9.6 Million "Rainy Day" Dollars Allocated To Flush Away Florida's Foreclosure Backlog... By 62%

It may not come as much of a surprise that the state of Florida is being impacted in a major way by a foreclosure crisis the likes of which it has never seen before. After all, it was one of the states that most benefited from the home building boom that fueled rising home prices and encouraged investors to purchase real estate using risky mortgages.

Add to that a bad economy and high unemployment, and suddenly you have not only investors suffering the consequences of a real estate bubble that inevitably burst, you also have families and individuals who bought new homes or refinanced existing ones that are now caught up in the chaos.

Their situation is further compounded by the high probability that: 1.) the terms of their mortgages were intentionally unclear, resulting in higher fees, interest rates that adjusted 2 or more points upward after a year or two, and monthly payments that eventually became unaffordable; 2.) the borrowing process they went through falls under the classification of "predatory lending," with last minute substitutions of a mortgage type different than what was orally agreed upon, inflated appraisals, unrealistic income projections, high pre-payment penalties, non-disclosure of unfavorable terms, etc.; 3.) their mortgage was forced into escrow and/or strapped with forced-placed insurance, pumping up their monthly payments to amounts they cannot pay, and 4.) the current market value of their home has fallen way below the amount they owe.

Yes, many people are feeling the effects of this distressed economic environment, as evidenced by the record number of foreclosure filings all over the country. For the month of July, that figure--which includes default notices, scheduled auctions and bank repossessions--was up 4% to 325,229 from the previous month, according to RealtyTrac, a firm that follows foreclosure filings.

Florida is one of five states that account for more than 50% of the national total of foreclosures.

California leads the pack, with 21% of the total and 66,910 properties receiving a foreclosure filing in July of 2010. Florida is second, with 51,557 properties accounting for 16 percent of the national total. Illinois, Michigan and Arizona make up the remaining 17% of the foreclosure filings.

But Florida is unique, in that the State Legislature looked at the foreclosure problem and came up with what is turning out to be a controversial solution: Foreclosure Court!

According to the Office of the State Courts Administrator, the backlog in foreclosure cases from fiscal year 2006-07 through fiscal year 2010-11 is approximately 559,945 cases statewide.

So what better way to whittle down that number than by setting up a Foreclosure Case Management Unit, and allocating $6 million to trial courts and $3.6 million to court clerks.

The controversy stems from whether justice can be meted out properly and within the boundaries of the law when there are dollars being doled out for a specific purpose and with a defined outcome: to clear the courts of 62% of the foreclosure cases by a designated deadline.

Oh yes, there are numbers... precise numbers that are the goal of every Circuit Court in the State of Florida in regards to the heavy foreclosure caseloads they are carrying.

Take for example the Fourth Circuit. It received $212,729 so it could remove from its backlog 13,344 of the 21,523 foreclosure cases that are weighing down the scales of justice.

Then there's the Ninth Circuit Court, which was given $425,457 to process through the court system 31,372 of its 50,600 foreclosures cases.

Down in South Florida, the Eleventh Circuit Court, with the largest amount of foreclosures in the state, was sent $862,053 by the Florida State Legislature to remove 54,532 of the 87,955 cases from its courts.

And in order to achieve its objective of wrapping up 24,424 of the 39,394 cases in its courts, the Sixth Judicial Circuit of Florida has set as its goal scheduling "up to 100 summary judgment cases per day during twice-a-week sessions at each of four courthouses in the Circuit."

To keep those courts focused on flushing, there is also an "incentive bonus for circuits that successfully clear the backlog early." The chief judge "may request in writing to use these 'foreclosure and economic recovery' funds to handle contracts and indebtedness cases, and county civil cases valued from $5,001 to $15,000."

Overall, 347,166 foreclosure cases must be "disposed of" with the money being sent to Florida's Circuit Courts and the Court Clerks.

And it must be done by the deadline of June 30, 2011.

Ask Attorney Lori Bangor how she feels about the "Rocket Docket," as this "Foreclosure Court" has come to be known.

She appeared at the Palm Beach County Courthouse on August 30, 2010, representing a client whose foreclosure case had genuine issues of material fact.

But Judge Roger Colton had already decided there was a process that would be followed, regardless of the specifics of any individual case, and that everyone in his court that day should just agree to the final summary judgment he had already determined he would sign.

In his manner of thinking, as he clearly implied to those present, a "gift" was being granted to each homeowner in the form of legal permission to stay in their homes for 120 days, possibly even 150 days, as opposed to the customary 20 to 35 days normally given when a foreclosed home is ordered to be placed for sale.

Attorney Bangor and her client had different expectations, though, and the encounter they had with the judge was not only disturbing, it was a chilling moment that defined the death of due process:

"When it came to hearing arguments which were fully briefed and provided to the court (pursuant to the instructions of the Divisions head judge) he only allowed 30-60 seconds for argument, failed to read any of the papers, failed to review the plaintiff’s foreclosure package, flatly ignored the Affidavit filed in Opposition, ignored my plea for a trial, signed the judgment and dismissed me. I never was permitted to even read the proposed judgment or to examine the “newly discovered” allonge which Shapiro’s counsel said I had no right to see."

From the court reporter's transcript, the predetermined outcome that the judge insisted on was even more blatantly obvious:


What is astonishing is the fact that the Plaintiff's legal counsel in this case, as with all of the cases heard by Judge Colton on that particular day, were from the Shapiro & Fishman Law Firm... the very firm that is under investigation by the Attorney General of the State of Florida for "unfair and deceptive actions" in handling foreclosure cases.

"The Attorney General’s Economic Crimes Division is investigating whether improper documentation may have been created and filed with Florida courts to speed up foreclosure processes, potentially without the knowledge or consent of the homeowners involved."

Shapiro & Fishman LLP recently admitted in a "Motion for Rehearing" to the Florida Supreme Court that it is "unclear whether an attorney or law firm representing a lender can verify a mortgage foreclosure complaint based upon information he/she/it obtained from the client or other parties, including the holder of the note and the servicer."

When you look at the Assignments of Mortgage Shapiro & Fishman have filed in foreclosure cases, you can understand why they would not want to swear in their filings that “Under penalty of perjury, I declare that I have read the foregoing, and the facts alleged therein are true and correct to the best of my knowledge and belief.”

The Fourth Judicial Circuit Court also recently found convincing evidence that along with Washington Mutual Bank and JP Morgan Chase Bank, Shapiro & Fishman LLP committed fraud upon that court.

So why would an experienced senior judge dismiss any questions about the validity of documents being filed by a law firm that is under investigation by the state's Attorney General, and not allow an attorney representing a Defendant in his court to have more than 60 seconds of his time and attention?

It's obvious that the answer lies in the numbers...

$9.6 Million Dollars
559,945 Foreclosure Cases
62% Disposal Goal
6/30/2011 Deadline

Something's got to give.

Unfortunately, it looks like justice and the Rule of Law are being flushed away with rainy day funds by a court system that has quite simply lost its bearings.

Equally unfortunate is that Florida citizens who expect the judges in the Florida courts to adjudicate based on the merits of a case will be looking back at this period in the state's history as the turning point when cutting the caseload trumped common law... and common sense.