Florida’s Kangaroo Foreclosure Courts: SCUMBAG Judges Denying Due Process on Behalf of Banks

IMBECILE JUDGE, LAWRENCE SCHWARTZ


Florida is ground zero of the foreclosure crisis. In addition to being one of the epicenters of the housing meltdown, it has also become the jurisdiction where local lawyers have been the most effective overall in unearthing how servicers and foreclosure mills have engaged in widespread document fabrications and use of improper affidavits to foreclose.

This abuse of contracts and legal procedures matters because the courts are the last bastion of defense of the individual. Even libertarians, who keenly oppose government mission creep, give courts an elevated role as a protector of rights.

Given the success that local attorneys are having (it has reached the point where the state attorney general’s office has opened an investigation into three so-called foreclosure mills operating in the state), pushback by the mortgage industrial complex was inevitable. The old saw about “best government money can buy” now looks to apply to the courts, the one area most people assume to be relatively free from tampering by well funded interests.

The New York Times did report on this development, but its account was such a pale version of what is happening on the ground as to give readers a distorted picture.

These new foreclosure-only courts are special creations of the Florida legislature, funded separately from the usual court system. They are manned by retired judges, which means in many cases they are not familiar with real estate law.

But perhaps most important, the explicit objective of these courts is to clear up the backlog. And that is coming to pass not by the Legislature having thrown enough resources at the problem (that is, having greatly enlarged court capacity to process more cases in parallel) but by pushing for faster resolution. The problem is that an accelerated process runs roughshod over due process and allows banks to foreclose when they may not be the right party, or worse, when the foreclosure is the result of servicing error.

Let’s look at one example of banana republic faux justice in the US, via a speech by foreclosure court Judge Roger Colton to his court on how the day was going to go. It’s simply breathtaking. He says that if the bank is foreclosing, he’s not going to consider any evidence that the foreclosure is in error (servicing errors, plaintiff can’t provide proof it owns the note, which means it might not be the right party and procedurally, means it lacks standing to take action). He says he has already heard everything, there is a lot of unemployment in the area; he is going to schedule a court date, but that is merely a deadline for negotiation. In other words, he makes it abundantly clear he has no interest in hearing evidence. When he gets to seeing a defendant after his speech to the court (p. 13), he rubber stamps what the bank wants without even considering the evidence. And apparently his entire day went like that. The summary from an attorney who was representing a client before him 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, 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.

Newly discovered allonges (separate documents with endorsements on them) are fakes; this is the new preferred method of document fabrication. Per the UCC (Uniform Commercial Code), an allonge is to be used ONLY when all the space that could be used for endorsement of a note has been used up. That means margins and the reverse side. And when an allonge is employed, it has to be so firmly attached to the original as to constitute a single document. Hence, no way can it travel separately and suddenly be discovered if it were legitimate.

If you think this case is isolated, here are some reports via e-mail courtesy Lisa Epstein, who runs ForclosureHamlet. The first is from Miami-Dade (emphasis theirs):

I went with a family member to court in attempts to stop a foreclosure sale….we were there sitting in court waiting….I heard this judge take on other cases….Regardless of their issue this judge just kept on denying every motion that he was hearing. Not even taking the time not even a minute or a second to even glance at the documents these poor homeowners were bringing to him.

People were telling him that they have been approved and/or were being considered for a modification under HAMP and that they were there to ask to have the sale of their home stopped because apparently the plaintiffs attorneys were not aware of this information. As you may all know, most of these attorneys DO NOT maintain constant contact with their clients, therefore servicers even though they may place in their system for a sale to be postponed based on loss mitigation approval, still, it doesn’t reach their attorneys in time to actually stop the sale. So homeowners are being told by the servicers to actually try and contact the attorneys because they are not able to. Unbelievable but true….

Once the homeowner left the court room the judge asked… “what is this HAMP that these people keep claiming they are approved for?” mannnnn I said to myself… “this judge must have been pulled from retirement from another part of this world, and to get put on the stand to make these decisions… the courts must really be desperate for not even taking the time to even educate them about the huge issue at hand with these foreclosures and modifications and fraudulent documents etc…. then after denying a few more cases in less than 2 minutes he said… “WOW… and i got paid to do this everyday 5 days a week?… this is easy.”

There’s is actually much more of the same, multiple instances with particulars, with the judge clearly operating from the presumption that the borrowers were all deadbeats and the sale would go forward.

