Attached is a court order quashing a foreclosure service process service (PDF here; embed here) because of a counterfeit court summons.

Apparently what’s happening is that private process servicer companies may not be serving people with summons, and are simply counterfeiting the documents so they can keep the fees without doing the work. That means that you could theoretically be foreclosed on without ever knowing there was even a foreclosure case against you.

This judge got wise to it.

Below are two more stories about the problem. The first is from the Florida Bar News, and the second is from prominent financial blogger Mike Konczal on the rampant violations of property rights.

Florida Bar News: Faulty filings hamper clearing foreclosures

Key quote: “If we had everyone defending their foreclosure, we’d never get through this.”

Florida’s Foreclosures Nightmare

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Simply astonishing . . .

Previously:
Man without Mortgage Loses Home in Foreclosure (September 23rd, 2010)

Stopping Counter-Productive Mortgage Mods and Foreclosure Abatements (January 5th, 2010)

Mortgage Electronic Registration Systems Loses Legal Shield (September 23rd, 2009)

Category: Credit, Foreclosures, Legal, Real Estate

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

31 Responses to “Florida’s Ongoing Foreclosures Nightmare”

  1. Arequipa01 says:

    This is order is from Duval county- same county as the now famous Pocopanni case. Different judges. Hmmm.

    Pocopanni case goes against JPM, Jeffs against Deutsche. Hmmm.

    Forgery and Fraud. Thanks for the PDF.

  2. Robespierre says:

    So Barry not long ago you said: “It is the law Bitches”. Aren’t these offenses enough for criminal charges?

  3. I did say that, didn’t I?

    If I was DA in that County, i would be throwing these muthafuckers in prison

  4. Darmah says:

    The Naked Capitalism post which is referenced in “Florida’s Foreclosures Nightmare” is quite good and worth a read — http://www.nakedcapitalism.com/2010/09/more-evidence-of-bank-fubar-mortgage-behavior-florida-banks-destroyed-notes-others-never-transferred-them.html

    The conclusion:

    “So here we are back to 2007-8. If you and I make a serious mistake at our jobs, we get fired, and if we make a really serious error, our company could perish. But when bankers screw up, and leave a lot of collateral damage in their wake, they are confident that their sugar daddies in DC will clean up the mess for them.

    And the worse is they might even be correct if we let them get away with it this time. ”

    Unfortunately, the bastards probably will get away with it.

  5. Matt S says:

    This is the end of private property rights.

  6. Lost in the system that took the house
    Ariana Eunjung Cha and Brady Dennis
    Washington Post Staff Writers
    Tuesday, September 28, 2010; 11:06 PM

    As more of these practices are coming to light, the entire foreclosure system is facing the threat of grinding to a halt. Connecticut, California and Colorado have frozen all foreclosures by one major lender, and other states are pondering whether to follow suit.

    The vast majority of families facing foreclosure do not fight their lenders. But that may change as a growing number of homeowners are contending in lawsuits that the process appears so flawed that they have the right to challenge their cases, even as they admit to missing payments.

    Economists say such a trend threatens to overwhelm an overburdened legal system struggling to handle the aftermath of the housing collapse, as well as delay a correction in home values that the real estate market desperately needs to return to normalcy.

    Legal experts say many homeowners may have legitimate cases, and even lenders in some instances are withdrawing foreclosure documents for fear that they might not hold up if challenged.

    The deep flaws in the foreclosure process came clear last week after Stephan, an employee of Ally Financial’s GMAC mortgage unit, admitted in a sworn deposition that he signed off on up to 10,000 foreclosure documents a month for five years without reviewing them thoroughly. That prompted Ally, which took a $17 billion federal bailout and is majority-owned by the government, to halt evictions in 23 states last week. Stephan also signed foreclosures for hundreds of other mortgage companies, including J.P. Morgan Chase.

    A picture is emerging is of an industry – from loan officers in local offices in neighborhood strip malls to the financial titans of Wall Street – eager to purge bad mortgages from its books. To speed that process, documents and signatures were forged, notary witnesses were faked and those responsible for checking court filings never read the massive stacks that passed across their desks at a breakneck pace, attorneys and law enforcement officials say.

    Some problems, such as a misplaced signature

  7. Transor Z says:

    Baby likee.

  8. dead hobo says:

    1 – Imagine a place where homes repossessed by foreclosure are sold by lenders who violated due process, possibly committing perjury in the process.

    Now, assume you are the proud new owner of a home you bought at a distressed price by such a lender.

    How clear is your title? What if you flipped it? Is the current owner’s title any better than yours? Will you get sued if you flipped it? You bought title insurance, right?

    2- Imagine a place and time where foreclosures cease to occur because no bank can assure the court that documents have correctly been processed according to all laws. Oh, wait a minute, that’s now.

