News Column

Foreclosure Ruling Disappoints, Lawyers Say

Feb. 8, 2013

Paul Owers, Sun Sentinel

Foreclosure

The Florida Supreme Court on Thursday declined to send a message to lenders that file fraudulent documents in foreclosure cases, local attorneys say.

In a 44-page ruling, the high court affirmed an earlier decision by the Fourth District Court of Appeal, which denied a motion filed by Greenacres homeowner Roman Pino seeking to sanction banks over bogus paperwork.

Pino fell behind on his mortgage in 2008. His law firm, Royal Palm Beach-based Ice Legal, said the foreclosure documents used by the Bank of New York Mellon did not appear legitimate. Ice contended the lender voluntarily dismissed the case to avoid punishment by the trial court.

The bank later refiled the foreclosure with the proper paperwork but eventually reached a confidential settlement with Pino.

Still, Ice had hoped the state's top court would issue a landmark ruling empowering lower courts to deny voluntary dismissals and issue sanctions instead. Bankers had argued that sanctions would discourage lenders from pursuing legitimate foreclosures or issuing new mortgages.

"If fraud is your litigation tactic, the supreme court is basically saying you can go ahead and do that," said Amanda Lundergan, a lawyer for Ice Legal.

Lundergan said the high court appeared ready to change state law when it agreed to hear the case in late 2011. "Why would you accept jurisdiction to preserve the status quo?" she said. "It's incredibly disappointing."

Despite the ruling, the justices said they "understand the concerns of those who discuss the multiple abuses that can occur from fraudulent pleadings being filed with the trial courts in this state." The court requested that the Civil Procedure Rules Committee recommend whether trial courts can sanction banks after a case is dismissed.

In the fall of 2010, some bank employees admitted under oath that they signed off on thousands of foreclosure cases nationwide without knowing the details. In some cases, banks and law firms recreated loan documents -- and hired someone to sign them -- because the originals could not be found.

Weston lawyer Roy Oppenheim, who was not involved in the Pino case, said he's pleased that the Florida Supreme Court at least acknowledged that fraud exists in foreclosure cases.

"The court is saying, 'We know the fox is running the henhouse, but our hands are tied until the legislature does something,'" Oppenheim said. "I'm telling you the legislature is not going to do anything."

Staff writer Kathleen Haughney contributed to this report.



Source: (c)2013 the Sun Sentinel (Fort Lauderdale, Fla.) Distributed by MCT Information Services


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