Matt Weidner – Fighting For The American People

Archive for March, 2010

In Florida, Circuit Courts grant foreclosure.  A party seeking to question the appropriateness of a foreclosure judgment entered may appeal any judgment to the appeals court for the lower circuit court, the appellate court.

In Florida, the Second District Court of Appeals covers the West-Central part of the state .  There are now fourteen counties in the Second District which includes a population of over 3.8 million: Pasco & Pinellas, Hardee,  Highlands, Polk, DeSoto, Manatee, Sarasota, Hillsborough, Charlotte, Glades, Collier, Hendry, and Lee.

The appellate court judges have been very serious about holding lender’s feet to the fire and forcing them to comply with at least most of the important rules and law regarding foreclosure.  I’ve previously reported on a string of foreclosure reversals out of the Second DCA and today I’m happy to report yet another one.  In this decision, the court makes an extraordinary reversal, finding that the circuit court committed, “gross abuse” in failing to set aside a foreclosure judgment.  Yet another decision that should be quoted liberally and cited often when appearing in front of circuit court judges who desire not to be reversed….happy hunting.

35 Fla. L. Weekly D700a

Mortgage foreclosure — Vacation of foreclosure sale — Trial court abused discretion in denying successful bidder’s motion to vacate foreclosure sale where, after the sale, the court substantially modified the judgment of foreclosure by reducing the amount the foreclosing first mortgagee was owed on the first mortgage — To conduct a fair foreclosure sale, the correct amount needed to pay off the foreclosing mortgagee must be known to all potential bidders — Process used by court conferred a benefit to second mortgagee, and a corresponding detriment to successful bidder, by awarding second mortgagee the amount remaining after satisfaction of the first mortgage
JOSE EDILBERTO PALACIOS, Appellant, v. FLORIDA FUNDING TRUST; EASY HOMES 123, LLC, as Trustee of the Marigold #1441 Trust dated 01/07/06; LYNN BROWNING, Beneficiary of the Marigold #1441 Trust dated 01/07/06; WACHOVIA BANK, N.A.; and BARBARA COLLINS, Appellees. 2nd District. Case No. 2D09-3335. Opinion filed March 26, 2010. Appeal pursuant to Fla. R. App. P. 9.130 from the Circuit Court for Polk County, Dick Prince, Judge. Counsel: Jean Marie Henne of Jean M. Henne, P.A., Winter Haven, for Appellant. Marie Tomassi and Lisa Easler of Trenam, Kemker, Scharf, Barkin, Frye, O’Neill & Mullis, P.A., St. Petersburg, for Appellee Wachovia Bank, N.A. No appearance for Appellees Florida Funding Trust; Easy Homes 123, LLC, as Trustee of the Marigold #1441 Trust dated 01/07/06; Lynn Browning, Beneficiary of the Marigold #1441 Trust dated 01/07/06; and Barbara Collins.
(CASANUEVA, Chief Judge.) Pursuant to a final judgment of foreclosure, the Clerk of Court for Polk County held a foreclosure sale at which Appellant Jose Edilberto Palacios was the successful bidder. After this sale, the circuit court substantially modified the final judgment of foreclosure by reducing the amount the foreclosing first mortgagee, Appellee Florida Funding Trust, was owed on its first mortgage. When the circuit court refused to set aside the sale on Mr. Palacios’ motion to vacate it, he appealed. We reverse.

