Judge's gavel in courtroomIn the face of banks' rampant disregard for the law in pursuing foreclosures with false paperwork, the judiciary has started to emerge as the great defender of due process and the rule of law.

For example, in October, New York put an end to the fraudulent document problem in its courts. Some Ohio courts started making similar efforts. And on Monday, New Jersey put in place rules to end document fraud in its system. New Jersey also called out major banks and demanded they affirmatively demonstrate that their foreclosure procedures are sound. This list of judges standing up for the system is hardly exhaustive.

In each case, the judges made clear they weren't picking sides. They were merely enforcing the rules, making sure the banks didn't get special exceptions unavailable to anyone else.

Split-Second Justice

Unfortunately, not all judges are responding to the foreclosure mess this way. Those in Florida have been particularly notorious, and new rulings show at least some members of the Florida judiciary seem more committed to speeding foreclosures through to completion than anything else.

For example, Florida's infamous "rocket dockets," in which a foreclosure case can take mere seconds or a few minutes to complete, continue. The Lee County court schedule for December shows two days with over 60 cases scheduled, two with over 25 and one with four. (No other days have cases scheduled.) Given the length of the court day, 25+ cases in a day amounts to at best several minutes a case. Attorneys defending foreclosures have taken several days to deal with just one.

Or consider that this motion to put a foreclosure proceeding on hold, filed by SunTrust Bank, and denied by a Lee County judge. SunTrust's motion was clear about why it wanted the delay:
1. Plaintiff seeks this stay in order to allow time for the completion of a review of its mortgage servicing procedures. That review was commenced following nationwide reports of certain industry-wide deficiencies in the preparation of affidavits submitted in connection with foreclosure proceedings.

2. Plaintiff intends to take all necessary steps in order to ensure that the documentation provided in connection with foreclosure proceedings, including this one, meets all applicable legal requirements.
SunTrust is saying: Judge, we respect the court system and want to do things right. Please give us the time we need.

By denying the motion, the judge (I can't tell who signed it) essentially responded: Don't bother. I don't care if your papers were right. Just hurry up and take the house.

Once Started, Can't Stop

T. John Costello Jr., the attorney for the homeowner in this case, said the motion denial isn't the worst thing he's experienced in Lee County. The worst, he said is the practice of judges deciding foreclosures are ready to go to trial at "docket soundings" -- when even the bank isn't ready:
[setting those cases for trial] has undoubtedly caused some homeowners to lose their homes while they were attempting to obtain modifications. The denial of the motion to stay is a symptom of the court's docket-sounding routine. Once the court puts a case into it, it refuses to stop the movement.

I attended a docket sounding on Friday, and the judge set over 100 cases for trial on Feb. 3. I informed the judge that the bank's attorneys (who failed to show up) had previously told me that my case was on administrative hold. His response was: "That may be, but it isn't on hold with us." He set the case for trial. I doubt the bank will be ready.
Or consider this court order, in which Lee County Judge James Thompson straightforwardly exempts the bank from following a rule that applies to everyone else (specifically, part [e]). That rule requires affidavits to be based on personal knowledge, state facts that would be admissible as evidence at trial and, of particular importance in this instance, ". . .all papers or parts thereof referred to in an affidavit shall be attached thereto."

As the motion that triggered this order exempting banks from following the rules explains, the affidavit in the case was signed by infamous robo-signer Xee Moua, making it hard to believe the affidavit complies with the part of the rule requiring personal knowledge. Moreover, none of the records that Moua's affidavit said she reviewed were attached to it. Since the homeowner says he made four $900 payments that weren't credited by the bank, actually seeing the documents Moua "reviewed" would be useful, even if they weren't required by the rule that apparently doesn't apply to banks foreclosing in Lee County.

The clerk of courts for Lee County, Charlie Green, told Fox4 in Florida: "We have not required, in the past, nor do I think we will, to have copies [of those documents] attached. It's not mandatory." Not mandatory, except of course, for everyone required to follow the rules about affidavits. The rule itself couldn't be more clear.

Unintended Consequences

In short, Judge Thompson's order says the bank can foreclose using "evidence" that no one else can. Green's comment says that in Lee County, the banks don't have to play by the rules.

