Lets not act surprise…by now we all know ANYTHING the US GOVERNMENT touches turns to ___________!
Because these lying banksters get away with ________________! We should foreclose on their _____________and kick them to the curb! Get your stress out and fill in the blank!
WE are not fools and we do not believe one thing they say!
First Posted: 06-29-10 06:22 PM | Updated: 06-29-10 06:22 PM
Potentially “thousands” of troubled homeowners were denied opportunities to lower their monthly mortgage payments under the Obama administration’s signature foreclosure-prevention plan due to servicer errors and inadequate oversight by the Treasury Department, a government audit has found.
Mortgage servicers failed to comply with basic guidelines, used different criteria to evaluate borrowers, recorded error rates up to six times their established thresholds, and couldn’t provide evidence that potentially eligible homeowners had been solicited for the administration’s Home Affordable Modification Program, also known as HAMP.
The errors are partly due to Treasury’s failure to issue specific guidelines for servicers to follow, and the administration’s lack of quality-control standards. Because servicers aren’t required to adhere to the same set of standards, there’s a risk that firms aren’t identifying practices “that may lead to inequitable treatment of borrowers or harm taxpayers through greater potential for fraud or waste,” according to a Thursday report by the Government Accountability Office.
But even if servicers were fraudulently modifying loans or improperly denying modifications to distressed homeowners, Treasury “has yet to establish specific consequences or penalties for noncompliance,” the GAO notes. The department has yet to fine any servicers for noncompliance, according to the report.
Already, “Treasury specifically allows some differences in how servicers evaluate borrowers… that could result in inconsistent outcomes for borrowers,” the report found.
The end result could be the “inequitable treatment” of struggling homeowners who were looking to an administration for help during the worst economic downturn since the Great Depression. HAMP is the centerpiece of the administration’s $75 billion effort to stem the rising tide of foreclosures.
“I find it saddening and frustrating that none of these problems, which we among other people identified to Treasury over a year ago, have been meaningfully addressed,” said Diane E. Thompson, a lawyer with the National Consumer Law Center. “And as a result, we lost a major opportunity to stem the foreclosure crisis.”
The big mortgage financing company, which owns or guarantees millions of mortgages, announced on Wednesday that it would sue homeowners who have the capacity to pay but default anyway. It also said it would prevent these strategic defaulters from getting a new Fannie Mae-backed loan for seven years, which could potentially shut millions of buyers out of the market.
But it was unclear, the experts said, why Fannie Mae was threatening delinquent owners and what it hoped to achieve. The new direction seems to run counter to the Obama administration’s efforts to reinvigorate the housing market. And there were basic questions about how Fannie would be able to distinguish between those homeowners who defaulted intentionally and the unfortunate ones who had no choice.
“How are they going to do this, and for what result?” asked Grant Stern, president of the Morningside Mortgage Corporation on Bay Harbor Islands, Fla. “So they can find the people who have a little money left after their house crashed and take it away from them?”
A Fannie Mae spokeswoman said that the goal of the new punitive policies was to force defaulting homeowners to work with their servicers to surrender their houses through either a lender-approved short sale or by formally giving up the deed.
“We really want to encourage borrowers to pursue alternatives to foreclosure,” said the spokeswoman, Janis Smith.
Fannie’s newly aggressive stance comes as the debate is heating up over how much, if at all, borrowers should be held liable for their foreclosures.
Republicans recently added a measure to a Federal Housing Administration financing bill in the House of Representatives that would forbid strategic defaulters from getting an F.H.A.-insured loan.
The California Legislature is debating a proposed law that goes in the other direction, shielding many more delinquent borrowers from debt collectors.
Fannie and its sister company, Freddie Mac, control 30 million mortgages, providing liquidity to the housing market. They have been under government conservatorship since September 2008; the ultimate cost of the rescue to taxpayers might hit $400 billion.
Chris Dickerson of the Federal Housing Finance Agency, which regulates Fannie, said, “We support Fannie Mae taking a policy position that discourages borrowers who can afford to pay their mortgage from walking away.”