This message comes from Hillsborough County:

As I previously noted, when I attended court, many many cases were missing the note and mortgage. Many of these were located later but they definately did not meet the deadline for 20 days ahead and the question is–is anyone reviewing these for fraud? My assessment is that court staff are too buried and have no training in this. I literally saw pile after pile of cases moving through the system like a Burger King window. Legitimately, the court staff can say they are overwhelmed….One could ask, how do you have a summary judgment without the note and mortgage????? I do not feel that what I witnessed was something done on purpose to hurt the homeowner. instead, I feel that the judges believe that the homeowners have not met their obligations and they still haven’t “gotten it” that lawyers could blatantly lie to the court and present false documents. But I honestly did not feel as I observed that there is some horrible conspiracy taking place. It’s more like the judges are bending over too much to assist their “work partners”, i.e., the attorneys handling the cases, to pull their cases together.

Further confirmation of the e-mailed reports comes from Mark Stopa, a Florida attorney:

When do judges decide who wins a foreclosure case? Do they evaluate each case on the merits? Or do judges see “foreclosure case” and automatically decide, in their minds, that the bank is going to win (but refrain from announcing such until entry of final judgment)? In other words, is the outcome of these cases predetermined by some judges? …

My experience yesterday, though, as outlined in this Motion to DQ Judge, makes me wonder, not about myself, but about the thousands of cases in Florida where homeowners don’t have an attorney. I strongly encourage you to read the entire Motion to DQ Judge, as it’s a matter of public record, but here’s the cliff notes version.

On August 19, 2010 at 9:30, a summary judgment hearing was set on a mass-motion calendar. My clients were pro se until just a few days prior, so the documents I filed in opposition to summary judgment had not yet made it into the Court file yet. As such, the Judge thought my clients were pro se. At or before 8:15 a.m. on August 19, 2010, the Judge entered conformed copies of a Final Judgment of foreclosure even though the summary judgment hearing was not scheduled until 9:30 a.m. that day. That’s worth repeating:

The judge entered a Final Judgment of foreclosure more than an hour BEFORE the scheduled hearing.….

At 9:30, when the hearing began, I voiced my concern about this to the Judge. She was obviously caught off guard, but it quickly became apparent to me that her “procedure” is to make conformed copies of the Final Judgment, to be mailed to the parties, prior to the hearing (and to send out those copies to all parties immediately upon conclusion of the hearing). Essentially, she’s already made up her mind before the hearing, is holding the gavel in the air, and is ready to throw it down as soon as the hearing starts.

Moreover in Florida, the public is being barred from observing these trials. In Duval County, Palm Beach County, and Hillsborough County (and this is not a full list), police are refusing entry, claiming safety issues (overcrowding) when lawyers and defendants report there are plenty of open seats. The First Amendment Foundation has urged concerned parties to write letters of protest to judges denying access, including camera access. That battle has not yet been escalated.

Contrast this rubber-stamping of these cases with the statement of the Florida attorney general: ““We’ve had so many complaints that I am confident there is a great deal of fraud here.” Representative Alan Grayson has asked the Florida to halt all foreclosures in the state pending the outcome of the investigation of the state attorney general, since 80% of the foreclosures are undertaken by three of the four foreclosure mills under scrutiny.

But don’t hold your breath. Even though the Supreme Court is preparing a response to Grayson’s, the Chief Justice, Charles Canady, is very much a corporate Republican. In other words, doing the right thing will no doubt be deemed to be too inconvenient.

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Time for Some New Stress Tests for {SCUMBAG}Banks

By SIMON JOHNSON
Today's Economist

Simon Johnson, the former chief economist at the International Monetary Fund, is a co-author of “13 Bankers.”

How much damage to the financial system should we expect from what is now commonly called the foreclosure morass, the developing scandal involving document robo-signing (and robo-dockets), completely messed up mortgage paperwork and highly publicized inquiries into accusations of systematic and deliberate misbehavior by banks?

The damage to banks’ reputation is immeasurable. They have undermined property rights — the ability to establish clear title is a founding idea of the American republic. They have mistreated customers in a completely unacceptable manner. If people doubted the need for a new consumer protection agency dealing with financial products — and the importance of having a clear-thinking reformer like Elizabeth Warren at its head — they have presumably been silenced by recent events. (If you need to get up to speed on the basics of this issue, see this series of posts by Mike Konczal.)

But what is the cost in terms of additional likely losses to big banks? The likely size and nature of these are leading to exactly the kind of systemic risks that the Financial Stability Oversight Council was recently established to anticipate and deal with.

It is hard to know how the precise numbers for losses will end up; so much uncertainty remains about the basic parameters of the foreclosure problem. A lot of smart people are looking for ways to sue the big banks — in particular to force them to take back (at face value) securities that were issued based on some underlying degree of deception.

