September 21, 2011

We recently predicted that the David Stern debacle, which left over 100,000 Florida foreclosure cases in limbo, would soon result in significant re-filings of these foreclosure cases by other law Firms which have and are being retained by the former Stern clients. This is exactly what has happened and is happening now.

Since our article was published, we have received a slew of inquiries from Florida homeowners whose cases, which had originally been filed by the Stern Firm and had been previously dismissed, are now being re-filed by other other law Firms. The Plaintiff in most of these re-filed cases is the alleged “trustee” of a securitized mortgage loan trust. As most of the cases were dismissed on procedural grounds (e.g. lack of record activity in the case or failure of a Stern attorney to appear for a court status conference), the dismissals were “without prejudice”, meaning that the cases can be re-filed under Florida law.

Separately, actions have been instituted in New York and Nevada alleging that Countrywide did not actually deposit mortgage loans into securitized trust pools, and thus Countrywide had no legal authority to seek foreclosure on the properties the subject of the non-placed mortgage loans. This will probably lead to massive litigation against Countrywide for fraud-based claims and punitive damage requests, which may be one of the reasons why Bank of America has recently disclosed that Countrywide may be filing bankruptcy as we reported on this website earlier this week.

Which, again, leads to the importance of the immediate establishment of a separate Borrowers’ Committee in any Countrywide Bankruptcy. Otherwise, and as we cautioned in our article on this matter, Countrywide may seek to destroy literally millions of documents upon filing bankruptcy, and borrower claims may be relegated to the general unsecured creditors’ committee.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com