    3 – Now, imagine how this will affect home pricing and the reduction of the backlog of the shadow inventory. Would you buy a foreclosure if you thought that you didn’t have clear title and the previous owner might legally demand it’s return? You would have to sue the bank for repayment of any down payment plus damages unless your title insurance paid up. I wonder how that’s going to work out. Nope – I strongly suspect the foreclosure market is going to grind to a halt with respect to clearing out inventory. Even if the bank assures “No- Not This House” – you can be sure the price will reflect this new concern.

    4 – Perversely, being able to advertise “We Guarantee Clear Title – No Foreclosures For Sale Here!” may become a selling point and generate a premium price.

    5 – How long will the title taint last? How much bottom line impact will it have to all sellers if distressed home realty? Imagine you run a title insurance company and you have to pay billions because the banks screwed up and probably committed fraud in the process. Yes, you can eventually recover but after how long and after how much was spent?

    6 – How much is Uncle Stupid on the hook for?

  9. dead hobo says:

    Will title insurance companies now, as a matte of routine, have to research the legality of signatures and proper due process when it finds out that any house it is asked to write a policy on was foreclosed on at one point? Or will Uncle Stupid go into the title insurance business to accommodate a real estate market that will surely grind to a halt very soon now?

    Will GMAC require a TARP bailout to pay for this?

    Will anyone go to jail for this? (Just joking – of course not)

  10. willid3 says:

    not just GMAC/ALLY
    http://dealbreaker.com/2010/09/was-that-wrong-should-they-not-have-done-that/

    seems to be a very contagious disease

  11. Thor says:

    I know just how to solve this problem!

    Less regulation should do the trick! ;-)

  12. willid3 says:

    yup after they can just sue if things go wrong right? even if we do make it harder to sue, its still not a problem,

  13. b_thunder says:

    “If we had everyone defending their foreclosure, we’d never get through this.” – same is true for speeding tickets! Use the system to fight the system, use the rights given you by the Constitution!

  14. Darkness says:

    Judges have never read foreclosure notices at the county level. This is a very old problem that no one would have noticed except for the sheer volume and others jumping in to profit on it.

  15. DeDude says:

    How about the courts spend less than a dollar on sending a message to the address being foreclosed informing the inhabitant? At least that would prevent that the first thing you hear about it is when they stand at the stairs ready to kick you out.

  16. changja says:

    btw, where is everyone claiming that free market is the best way to govern? corporations often times become corrupt, just as easily (or more easily due to greed for profit) as governments

  17. JasRas says:

    In horror flicks, the monster is never dead on the first attempt. When a bully gives a swirly, he usually brings you up for air before putting your face in the water again. Is this the Bank swirly part deux? Is this enough to shake the foundations of the market?

  18. Jack says:

    Barry,

    Why do you believe the DA’s are honest? They ARE the muthafuckas

  19. FrancoisT says:

    Go ahead bankers muthafuckers! Keep destroying any remnant of confidence in the market. See what happen to YOU after that; thou shall receive a stiff and repeated dose of socialist vaccine right there in the gluteus maximus.

    Mind you, me not very keen in having socialist vaccination around here. Me know mucho people don’t like it either chop chop!

    Alas…you guys keep spreading contagious disease everywhere, like these AIDs patients who refuse to have protected sex and don’t wanna warn their multiple partners.

    Tsk! tsk! tsk! (me shaking head long time)

    And yes! the vaccine’s gonna hurt and burn too. You know what they say about Karma…

  20. Glen says:

    It’s amazing how we have to “honor contracts” for bonuses to bankers that wrecked the world economy, but actually following the law for loan origination, title transfer, or foreclosure of some of the very same “loans” that make bankers millions and billions is optional.

    America is a banana republic.

  21. QOTD: “You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete.” -Buckminster Fuller

    b_thunder Says: September 29th, 2010 at 5:27 pm

    “If we had everyone defending their foreclosure, we’d never get through this.” – same is true for speeding tickets! Use the system to fight the system, use the rights given you by the Constitution!
    ~~

    b_thunder, actually, outlines the ‘new Model’, referred to by b_fuller, above..

    see also http://avalon.law.yale.edu/18th_century/usconst.asp for, at the very minimum, more proof that New Haven isn’t Hartford..

  22. hammerandtong2001 says:

    JPM Chase announced yesterday they were suspending all residential foreclosure proceedings in the 23 states where a court must rule on the proceedings, including New York, New Jersey, Florida and Illinois.

    http://www.nytimes.com/2010/09/30/business/30mortgage.html?partner=yahoofinance
    _________________________________________________

    “….Chase and GMAC, in their zeal to process hundreds of thousands of foreclosures as quickly as possible and get those properties on the market, employed people who could sign documents so quickly they popularized a new term for them: “robo-signer.”

