Some interesting information was presented at this week’s South Broward Bar Association luncheon by the current foreclosure judge, Judge Marina Garcia-Wood.(All residential foreclosures are now assigned to her; commercial foreclosures and association foreclosures are still assigned to other judges) Approximately 42,000 foreclosures are pending in Broward County. About 1500 foreclosures are being filed per month with about the same number being completed. Approximately 8500 cases are dormant.

At each morning motion calendar and at each 1:30 p.m calendar there are typically over 100 cases scheduled. Special settings are not being scheduled to June. The judicial assistant receives 100 voice messages a day, so do not expect a call back. If a true emergency hearing is needed, come to chambers.

Meanwhile, as reported in the press this week, David Stern is being sued for $60,000,000 for fraud when he took his mortgage processing company public(his law firm was the only client, which is now out of business)

An article by Kimberly Miller of the Palm Beach Post, published today in the SunSentinel, reflects what may seem to be a stunning portrait of ortgage delinquencies in Florida. A report shows that 56% ofFlorida foreclosures involve homeowners who are more than 24 months behind on their payments.

Based on my experience, this really is not that surprising based on the situation that many of my clients confront. Mortgage servicers are taking forever to review modifications with excuse after excuse that they need the same documents over and over again. Foreclosures were put on hold with the closing of foreclosure mills and the robosigning fraud issues. Many lenders don’t want the properties back, especially condominiums with association fees. And it is generally understood that banks don’t want to write off all the loans so that their capital requirements are not met, and that they don’t want too many homes on the market which would further depress prices. On the other hand, some lenders are increasing their interest in short sales and deeds in lieu even to the extent of offering cash incentives to the homeowners to move.

The foreclosure delays have had a great impact on the slowdown of bankruptcy filings. Perhaps nothing motivates a debtor to proceed to file bankruptcy and clear up debt issues then a pending foreclosure sale(not to mention service of a writ of garnishment)

The foreclosure mill fallout has continued. As reported in the Sun-Sentinel from an article in the Palm Beach Post by Kimberly Miller, Ben-Ezra & Katz is closing its foreclosure practice and has provided layoff notices to its employees. This follows the closure of David Stern’s foreclosure practice in March. Each of these firms is headquartered in Broward County but handle foreclosures statewide. Meanwhile, perhaps 100,000 pending foreclosure cases still have Stern’s firm as attorney of record with no staff to file motions to withdraw.

On another front, an appellate court, the 4th District Court of appeals, has ruled that the Florida Attorney General’s office does not have the authority to investigate with subpoenas Shapiro and Fishman under Florida’s Deceptive and Unfair Trade Practices Act. (a criminal investigation would be permitted but is not at issue). The Florida Bar is known to have opened investigations of numerous attorneys on foreclosure practices.

A completed foreclosure may well not be the end of the legal process for the homeowner. In Florida the lender has 5 years to seek a deficiency judgment. For example, if the home at the time of foreclosure is worth $100,000, but the mortgage balance is $180,000, the homeowner can be sued for $80,000.

There have been very few deficiency cases so far, but it is expected that lenders will eventually pursue these claims. These claims might be sold to debt buyers, similar to the sale of delinquent credit card accounts.

As a Fort Lauderdale bankruptcy attorney, I have seen the greater prevalence of suits by second mortgage holders including equity lines on the promissory note. The lenders are not bothering trying to foreclose since they would have to take over the first mortgage. Many clients have been forced into bankruptcy by these claims.

As I previously reported, the decline in foreclosure files has led to a decrease in court filing fees which provide a dedicated source of funds for the courts.

The large decrease in foreclosure filings was reported in the April 14 Sun-Sentinel. Relying upon figures from RealtyTrac, Florida foreclosures fell by 62% from the prior year.

The large reduction in foreclosure filings does not imply that the corner has turned on the foreclosure crisis. Lenders have been forced to finally deal with the robo-signers and fraud issues that have become so widespread. Foreclosure mills have been fired, replaced, or as for David Stern, closed. Hundreds of thousands of files have to be transferred, and new attorneys have to be hired. Also, there has been litigation with state attorney generals across the country. A new consent decree between loan servicers and bank regulators also will have an impact on the processing of foreclosures.

There is still no end in sight to the foreclosure mess.

