Notes from Charlotte County, Florida

TALLAHASSEE, Fla. – June 14, 2011 – The Florida Supreme Court could decide that lenders deserve punishment if they submit fraudulent paperwork in a foreclosure case. Lawyers filed initial briefs Monday on a closely watched case that could impact thousands of foreclosures in the state.

The core issue focuses on ownership of the mortgage. Thanks to complex financial instruments, the lender servicing the mortgage does not always have paperwork giving it the authority to foreclose; and in some cases, paperwork showing mortgage ownership has been pushed through with questionable signatures and research. Some homeowners question the paperwork as they fight foreclosure in court, saying the foreclosure should not go through because the lender cannot prove it owns the mortgage or has the owner’s permission to litigate.

If paperwork is questioned, however, a lender simply pulls the foreclosure suit. By doing so, it doesn’t have to prove in court whether the documents are valid. The lender then can refile the case later using different paperwork. However, that move essentially allows lenders to commit fraud before the court and get away with it, since lenders then routinely refile the foreclosure suit later using different documents, according to Palm Beach attorney Thomas Ice who represents the Palm Beach homeowner, Roman Pino.

The Florida case involves Pino and the Bank of New York Mellon. According to papers filed, Pino questioned the authenticity of the bank’s mortgage ownership papers and attempted to prove that some had been illegally backdated. As a result, the Bank of New York Mellon cancelled the foreclosure.

Two lower Florida courts sided with the Bank of New York Mellon, saying the point was moot since the foreclosure had been pulled. But appellate court Judge Mark Polen disagreed, and the case moved to the Florida Supreme Court for a final verdict because “many, many mortgage foreclosures appear tainted with suspect documents.”

“Decision-making in our courts depends on genuine, reliable evidence,” Polen wrote in his dissent. “The system cannot tolerate even an attempted use of fraudulent documents.”

The mlsDetectives team can help provide alternative options to foreclosure, such as a Short Sale and a Deed in Lieu.  Contact, Mike Federau, Curt Mellon or Dan McKinney for information on how to sell your home before a foreclosure.

© 2011 Florida Realtors®