Will Lawyers for the Banks Be the Ones to Pay for All The Florida Foreclosure Fraud? Maybe.

Posted By on April 5, 2011

A few weeks ago, we questioned who was going to hold the ForeclosureFraud law firms responsible for their actions — back then, the Attorney General was seeking to look through the files of a Florida law firm that was fighting hard to protect those files from scrutiny.

Interestingly, the argument put forth by the law firm against seeing those files wasn’t based upon attorney-client privilege.  The lawyers (Shapiro & Fishman) were arguing that the AG wasn’t the right party to do the investigation.  The lawyers argued that the right authority to go through law firm files in search of illegal deceptive trade practices was the Florida Bar.

Today, there are several parties investigating these law firms for wrongdoing:  the Federal Bureau of Investigation, lawyers representing plaintiffs, and the Florida Bar are all asserting their legal rights to look at the law firm paperwork to see what wrongs they may have committed.  Everyone knows this is all going to take awhile, but it is a necessary step in order to restore and preserve the integrity of the judicial system.  (For more information, check out the Florida Bar’s Weathering Florida’s Foreclosure Crisis webpage.)

Florida Trial Court Judges Are Tired of Waiting:  “Fraud on the Court”

This week, the Sun Sentinel reported on the huge burden that Foreclosure Fraud is having on the Florida trial courts — and how savvy Florida judges are taking swift action to deal with the problem.  With Circuit Court Judge Maxine Cohen Lando leading the way, foreclosure cases are being dismissed with lenders being banned from refiling them.

Rather than face months and months of congested dockets and overwhelming workloads because bank lawyers are filing unreliable foreclosure documentation, trial judges are using their powers to follow Judge Lando’s lead, awarding homes to owners and barring lenders from attempting to foreclose again (e.g., Miami Dade’s Judge Jennifer Bailey); to dismiss foreclosure actions (albeit with the ability of the bank to refile if they can get it right); or to throw out summary judgments already on the books (e.g., Pinellas County’s Judge Anthony Rondolino).

Florida Judges’ Swift Action; What Does It Mean to Those Wronged in Foreclosure Fraud?

If you’ve been wronged because of foreclosure fraud– and there are new versions of wrongful foreclosures popping up all the time — then why should you care about this?  Well, if you are a homeowner facing foreclosure, then a lawsuit in front of these savvy trial judges may turn out differently than what you think or what you have heard or read about in the past.  These judges may be almost as frustrated and angry at your bank as you are.

And, the silver lining: the lawyers who ignored the law – forged documents, failed to read documents (robosigning), disrespecting longstanding real estate law and precedent – may well end up being held responsible for the Foreclosure Fraud that so many in Florida have experienced.  How?

Courts can sanction these lawyers – Marc Ben-Ezra, founding partner of Ben-Ezra & Katz P.A, being held in contempt is one example – and the Florida Bar can discipline them.  However, in the bigger picture while homeowners cannot sue those bank lawyers for wrongful acts (maybe), those banks clearly can.

No one should be surprised when these banks, who have their cases barred or dismissed by angry judges, take those damages and file lawsuits against their former lawyers for legal malpractice.  Sure, it may mean more cases for those overburdened Judges and the court docket — but you can bet that these Bank vs. Lawyer lawsuits will have all their i’s dotted and their t’s crossed.

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