Background Facts
The facts of this case are undisputed, and only Mr. Palacios and the second mortgagee, Appellee Wachovia Bank, N.A., are interested parties in this appellate proceeding. On April 15, 2008, the circuit court entered a final summary judgment of foreclosure in favor of Florida Funding for $60,136.09. On May 9, 2008, the Clerk conducted the foreclosure sale, at which Mr. Palacios and Florida Funding were the only bidders. Florida Funding bid $40,000 and Mr. Palacios ultimately prevailed with a bid of $41,000. Shortly thereafter, Mr. Palacios moved to release his money from the Clerk because he discovered that there was a second mortgage on the property. Then, on May 19, 2008, Wachovia moved to set aside the foreclosure judgment and the sale, claiming that it had not been properly served in the initial proceedings and that there were substantial unexplained irregularities in the final judgment concerning the proper amount owed to Florida Funding. At the
hearing on Wachovia’s motion, the circuit court determined that instead of more than sixty thousand dollars, Florida Funding was owed in total only $16,427.28 on its first mortgage because its contract did not properly secure future advances on the mortgage. The circuit court denied Wachovia’s motion to set aside the final judgment of foreclosure and sale and instead merely modified the final judgment to reflect the newly corrected amount owed to Florida Funding. This postsale modification left over twenty-four thousand dollars in excess of the first mortgage to satisfy junior lien holders like Wachovia. The circuit court also retained jurisdiction to later consider Mr. Palacios’ pending motion to return his money.
Mr. Palacios then amended his pending motion to change tack,1 claiming that the amended final judgment of foreclosure and foreclosure sale should be vacated because the judgment was substantially modified after the sale was held. He cited section 45.031, Florida Statutes (2007), which states that a judicial sale will be held no sooner than twenty days after entry of the final judgment. His motion argued that allowing the sale to stand when such a substantial change was made to the final judgment would defeat the intent of the statute and result in a fraud on and injustice to the third-party bidder who has a right to rely on the affidavits and judgments filed prior to a sale. The circuit court heard argument on this motion from Mr. Palacios and Wachovia at a hearing but denied the motion. The circuit court reasoned that there were no known irregularities before the sale, distinguishing 601 West 26 Corp. v. Equity Capital Co., 174 So. 2d 626 (Fla. 3d DCA
1965), on this point. Further, because the amended final judgment decreased rather than increased the amount due, the circuit court concluded that the third-party bidder was neither disadvantaged at the time of the sale nor thereafter. We do not agree.

Analysis
Wachovia adopts the circuit court’s reasoning on appeal, emphasizing that because there were no irregularities noted before the sale, all requirements of the statute were complied with. This is true but misses the point. The statutory notice requirements are meant to ensure that the public, i.e., a potential third-party bidder like Mr. Palacios, is adequately on notice in order to determine his fair market bidding price at the foreclosure sale. Mr. Palacios was prejudiced here by the faulty original foreclosure judgment because it misled him as to the property’s foreclosure market value. Had the correct amount due to Florida Funding under its first mortgage — approximately $16,427 — been known and set forth in the final judgment of foreclosure at the time of the sale, Mr. Palacios would not have been required to outbid Florida Funding’s interest by offering $41,000; a bid of slightly more than $16,427 would have sufficed. At that point, a junior lienor
would have been required to bid more or lose its interest in the foreclosed property. Thus, Wachovia, which had a position subordinate to Florida Funding in the foreclosure sale process, would have been required to bid higher or lose the property. Depending on what a junior lien holder would have done at the sale, Mr. Palacios could have bid higher — or not — depending on his evaluation of his particular circumstances. He may not have had to bid much more than $16,000 to acquire the property.
To conduct a fair foreclosure sale, the correct amount needed to pay off the foreclosing first mortgagee must be known to all potential bidders, be they outsiders like Mr. Palacios or junior lien holders like Wachovia. This is so each bidder can assess the situation corresponding to that bidder’s individual circumstance and decide what the bidder is willing to pay to protect that bidder’s interest. When the true circumstances became known to the circuit court, it should have set aside the final judgment of foreclosure and the sale. Instead, the process the circuit court utilized conferred a benefit to the subordinate lien holder, and a corresponding detriment to Mr. Palacios, by awarding Wachovia the amount remaining after satisfaction of the first mortgage, a benefit to which Wachovia was not entitled by law.
Wachovia cites Sundie v. Haren, 253 So. 2d 857 (Fla. 1971), for the proposition that “[a]s to non-party persons, a purchase at an execution sale pursuant to a judgment afterwards reversed is final.” Id. at 859. Sundie is distinguishable in many respects, not least of which is that the third-party bidder there, unlike Mr. Palacios, was not contesting the final judgment of foreclosure or objecting to the sale. Moreover, the supreme court ultimately dismissed Mr. Sundie’s petition for certiorari, deciding it was without jurisdiction because there was no conflict between the decision on which he sought review, Haren v. Sundie, 233 So. 2d 417 (Fla. 3d DCA 1970), and Horn v. Horn, 73 So. 2d 905 (Fla. 1954). This result left standing the Third District’s decision to reverse and remand to the circuit court with directions to enter a final judgment of foreclosure and proceed with a new foreclosure sale.
Most telling of all is the supreme court’s warning that the result in Sundie “is limited to those situations in which the person required to make restitution was connected with the litigation. It is settled law that reversal of a decree on appeal does not affect the rights under that decree as to persons who were not parties to the appeal.” 253 So. 2d at 859. Thus, the supreme court’s dictum in Sundie regarding non-party persons is not controlling here.
It is the Third District’s opinion in Sundie that is more persuasive here. In its decision, the Third District had stated: “[T]he [foreclosed mortgagors] urge that the final judgment should have ordered a sale of the property so that they might exercise their right of redemption. It is apparent that a sale pursuant to a judgment which has been reversed is not a valid sale.” 233 So. 2d at 418 (emphasis added). Thus, although the final judgment of foreclosure sale in Mr. Palacios’ case was not technically reversed on appeal, the circuit court in fact reversed itself when it modified the final judgment by modifying it from $60,136.09 to $16,427.28.