Fannie Mae will announce the details of its new program next month, when the servicers who collect mortgage payments on Fannie’s loans will get explicit instructions on how to make recommendations for lawsuits.
But for some in the mortgage business, the new direction seemed little more than a cruel joke.
“Fannie wants to lock people up in a jail of negative net worth for much of the rest of their lives,” said Lou Barnes, a Colorado mortgage banker. “They’re bringing back the debtor’s prison.”
The plan poses some political problems as well as practical ones. Fannie Mae might be a ward of the government but its new policy is at distinct odds with the Obama administration, which has been trying to restart the fragile housing market by lowering interest rates, offering tax credits and insuring millions of new loans.
A Treasury Department spokesman said Fannie Mae’s plan did not represent official Obama administration policy. A spokesman for Freddie Mac said it was closely following Fannie’s moves but had not yet adopted them.
Strategic defaults have been a rising concern for years. Lenders first noticed people purposefully ditching their houses early in the financial crisis. In late 2007, Kenneth D. Lewis, then chief executive of Bank of America, said people were remaining current on their credit cards but defaulting on their home loans, a phenomenon that he said “astonished” him.
The lenders are less surprised now, but perhaps more worried. Bank of America said recently that it was putting owners in danger of foreclosure into payment plans that were supposed to be affordable — but that a third of the borrowers were failing to pay anyway.
“You could say the customer is choosing not to make those payments,” said Jack Schakett, credit loss mitigation executive for Bank of America Home Loans.
Borrowers who stop paying the mortgage can get a year of free rent, and sometimes two. “There is a huge incentive for customers to walk away,” Mr. Schakett said in a recent media briefing.
Fannie is not saying how many of its borrowers are strategically defaulting. The firm’s delinquency rate, traditionally about 0.5 percent of its portfolio, began sharply ascending in mid-2007. At the beginning of this year, it leveled off at 5.5 percent.
About a quarter of homeowners with mortgages, or about 11 million households, owe more than their home is worth, and are potentially vulnerable to a strategic default. A flat or rising real estate market could encourage many of them to hold on; a declining market would suggest it was time to go.
Fannie was established as a federal agency in 1938 but was chartered by Congress as a private company in 1968. For years it prospered by virtue of its special status as a government-sponsored entity charged with increasing the nation’s homeownership rate, enriching its shareholders and executives in the process.
During the housing boom Fannie overreached and bought many loans of buyers who were ill-equipped to pay them. Its fate is uncertain; it is not even clear it will be around in seven years to enforce any edicts.
Christopher F. Thornberg, a principal at Beacon Economics who correctly forecast that the housing boom would implode, said he understood what Fannie was trying to do, and even sympathized to a degree.
It is rational economics, he said, to assume that someone who walked away from an unpaid mortgage once might do so again. It also made sense, he said, for Fannie to try to limit strategic defaults from becoming an even bigger problem. And the new program also addresses the moral hazard question, Mr. Thornberg said: If borrowers are not punished for their missteps, they might not learn their lesson and might do it again.
And yet, he noted, the banks were bailed out, and their executives walked away rich. “Why should I pay my dues when they did not?” he said. “There is no clean answer on this.”
Once more they are going after the WRONG PARTY and they KNOW IT!
Fannie and Freddie were responsible for so much of this meltdown – and now we have to listen to their ranting and thuggery. Is there a hole deep enough for these guys?
They are so angry because their precious RMBS trusts are being exposed as schemes to loot pension funds, and that will make it harder to sell the next batch of poison they are cooking up.
First Posted: 06-23-10 11:03 PM | Updated: 06-23-10 11:28 PM
Taxpayer-owned mortgage giant Fannie Mae is targeting families by going after struggling homeowners who strategically default on their mortgage, the firm announced Wednesday.
A default is considered strategic when homeowners have the capacity to pay, yet choose to walk away from their mortgage. The trigger, researchers say, is negative equity: When the value of a home is less than what the lender is owed on it, borrowers are more likely to strategically default.
