Some of you who have been following the issue know that I have mixed feelings about Florida’s new foreclosure rescue fraud law. Although it comes from good intentions, and does some good things, it could have potentially disastrous consequences on homeowners who need lawyers to help them defend foreclosures. Other lawyers are taking notice.
Here’s a report from Lori Patton, a bankruptcy attorney in Orlando, regarding the new foreclosure rescue fraud bill.
So Rep. Simmons (don’t know if I spelled that correctly) at the CFBLA lunch basically just apologized for the law, said it was one of those that was voted through like a cattle call, the impact on us was unforeseen, very unfortunate, etc… and his recommendation was, in a nutshell, for us to adjust our practices accordingly and deal with it until someone could put a “glitch fix” through next year. Ummm… NO. He did say that he would be happy to sponsor and push through a “glitch fix” if there happened to maybe be a special session this year, but the chances of that happening are slim to none.
The OCBA lunch meeting (on June 27 at noon) topic will be a discussion of options and remedies the consumer attorneys may have to deal with FS 501.1277. [Should be 501.1377 - Ed.] There is already talk of maybe filing some kind of lawsuit for injunctive relief in the federal court.
This is an issue that’s starting to get some traction, at least in the bankruptcy community. I hope the suggested federal injunction avenue also raises the issue of foreclosure defense, not just federal bankruptcy preemption – since many attorneys practice both. I can see three issues to raise for state-law foreclosure defenses:
- Florida’s litigation privilege. Services in connection with appearance in a court proceeding may fall within this protection.
- Noerr-Pennington doctrine (1st Amendment right to petition the government applies to litigation)
- Due process rights of litigants to have access to counsel of their choice.
I can also see the question of raising whether the law unduly chills the civil remedies in federal laws like TILA, HOEPA, RESPA, and FDCPA actions.