This is a fast-evolving situation in which every day brings potentially significant news, but our baseline view is that the losses are in the range of $50 billion to $100 billion — that is, these are “new” losses not yet recognized by banks. (Our downside possibility, with perhaps a 10 percent probability, is that the losses are much larger.) Most of this is so-called putbacks to the banks from Fannie Mae and Freddie Mac, meaning that the banks are forced to take back onto their books the underlying securities (and absorb the associated losses) if there was significant misrepresentation in the original documentation.

In almost all cases, these additional losses will remain an order of magnitude smaller than the trillions of dollars in credit losses that brought down the global financial system in 2008-9. Still, these latest losses are not helpful to confidence in big banks, and the continuing uncertainty, which is entirely the banks’ fault, will make their managements more cautious about extending new credit.

Capital is the buffer that banks hold against losses, and banks really do not want to raise more capital under current conditions. Their executives’ fear about potentially having insufficient capital will further undermine loan availability, even for creditworthy borrowers. This is exactly what the economic recovery does not need.

In addition, Bank of America is a particular worry, because its capital position is already precarious, and any downgrade by rating agencies will push it into dangerous territory. To the extent the market believes that the government does not stand fully or immediately behind Bank of America (a view expressed by Morgan Stanley analysts in a note this week), we should expect pressures reminiscent of fall 2008.

We also learned this week of sizable additional potential exposure from the lawsuit filed by the Federal Reserve Bank of New York, Pimco and BlackRock — seeking to force Bank of America to buy back bad mortgages packaged into $47 billion of mortgage-backed securities issued by Countrywide.

The best approach would be a fresh set of stress tests, resulting in the requirement that Bank of America and perhaps other banks need to raise a specified dollar amount of capital (not hit a particular capital-asset ratio, as that would just result in further dumping of assets), and reassuring the market that other banks have sufficient capital, including under the augmented Basel III requirements. (For a primer on capital requirements and the thinking that underlies the approach we are recommending, see a post I wrote with Peter Boone on Oct. 7.)

Created by the Dodd-Frank financial regulatory act, the Financial Stability Oversight Council has plenty of power to order and organize such stress tests. In fact, because of the powers granted to the council under the Kanjorski Amendment, the country’s top regulators have a complete menu of choices available in terms of what they can require banks to do in order to reduce risks to the system (up to and including pre-emptively breaking up big troubled banks).

The foreclosure morass clearly poses systemic risk, both through its general effects on uncertainty about losses and because any manifest weakness at one big bank could spread — in some obvious ways and in some unanticipated ways — through the rest of the system.

In addition, the stress tests of 2009 (known as the Supervisory Capital Assessment Program) did not consider the possibility of large losses arising from the litigation now surrounding mortgage-backed securities. When Representative Brad Miller, Democrat of North Carolina, asked Treasury Secretary Timothy F. Geithner about this at a House Financial Services Committee hearing on Sept. 22, the exchange went like this:

MILLER, asking about possible breach of contract in securitized mortgages: Was potential liability on these theories taken into account at all in the stress test? I mean, the securitizers, who presumably would be the defendants in any litigation, are the 19 biggest banks that got the stress tests. Was their potential liability taken into account at all in the stress tests a year ago?

GEITHNER: I don’t think so.

Mr. Geithner also said he would take this question up in more detail with his colleagues at the Federal Reserve, which administered the 2009 stress tests. The exchange can be heard in full online, with the Miller-Geithner exchange at about the 42-minute mark.

The only fair, reasonable, and safe way to handle this situation is to order a fresh round of stress tests for all systemically important financial institutions. The stress case should consider not just the current dismal macroeconomic prognosis (and the potential for another slip back into recession) but also the downside with regard to litigation losses.

If the Financial Stability Oversight Council refuses to act decisively in this regard, a vital piece of the Dodd-Frank financial reforms will have failed.

 

TAKE THAT SCUMBAGS…

SOVEREIGN  BANK,

Plaintiff,

vs.

FLORIDA DEFAULT LAW GROUP, P.L., d/b/a ECHEVARRIA, CODILIS  & STAWARSKI

Defendants

From the complaint…

The within  action  arises  from  legal services  provided  by Defendants to Plaintiff in Broward County,  Florida.

On or about February 2, 2007, Plaintiff engaged Defendants to bid on a foreclosure sale  in Broward County, Florida.

Specifically, Plaintiff was  the holder of a second mortgage,/home  equity line of credit…

On or about August 17, 2006  the Brandts were sued by the homeowners association…

Plaintiffs nominee, Mortgage Electronic Registration  Systems, Inc., was named as a defendant…

The HOA  lawsuit proceeded  to final  judgment  in the County Court in Broward County, Florida,  and  the  foreclosure  sale was scheduled for February 9, 2007…

A copy of the final judgment in the amount of $4,294.68,  is attached…

Pursuant  to the February  2,2001  engagement letter, Composite Exhibit “B” the approved  bid amount  was $383,700, since Plaintiff at  the time believed  that  in order to protect  its interest  it had  to pay off the first mortgage  on the Real Property in addition to the HOA judgment amount, and  that the approved  bid amount would be sufficient  to pay off the  first mortgage and  the home owner’s  judgment and acquire a first lien on the Real Property.

