“Stop the Slop” Legal Mess Over Foreclosures Deepening

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.

“The decision by the Supreme Court in Florida specifically says ‘Not final,'” said Miami attorney Gerald Richman, who is still fighting the new requirement on behalf of one of the state’s largest foreclosure firms.

The issue may have to be settled by the Florida Supreme Court, though no action is scheduled.

The continuing problems with the foreclosure process could affect the speed at which the housing market recovers by slowing the process of reselling properties and stabilizing the market.

The vast majority of the state’s housing lawsuits come from Florida’s five so-called foreclosure mills, where attorneys can each handle thousands of cases gushing from the deflated housing market.

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 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.

Haworth, along with other judges and attorneys across the state, rely on the part of the ruling that states the rule “shall become effective immediately upon the release of this opinion.” The opinion was released Feb. 11.

But the foreclosure mills cite a line later in the opinion that states the ruling is “not final” until any motions for rehearing are considered. That interpretation delays implementation of the rule, which benefits their bottom lines because verifying the documents takes time and could bring perjury accusations if wrong.

Richman filed a motion for rehearing in February, saying the new rule needs to be clarified. But the top court has not acted on that motion, set a date to hear arguments or otherwise clarified its ruling.

A spokesman for the Supreme Court said ethical rules prevent anyone there from commenting on the opinion, or clarifying whether the verification rule is in effect.

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.

“I’m expecting they’ll do something to clarify the situation,” Haworth said.

The bottom line for homeowners: when a foreclosure is filed, do not give up your property easily. Rather, make sure the bank or lender retaking your home has the paperwork to show it can, attorneys say.

Continue reading here…


4 Responses to ““Stop the Slop” Legal Mess Over Foreclosures Deepening”
  1. lisamarie says:

    I don’t think the ‘new’ rules or laws or whatever will change much of anything. The way it’s worded, one only has to swear under threat of perjury that the paperwork is legit. The banks lawyers have lied and committed fraud nintey to nothing from the get go, whats gonna stop them? They have to promise they arn’t lying or fabricating documents? Get real!

  2. Chief Judge Haworth fails to mention that he was sued in April 2009 in the U.S. District Court because he refused to stop the slop and insisted upon the Court’s right to hand down summary judgment of foreclosure in uncontested cases relying upon paperwork known to be deficient and defective. In 2009, the Chief Judge claimed that the Court lacked the funds to read and examine the paperwork filed by counsel for the foreclosure mills.The Chief Judge’s change of heart is most welcome even if he takes credit for instituting reforms he initially refused to make.

  3. Michael says:

    All the appellate cases say that and they know it; it’s part of the appellate rules. They have thirty days to file a Motion for Rehearing; the appellate court responds quickly, and it’s over. In the interim they’re treading on dangerous ground; the cases will be subject to dismissal when the ruling becomes final (any day now). A rehearing won’t be granted: the only way that happens is if there’s a substantive point of law the justices overlooked or if something substantive changed in the interim: neither happened.

    They can appeal to the US Supreme Court Bush v Gore style and ask the FL Supreme Court to stay the rule pending a decision on cert but that seems far-fetched. There is no issue of federal law here and, even if there were, there is no risk to the servicing companies or mills if the new rule applied while the issue was under consideration. Given the recent 7-2 Jarman decision it’s apparent that even the conservative Justices at SCOTUS are not sympathetic to legal fraud in debt collection.

Check out what others are saying...
  1. […] Herald Tribune reported  a local court-sponsored program — unofficially dubbed “Stop the Slop” — to once again review all foreclosure filings and dismiss those that are incomplete. […]

Leave a Reply

Your email address will not be published. Required fields are marked *