Bankruptcy Court is Perfect Antidote for Florida’s Unfair Foreclosure System

15 Mar Bankruptcy Court is Perfect Antidote for Florida’s Unfair Foreclosure System

I had two foreclosure trials scheduled earlier this week, and in both cases, the bank lawyers dismally failed to comply with very specific, important pretrial rules which should have resulted in sanctions against the banks. Specifically, in both cases, the banks refused to disclose the name of their testi-liar . . . er . . . robo-witness until hours before trial. In one case, I literally learned the name of their corporate representative when the bailiff called the case to start.

You must be thinking, “Boy, that judge must have read them the riot act!” I mean, even a layperson would understand the importance of disclosing a witness before trial. Well, in both cases, the senior judge just rescheduled the trial to a later date, allowing derelict bank lawyers yet another chance to ignore the rules. Typical.

And now retired Senior Judge A.C. Soud, Chief Foreclosure Prosecutor . . .er . . . Judge of Duval County, has begun working hand-in-hand with the bank lawyers in setting thousands of foreclosure cases for trial all at once with three-weeks notice even though the Florida Rules of Civil Procedure require at least 30 days notice. You see,Judge Soud is ignoring the law because he must have his foreclosure numbers reduced by the end of June in order to receive additional funding (ie. retirement pay) from Florida’s Supreme Court. Gotta git-er-done.

And as I write this blog, our legislature is rolling right along with a bill designed to surgically remove the homeowner’s right to due process in foreclosure cases because powerful banks, land title companies and their lawyers have paid a princely sum for this law.

When it comes right down to it, Florida’s Judiciary is unreliable, unresponsive and suspect at best. By and large, Florida is still a good ‘ol boy judicial system.

So, what’s a homeowner to do? File a Chapter 13 bankruptcy!

First of all, the moment you file a bankruptcy, the automatic stay freezes the foreclosure case dead in its tracks. Any scheduled hearing, trial or foreclosure sale is immediately removed from the calendar.

Secondly and more importantly, the Middle District of Florida, the Chapter 13 Mortgage Modification Mediation Program is in full swing, and the results are astounding. Currently, my firm has more than 50 homeowners in the mediation program, and we have nearly a 100% success rate.

You may be wondering how “good” the results are. After all, you’ve been begging for a modification for months or years, and your servicer has offered you “jack squat.” Well, we modified another mortgage this week, involving a principal reduction from $342,418.31 to $237,307.49 ($107,110.82 savings). This is a typical result for loans not owned by Fannie Mae or Freddie Mac.

Unfortunately, Fannie and Freddie still do not allow for principal reduction, but even if you have a Fannie or Freddie mortgage that is way underwater, you can still take advantage of low interest rates and principal deferrals.

The bankruptcy mediation program has been so successful that it is now spreading to the Southern District of Florida. Beginning April 1st, homeowners in South Florida will get some relief from their absurd foreclosure courts.

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Chip Parker is the managing partner of Parker & DuFresne, P.A., where he represents Northeast Florida businesses and consumers facing bankruptcy, and homeowners facing foreclosure. His firm files more homeowners in the Mortgage Modification Mediation Program than any other law firm in Northeast Florida. Parker is the recipient of Jacksonville Area Legal Aid's prestigious Award for Outstanding Pro Bono Service. Mr. Parker is an active member of the National Association of Consumer Bankruptcy Attorneys and National Association of Consumer Advocates.
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