Lenders, mortgage servicing companies, foreclosure mill law firms, and even judges are implicated. With new revelations daily, the problem gains momentum making possible solutions seem further away.
Palm Coast, FL – October 15, 2010 – In November 2007, an Ohio federal judge dismissed 14 foreclosure cases because the mortgage investors were unable to prove that they owned the mortgages underlying the foreclosed properties. GoToby.com reported at that time: Judge Dismisses Foreclosures because Banks couldn’t Prove They Owned the Mortgage. The news rippled gradually as attorneys began specializing in a new foreclosure defense strategy spawned by the Ohio case; Show me the mortgage. At the time, most industry observers believed the new defense would only delay the inevitable; that lenders would eventually produce the required documents. What really happened is appalling. It is enough to shake one’s confidence in our financial and legal systems.
Evidence is growing that lenders, service providers, attorneys and even some judges actively participated in activities designed to reduce the foreclosure backlog. Legal niceties and ethics fell by the wayside as a new term, robo-signer, was created. Recent sworn statements of employees attest to the wanton mass production of phony documents. Some testified that they and their staff produced as many as 18,000 affidavits per month without personally checking their validity.
The State of Florida is one of 23 states with a judicial foreclosure process. A final judgment is required before a foreclosure sale can proceed. Florida’s courts were simply overwhelmed with the volume of cases. The solution was to bring judges out of retirement to form a special court system to handle only foreclosures. The new system has been dubbed "the rocket docket." At least some of the judges apparently allow an anti-defendant climate to exist within their courtrooms. Expediency has its price.
I found one example on the Naked Capitalism blog. A Judge was presiding over a courtroom dedicated to foreclosures brought before the court by attorneys from Shapiro & Fishman; one of the four law firms under investigation by Florida’s Attorney General.
The summary from an attorney who was representing a client before Judge Roger Cotton that day:
On 8/30, I had a Summary Judgment Foreclosure hearing on Palm Beach County’s “Rocket Docket”. The judge spoke for 14 minutes to the crowd, of mostly pro se defendants [without attorneys], about how they should just agree to the summary judgment and the plaintiffs, (whose attorneys (Shapiro & Fishman had a dedicated courtroom and to whom he referred to as “my attorneys”) would be gracious (Ha!) enough to allow them to stay in their homes for 120 days if needed (even though the statute says he only has to give them 30). When it came to hearing arguments which were fully briefed and provided to the court (pursuant to the instructions of the Divisions head judge) he only allowed 30-60 seconds for argument, failed to read any of the papers, failed to review the plaintiff’s foreclosure package, flatly ignored the Affidavit filed in Opposition, ignored my plea for a trial, signed the judgment and dismissed me. I never was permitted to even read the proposed judgment or to examine the “newly discovered” allonge which Shapiro’s counsel said I had no right to see.
In another case extracted from a Motion to Disqualify Judge, attorney Mark Stopa alleges Judge Pamela Campbell "entered a Final Judgment of foreclosure more than an hour BEFORE the scheduled hearing.…." Attorney Eric Del ‘Etoile, representing the lender, is with the Florida Default Group, another of the four foreclosure mill law firms under investigation by Florida’s Attorney General. He’s also a former intern of Judge Campbell.
Each day brings forth more examples of expediency trumping individual rights. Lenders claim the problem is being exaggerated. It’s only a procedural problem easily fixed, they say. Don’t believe them. Heads will roll once the powers that be select the scapegoats. Meanwhile, faith in our long-revered institutions continues to crumble.