Miami Foreclosure Watch: Court to Hear Landmark Foreclosure Fraud Case

Our Miami foreclosure lawyers aren’t surprised that a bank is being accused of foreclosure fraud. courthouse.jpg

What does prompt a pause is a Florida foreclosure case that a state appellate court is pushing to hear – even after both parties agreed to settle.

Here’s what we know so far:

The case involves Bank of New York. Originally, the south Florida homeowner was being sued for foreclosure. But then, the homeowner filed a complaint, contended that the mortgage assignment the bank was relying on in his foreclosure case was fraudulent. That would be nothing new, as many banks have been caught red-handed forging documents and attesting to details concerning ownership that they actually had no knowledge of.

The bank, apparently conceding the strength of the homeowner’s case, agreed to dismiss the foreclosure suit.

But then, less than half a year later, the bank again filed for a foreclosure against the man’s home, using a mortgage assignment document that was dated after the dismissal of the first lawsuit.

So the homeowner sought sanctions for both cases.

This ongoing dispute worked its way through the court system, and made it to the 4th District Court of Appeals. Then, the homeowner agreed to settle with the bank and dismiss the case.

Usually, that would be the end of it.

However, the state supreme court has ordered those involved to press on with the case, saying the homeowner’s brief had already been filed in the appellate court.

The court said that even though both parties had agreed to drop the issue, it still has the discretion to make a decision on what the power of a trial court is in regards to the issue of fraud – particularly because whatever the court finds in this case will set a precedent for future foreclosure fraud cases in Florida.

In fact, the court deemed the matter one of “great public importance” which was in need of being resolved.

That means they don’t get to just drop it.

This is an extremely rare move by the state’s supreme court, and one that illustrates the severity of the housing crisis in this state and the court’s recognition that something must be done to address the widespread fraud that is still impacting tens of thousands of homeowners – despite banks’ claim that such actions have vastly dissipated.

Oral arguments in the case are scheduled to begin soon. Interestingly, this case will have implications not only in the realm of future foreclosure cases, but also with regard to the power of trial courts to impose sanctions on real estate matters that have been previously dismissed. lenders and real estate agents say if the court is given that authority, it could have devastating consequences to their industry, and subsequently the overall economy.

To be sure, the state is already bogged down with these cases. It’s possible that if the state was required to relitigate cases that are already closed due to allegations of prior misconduct, it may open the flood gates for even more cases bottlenecked into the system. What’s more, it could slow the regrowth of the housing market if individuals couldn’t purchase new homes due to title uncertainty.

One thing is certain: Our Miami foreclosure attorneys will be watching this case closely.

If you’re battling foreclosure in Miami or the surrounding areas, contact Jacobs Keeley for a confidential appointment to discuss your rights. Call (305) 358-7991.

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