Conclusion
“Whether the complaining party has made the showing necessary to set aside a [foreclosure] sale is a discretionary decision by the trial court, which may be reversed only when the court has grossly abused its discretion.” Ingorvaia v. Horton, 816 So. 2d 1256, 1259 (Fla. 2d DCA 2002) (quoting United Cos. Lending Corp. v. Abercrombie, 713 So. 2d 1017, 1018 (Fla. 2d DCA 1998)). We conclude that the circuit court grossly abused its discretion in declining to vacate the foreclosure sale when the final judgment of foreclosure was substantially modified after the sale. Mr. Palacios made the necessary showing to set aside the sale and his motion to vacate the sale should have been granted.
Reversed and remanded with directions to vacate the sale and proceed thereon in accordance with established procedure based on the amended final summary judgment of foreclosure filed July 1, 2008, that awarded $16,427.28 to Florida Funding. (KELLY and CRENSHAW, JJ., Concur.)
__________________
1Mr. Palacios’ original pleading was an untitled pro se “petition” to release purchase money; it was renamed to “supplemental/amended motion to vacate sale,” filed by newly retained counsel.

* * *

The banks are finding it harder to take homes from consumers in courts as both federal and state court judges are increasingly aware of the lies, misrepresentation and outright fraud being committed in courtrooms.  In response to the fact that lenders probably cannot conclude foreclosures if they are forced to tell the truth, they are pushing hard to pass legislation which would allow them to circumvent the judges and their pesky demands on the truth.

The newest piece of ironically titled legislation can be found here The ironic thing is they have chosen to call it the “Homeowner Relief  & Housing Recovery Act”…make no mistake, there is no relief for homeowners….it’s just a blatant attempt by lenders to circumvent the pesky requirements of honesty that courts sometimes still require…..

I wouldn’t expect this could become law this session, but they’re going to push hard and when everyone else is corrupt, it’s not hard to believe that the bankers could pay the right amount to the right people and push it through.

Now is the time…please take a moment to contact the following members of the Florida House of Representatives, who have sponsored House Bill 1523….

MAKE SURE THEY GET THE MESSAGE LOUD AND CLEAR THAT NO FORM OF NON-JUDICIAL FORECLOSURE SHOULD BE

PERMITTED IN THE STATE OF FLORIDA

ESPECIALLY WHILE LENDERS CONTINUE TO ENGAGE IN SYSTEMATIC FRAUD AND ETHICAL ABUSES.

DO YOUR PART…MAKE ONE PHONE CALL A DAY!

BUILD A NETWORK AND ASK YOUR FRIENDS TO MAKE JUST ONE PHONE CALL A DAY.

KILL THIS BILL!

