The Senate Banking and Insurance Committee in December held hearings that we are now finding out about. We have submitted a written request (see below) to get the recording of the hearing and will publish once it is received.

Here are some excerpts from the Florida bar News on what went down…

Progress made in moving foreclosures, but courts brace for even more filings to come

The courts are making progress in tackling the huge backlog of foreclosure cases — thanks in large part to supplemental legislative funding — but defective paperwork is still a big problem, and another wave of home foreclosure filings looms on the horizon.

The judges said faulty and fraudulent documentation is the main cause of delays, and the courts are bracing for an anticipated deluge of commercial foreclosures in the coming year. Court officials also discussed the limitations of the Supreme Court-ordered managed mediation program.

Got that, “fraudulent documentation.”

Now how many indictments have we seen for these fraudulent activities?

Hell, how many cases were dismissed where the fraud was found?

Sen. Garrett Richter, R-Naples, the committee’s chair chair, soberly noted approximately 14 percent of Florida mortgages are in foreclosure and over 23 percent are “past due in one form or another.” He said those numbers are placing “significant stress and strains” on the judicial system’s ability to resolve foreclosure cases in a timely manner.

23% of Florida are “deadbeats.”

“We have finally turned that corner of closing more cases than are coming in,” said Bailey. She cautioned, though, that could change without additional resources because another bump-up in foreclosures is expected as adjustable rate mortgages and other exotic loans made in 2007 begin resetting in May.

“The process-servers tell me they have warehouses of stuff they are just waiting to file, and it is not getting filed because they are waiting to get all the documentation set,” she said, adding that no objective economic indicators tell the court anything other than delinquencies will continue to accrue.

Is that what they are calling it now? Getting their documentation set.

Here are some excerpts from the testimony…

“And I’m ripping my hair out because it is a complete waste of time for them to see me and get a stay,”

“In Dade County, for example, we have had over 3,000 stays to the end of November.”

“We grant those stays because we want to make sure there are not title insurance problems . . . and the process is done correctly,” Bailey said. “But that is a squandered hearing.”

Plaintiffs are mostly to blame for paperwork quality control issues, Bailey said, and while most foreclosures are uncontested, she is often hesitant to rely on the summary of the evidence to dispose of the cases.

“I’ve got affidavits that were supposedly signed in California and notarized in Minnesota. I’m not out there digging for problems, but if someone hands me an affidavit that is signed in California and it is notarized in Minnesota, I can’t ignore that,” Bailey said. “That would seem to be unjust and call the evidence into question.”

That sentence almost sounds like “we are trying to ignore the fraud, but it is so blatant we cant.”

“That would seem to be unjust and call the evidence into question.” Unjust? Really? How about fraudulently fabricated…

“A number of institutions have pulled cases from the folks who are under investigation, but the attorneys from those firms are still the attorneys of record until somebody substitutes in for the client,” Bailey said. “That is another event where there is no forward momentum because of the investigations.”

Nonjudicial Foreclosure

After studying nonjudicial foreclosure statutes in other states and some Florida proposals being floated, Gelfand said, the section doesn’t think they “meet the exacting standards of the Florida Constitution and Florida’s history dealing with homestead and other real property issues.”

Sen. Ellyn Bogdanoff, R-Ft. Lauderdale, asked: Is it possible to do nonjudicial foreclosure in uncontested cases?

“In theory, the answer is ‘yes,’” Gelfand said. “The problem is in practice, because who is going to determine whether or not, for example, the unit owner has been served with papers and that there really is no opposition?

And we all know how good the “Sewer Service” is here in Florida…

“You are going to have someone who is paid by the person who is foreclosing to make that decision, and that goes to the heart of the public perception of the system,” Gelfand said.

You can check out the Florida Bar article in its entirety here…

We are working on getting the complete testimony of this hearing (see letter below) but in the meantime, you can check out the Senate Banking and Insurance Committee meeting packet from the hearing which is also below…