Assembly Line Foreclosure Mills Dominate Fla. Law Market For Home Repo Suits; Judge Exoriates Law Firm, Wells For Mindlessly Cranking Out Legal Papers

In Tampa, Florida, the The Tampa Tribune reports:

• Few areas of the legal field are so dominated by a handful of players as foreclosure law. Florida Default Law Group is one of four foreclosure mills operating in Florida that appear to be winning the lion's share of business from lenders or their representatives. Along with Florida Default, other big firms include the law offices of David J. Stern in Plantation, the law offices of Marshall C. Watson in Fort Lauderdale and Shapiro & Fishman in Boca Raton.

• The Tribune looked at 1,994 initial foreclosure documents filed in October to see which firms were handling the most foreclosures. Combined, those four industry heavyweights filed 1,049 foreclosure cases in October, or 53 percent of all new foreclosures filed in Hillsborough County that month. Florida Default filed 323 new foreclosure cases in October, second only to the 352 cases filed by David J. Stern. Florida Default operates in Florida's 66 other counties, the firm's managing partner testified in a court deposition.

• To handle the workload, foreclosure mills have developed a common model: use lower-paid paralegals and support staff for much of the routine legwork, and hire young lawyers to sign off on the lawsuits and handle complications.

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• John Olson, a U.S. Bankruptcy Court judge in Fort Lauderdale, had no problem taking Florida Default and a big client, Wells Fargo, to task. After the firm made errors in up to 50 cases in court, Olson called out the firm in October 2008 in a strongly worded opinion. Florida Default made the errors when an employee pulled information from the wrong computer screen, according to court documents. Florida Default and Wells Fargo "have engaged in the systematic process of churning out unrefined and unexamined form pleadings, instead of producing and filing carefully considered legal papers," Olson wrote.(1)

For more, see Law firm gorges on home defaults (Florida Default and Wells Fargo "have engaged in the systematic process of churning out unrefined and unexamined form pleadings, instead of producing and filing carefully considered legal papers," a bankruptcy judge wrote).

(1) In Sarasota County, Lee Haworth, chief judge in the state's 12th Judicial Circuit, started noticing a trend in foreclosure filings: Foreclosure law firms would start a foreclosure lawsuit against a homeowner but push it to the back burner if complications arose. Meanwhile, the stalled cases began to languish in Sarasota and Bradenton courts, the story states. Foreclosure mills seemed to think pursuing such cases was too much trouble for the $1,200 fee, he reportedly said.