According to Associated Press, David Stern’s Plantation-based law practice will end operations March 31, 2011. “The firm once had more than 1,200 employees and handled tens of thousands of foreclosures each year.”
While one foreclosure mill is closing its doors, many more remain open for business. Lenders and borrowers involved with foreclosures should opt instead for competent local counsel to protect their interests. Got a foreclosure question? Call Brad Hogreve at 941.364.2400.
The Sun-Sentinel recently reported that Florida Attorney General Pam Bondi had expanded its investigation of foreclosure law firms. The Florida AG’s office is now examining whether these firms were submitting court documents seeking, among other things, inflated fees for process serving and filing foreclosures before the lender or loan servicer shows that it has a legal interest in the mortgage.
The perceived benefits lenders see in foreclosure mills are quickly being replaced by potential liabilities. Lenders, and borrowers, need competent, local counsel for foreclosures.
By now, most Floridians are familiar with the foreclosure problem created by so-called “robo-signers,” those bank and law firm employees who signed whatever mortgage-related materials was put in front of them and pretended that they had knowledge of such materials. Now, Floridians are learning about “robo-verifiers.” 
The Florida Supreme Court enacted new rules designed to avoid further problems with robo-signers which required lender’s pleadings to be verified. “The rule, as interpreted by several attorneys and based on recent trial court rulings, requires lenders to review and verify the accuracy of foreclosure complaints and their attachments after they are assembled by their attorneys. A lender employee who independently double-checks the information would then sign the documents to verify the accuracy. But foreclosure defense lawyers say that in many cases the same attorney who put together the lawsuit is signing as the verifier.” Polyana da Costa, “Defense lawyers raise new issue: ‘Robo-verifiers’,” http://www.dailybusinessreview.com/PubArticleDBR.jsp?id=1202476541917&hbxlogin=1 (Dec. 22, 2010).
Although attorneys engaged in this process may be exposed to court sanctions, the larger problem – a foreclosure caseload which fails to be resolved – will remain unresolved.
As we have been repeatedly saying, it is important to have competent local counsel involved in any foreclosure action. If you have questions about foreclosure – whether you are a lender or a property owner and whether the involved property is commercial or residential – call Brad Hogreve at 941.364.2455.
Abigail Field for DailyFinance reported on two recent Pennsylvania cases accusing a foreclosure law firm of engaging in the unlicensed practice of law. In these cases, a law firm is accused of allowing non-lawyers to prepare and prosecute foreclosure actions with no attorney supervision or involvement. (http://www.dailyfinance.com/story/real-estate/thousands-of-pennsylvania-foreclosures-could-be-thrown-into-doub/19740497/
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Here in Florida, as in Pennsylvania, most of the foreclosure actions are filed by a few firms. These “foreclosure mills” have already been caught in Florida having employees sign mortgage-related documents without even knowing what the documents were. (see e.g., http://www.heraldtribune.com/article/20101201/ARTICLE/12011057) Are we now going to find that some Florida foreclosure mills are allowing non-lawyers to engage in the unlicensed practice of law?
As detailed in an earlier blog post, mortgage holders and lenders would benefit by retaining competent, local counsel to represent them in foreclosure actions. Foreclosing lenders would do well to remember the adage that “quality is remembered long after low price is forgotten.” Foreclosure mills are cheaper for a reason.
Property owners being foreclosed upon should also retain competent, local counsel. Florida courts have, on a local level, imposed procedural requirements designed to help borrowers renegotiate loans and remain property owners. Local counsel can help borrowers protect their rights.
Need help with a foreclosure action? Call Kirk Pinkerton’s Brad Hogreve at 941-364-2455.