Todd Allen, the attorney for the homeowner in that case, points out ironically that Lee County judges' rush to foreclosure slows things down rather than speeds them up:
Collier County has been very successful managing its docket and still manages to follow the rule of law, but let me add some perspective to that statement.

I have three times the number of foreclosure clients in Collier County than I have in Lee County. However, I spend twice as much time in Lee County court than I do in Collier County.

I think the fact that Lee County is moving at such an accelerated rate and is ignoring the basic rules creates more problems for them. Which in turn requires more hearings, which is where the rules are ignored. It's a vicious cycle. Cutting corners in this process will create problems in the title to these properties, and the County will have another wave of problems where owners are trying to clean up title issues.
Admittedly, this order seems to be something of an outlier. Other Florida judges have rejected summary judgment motions because the foreclosing bank's papers weren't in order.

New Type of Robo-Signing

Sadly, when the Florida Supreme Court acted last February to improve the integrity of its process by requiring foreclosing banks to verify the accuracy of their attorneys' filings, the rule was widely ignored, reported the Herald-Tribune. Attorneys claimed it wasn't yet in effect. So the Florida Supreme Court clarified in June that the rule was indeed in effect.

But now, the Daily Business Review explains, the rule is being bypassed by a new type of robo-signing: The bank employees who sign as having verified the documents aren't actually checking their accuracy. Another twist: In some cases the same attorneys preparing the filings are signing as verifying the filings. It seems the Florida Supreme Court has quite a challenge on its hands getting its lower-court judges and the attorneys practicing before it to respect the rules for foreclosure cases.

Here's a crucial point: demanding that banks play by the same rules as everyone else isn't some abstract and empty ideal that puts form over substance. Despite the banks' claims to the contrary, their document problems aren't purely technical. The banks' records are in such poor shape -- the very records used to create the foreclosures -- that, as The New York Times has reported, banks are breaking into homes they haven't foreclosed on.

In judicial foreclosure states and in bankruptcy proceedings, judges are in a position to ensure that such travesties of justice don't occur. Some judges are indeed stepping up, but clearly not enough of them.

Increase your money and finance knowledge from home

Investing in Real Estate

Learn the basics of investing in real estate.

View Course »

Goal Setting

Want to succeed? Then you need goals!

View Course »

Add a Comment

*0 / 3000 Character Maximum

134 Comments

Filter by:
JB

Banks! Templar Knights started the system and they receieved 10% of a rich man's (rich men being 1% of the population back then) wealth for transporting his valuebles over dangerous borders, these days the banks make the same 10% from every account holder in the world but instead of having to work for it like they did even as recently as 30 years ago now tellers sit in their well air conditioned office and pick their nails four days a week and if you point this out bet they'll tell you " You should have seen how busy we were on Monday" oneday the banks will have all the money in the system and when we look at them with the angry puzzled look on our dumb faces the banks will look at us and say with high brows "What?- I'm convinced thay we only deal with it because our fathers did it and their fathers did it...I also think people are getting smarter and realize that most of their hard earned money will just end up as bonuses so COEs can drive BMW golfcarts, but still we let it continue. I work installing cabinets and I'm good at it, I should not be loseing my home but it look like I will due to someone elses greed, feel like telling the bank I won't be thrown out on the street and will protect my home with my life and weapons, I'll walk away when I can afford to, noone has bailed me out yet and I can't print money.

January 06 2011 at 4:07 PM Report abuse +1 rate up rate down Reply
madaline

Scary thought: Maybe this is a act of terrorism, after all, we all seem to be in the same boat with the same lame excuses coming from the banks.....

December 26 2010 at 7:09 PM Report abuse -1 rate up rate down Reply
ajgorm

I find it amazing that anyone that has invested in a mortgage backed product can honestly say the own something and claim it.

December 26 2010 at 3:21 PM Report abuse +2 rate up rate down Reply
1 reply to ajgorm's comment
ajgorm

I find it amazing that anyone holding a mortgage backed security without a note to back it up , backed by missing or lost notes , can honestly say they own something of value without the note to back it up. Can this go on forever.