    In depositions taken by lawyers for embattled homeowners, the robo-signers said they or their team had signed 10,000 or more foreclosure affidavits a month.

    Now that haste has come back to haunt them. The affidavits in foreclosures attest that the preparer personally reviewed the files, which those workers acknowledge they had no time to do.

    GMAC and Chase say that their lapses were technical and will soon be remedied with new filings. But defense lawyers are seizing on these revelations and say they will now work to have their cases thrown out.

    Beyond the relative handful of foreclosure cases being contested are many more in which the homeowner did not have legal counsel. Potentially, hundreds of thousands of cases could be in doubt.
    _________________________________________________________

    Beyond this, remains the issue of establishing deed and title holdings. In the mass securitization process, where actual holding ownership is transferred, the actual owner of one’s mortgage could be a bank in Greece.

    Hello Bank In Greece: produce the title and deed for the mortgage bond related to property located at 47 West Amelia Drive, Peoria, Illinois in the United States. Good luck with that.

    .

  23. curbyourrisk says:

    Might be news here on this blog, but Denninger has been yelling about these games going on for over 2 years……This is gonna be HUGE.. But in my view….the banks will delay things long enough for them to change the laws. Uh…you did know the banks make the laws….didn’t you???

  24. rktbrkr says:

    Dead Hobo,

    I imagine Title Ins cos will stop writing insurance in a bunch of states and maybe try to reneg on policies written, refund premiums paid.

    The prices of homes purchased out of all foreclosure will be priced as if there is not clear title.

    At first I though prices would rebound in places like FL where the big banks are being to halt their FC sales but now I think buyers won’t touch these with a 10′ pole, sales will occur for pennies on the dollar.

    How will banks account for the value of their inventory now? Will they account in any way for their potential liabilities for these bad foreclosures.

    The big mortgage mills have truly underpromised & overdelivered LOL.

    How about the big money center banks that gobbled up these Countrywides at what they thought were bargain prices. Than god they got guarantees of immortality from Geithner, how big are the CITI and BOA guarantees, a half trillion, they may need them before this is done.

  25. rktbrkr says:

    The Thyphoid Mary of foreclosures. He apparently signed 1/2 million bogus foreclosures. Designated signer for Chase & MERS VP. Back to pumping gas after he does a couple years in min security.

    http://www.nakedcapitalism.com/2010/09/meet-gmacs-robo-signer-jeffrey-stephan.html

  26. curbyourrisk says:

    NO BANKERS will be harmed in this scenario. The letter of the law is just that….so, they will change the letter of the law absolving all the crooks of their mis-deeds. We can’t have an honest banking system now…the ponzi might end. It is a fucking joke that this government allows the banks to continue to STEAL from the American people. It not only allows the theft to continue it aides it!!!! Sorry, but if you are a banker out there……YOU ARE THE PROBLEM……

  27. Lugnut says:

    The banks won’t lose, except on an high profile basis. This is another varient on TBTF. The ‘larger interests’ will be pandered to, not the law. This should be obvious, evidenced by the mere creation and existence of these special courts, created by the governement, who’s sole purpose is to clear out the backlog in favor of the banks, as quickly as possible, with as little fuss as possible for the banks and foreclosure mills.

    Warning: extremely distasteful analaogy ahead!

    The establishment of these courts are legal equivilent of a governement run concentration camp. Citizens are herded into them with fear and trepidition, but with at least a small expectation of fairness. Instead when its there turn, instead of a chance to plead their case, the judge gives em a quick Zyklon B rubber stamp approving the banks motion, and sends everyone on their way. Shameful really.

    Tha banks can’t face the prospect of backlogged courts preventing them from clearing out assets and cleaning up their books, so the courts and the government become their partner in crime.

  28. Darkness says:

    This smells like Al Capone and the IRS to me. Notary fraud, summons fraud, that is some straightforward stuff and can be prosecuted, easily.

    Unfortunately, this is a whole different set of screw-ups, not the greedy losers who caused the original mess.

  29. curbyourrisk says:

    ^^^^^^^^Wrong….it is the SAME greedy losed who caused the original mess.

  30. rktbrkr says:

    Who’s Next? CITI, BAC or Wells? The doofus in the video was a MERS VP.He sounded like he was preparing an insanity defense. He should be worried some poor soul who got foreclosed unfairly will declare doofus open season on this mulleted fool.

  31. rktbrkr says:

    BAC was next with a Friday announce, a more extensive freeze than the others.CITI and WF claim they have no problems, I find that laughable.

    One title insuror has stopped writing policies for Ditech/GMAC/Ally. What if title insurance becomes unavailable for foreclosures in numerous states where these Big 5 banks have been fast tracking foreclosures? What is the fair market value of an uninsurable foreclosure in those states?

