C. Fla. Circuit Court Chief: Foreclosure Mill Law Firms' "License Could Be On The Line" Regarding State "Supremes" Directive To File Proper Paperwork

In Sarasota, Florida, Sarasota Herald Tribune columnist Tom Lyons writes:

• Law firms that some call "foreclosure mills" handle loan default cases by the thousands for financial institutions that were not the original lenders. Some have filed odd documents in their court cases. Many claim loan documents are lost, but that ownership of the note was transferred, perhaps multiple times, and that the foreclosing bank is now the owner or trustee.

• Problem is, they rarely show a clear chain of transfers back to the original lender. Often, the documents are not only vague but also of fresh vintage. Some are only created, signed and notarized after the foreclosure is filed. And signatures authorizing the transfers make fun reading. Some people listed as vice presidents and the like often are not, and were never even employees of the companies named. They work for companies that are hired to create the documents.

• When accused of using sham documents, the response has sometimes been that the signers were somehow authorized to sign, a claim some judges have rejected.

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• In uncontested cases, most still slip by, and [Sarasota County Circuit Court Chief Judge Lee] Haworth says judges have too many cases to do the checking that a defense lawyer would do. But there is bigger news that should help, Haworth says.

• Last month, Florida's Supreme Court decided that attorneys filing foreclosure cases will no longer be presumed blameless when they claim a right to foreclose based on faulty documents.(1) The foreclosure mills normally rely on an army of assistants and clerical workers, and lawyers claiming that an assistant's error led to a faulty filing have rarely been called to task. That's about to change, Haworth says.

• Some may still gamble in cases where they expect no opposition lawyer will be checking the documents. But if they take the time and effort, most should be able to do things right and establish their claims, Haworth said. If not, he said, they'll have a problem. "I'm looking forward to see how they do comply," Haworth said. "Their license could be on the line."

For the story, see Documents insufficient in foreclosure case.

(1) See:

• Fla. High Court Enacts Procedural Rules To Apply In Residential F'closre Mediations; Seeks To Tamp Down Use Of "Lost Note" Affidavits, "Sewer Service"
• The Tampa Tribune: Court makes it more difficult for lenders to foreclose (The Florida Supreme Court says lenders are now required to verify they own loans before they file a foreclosure lawsuit).