In flood of foreclosures, growing challenges to lenders seizing homes they may not own

Foreclosuresignap Wake up and good morning. More and more, allegations are cropping up that certain law firms may be fabricating or presenting false and misleading documents in Florida’s huge wave of home foreclosures. Last week, Florida Attorney General’s office said it has launched a civil investigation of Florida Default Law Group, based in Tampa, which is described as one of the largest so-called foreclosure-mill law firms in the state. The law firm had no comment.

That’s a big reason why dozens of homeowners facing possible foreclosure last month hopped on buses from Tampa Bay and West Palm Beach to rally in Tallahassee against proposals to take foreclosure proceedings out of the courts and make it easier for banks (and the law firms they hire) to expedite the process of tossing people who are behind in payments out of their homes. Speeding up Florida’s huge foreclosure backlog is a good goal — if there was not such a rash of doctored mortgage documents already pouring into the system.

This story in the Wall Street Journal points out some of the broader problems. And judges have said in hearings they are increasingly concerned that banks are attempting to seize properties they don’t own. In one recent case in Pasco County (reported by the WSJ here), a Florida state-court judge said U.S. Bank, a major national bank, perpetrated a “fraud” in a foreclosure lawsuit, raising questions about how banks are attempting to claim homes from borrowers in default.

— Robert Trigaux, Times Business Columnist