Thus, Defendants knew from  the moment  they received  the facsimile  transmission on February  2, 2007, that the amount  of the Final Judgment was only $4,294.68 although  the approved  bid amount was $383,700.

Defendants failed  to give Plaintiff proper  legal advice  that a bid amount of $383,700 was completely unnecessary  to satisfy  the HOA  judgment and that all that had  to be paid to obtain  a certificate of sale and certificate of title, subject to the first mortgage, was $4,294.68

Additionally, apparently believing  that $383,700 was an  insufficient sum  to satisfy a$4,294.68 judgment,  on or about February  6, 2007, Defendants requested Plaintiff wire monies in the total amount of $392,148.90, or $8,448.90 additional,  in order to bid at the February 9, 2007  sale and  to pay for court costs and documentary  stamps.

Although  the Real Property could have been purchased at the February 9, 2007 foreclosure  sale  for $4,294.68,  subject  to the first mortgage, Defendants  failed to advise Plaintiff of this  fact and proceeded  to bid and pay $392,148.90  at  the sale on behalf  of Plaintiff.

Since Defendants bid $392,148.9A at a foreclosure  sale when the Final  Judgment was $4,292.68,  excess funds of $376,200.50 were placed into  the court registry.

Defendants  compounded  their errors and  failed  to  timely and properly  advise Plaintiff of the steps  to take  to reclaim the excess  funds

Instead,  the Brandts,  the parties  in default,  petitioned  for and received  the $376,200.50  in excess funds…

And you know what?

The homeowners took the money and ran…

Hahahahhahahhha

 

Former secretary says signatures were faked at {SCUMBAG} law firm being investigated over foreclosures

The Associated Press

By MIKE SCHNEIDER and TAMARA LUSH Associated Press Writers
ORLANDO, Fla. October 18, 2010 (AP)
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An office manager at a Florida law firm under investigation for fabricating foreclosure documents would sign her name to 1,000 files a day without reviewing them and would allow paralegals to sign her name for her when she got tired, her former secretary said in a deposition released Monday.

Cheryl Salmons, office manager for the foreclosure department at the law offices of David Stern, would sign 500 files in the morning and another 500 files in the afternoon without reviewing them and with no witnesses, said former assistant Kelly Scott in a deposition released by the Florida attorney general’s office.

The files were laid out on a conference room table for Salmons to sign, the former secretary said.

“She doesn’t review them. She just looks,” Scott said. “The paper is going to be in the top folder so it’s visible to her, and she knows exactly where she has to put her signature.”

Paralegals would then collect the files and swap them with each other, signing them as witnesses even though they had already been notarized and executed, Scott said.

Salmons allowed some paralegals to sign her name for her, said the former assistant, who worked at the firm for a year in 2008.

“Most of the time she was very tired, exhausted from signing her name numerous times per day,” Scott said. “You have to understand it was more than 500 files that she is signing morning and afternoon.”

The deposition took place two weeks ago as part of the attorney general’s investigation into the law firm.
Another deposition released Monday was of Mary Cordova, who worked at G&Z Process for two months. Stern’s law firm used G&Z as a process server for foreclosures.

Cordova said when she was hired, she was told that she needed to process at least 22 cases per eight-hour shift.

“It was almost like we didn’t have time to really look at what we were doing,” she said during her deposition. “It’s like this is the particular information, input that, turn that page, here’s this piece of information, type that in. It’s more about speed than accuracy per se. Although a supervisor would look at the papers to see if they’re pretty accurate.”

Jeffrey Tew, an attorney for Stern’s firm, didn’t immediately return a phone call.

Matt Weidner, a St. Petersburg attorney who has been defending homeowners whose paperwork was signed by lawyers in Stern’s office, said the latest depositions reveal that lawyers aren’t abiding by the rules and judges aren’t doing their jobs by scrutinizing foreclosure cases.

“I am literally getting to the point of speechlessness,” Weidner said. “The federal government has to come in and take control of the Florida foreclosure court system. If this stuff is occurring, it’s a crisis of confidence in our courts. It really calls into question the legitimacy of a court system.”

.

 

CLASS ACTION AGAINST THE MAJOR SCUMBAG LAWFIRMS

Below is a Class Action against all the major SCUMBAG law firms defrauding people.

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