For the fourth year in a row, an anti-consumer, Anti-American bill, backed by the very powerful mortgage servicing industry, is cruising through the Florida House of Representatives, and this time, it looks like it could actually become law! It has already passed through a very important committee.
After 4 years of trying, it appears Wall Street has finally purchased enough of our state legislators to enact a bill that will eliminate due process and fundamental justice in Florida foreclosure cases. Rep. Kathleen Passidomo’s HB 87, perversely named Florida Fair Foreclosure Act, makes it much easier for mortgage companies to foreclose on residential mortgages by literally eliminating a homeowner’s right to fight the foreclosure.
I could see such a law in China, North Korea, or Cuba, but I never thought I would see such an Anti-American bill proposed by Florida’s Republican Party.
Fact: The proposed bill shifts the burden of proof to the defendant
The basic tenant of civil jurisprudence is that the plaintiff has the burden of proving its case, just as the basic tenant in criminal jurisprudence is that an accused is presumed innocent until convicted.
As Americans, we have earned our “Day in Court.” However, HB 87 actually shifts the burden to homeowners to present evidence that they shouldn’t have their house taken away. The plaintiff no longer need to present evidence at all.
Under the proposed bill, a bank files a civil complaint alleging the necessary elements of a foreclosure. The Court then sets a “Show Cause” hearing, wherein the homeowner must disprove the allegations.
Yes, the Court must assume the mortgage industry is telling the truth, despite the fact that the entire country knows mortgage companies have been caught lying in nearly every foreclosure every filed in the United States in the last decade or so. This should only make sense to Lance Armstrong.
Foreclosure complaints are often inaccurate. Banks routinely fail to properly apply payments in accordance with the mortgage, and they usually always fail to exhaust all contractual and legislative obligations to the homeowner prior to commencing a case. For instance, mortgage servicers who took taxpayer bailout money under the TARP program are required by law to act in good faith in modifying their customers mortgages prior to foreclosing on their home, but this never happens.
The process for uncovering the misdeeds of the banking industry is complicated by industry efforts to stonewall discovery. A homeowner’s right to seek this discovery is all but eliminated under the proposed legislation because of the speed with which evidence must be gathered.
Fact: A Judge can ignore evidence that the foreclosure is improper
Even if the homeowner has the ability to provide actual proof that a foreclosure is improper, a trial judge is free to ignore the evidence and enter a foreclosure. This provision has become even more anti-homeowner since last year. Here is the exact provision in the bill.
Stricken words are REMOVED from last year’s version and underlined words are ADDED to last year’s version:
3. State that the filing of defenses by a motion, responsive pleading, affidavits, or other papers
or by a verified or sworn answer at orbefore the hearing to show cause may constitute constitutescause for the court not to enter the attached final judgment.
Why would the Republicans add the word “may”? The message is clear to foreclosure judges, most of whom were appointed specifically to ram foreclosures through the Courts, “You are free to ignore any evidence submitted by the homeowner.” What if the homeowner brings cancelled checks proving payment and no default? IGNORE!
Fact: Foreclosures are slow for many reasons, but the legal process isn’t one.
Supporters of the bill have intentionally mischaracterized the “problem” in foreclosure cases complaining that “it takes too long.” They cite to statistics that it takes twice as long as the national average to foreclose on a Florida home.
The problem is not that foreclosures take too long. The “problem” is that banks have built an entire legal strategy based on fraud (consider the LPS’s recent $129M foreclosure fraud settlement, the $26B AG Foreclosure Fraud Settlement and the shuttering of the two largest foreclosure law firms in the state – David J. Stern and Marshall C. Watson). The fraud became necessary because they failed to comply with their own underwriting rules, securitization rules and even requirements found in the homeowner’s mortgage.
According to a new report by the Florida Legislature’s Office of Economic and Demographic Research (p17), it now takes an average of 853 days to foreclose on a home in Florida, while the national average is 414 days. However, the same graph reveals that in 2007, it only took 169 days to foreclose on a Florida home. This tells us that the judicial rules are already in place to allow for fast foreclosures.
