Dear Subcommittee Members, Party Leaders, and all Legislators:
Vote NO on House Bill 87.
If you’ve never stepped foot in a foreclosure courtroom, vote NO HB 87, because you cannot understand what the real problem is.
If you think that the speed of foreclosure is the fault of Florida’s homestead property owners, then vote NO HB 87, because you’ve been misled by moneyed special interests who don’t share your desire to help the people of Florida.
If you think that greedy cash-out refinancers are the bulk of Florida’s foreclosure problem, the vote NO HB 87 because you’ve somehow missed the headlines and the national lawsuits exposing the fraud and the greed of America’s largest banking institutions when it comes to doing business with Florida’s homeowners.
HB 87 is based on false information.
The bill is based on a false premise that removing homesteaders from their homes more quickly benefits the people of Florida or its economy; on another false premise that the main thing slowing the process down is our court system; and on yet another false premise that the proposed legislation will speed the foreclosure process while somehow still protecting Florida homeowners.
As an attorney, I stand in the trenches of foreclosure litigation every day on behalf of borrowers. What I see every day in court and hear every day from my clients tells me that this proposed legislation will not only fail to solve the problem, it will throw gasoline on the fire of Florida’s foreclosure crisis. If you like lower property values, unclear title to property, and erosion of the public’s respect for the legitimacy of our judiciary, this bill will do exactly those things.
Foreclosures are slow because banks are slow.
First, let me address the myth that Florida foreclosures are slow because of the judicial process. If you have never sat in on a foreclosure trial docket, you must do so before passing legislation, because you’d already know this.
On Monday, February 4, I traveled to Miami to volunteer my services for destitute homeowners facing foreclosure. The trial docket for that day listed more than a hundred cases. Almost every case heard that morning was uncontested. Most homeowners had already given up, and didn’t even come to the hearing. Those few trials that occurred took only 90 seconds each. Just ninety seconds, for a Court to strip a homeowner’s constitutionally-protected homestead rights! But the afternoon docket—perhaps fifty cases in all—was canceled because the bank lawyers were not ready to move forward and obtain judgment.
Sadly, this is all too typical of what I see every day in my practice. The speed of foreclosure cases vary greatly from county to county, because some circuit courts have decided to impose “rocket dockets,” hearing cases whether the bank lawyers are ready or not. Dockets in those circuits move quickly, because the courts have used the tools available to them to manage their on dockets and make the banks stop dragging their feet.
Most foreclosures are handled by so-called “foreclosure mill” firms, headed by now-disgraced lawyers like David J. Stern, Marshall C. Watson, and Henry Adorno. Those firms, like the foreclosure legislation before you, valued volume over accuracy. And the results have been disastrous. But in a handful of my cases, small banks have retained more professional “boutique” firms who actually litigate their cases. These firms do not file a case until all the proper information is in place, and when they file, they move their cases along quickly to conclusion. And they almost always get what they want.
The mythical foot-dragging homeowner, raising spurious defenses, as the cause of our current foreclosure problems is a myth. Again, if you have ever bothered to visit a foreclosure courtroom, you would see that this is simply not so. Most homeowners fail to contest their cases at all. Of those who do, most represent themselves. Of those, few actually have the ability to defend themselves and simply plead for mercy because they don’t now they have any other option.
If a bank wants to get a foreclosure judgment quickly, in more than 90% of the cases filed it can get a judgment in less than 120 days. For whatever reason, banks have chosen law firms that are unwilling or unable to prosecute cases as quickly as you think should happen.
Did you know that there is already an “expedited” foreclosure process in the statute, that banks almost never use? That procedure is codified at § 702.10, Fl. Stat., and banks almost never use it. Between my own cases and the cases I observe every day in courtrooms across the state, I have personally seen more than one thousands foreclosure cases in some stage of the process. Only one used the expedited procedure in place.
Have you asked the banks why they don’t use the tools already available? I think the answer will shock you.
Not only does the proposed legislation attack the wrong problem, it makes the existing problem worse. It proposes to expedite foreclosure cases by turning our justice system on our head, and placing a premium on speed over the proper and accurate adjudication of foreclosure cases.
You may be aware that Florida’s attorney general, along with those of the other 49 states and the United States Department of Justice, has spent years investigating foreclosure fraud by banks and their lenders, and earlier this year reached a $26 billion settlement to address the fraudulent practices of some of the largest lending institutions. You may be aware that the largest law firms handling foreclosures in Florida have all been disgraced or even destroyed entirely because they routinely fabricated evidence or abused the court system in any number of other ways.