Representative Tom Grady

UNITED STATES BANKRUPTCY COURT MIDDLE DISTRICT OF FLORIDA ORLANDO DIVISION

In re:

JORGE CANELLAS, Case No. 6:09-bk-12240-ABB
Chapter 7
Debtor.
_____________________________/

ORDER

This matter came before the Court on the Motion for Relief from Stay (Doc. No.22) (“Motion”) filed by U.S. Bank National Association, as Trustee of the LehmanBrothers Small Balance Commercial Mortgage Pass-Through Certificates, 2006-3(“Movant”), and the Objection thereto (Doc. No. 25) filed by the Chapter 7 Trustee Carla P. Musselman (“Trustee”). Hearings were held on November 23, 2009, December 7, 2009, December 21, 2009, and January 4, 2010 at which the Trustee, her counsel, counsel for Movant, and counsel for the Debtor Jorge Canellas (“Debtor”) appeared.

Trustee’s Objection

The Trustee opposes Movant’s Motion on the grounds Movant lacks standing to obtain stay relief and it failed to perfect its security interest prior to the Petition Date.
Her opposition is grounded on the contention the Assignment is invalid. She has
presented various legal theories in support of her position:

1.Aurora Bank FSB f/k/a Lehman Brothers Bank did not own the Mortgage and Promissory Note on the date of execution of the Assignment and had no authority to assign them to Movant.
2. By the terms of the two securitized trusts for Lehman Brothers designated 2006-3 registered with the U.S. Securities and Exchange Commission, no assignment occurred.
3. The Assignment was executed and recorded post-petition and may constitute a violation of the automatic stay pursuant to 11 U.S.C. Section 362(a)(4).
4. Movant has not established that on the Petition Date it had physical possession of the original Promissory Note properly endorsed in its favor.
5. Lehman Brothers’ ability to enforce the Promissory Note or Mortgage was extinguished in 2006 when it was paid by the Trust for the pool of mortgages which form the Trust’s corpus.
6. Title between the Promissory Note and Mortgage were bifurcated, thereby rendering the Mortgage unenforceable.

The Trustee asserts Movant is an unsecured creditor and she has authority to sell the Property free and clear of encumbrances for the benefit of the estate.

Movant asserts the Note and Mortgage are owned by the Lehman Brothers Small Balance Commercial Mortgage Pass-Through Certificates, 2006-3, a private securitized trust, and Movant, as the asserted owner and holder of the Note and Mortgage, has
authority to enforce the security interest. Movant presented with its post-hearing brief an Allonge to Promissory Note (“Allonge”) purportedly dated August 1, 2006 and executed by Jennifer Henninger as the Special Assets Administrative Assistant of Aurora Bank FSB directing: Pay to the Order of U.S. Bank National Association, as Trustee (the ‘Trustee’) under the Trust Agreement dated as of October 31, 2006, among Structured Asset Securities Corporation, as Depositor, Lehman Brothers Bank, FSB, as Servicer, and the Trustee relating to Lehman Brothers Small Balance Commercial Mortgage Pass-Through Certificates, Series 2006-3, without recourse.

Doc. No. 46 (emphasis added).

The Debtor filed an Affidavit (Doc. No. 47) stating he had no prepetition communications with Movant, was not aware Movant had a security interest in the Property, and, if the Assignment is deemed invalid, desires to purchase the Property from the Trustee.

Analysis

The evidence presented establishes the Property is encumbered by the Mortgage, which secures the Debtor’s performance of the Note. The Mortgage was properly perfected pre-petition through its recordation in the Official Records Book for Orange
County, Florida. The Mortgage and Note have not been bifurcated. The Mortgage has not been satisfied. The Debtor had actual knowledge of the unsatisfied Mortgage and the Trustee, through the recordation of the original Mortgage, had constructive, if not actual,
knowledge of the unsatisfied Mortgage. Kapila v. Atlantic Mortgage and Inv. Corp. (In re Halabi), 184 F.3d 1335, 1339 (11th Cir. 1999).

