PB Post | Florida Bar Says Foreclosure Lawyers MUST Report Fraud to Court

“I haven’t seen any widespread problem”

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If they only would of listened…

Florida Bar says foreclosure lawyers must report fraud to court

By Christine Stapleton and Kimberly Miller

In an opinion that could have unfathomable consequences in countless foreclosure cases, The Florida Bar says attorneys must notify a judge about potential fraud — including robo-signed affidavits and forged notary stamps — even if a foreclosure case is closed and the home has been sold at auction.

The direction was published in an article in today’s issue of The Florida Bar Journal as part of an outline in a new free online foreclosure class offered by The Bar. The class is in response to problems that led several major lenders to temporarily freeze foreclosures last fall.

No one knows how many cases could be affected or what judges will do when they are notified. About 1.2 million foreclosures have been filed in Florida since January 2007, according to RealtyTrac. Investigators for the Florida Attorney General’s Office have found tens of thousands of forged signatures, backdated documents and other problem paperwork at four law firms, so-called “foreclosure mills” currently under investigation.

“There has never been a problem like this before or this kind of wholesale misrepresentation,” said Margery Golant, a Boca Raton-based attorney who teaches a portion of the Bar’s four-hour online course, which instructs lawyers to report fraud. “No one knows how this is going to turn out or what the right things to do are.”

While attorneys are instructed to report fraud, they should not to do so in a public court hearing without their client’s permission. Instead, the banks’ attorneys should ask for a private hearing with the judge, said Cynthia Booth, an ethics attorney with the Bar.

“You try to cause the least amount of harm as possible to the client,” Booth said. When fraud is suspected, an attorney’s duty to the court supercedes the attorney’s duty to the client, Booth said. Private hearings would allow the attorney to fulfill both duties, she added.

But the thought of private hearings about widespread fraud in foreclosure cases has some lawyers bristling. Robo-signers have admitted in depositions that they signed off on hundreds of thousands of foreclosures and major lenders have already acknowledged that court documents were not properly verified, said foreclosure defense attorney Thomas Ice of Ice Legal in Royal Palm Beach

“This is a very public problem and to try and address it in a private way is not going serve the court in its attempt to assure everyone about the integrity of the court system,” Ice said.

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Comments
3 Responses to “PB Post | Florida Bar Says Foreclosure Lawyers MUST Report Fraud to Court”
  1. pparke500 says:

    The Judge would like to think that the lawyers already report fraud? Has he been living under a bridge?

  2. DC says:

    Lawyers shouldn’t have to be told to report fraud, its part of their oblkigationa and duty. Lawyers are a self governing association, their codes and ethics require them to report any and all fraud. It’s a joke. I can’t tell you how many attorneys I’ve dealt with in business that lie through their teeth to protect their employer or client.

  3. indio007 says:

    I’m revolted by the comment quoted that they don’t know what the right thing to do is. That is absolute bunk! They know what the right thing to do is , they just don’t want to pay the piper for heir screw ups.

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