More and more articles have been published documenting the continuing problems with the foreclosure crisis. A few observations here about the relationships between the subject of these articles and how they are impacting the court system and homeowners.

The Florida court system is short of money. This is largely due to the reduction in the expected filing fees from foreclosure cases. The lenders are holding off on filing these cases. Banks have delayed filing foreclosures, largely due to the conduct of their foreclosure mills. Robo-signers have become a new term in our vocabulary as a symbol of massive foreclosure fraud. Statewide foreclosure firms are being investigated by the state, and the banks and servicers have been firing their attorneys. In some instances, the banks are suing the law firms for return of their court files, and the law firms are claiming they are owed millions of dollars in legal fees. There is a scramble to hire new law firms to take over hundreds of thousands of case.

No wonder pending cases are just sitting with the court and there are fewer foreclosures being filed than expected. Simple motions filed on behalf of the homeowner can delay a foreclosure for a year.

By the way, homeowners should seriously question hiring a foreclosure defense attorney who charges by the month to delay a foreclosure. A case can be delayed indefinitely with only minimal services by the homeowner’s attorney as a result of the problems facing the banks and servicers.

On January 7, 2011, the Supreme Court of Massachusetts entered a major decision that may have far reaching consequences across the country. Though the case relies upon Massachusetts statutes and case law, it may be highly influential with judges in Florida.

In US Bank National Association, Trustee v Ibanez, Case NO SJC-10694(in a consolidated appeal with a second case), the Supreme Court reviewed many of the issues that have long been raised by foreclosure defense attorneys. These issues go to what has been commonly known as the “who owns the note” defense. As is typical of modern day home mortgages, the note was sliced and diced and sold through several investment trusts. Notes and mortgages have been mysteriously assigned without proven documentation. To satisfy these proof problems, some foreclosure firms in Florida have been accused of participating in the widespread providing of fraudulent documents to the court to establish that the foreclosing entity is the proper party. Affidvaits have been signed by “robo-signers” who sign without verifying huge numbers of affidavits to obtain foreclosure judgments.

Basically, the Massachusetts Supreme Court upheld the legal requirement that the foreclosing entity must establish with proper proof that it owns the note and received a timely and valid assignment and is the correct entity to foreclose.

This case may be of great benefit to Fort Lauderdale foreclosure attorneys and Fort Lauderdale bankruptcy attorneys.

As a Fort Lauderdale Bankruptcy attorney and Fort Lauderdale foreclosure attorney, I repeatedly see the delays, frustrations and eventual rejections of mortgage modification applications. The following information is taken from the Sun-Sentinel on December 30, 2010.

“Mortgage aid trailing off-foreclosures rising.

Fewer troubled homeowners are receiving help with their mortgages as government efforts to prevent foreclosures are slowing.

…(The number of modifications had) a 17 percent drop from the previous quarter and a decline of 32% from the same period last year.

The pool of homeowners eligible to have their mortgages modified is declining, federal regulators says, as banks have concluded many distressed borrowers can’t be helped…That is pushing up the number of foreclosed homes, which keeps prices low…”

We all know foreclosures have been a mess for years. Homeowners trying to communicate with their lenders and the loan servicing companies cannot obtain straight answers, submit documents which are lost and must be sent over and over, and are kept in limbo for months if not years.

Two recent newspaper articles give a prime examples of the left hand not knowing what the right hand was doing. As reported in the SunSentinel on December 5, 2010, one home was sold twice. The owner was approved for a short sale and the closing took place. The new owner moved in to the home. However, the bank’s attorney did not cancel the foreclosure sale at the courthouse. Another individual bought the home at the foreclosure sale. (The second purchaser later agreed to vacate the foreclosure sale).

In the December 11, 2010 Miami Herald, an article reprinted from the Palm Beach Post, describes a case in with the homeowner lost ownership of the home in foreclosure. The owner did not know the foreclosure sale had taken place, and had tried to obtain a loan modification. After moving out and losing title, the bank notified the foreclosed homeowner that they had been appoved for a loan modification. It is common practice for the modification process to be ongoing waiting for approval while the attorneys continue with the foreclosure. A chapter 13 bankruptcy is often necessary on an emergency basis because the homeowner has been led to believe that the loan would be or has been modified, but nothing is finalized and the foreclosure sale date is about to take place.