    October 1, 2010
    Bank of America to Freeze Foreclosure Cases
    By DAVID STREITFELD
    Bank of America, the country’s largest mortgage lender by assets, said on Friday that it was reviewing documents in all foreclosure cases now in court to evaluate if there were errors.

    It is the third major lender in the last two weeks to freeze foreclosures in the 23 states where the process is controlled by courts.

    But Bank of America went further than the first two lenders, GMAC Mortgage and JPMorgan Chase, which have said they will amend paperwork only in cases they think were improperly done. So far, that has amounted to only a handful of cases.

    Bank of America, in an e-mailed statement, said it would “amend all affidavits in foreclosure cases that have not yet gone to judgment.”

    That could mean tens of thousands of foreclosure cases would be in limbo for months or, if the consumers in default hire lawyers, years.

    Spokesmen for the bank said that they were uncertain how many cases the lender currently had in court. They provided no timeline or explanation for the freeze, saying only that the bank planned to eventually resubmit all the cases.

    The moratorium is likely to further fuel the uproar over the foreclosure tactics of the big lenders, which continued to have political ramifications on Friday.

    Before Bank of America’s announcement, Richard Blumenthal, the Connecticut attorney general, asked judges in his state to put a halt to all foreclosures for 60 days. Connecticut is one of the 23 states where foreclosure is a judicial matter. Others include Illinois, Florida, New Jersey and New York.

    Mr. Blumenthal, who is running for senator in Connecticut, said the freeze “should stop a foreclosure steamroller based on defective documents and enable effective remedies.”

    California’s attorney general, Jerry Brown, said that Chase should stop any foreclosures in the state until it proved that it was following the law. Mr. Brown, who is a candidate for governor, earlier made the same demand of GMAC.

    In California, lenders generally pursue foreclosures outside of the court system, so they are presumably still proceeding with evictions. Chase declined to say whether it would comply with Mr. Brown’s comments.

    Chase said this week that it had frozen 56,000 foreclosure cases. GMAC, which is largely owned by the Treasury after receiving $17 billion in federal bailout money to prevent its collapse, has repeatedly declined to say how many cases it is halting.

    The nation’s two other major lenders, Citi and Wells Fargo, have issued statements maintaining they have no problems with their cases.

    The problem for all the lenders that have announced moratoriums stems directly from their attempt to deal with an unprecedented number of foreclosures.

    According to LPS Applied Analytics, a mortgage data firm, 2 million households are in foreclosure. Another 2.37 million households are seriously delinquent and waiting for their lender to take action.

    Sometimes these loans are still owned by the lender but often, the banks are merely the loan servicer acting on behalf of the owner. Many of the loans are owned by Fannie Mae and Freddie Mac, the mortgage holding companies now controlled by the Treasury. In other cases the loans have been sold to private investment pools.

    Confronted with so many cases, the lenders tried to process them on a wholesale basis, with the goal of avoiding the expense of a full trial and instead getting summary judgments.

    The tool for doing this was the so-called robo-signers, in which midlevel bank executives would sign thousands of affidavits a month attesting that they had personal knowledge that the facts of the case were as presented. The affidavits were prepared by lawyers who were paid a flat fee, which also placed a premium on volume.

    When defense lawyers started deposing these robo-signers, they acknowledged that they could not possibly have knowledge of all the cases. The banks say this is a technicality and they will refile the proper affidavits. The defense lawyers say the practice calls the cases, and indeed the entire process, into question.

    Thomas Lawler, a housing economist, said the current mess was predictable and probably inevitable. Lenders made their money by making loans and then simply and efficiently servicing them by collecting the checks every month. They were never prepared to deal with the labor-intensive problems of delinquency and foreclosure.

    “However, the foreclosure crisis is now almost three years old, and not having staffed up sufficiently to deal with the problems with inadequate staffing borders on criminal,” Mr. Lawler said. “I mean, jeepers, look at the unemployment rate; how hard would it have been to hire more folks?”

    Mark Stopa, a Florida lawyer who represents defaulting homeowners, said the magnitude of the current troubles depends on how title insurance companies react. If those firms begin to shy away from insuring foreclosed properties because they think those properties are vulnerable to claims, he said, the entire housing market could suffer.

    “Judges have to force banks to do foreclosures correctly,” Mr. Stopa said. But he noted that would require a significant increase in staff. “I’ll believe it when I see it,” he said.

    Stocks of the major title insurance companies dropped on Friday amid concern that their business would suffer as a result of the foreclosure freezes. Fidelity National Financial fell more than 4 percent, while First American Financial dropped 3 percent.

    One firm, Old Republic National Title, said this week it would not issue policies on GMAC foreclosures until further notice.