The purported assignment of the Note and Mortgage to Movant does not affect perfection or constitute a transfer of property of the estate or the Debtor. Id. at 1337.
“[A] subsequent assignment of the mortgagee’s interest – whether recorded or not – does not change the nature of the interest of the mortgagor or someone claiming under him.”
Id. at 1338. Recordation of an assignment post-petition does not constitute a violation of the automatic stay. Id. at 1337; Rogan v. Bank One, N.A. (In re Cook), 457 F.3d 561, 568 (6th Cir. 2006) (affirming the analysis of In re Halabi).

It is uncontroverted the Note has been in default since approximately May 2009 and a balance of approximately $300,662.84 is due and owing. The Debtor, who is a property appraiser, values the Property at $250,000.00 and Movant values the Property at $178,000.00. The Debtor is not making adequate protection payments to Movant. There
is no equity in the Property and it is not necessary to an effective reorganization given this is a Chapter 7 proceeding and the disclosures made by the Debtor regarding the Property in his bankruptcy papers. Grounds exist for relief from the automatic stay
pursuant to 11 U.S.C. Sections 362(d)(1) and (d)(2).

Movant’s Motion, however, is due to be denied because Movant has failed to establish it has standing to seek stay relief. A motion for relief from the automatic stay must be prosecuted in the name of the real party in interest. 11 U.S.C. § 362(d); FED. R. 7
CIV. P. 17(a)(1); FED. R. BANKR. P. 7017. “The real party in interest in relief from stay is whoever is entitled to enforce the obligation sought to be enforced.” In re Jacobson, 402 B.R. 359, 366 (Bankr. W.D. Wash. 2009). Only the holder of the Note and Mortgage, or
its authorized agent, has standing to bring the Motion. Id. at 367.
Movant asserts in its Motion it is the “owner and holder” of the Note and Mortgage, but has presented no evidence substantiating that assertion. The copies of the Note presented do not contain an endorsement evidencing an assignment of the Note.
The Affidavit executed by Movant’s loan servicer makes no mention of the location of the original Note or who has possession of it. Movant proffered no business records or testimony tracing ownership of the Note and establishing Movant is the present holder of
the Note.

The veracity of the Allonge and Assignment is questionable. The dates contained in the Allonge are chronologically impossible. The Allonge is dated August 1, 2006, but references a trust that came into existence on October 31, 2006. The signature of Jennifer Henninger is undated and not notarized. The Allonge was not referenced in or filed with Movant’s Motion in October 2009, but was presented three months later as an attachment to its post-hearing brief.

The Assignment was executed and recorded post-petition approximately two weeks prior to Movant’s filing of the Motion for Relief. It was prepared by Jennifer Henninger, who executed the Allonge, and was recorded by the law firm that is representing Movant in this proceeding. Jack Jacob’s execution of the Assignment was notarized by Jennifer Henninger and witnessed by Louis Zaffino, the affiant of Movant’s Affidavit. It appears the Allonge and the Assignment were created post-petition for the purpose of the relief from stay proceeding. Movant did not establish Jennifer Henninger and Jack Jacob had authority to execute the Allonge and Assignment.

Movant’s submissions are insufficient to establish it is the owner and holder of the Note and Mortgage or is authorized to act for whoever holds these documents. In re Relka, No. 09-20806, 2009 WL 5149262, at *5 (Bankr. D. Wyo. Dec. 22, 2009) (granting stay relief where movant established possession of note through testimony of witness who personally retrieved note from movant’s vault); In re Jacobson, 402 B.R. at 370 (denying movant’s stay relief motion due to movant’s failure to establish it was holder of note); In re Hayes, 393 B.R. 259, 270 (Bankr. D. Mass. 2008) (denying movant’s stay relief motion and sustaining debtor’s claim objection due to movant’s failure to establish it was holder of note). Movant has not established it has standing to bring the Motion and the Motion is due to be denied.

