Under Pressure, Florida Judge Opens Foreclosure Hearings to the Public

A follow up to the Rolling Stones Magazine piece about a Jacksonville, FL rocket docket foreclosure court.

Palm Coast, FL – November 18, 2010 – No news story about the real estate industry is as big right now as the foreclosure documentation mess. Lenders and loan servicing companies are now in the middle of a huge problem of their own creation. During the real estate equivalent of the gold rush, mortgages were bought and sold, repackaged and sold again and again. To avoid the delays and costs associated with actually filing each transfer with the local clerk of courts, the industry invented the Mortgage Electronic Registration System (MERS). MERS kept digital records of the transfers, avoiding the inefficient and cumbersome paper trail required by law (not to mention the millions of dollars in filing fees they avoided paying local clerks’ offices).

Now as lenders and mortgage processing companies find themselves facing mountains of defaulted loans, they are discovering the reality that foreclosures cannot avoid the paperwork trail. Lenders initial response was to fake the paperwork, but they got caught. Now the extent of the problem is seeing the light of day. Several banks suspended foreclosure proceedings as they assessed their position. Most have decided to restart foreclosures from the beginning; this time with "correctly executed documents." We’ll see how that goes.

Foreclosure law firms and some courts got caught up in the mad rush to push the massive backlog of foreclosures through the mill. On Monday, GoToby.com pointed readers to an excellent Rolling Stones Magazine article by Matt Taibbi that told the story of a "rocket docket" foreclosure court in Jacksonville, FL. Rocket Dockets are special Florida courts set up especially to handle the foreclosure logjam. These courts utilize retired judges, many of whom had no foreclosure experience. Rolling Stones discovered, among other things, that public access was limited or denied in the Jacksonville court.

Several groups petitioned the Florida Supreme Court seeking unfettered access. Yesterday, Florida Chief Justice Charles Canady wrote the following: "I have received the letter and am deeply concerned about the allegations it makes. Today I am directing the Office of the State Courts Administrator to make recommendations concerning appropriate corrective actions."

Monday’s Rolling Stones Magazine piece

Today’s Rolling Stones follow-up