Today, RealtyTrac is making the national news again with its report that the State of Florida has more than twice the number of foreclosure actions as any other state in the country. According to its U.S. Foreclosure Market Report™ for January 2013 (released this morning), in January 2013 Florida saw its foreclosure activity increase on an annual basis for the 11th time in the last 13 months.
Which means that Florida Representative Kathleen Passidomo has more ammunition to use in her fight to get HB 87 passed in Tallahassee, with its goal to revamp the Florida judicial foreclosure process and allow certain foreclosure lawsuits to be “fast tracked.” (For details on that proposed law and links to its language, docket, and more read our post from last week).
Meanwhile, not one banker has gone to jail for any kind of foreclosure bad acts – and for many South Florida foreclosure defense attorneys, bad acts by banks aren’t going away with all the “robosigning” settlements that the state attorney generals keep entering into with various mortgage lenders. Nope: what many Florida foreclosure lawyers are worried about is a new twist on the bank bad acts, as these foreclosure lawsuits are being litigated.
The New Foreclosure Fraud Actor: The Robo-Witness as Custodian of Records
Florida is a judicial foreclosure state. This means that lenders must file a civil lawsuit to foreclose on a home. This allows a judge to watch over the bank’s actions and, in theory, protect and prevent borrowers from being overpowered by a situation of unequal bargaining power. Most residential foreclosure lawsuits are by definition the Big Guy versus the Little Guy.
What South Florida foreclosure defense lawyers are seeing happening now is a new Robo actor in these cases. Not someone who robosigned in the transfer of the bank notes, but someone who is a robo-witnesses – the bank’s official custodian for business records. It’s especially bad here in our neck of the woods for foreclosures lawsuits filed in Miami-Dade Circuit Court.
Miami-Dade is notorious for its foreclosure docket: it has almost 50,000 pending foreclosure lawsuits and there’s an established priority system in place to try and move these cases through the system and get this number down. That’s understandable.
However, what we Foreclosure Defense lawyers here in the Miami area are seeing is a problem with proof: banks are sending over people to take the witness stand on their behalf in these cases that legally may not meet the legal standards needed to stand in the shoes of that bank for purposes of giving evidence in a trial.
These are the “robo witnesses.”
Larry Tolchinsky’s Tip: In Miami and other parts of Florida, the foreclosure bottleneck is a serious problem for the judicial system and it’s been a huge problem for several years now. We’ve monitored attempts to fix this, like the Florida Supreme Court trying to get banks to get busy with loan modifications (that didn’t work).
Now, there is a fever pitch to get the Florida Foreclosure Bottleneck cleaned out — and the tension is almost palatable down in Florida courtrooms. Florida foreclosure defense attorneys, in particular, are feeling that tension because they are representing homeowners who are at risk of seeing their constitutionally protected rights to due process evaporate along with ownership of their family home.
The “robo witnesses” today are walking into courtrooms (or into depositions) and taking the stand as “custodians” of business records of the lender. A “custodian of records” is an official term; under Florida rules of procedure, to avoid a hearsay objection this person must have personal knowledge of things like the bank’s record keeping system as well as the file involved in the case as being kept in the regular course of business of the lender and made at or near the time of the transaction. (See Florida Statute 90.803(6)).
Many of the witnesses being called in foreclosure trials (or in depositions in preparation for trials) don’t know these things, they don’t have personal knowledge (or any knowledge) of critical documents like the notes themselves, or the Notices of Default that are the cornerstone of the foreclosure action. Who made them? When where they made? Where were they filed? They don’t know.
Accordingly, these witnesses for the plaintiff aren’t meeting the “custodian of records” standard, therefore their testimony should not withstand a hearsay objection, and they are merely “robo-witnesses.”
The Florida Foreclosure Bottleneck is filed with all those suspicious foreclosure filings that were filed in a fury by bank lawyers who are now facing all sorts of fraud allegations – and Florida Bar discipline. Back in 2008 and 2009, for example, robo-signing was a free for all in many foreclosure filings and now, those cases are sitting on file in Florida clerk’s offices, still waiting for trial and resolution. (Read our free ebook for details on Florida’s Robosigning mess.)
Never has it been more important for a Florida homeowner dealing with a foreclosure action to have a Florida foreclosure defense attorney for an advocate. As the pressure cooker of the Florida Foreclosure Bottleneck stays on the burner, things are getting hotter and hotter which threatens not only a borrower’s right to defend against a foreclosure with robo-signed documents but also against slam-wham quickie foreclosure trials that may disregard procedural standards for records evidence and due process rights.
It’s becoming a frenzy in some foreclosure dockets with longstanding legal rights endangered. The savvy foreclosure defendant doesn’t and shouldn’t enter that frenzy alone.
Do you have questions or comments? Then please feel free to Chat with Larry in the comments below, at firstname.lastname@example.org, or (954) 458-8655. If you have a specific or personal situation, please call or email Larry because he can’t answer specific fact questions in general comments.
“I’m happy to take your call.”