Accordingly, it is

ORDERED, ADJUDGED AND DECREED that the Property located at 830 Hoffner Avenue, Orlando, Florida 32809 and more particularly described as:

Lot 7, SUNDAY BLOCK, according to the plat thereof, recorded in Plat Book O, Page 27, of the Public Records of Orange County, Florida is encumbered by the Mortgage executed by the Debtor on August 1, 2006 and recorded in the Official Records Book for Orange County, Florida on August 15, 2006 as Instrument 20060534342 at Book 08805, Page 4292, which Mortgage constitutes a valid properly perfected lien, and which secures the Promissory Note executed by the Debtor on August 1, 2006 in the principal amount of $274,500.00 and designated as Loan
Number 00207199; and it is further ORDERED, ADJUDGED AND DECREED that the amount of the Mortgage lien encumbering the Property exceeds the Property’s value and there is no equity in the Property; and it is further ORDERED, ADJUDGED AND DECREED that the Movant’s Motion for Relief from Stay (Doc. No. 22) is hereby DENIED due to Movant’s failure to establish it has standing to bring the Motion; and it is further

ORDERED, ADJUDGED AND DECREED that the Trustee, within twenty-one days of the entry of this Order, is hereby directed, pursuant to 11 U.S.C. Section 704(a) and Federal Rule of Civil Procedure 5009, to file with the Court a Report of No Distribution or to designate this case as an asset case.

Dated this 9th day of February, 2010.

/s/ Arthur B. Briskman

ARTHUR B. BRISKMAN
United States Bankruptcy Judge

An issue I’ve been fighting in court long before the foreclosure crisis began is the issue of “Capacity”, which in layman’s terms means, tell me who this Plaintiff that is suing my client is so that I can first determine if they have the legal ability to sue my client. Then we’ll get to work on determining whether they in fact have the right to collect anything from my client. (Despite what the paperhangers and robosigners have produced, these plaintiffs have no clear right to foreclose.)

It’s an amazing thing that in the vast majority of foreclosure cases, no-one has any idea who the plaintiff suing the homeowner is.  Not the Plaintiff’s attorney, not the homeowner, not the defense attorney and unfortunately, not even the judge.  I say no one has any idea because capacity is not even plead or alleged in the complaint…it’s just not part of their word processor program it they apparently don’t want to go through the effort to plead it.  You see, basic rules of legal pleading require the parties in a lawsuit to be properly identified so we know exactly who is before the court.  Correct pleading would look something like this:

“Plaintiff XYZ Bank is a Federal Bank Chartered under the National Banking Act with it’s principal place of business in Des Moines, Iowa.”

Problem is you’ll never see this proper pleading in the typical foreclosure mill complaint….as a result it is not at all clear who the Plaintiff is in the litigation…and therefore it is not clear that the Plaintiff has even properly invoked the jurisdiction of the court.  There are a whole range of other issues that flow from this…such as the cases where the Plaintiff makes an ex-parte motion to substitute party plaintiff, or when the certificate of title is assigned or substituted for another party.  All of this is totally improper but it goes on all the time.. Some judges get it, (see my published case from Pinellas County Judge Anthony Rondolino, Wachovia v. Matacherro) where the judge required that the plaintiff properly identify themselves as a condition of proceeding with the case.

The unregulated, unregistered, unknown shadow entities that are filing foreclosures across the country (i.e. Deutsche Bank as Trustee for the IXIS trust) raise real questions that must be answered….who are they?  Where are the registered?  Who are the real parties in interest?  Other questions that flow from these questions is why the judges, Florida Attorney General, Florida’s Chief Financial Officer and Florida Governor (and their counterparts in every state) are allowing unregistered, unregulated, unknown entities take title to bajillions of dollars worth of property in this state without even bothering to give us an address to send their checks to….think about it…we don’t even have a proper address to mail them a thank you letter.

If we’ve learned anything about the collapse of the economy and issues like the Bernie Madoff scandal, the power players play by an entirely different set of rules and our government institutions and leaders lack the will to challenge their power. There is something terribly amiss when judges are taking their neighbors homes and with a stroke of a judicial pen granting it to some shadow entity that no-one can identify and who were not sure plays by any sort of rules.  Another practical consideration is, as a title attorney, the properties that are taken back through foreclosure cannot be properly conveyed without proper identification of the trust that purported to own it….at the time of filing the complaint.