Yet somehow Florida’s homeowners are to blame for the current state of affairs.
This bill will make the problem worse by shifting the burden of proof from the banks to the homeowners in every dispute—so the banks won’t even have to fabricate evidence anymore, because none will be required of them.
One alarming portion of the bill provides that 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. Besides the obvious infringement on Florida’s constitutional homestead provisions—how can you lose your home, permanently, based on a void judgment?—it exposes the real fear of the banks and their lawyers: they know that many of the foreclosures are subject to reversal because they were not properly proven.
For example, take the story of Jason Grodensky. In December of 2009, he bought a home in Fort Lauderdale for cash. No loan, no debt, no mortgage. But in July of 2010, Bank of America sold the very same house at a foreclosure auction.
That’s not even the worst part. That all-cash deal Grodensky made to buy the property—was with Bank of America. They knew they’d gotten the cash and went to auction anyway. Grodensky eventually did hire a lawyer and successfully defended his property. But Grodensky’s story would have turned out much differently if HB 87 was the law at that time.
Consider also the words of Judge William Haury of the Seventeenth Circuit Court in Broward County:
This is one of the few times in the history of Florida jurisprudence where the Florida Supreme Court has deemed it necessary to subject an entire industry to special rule due to the industry’s documented illegal behavior. The amendment of Fla. R. Civ. P. 1.110 (b) was a direct result of the robo-signing scandal. The comments to the rule amendment, In re Amendments To The Florida Rules Of Civil Procedure, 44 So.3d 555, 556 (Fla. 2010) indicate the depth of the court’s concern with this industry.
Bank of America v. Casey, Case No. CACE-12003317, January 22, 2013.
It is the banks and their lawyers, not the borrowers and the owners, who are abusing the system. When you vote on this bill, which will you choose to serve?
Although most homeowners do not contest their foreclosures, those that do often have legitimate disputes with their lenders. The court rules provide for a way to investigate those claims in a reasonable time, provided all the parties obey court rules, and make an orderly presentation of their defenses. The laws we already have in place contain all the tools the courts need to manage their own dockets, al the tools the banks need to quickly foreclose when proper, and all the tools borrowers need to raise their defenses when those defenses are legitimate. Changing those procedures solely for the sake of speed undermines the ability of the court system to fairly decide those few cases that are actually disputed. And for those people whose only encounter with Florida’s court system is their foreclosure cases, depriving them of their day in court only serves to de-legitimize the system in their eyes.
Don’t act without correct information.
You’ve been told by some that foreclosures are too slow, because borrowers have the right to contest their cases in court. You should consider this information, and its sources, as suspect.
Unless you’ve sat in a courtroom watching our judges struggle with foreclosure dockets made unwieldy by the misconduct and foot-dragging of the banks and their lawyers, you can’t really know where the real problem lies or how to solve it.
Unless you’ve had your own bank lie to you about modifying your loan and then proceeding to foreclosure anyway, you can’t know about the real disputes that those of us doing this work see every day.
And if you’ve never sat in a courtroom watching, as a disabled homeowner gets ninety seconds to beg the court for a chance to work out a deal to save her home, then you have no right to vote for a bill that will take away her right to even do that.
I sent this letter to the members of the Civil Justice Subcommittee:
- Metz, Larry [R] Chair 850 717-5032 email@example.com
- Hager, Bill [R] Vice Chair 850 717-5089 firstname.lastname@example.org
- Stafford, Cynthia A. [D] Democratic Ranking Member 850 717-5109 email@example.com
- Boyd, Jim [R] 850 717-5071 firstname.lastname@example.org
- Clelland, Michael Philip “Mike” [D]850 717-5029 email@example.com
- Davis, Daniel [R] 850 717-5015 firstname.lastname@example.org
- Goodson, Tom [R] 850 717-5050 email@example.com
- Oliva, Jose R. [R] 850 717-5110 firstname.lastname@example.org
- Passidomo, Kathleen C. [R] 850 717-5106 email@example.com
- Rodríguez, José Javier [D] 850 717-5112 firstname.lastname@example.org
- Spano, Ross [R] 850 717-5059 email@example.com
- Stone, Charlie [R] 850 717-5022 firstname.lastname@example.org
- Waldman, James W. “Jim” [D] 850-956-5600 email@example.com