October 7, 2010

The recent investigations of Florida foreclosure mills by the Florida Attorney General’s Office; the Attorney General filings in Ohio and other states; and the recent temporary foreclosure stoppages by Bank of America, JPMorgan Chase, and GMAC/Ally Bank because of “document irregularities” are news and are well-discussed on the internet. However, no one is discussing what the real upshot of these matters are in terms of their effect on victims of the fraudulent foreclosure practices perpetrated by the wrongdoers.

Literally millions of foreclosures were railroaded through the system with missing documents, fraudulent documents, and incomplete proofs before the judiciary was made aware of the fraudulent practices of those undertaking these actions. The majority of the victims of these practices originally believed that they had no defense to a foreclosure, and many still do not know that they do. What these AG investigations, etc. have done is to send up a red flag that many of the foreclosures which have already been “processed” are probably open to being challenged and possibly set aside on grounds that the judgments were void or were procured by fraud.

Most states have the equivalent of Federal Rule 60 which provides a legal mechanism to seek to vacate and set aside a judgment for a number of defined reasons. The state versions are usually pursuant to a procedural rule, and provide that a judgment may be challenged on the grounds that it was procured by fraud or is void or suffers from some other infirmity. Although there is generally a one-year time limit on these types of Motions, several states have a “catch-all” provision within their rules which has no such limit to challenge the judgment on “any other grounds”.

As such, the next wave of foreclosure litigation is most probably going to be legal proceedings instituted by borrowers/homeowners/investors who were victimized by the likes of The Law Offices of David J. Stern, The Law Offices of Marshall C. Watson, Shapiro & Fishman, and other foreclosure mills which perpetrated millions of fraudulent foreclosures. With the massive amount of foreclosure judgments which were entered within the past year, the number of challenges is probably going to be significant, but necessary to preserve the integrity of the judicial system and further foreclosure reform.

Foreclosure victims should thus pull their entire court file and scrupulously examine all documents in the file for possible irregularities. A deposition of someone from the Stern law Firm taken by the Florida Attorney General’s office is being posted on the internet where the deponent testifies, under oath, as to signatures of persons on documents not being by the named signatory; “floating” notary stamps used by others than the given notary; and directives given to workers by Stern paralegal Cheryl Samons to undertake actions which were, shall we say, suspect and questionable at best.

Exposing these frauds and illegal actions is necessary. Challenging fraudulent foreclosures is necessary. Educating the judiciary to the extent of these frauds is necessary. Enforcing the rules on vacating judgments procured by fraud is necessary. It is only in this way that true justice will be achieved.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com