There are two recent Supreme Court cases that address some of the issues surrounding capacity, (Watters v. Wachovia and Cuomo v. Clearinghouse) but the following links take you to sites that offers a complex explanation of why these cases and why capacity is so important….read on and here

The Florida Supreme Court’s Residential Task Force spent a year reviewing the practices of the foreclosure mills and determined (I’m paraphrasing here) that they were engaged in systematic fraud and misrepresentation in courts across the state. (The full report is here)

I’m concerned that the report raises serious constitutional issues…I mean, if the Supreme Court makes findings of fact that citizens are being abused by systemic fraudulent and improper practices and the practices continue largely unchecked, aren’t there due process issues that the Federal Courts are obliged to address?  This is an issue that will eventually catch the attention of law clerks, academics and  law school professors who will eventually provide some scholarly work on the subject.  I can tell you that a very real practical consequence of all this mess will be instability in the real property markets for decades to come….you see Final Judgments of Foreclosure that are based on facially incorrect information, fraud or misrepresentations are void or voidable for the next twenty years.  The good people that are buying REO homes that have been subject to the foreclosure process simply cannot be secure in their homes.  Plaintiff’s attorneys and the investors who actually own the notes that were secured by the mortgages that were improperly foreclosed will be coming….just wait.

Anyway, in an effort to curb the abuses, the Supreme Court of Florida enacted a rule that required the foreclosure mills to verify the foreclosure cases they’re filing in bulk across the state, effective February 11, 2010. (Copy of the rule  here)

“Verified” means the Florida Supreme Court is asking the Plaintiffs and their attorneys to swear or affirm that they have the right to invoke the awesome power of the courts of this land as a key component of their effort to deprive citizens of their homes and property.  Now asking a party to prove they have the right to invoke the power of the court before that party wield such a powerful force shouldn’t be such a big deal…problem is, the foreclosure mills are not comfortable or are totally unwilling to make such a basic and fundamental affirmation.

In comments submitted to the Florida Supreme Court (found here) Shaprio & Fishman told the Supreme Court (and I’m paraphrasing here), “You see court, foreclosure is like dogs playing poker….it’s hard to explain and difficult to grasp, but let us lay it out for you here.”  Read carefully the comments they’ve made…there’s a little slip of the ethical tongue  in paragraph six when they comment about the fact that notes and mortgages are sold back and forth and the end purchaser cannot verify any of the key facts in the complaint….interestingly the drafter calls them, “alleged facts”…you see the author of the comment concedes they’re not even sure about the facts.  Anyway, the balance of Shapiro’s comments are essentially the fact that none of the parties the Plaintiff’s attorneys bring before the court are in a position to verify all of the facts necessary to foreclose.  To me the admissions in the comments are staggering….they’re telling the Supreme Court we cannot possibly be required to actually prove we have the right to foreclose and what we’re owed.

The comments also point to a much larger problem the Supreme Court and all of us are going to have to come to grips with real soon….

MEDIATION IS NOT GOING TO WORK AT ALL BECAUSE THE PARTIES TO THE MEDIATION DO NOT HAVE THE AUTHORITY TO EFFECTIVELY MEDIATE.

ANOTHER THING TO KEEP IN MIND PEOPLE…

EVERY SINGLE ONE OF THE TENS OF THOUSANDS OF FORECLOSURE CASES FILED AFTER FEBRUARY 11, 2010 THAT ARE NOT VERIFIED WILL NEED TO BE REFILED TO COMPLY WITH THE RULE ANY JUDGMENT BASED ON SUCH INCORRECTLY FILED CASES IS VOID.

With that in mind, I just cannot understand why the Chief Judges in every circuit across the state are not just dismissing all these cases?

Finally, as reported here in today’s edition of the Wall Street Journal, BofA is going to start reducing the principal balance on mortgages.

After being pumped full of billions of dollars in taxpayer money and after acquiring many of the loans that will be reduced for cents on the dollar….reducing principal is just something that makes sense.

Read on and stay tuned….much more on this later. This is a trend that will undoubtedly make its way to other lenders as well!