Housing Meltdown

Grassroots effort leads to attorney general probe

By: Paola Iuspa-Abbott

September 2010

Lisa Epstein, an unemployed oncology nurse, and Michael Redman, a former online consultant for Toyota, never planned to be on the front line of the foreclosure crisis.

But that happened when they independently mounted campaigns to challenge a system they say is stacked against consumers and where courts are more focused on moving cases than dispensing justice.

For nearly a year, Epstein, 44, and Redman, 35, have spent countless hours in South Florida courthouses scrutinizing foreclosure documents filed by lenders’ lawyers.

They have sent copies of filings they consider improper — including potentially fabricated documents and many with signatures they believe are forged — to the Florida attorney general, the FBI, Florida legislators, the U.S. attorney, the Florida Bar and other agencies urging probes of the law firms that filed them.

They say their efforts have paid off.

Last month, Florida Attorney General Bill McCollum began investigating whether Florida’s largest foreclosure law firms had submitted false affidavits and other documents in order to obtain final judgments against property owners whose properties were in foreclosure.

Among the firms McCollum is looking into are the Law Offices of David J. Stern in Plantation; the Law Offices of Marshall C. Watson in Fort Lauderdale; and Shapiro & Fishman, with offices in Boca Raton and Tampa. In May, McCollum’s office launched a probe into the Florida Default Law Group in Tampa.

The law firms have denied any wrongdoing.

“I am convinced the [investigation] would have not happened without Lisa’s input,” said foreclosure defense lawyer Elsa Figuera, with E. Figueras & Associates in Delray Beach.

She often goes to Epstein for help when she needs to locate foreclosure cases that could help her build better defenses for clients.

The AG’s office confirmed it has received information from Esptein.

“Ms. Epstein initially took her concerns to the Florida Bar, who then sent them to us and we also met with her,” according to statement from the AG’s office. “We appreciated all that she provided this office.”

Spurred By Frustration

Epstein, who is fighting to save her West Palm Beach home from foreclosure, said her activism grew out of frustration. Before her income significantly shrank and her savings disappeared, she spent eight months unsuccessfully trying to negotiate with her loan servicer for a reduced mortgage payment.

She stopped making home loan payment in 2008. U.S. Bank, as trustee, sued her in February 2009 and her case is pending. She defended herself until early this year, when she hired an attorney.

She said her motives to fight the system have evolved. In the beginning, she was upset by the government’s bailout of banks that made the risky loans while little was being done to help the homeowners losing their homes.

“Initially, we were mortified, outraged and grieving over the eviction of millions of Americans from the only home that they had,” she said. “Shelter was chosen as the basis for a Wall Street gamble. Wall Street lost and got bailed out while the average family was evicted onto the streets.”

She is now past the grieving stage. Now, she says, her motivation is to get a foreclosure moratorium until the attorney general’s investigation is completed.

“Let’s take a look with the best and brightest minds, let’s examine what’s happened, let’s really get some fair and equitable solutions and have some criminal investigations and indictments to give this country hope,” Epstein said.

Epstein’s outspoken approach is rare among distressed homeowners, who often want to remain anonymous to avoid being labeled “deadbeat homeowner,” said Epstein, who cringes at the term.

Rather than hiding her personal struggle, she turned it into a full-time cause: being the voice of a group of people she says are largely un-represented in the worst foreclosure crisis in decades.

Redman doesn’t own a home, but when he began to help his fiancee fight foreclosure of her Port St. Lucie home more than a year ago, he became an activist. He began uncovering what he considered suspicious documents filed by lenders’ lawyers trying to prove their clients owned the note and had the right to foreclose on people’s homes and decided to raise public awareness of the problem.

“I began noticing patterns of the same people signing assignments [of mortgage] for 20 different banks but their signatures never matched,” Redman said.

Last November, he founded 4closureFraud.org to post copies of the documents he considered flawed. Around the same time, Epstein launched ForeclosureHamlet.org, where registered users can chat and add content. Her site is mostly directed to homeowners seeking information on how the foreclosure process works. Redman’s is more oriented toward providing documentation to foreclosure defense lawyers.

Their sites have become information clearinghouses for judicial orders favoring homeowners, lawsuits filed against foreclosure firms and their clients, assignments of mortgage and affidavits with suspicious signatures and depositions of employees of loan servicers and foreclosure firms.

“It is strange, but they have the most ready and easy to access information for defense lawyers,” said attorney Lynn Szymoniak, with the Szymoniak Firm in West Palm Beach. “They are a huge resource tool for us. On their sites, I can find depositions that would take me hours to get. Some of the most helpful information comes from them.”

Szymoniak became a foreclosure defense lawyer early this year, when her own home went into foreclosure and she began noticing “fraudulent” documents being submitted by her lender.

Joining Forces

Epstein and Redman met last November at a foreclosure defense conference in Clearwater. They quickly realized they had a lot in common and agreed to join forces.

Every week, Epstein spends hours at the main courthouse in West Palm Beach examining foreclosure files, observing judges and foreclosure attorneys in court and listening to brief conversations that often sprout outside the judges’ chamber.

“I learn a lot by watching and listening,” said the mother of a 3-year-old girl who often accompanies Epstein to the courthouse.

Redman, through 4closureFraud.org, does his own research in addition to posting some of Esptein’s findings on his site. He has become so knowledgable about the foreclosure process that he recently landed a legal research position with a local law firm…

The firm now sponsors his website, which gets nearly 100,000 views a month, including visitors from the White House, the U.S. Justice Department, the U.S. State Department, the International Monetary Fund and the Federal Deposit Insurance Corp., said Redman, displaying a list of Internet address of the site’s visitors.

“We just want to empower others to see what is really going on,” he said.

To help homeowners research mortgages, their sites include a guide to navigating public records and a basic foreclosure litigation defense manual. They also have chatrooms for people to connect and discuss their cases.

Stuart homeowner Cathie Dorman has been defending herself in a foreclosure suit for nearly two years. Dorman is a frequent visitor to ForeclosureHamlet.org, where she goes to learn about court decisions that may help in her pro se motions and pleadings.

“I definitely benefit from the support of others within the U.S. that are also fighting,” said Dorman. “Sometimes it is enough just to know you are not alone.”

SOURCE: Daily Business Review

The Daily Business Review is the primary tool, information source and communication forum for South Florida lawyers and business professionals who routinely engage in dealmaking, client development and business negotiations. We publish legal, real estate and financial information for the top lawyers and business executives daily in Miami-Dade, Broward and Palm Beach counties.