Federal Judge OKs Banksters' Sleazy, Illegal Conduct During F'closure Litigation Where Homeowners Fail To Immediately Raise Issues During Proceedings

In Greenbelt, Maryland, The Baltimore Sun reports:

• A class-action lawsuit over alleged foreclosure "robo-signing" was thrown out of federal court in Greenbelt last week when a judge ruled that the plaintiffs could have raised those complaints during their foreclosure cases.

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• The class-action suit was filed after a former paralegal at the defendant Shapiro & Burson, a law firm based in Virginia that has handled many Maryland foreclosure cases in recent years, complained to regulators and prosecutors, alleging that robo-signing there was routine.



• An attorney for Shapiro & Burson suggested that the ruling could be a blow for other suits seeking damages for alleged foreclosure misconduct. The decision by U.S. District Court Judge J. Frederick Motz said homeowners could have raised the issue during their foreclosure cases and thus are barred from bringing it up in a later suit.

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• The law firm of JR Howell & Associates, which represented the plaintiffs, alleged in the April suit that robo-signing at Shapiro & Burson meant the firm's legal fees and other charges were "fraudulently obtained" and improperly passed on to the homeowners.



• The homeowners argued that allegations of robo-signing at Shapiro & Burson weren't made until after their foreclosures were complete, so they couldn't have raised the issue earlier.



• But Motz dismissed that argument in his written decision Thursday, pointing to the so-called "doctrine of claims preclusion" in Maryland law. "The fact that plaintiffs may not have been aware of the existence of their claims during the litigation of the previous action does not render the doctrine of claims preclusion from being applicable 'where the means of obtaining such knowledge existed and the knowledge could have been obtained with ordinary diligence,'" Motz wrote, citing a 1978 case.(1)

For more, see Md. 'robo-signing' case thrown out of federal court (Complaints should have been raised in the earlier foreclosure cases, judge says).

(1) Singer v. Steven Kokes, Inc., 39 Md. App. 180, 384 A. 2d 463 (1978).