given To Central Florida Judges; Circuit Chief Hopes Briefing Will Help Jurists Avoid Getting "A Pie In The Face"

In Central Florida, the Sarasota Herald Tribune reports:

• Starting Monday, three of the most experienced circuit judges will begin handling civil cases [in the courtrooms of Florida's 12th Judicial Circuit], but first they have a reading list: lengthy analysis of the latest foreclosure law and arguments, and guides written by judges who have been in the foreclosure mess for years.

• "It's hard to step into that role," said 12th Circuit Chief Judge Lee Haworth, who made the judicial assignments for this year. "I'm hoping we can get them briefed so they don't get a pie in the face."

• Foreclosures are not even close to the most complex type of litigation to cross a civil judge's desk -- for example, some trials about car crashes involve medical testimony and have seven or eight attorneys. But the more advanced foreclosure defenses now delve into the sometimes labyrinth world of financial markets, trusts and securities. The handbooks discuss the areas of disagreement, or "gray areas" in the law. "There's a larger gray area than we like," Haworth said.

For the story, see Judges studying home suits (FORECLOSURES: Three will have to get up to speed on a fast-moving field).

Use Of Undisclosed “Appearance Attorneys” In Foreclosure Actions - No "Interloping Counsel" Allowed In My Courtroom, Says Bankruptcy Judge

A recent story in the Sarasota Herald Tribune on The Florida Bar's failure to take disciplinary action against Florida foreclosure mill attorneys for their alleged ethical lapses alludes to one of the practices that is arguably making it difficult to affix fault on the these attorneys - the use of 'coverage' or 'appearance' attorneys:

• Circuit Judge Lee Haworth, chief judge of the judicial district that includes Sarasota and Manatee counties, says he only reports lawyers after he sees a pattern of egregious violations in cases.
  
  "I think one of the problems we have is identifying exactly who it is at fault here," Haworth said. "Lawyer A will file the pleadings, but Lawyer B will show up."
  
  Law firms from across the state also hire local lawyers to represent them at hearings. "The judges are not always face to face with the people who are causing the most problems," Haworth said.

The use of a late-appearing, undisclosed 'appearance' or 'coverage' attorney - was addressed and rejected by U.S Bankruptcy Judge Philip H. Brandt in a 2009 ruling (involving a failed attempt by mortgage loan servicer to establish that it was a "real party in interest" in a homeowner/debtor's Federal bankruptcy proceeding) in this excerpt from the ruling (footnotes in the orginal text omitted, bold text is my emphasis, not in the original):

• The careful reader will have noticed that none of the foregoing rules directly address the situation where the original attorney continues as counsel of record, but another lawyer, not of the same firm, joins for some portion of the representation. But, read together, the requirement of corporate representation and the continuing role of counsel of record preclude interloping counsel. For other attorneys not part of the same firm as record counsel to represent a party, something must be done of record. Customarily, this is accomplished by filing a notice of association, and it is common when lead counsel is distant and the use of local counsel for particular matters in the case will promote efficiency, or the new counsel provides particular expertise. Once the notice of association is served and filed, all parties to the case are aware of the changed representation, and associated counsel receives notice directly of events and filings in the case.
  
  The practice of undisclosed “appearance attorneys” creates problems — other parties (and the court) are sandbagged, and the Debtor, trustee, other creditors, and counsel cannot readily communicate regarding scheduling or substance. In addition to the ramifications of this practice, explored in In re Wright, 290 B.R. 145 (Bankr. C.D. Cal. 2003); Hon. Jim D. Pappas, Simple Solution = Big Problem, 46 The [Idaho] Advocate 31 (Oct. 2003); and Neil M. Berman, Judge, This is Not My Case . . ., Norton Bankr. L. Adviser 3 (May 2004), the lack of formal association could raise questions about the informally-appearing attorney’s authority to speak for, and make judicial admissions on behalf of, the client (the contrary suggestion would not be a promising argument).
  
  While this defect is not dispositive, clarity of representation on the record is important to judicial economy and the orderly representation of other parties. So I will require, absent emergency or significant hardship, formal notice of association to be filed not later than the confirmation of the hearing. And there is no remedy for self-inflicted harm — law firms undertaking distant representations must be prepared to appear or timely associate local counsel who will. As corporations must be represented by counsel in federal court, the consequence of not having counsel of record at hearing will be that the party’s position may be deemed without merit. See LBR 9013-1(e)(1).6 This is the flip side of Woody Allen’s observation that “Eighty per cent of success is showing up” — if you (or your counsel of record if you are a corporate entity) don’t, your chance of success approaches zero.
  