December 26 2010 at 3:27 PM Report abuse +1 rate up rate down Reply
ajgorm

Most notes are sold off into the dark hole of no return. Once the note is lost there is no proof of note ownership it neeeds to be re-established so technically the new note holder has worthless paper because the asset they are buying is ficticious it only has an implied value based on false paper work. You could never trace the asset sold without knowing the assets location and how do you do that without a note.. The servicer of the note and the buyer know not the true ownership of the property note leaving it in the hands of a judge. Without both parties present in court , without the true note holder in court to defend the notes ownership the judge should favor with the home owner until resolved.

December 26 2010 at 3:13 PM Report abuse +1 rate up rate down Reply
3 replies to ajgorm's comment
ajgorm

To sum it up if left the way it is we can honestly say our future is in the hands of the banks and our hijacked government that is convinced we need no accountability in our banking system. Yes we can allow judges to destroy our rights in favor of too big to fail.

December 26 2010 at 2:55 PM Report abuse +2 rate up rate down Reply
ajallenky

If someone losses $ at a casino should they be allowed to demand the casino or the taxpayers to bail them out ?? Or, should the casino reduce their losses to a point where they can bet again at a later date ?? Then why should the taxpaers or any bank be forced to reduce ANY loan for anyone that took a chance on buying any property ?? If they had MADE $ do you think they would share their earnings with the same taxpayers ?? I think not. NO ONE HELD A GUN to their head and forced them to sign the mortgage - they KNEW the paper work was a fabrication and the Banks did also, but neither party cared because both thought they were going to make $ on a " SURE THING " . Real estate deals have ALWAYS been " let the buyer beware " - I have a bridge for sale in Brooklyn - REAL CHEAP !!!!

December 26 2010 at 1:42 PM Report abuse +1 rate up rate down Reply
2 replies to ajallenky's comment
ajgorm

Do we let the casino set their own rules on how much they will take in and how much they will pay out. Do we regulate or not ! do we let the casino regulate themselve . Can we trust them without checks and balances. NWO !

December 26 2010 at 1:52 PM Report abuse -1 rate up rate down Reply
Wayne

Sorry ajalienky ... that is apple and oranges. Going to a casino and signing your name on a Promissory Note is two different things. I don't know why you are trying to compare the two. Your coming to a gun fight with no bullets. Would like to debate this with you, however until you understand Mortgage Pools and MERS and what is LAW, their is no way I will debate you. You MUST understand the LAW and when you do, it will blow you away. You will find out that people who have been foreclose on should never had been and those who haven't been and are making payments and with no worries should be worried as hell. It is what is RIGHT and what is LAW and it is now about how through their own scamming they have Fraud ed the American People. I am talking about the Banks. They have tried paying off our Senators. So again afallenky Please understand the Situation before jumping in. Believe you me, I am being really Nice to you.

December 26 2010 at 2:51 PM Report abuse +1 rate up rate down Reply
dwilli9976

Its all gonna fall down people. Get out of paper money and buy gold or stock up on food and amo. It won't matter how much money you have in the banks when it lets go cause the judges aren't going to believe the little guys cause they are siding on the banks.

December 26 2010 at 1:39 PM Report abuse +1 rate up rate down Reply
ajgorm

Was the note bought by the fed or is the note in timbuck2. Is it about a broken system with zero accountability or the mortgage buyer that bought too much home.

December 26 2010 at 12:43 PM Report abuse rate up rate down Reply
ajgorm

Can we have different laws for banks than we have for We The People. Can I buy a home owned by endless mortgage holders. Can a bank lend me more money on a home that has a note cut up and sliced among hundreds of investors without paying it off first. Can I find the origonal note or do we create another note on the same home while our fed buys the toxic note and pays the cost of the old note.Can I find a job and buy a house without the job and the homes note being outsourced from underneath me without a fight.

December 26 2010 at 12:39 PM Report abuse +1 rate up rate down Reply
4 replies to ajgorm's comment
ajgorm

The system is broken.How do we explain what our government has done. Can we simply allow our economy to be run without accountability. Can we simply allow banking crime. Can we call ourselves equals in the eyes of the law. Can we allow our jobs and mortgages to be outsourced without recourse. Can we simply let them sell us out without the right to a fair trial.

December 26 2010 at 12:13 PM Report abuse +2 rate up rate down Reply