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“Groundbreaking” Disciplinary Action Against Florida Foreclosure Firm

In the first disciplinary action of its kind, the Florida Bar Association has recommended that the lead attorney of a suspected “foreclosure mill” be suspended for three months, close his practice and pay nearly $36,000 in fines and costs related to ongoing investigation.

The recommendation is headed to the Florida Supreme Court for final approval. Our Miami foreclosure lawyers note this recommendation by the state Bar, and hope this will be the first of many such actions that aim to hold these firms accountable.

The plea agreement, signed by the Fort Lauderdale attorney late last month, is for his failure to implement foreclosure policies for the firm and for his employees. Specifically, he has admitted to routinely filing formal court documents indicating that the mortgage note was lost, without confirming that fact with clients. The mortgage note is a critical piece of evidence in a foreclosure case, as it establishes the lender’s right to pursue the foreclosure in the first place. By saying it was lost, the court could decide to proceed without it. This was, for all intents and purposes, a cost saving measure because tracking down that note would have meant the expenditure of time and money, as it would likely have significantly delayed a number of proceedings. However, in many cases, the mortgage note was actually located prior to the court entering a final judgment.

These were not only sloppy but fraudulent practices – and this firm isn’t the only one that has or continues to utilize such tactics. There was a great deal of concern among foreclosure defense lawyers that, like so much else in the wake of the housing crisis, nothing would be done and no one would be held accountable.

This was even more of a concern after an investigation by Florida Attorney General Pam Bondi’s Office was brought to a halt by the Florida Supreme Court, which prevented her from issuing subpoena’s on law firms representing lenders.

So the fact that this plea agreement has moved forward is monumental. In this particular case, the firm had previously signed a $2 million consent agreement with Bondi’s office that at the time allowed it to avoid the admittance of wrongdoing.

But he still had the Bar to contend with. Among the Bar’s findings, one of the attorneys the firm contracted with was reportedly paid $1 for signing some 150,000 fee affidavits – many of which turned out to be notarized fraudulently. In a great number of instances, only the last sheet of the entire affidavit was presented to this contracted attorney to sign – even though this was a person who was swearing to the accuracy and truth of the entire document, according to the Bar.

This was a firm that expanded exponentially during the foreclosure crisis. When 2009 came to a close, the firm was handling more than 65,000 cases with more than 70 lawyers and nearly 600 supporting staffers.

Now, it will be no more.

This judgment sets the tone. And if the Bar continues its “foreclosure mill” investigations, we may end up seeing a great number of these cases.

For those who have been wrongfully foreclosed upon, these judgments may serve to bolster your case for recompense. For those currently facing foreclosure, it strengthens the protections in place for you. Either way, you will need an experienced foreclosure lawyer to help you wade through it all.

If you’re battling foreclosure in Miami or the surrounding areas contact Jacobs Legal for a confidential appointment to discuss your rights. Call (305) 358-7991. Also, don’t miss Miami Foreclosure Attorney Bruce Jacobs on 880AM/the Biz, every Wednesday from 5 p.m. to 6 p.m. on “Mortgage Wars,” discussing foreclosure topics that matter to YOU.

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