  In short, henceforth only counsel of record or individuals representing themselves will be heard.

It may be that judges presiding over foreclosure actions may want to take a cue from Judge Brandt and stop allowing these foreclosure mill law firms from freely substituting attorneys when handling these cases without imposing some measure of control so that fault can be less difficult to assign when screw-ups occur.

For Judge Brandt's ruling, see In re Jacobson, 402 B.R. 359 (Bankr. W.D. Wash. 2009).

C. Florida Court Opts For "Rubber Stamp Method" In Effort To Bulldoze Undefended Foreclosures Thru Legal System, Despite Myriad Of Paperwork Errors

In Sarasota, Florida, the Sarasota Herald Tribune reports:

• Starting Friday, hundreds of people could lose their property each month in foreclosure hearings scheduled to take less than two minutes. Often called a "rocket docket," the streamlined foreclosure court can schedule up to 250 cases per day, sending properties to auction in cases where the owners never showed up to defend themselves.

• Speeding those cases through the court system will help unclog a glut of foreclosure cases, allowing civil judges to focus on cases where homeowners are fighting to save their property, as well as the other lawsuits they normally oversee. [...] "I don't want to have these undefended cases stacking up," 12th Circuit Chief Judge Lee Haworth said. "It just seemed to be the right thing to do."

***

• Foreclosure defense attorneys, who have seen case after case where lawyers representing banks are giving false statements in court, worry that some homeowners will slip through the cracks and lose property they should not. [...] A retired attorney living in Sarasota, whose study of 180 Sarasota County cases found only one in four had complete paperwork, said the fast docket leaves less time to catch those kinds of mistakes. "There is no check, no screen, to make sure the most obvious, egregious errors are corrected," Richard Kessler said. "It's not a hearing, it's a hanging."

• Haworth said the system puts the burden on the person being foreclosed on to point out any flaws there may be in the case against them. "If they decide for whatever reason they choose not to defend it, then they are defaulted," he said.

For more, see Two minutes, and home goes away.

For story update, see 'Rocket docket' for foreclosures begins.

For posts that reference the failure of mortgage lenders and their attorneys to file the proper paperwork when bringing foreclosure actions, Go Here, Go Here, Go Here, Go Here, Go Here, Go Here, and Go Here. EpsilonMissingDocsMtg

Central Florida Judges Hit With Federal Suit Over Implementation Of "Rocket Docket" Foreclosure Hearings

In Sarasota, Florida, the Sarasota Herald Tribune reports:

• Gregory Dixon and Maria Goldberg expect to lose their homes to foreclosure, so they have not appeared in court or tried to defend themselves. But they also think the way the judicial system handles uncontested foreclosure cases such as theirs violates the constitutional rights of all Sarasota and Manatee county residents, and they are asking a federal judge to step in.

• Their lawsuit against 12th Circuit Chief Judge Lee Haworth and two judges handling foreclosure cases argues that the courts should review cases to prevent lenders from taking homes based on incomplete or incorrect information. Their attorney, Richard Kessler, says judges have a responsibility to verify documents filed by lenders, and not doing so violates foreclosure defendants' rights to due process in court.(1)

***

• Kessler's lawsuit argues that a new "rocket docket," where up to 250 uncontested foreclosures are heard in one day to help unclog the congested court system, only accelerates the problem. But, judges say, it is the defendants' job to challenge the documents being used by lenders to take their property.

For the story, see Homeowners contend courts must review documents.

For earlier stories on Sarasota's foreclosure "rocket docket," see:

• Two minutes, and home goes away,
• 'Rocket docket' for foreclosures begins,
• It's fast, furious at Sarasota's 'Rocket Docket' court.

For posts that reference the failure of mortgage lenders and their attorneys to file the proper paperwork when bringing foreclosure actions, Go Here, Go Here, Go Here, Go Here, Go Here, Go Here, and Go Here.

(1) Reportedly, Kessler conducted a study of 180 Sarasota County cases and found only one in four had complete paperwork. EpsilonMissingDocsMtg