In reality, a confluence of conditions have materialized since 2007 that have caused a slow-down:
- The entire housing market collapsed in 2008 as a result of the sub-prime mortgage market, dragging the entire economy down with it and forcing an avalanche of mortgage defaults.
- As a condition to the 2008 TARP bailout of the mortgage industry, mortgage companies are now required to analyze each borrower for a mortgage modification under the government’s Making Homes Affordable Program (commonly known as HAMP) or in-house modification programs.
- Mortgage companies commonly commence a foreclosure case then “put it on ice” while taking the borrower on a mortgage modification odyssey that always involves lost documentation and never ending demands for updated information. The foreclosure case just “sits there” when it never should have been filed until modification options had been exhausted.
- Consumer lawyers began defending homeowners facing foreclosure because of the dual tracking of foreclosures and modifications. These lawyers began to uncover an entire industry of foreclosure fraud upon our judicial system.
- The largest foreclosure firm (by far) in the state, David J. Stern, collapsed after Fannie Mae and Freddie Mac fired the firm for committing massive foreclosure fraud. These tens of thousands of orphaned David Stern cases sat in limbo in courthouses across the state for a year before being reassigned to new firms.
- Mortgage servicers and default servicers came under fire by state attorney generals for the commission of wholesale fraud. The result was a foreclosure moratorium by the largest mortgage servicers during the investigation and eventual settlement with the Nation’s Attorney Generals. This delay added many months to pending foreclosures.
- The Supreme Court of Florida mandated that every foreclosure case attempt mediation through the Residential Mortgage Foreclosure Mediation Program (RMFM). This added months to nearly even foreclosure because of delays by the Collins Center and mortgage companies in scheduling the court ordered mediation. The program was an utter failure and waste of money because Wall Street and their servicers are not required to mediate in good faith.
- Mortgage companies and their Florida foreclosure law firms continue to be a discombobulated mess. Even when a case is uncontested, these plaintiffs routinely seek continuances of their own motions because they have not properly prepared their file to proceed with the hearing.
Fact: Florida law already has an expedited foreclosure procedure
Florida Statute § 702.10 sets forth an expedited process known as Summary Foreclosure Procedure. The simplified procedure addresses the vast majority of uncontested foreclosures by forcing the homeowner to affirmatively act at the outset of the case or suffer judgment. It also contains a safeguard that removes the case from the “fast track” if the homeowner contests the alleged default under the terms of the mortgage. The mortgage industry and their lawyers do not use this procedure because they WANT to create a perception of a backlog to encourage lawmakers to pass a more oppressive bill.
Fact: The proposed bill encourages fraud
Under HB 87, foreclosure judgments will be final, and that once the foreclosure is completed, even if it was fraudulent or void for other reasons, the homeowner cannot get their property back, even in Court. They can only get a money judgment. So, the game plan is to ramrod foreclosures, displacing American taxpayers from their homes, and even when a homeowner overcomes all odds and convinces an appellate court that the bank committed fraud, the only remedy is “damages.” And in a case when the homeowner voids the Final Judgment of Foreclosure, the Courts will tell the homeowner, “You weren’t damaged because your home was underwater. You didn’t lose anything.”
Doesn’t this sound like something that happens in some totalitarian dictatorship or communist country?
Fact: The Proposed bill is retroactive
Under HB 87, the expedited foreclosure procedure would apply to homeowners who have been fighting the fraud in their cases for years. These many homeowners who have endured years of litigation with Goliath and are winning could now lose their Day in Court.
Fact: This bill will become law this legislative session if you don’t voice your opposition
Will Florida’s Republican Party succeed? I guess that depends upon whether you do anything about it.
Please contact your state representatives and tell them you don’t want the banking industry to buy our court system, and you want them to put the property right of Floridians above the greed of Wall Street. Also, sign and share this petition!