About 11.3 million homeowners with a mortgage, or 24 percent, owe more on their mortgage than the home is worth, according to real estate research firm CoreLogic. Another 2.3 million have less than 5 percent equity in their homes. All told, about 29 percent of all homeowners with a mortgage are either underwater or very close to it. The firm estimates that the typical underwater homeowner won’t return to positive equity until late 2015 or early 2016.
And Fannie Mae, an arm of the federal government and a big part of the Obama administration’s housing policy, wants to make sure that if struggling families walk away, they suffer for it.
Homeowners who strategically default or did not work “in good faith” to avert foreclosure through other means will be ineligible for new Fannie Mae-backed mortgages for seven years. The firm said it will also pursue homeowners in court, seeking so-called “deficiency judgments” to recoup outstanding debt by seizing borrowers’ other assets. Thirty-nine states do not limit the ability of lenders to recover what they’re owed.
Fannie Mae said that next month the firm “will be instructing its servicers to monitor delinquent loans facing foreclosure and put forth recommendations for cases that warrant the pursuit of deficiency judgments.”
“Walking away from a mortgage is bad for borrowers and bad for communities and our approach is meant to deter the disturbing trend toward strategic defaulting,” Terence Edwards, Fannie’s executive vice president for credit portfolio management, said in a statement.
Strategic defaults among homeowners have been on the rise. More than a million homeowners went that route last year, nearly double the amount in 2008 and more than four times the level in 2007, according to a recent analysis by the credit reporting company Experian and Oliver Wyman, a management consulting firm. A study by a team of academics from the University of Chicago and Northwestern University estimated that nearly a third of home mortgage defaults in March were strategic. The deeper underwater homeowners are, the more likely they are to walk away from their mortgage, the researchers noted.
Earlier this month, the House of Representatives passed a bill barring strategic defaulters from obtaining home mortgages backed by the Federal Housing Administration. The agency guarantees nearly one in four new mortgages.
“I can’t help but notice that every group now frantically calling for tough penalties for homeowners who walk away was virulently opposed to judicial modification of mortgages in bankruptcy,” Rep. Brad Miller, a North Carolina Democrat, told the Huffington Post.
Bank of America and Citigroup, the nation’s largest and third-largest banks by assets, respectively, support changing existing law to give federal judges the power to modify mortgages in bankruptcy, otherwise known as “cramdown.” Proponents argue that if homeowners were able to modify their mortgages in bankruptcy, the number of strategic defaults would substantially decrease, if not nosedive.
About 3 million homes will receive foreclosure notices this year, real estate research firm RealtyTrac estimates. More than 1 million will be repossessed by lenders, adding to the nearly 2.2 million homes that lenders took over from 2007 to 2009.
Fannie Mae and its sister firm Freddie Mac guarantee nearly three out of every four new mortgages, according to leading industry publication Inside Mortgage Finance. The two firms control about $5.5 trillion in home mortgages, according to their federal regulator. That’s nearly half of all outstanding mortgage debt in the U.S. Their share of the mortgage market is nearly double what it was 20 years ago.
Because Fannie controls such a large portion of new mortgage issuance, the freezing out of homeowners for seven years could prove devastating.
Brent T. White, a law professor at the University of Arizona, recently wrote in an academic paper that most homeowners can recover from a foreclosure within two years. In fact, defaulting on a mortgage is not as bad as most people think, White notes.
“Lenders are unlikely to pursue a deficiency judgment even in recourse states because it is economically inefficient to do so; there is no tax liability on ‘forgiven portions’ of home mortgages under current federal tax law in effect until 2012; defaulting on one’s mortgage does not mean that one’s other credit lines will be revoked; and most people can expect to recover from the negative impact of foreclosure on their credit score within two years (and, meanwhile, two years of poor credit need not seriously impact one’s life),” he writes.
There is a “huge financial upside” for seriously underwater homeowners to strategically default on their mortgages, White said.
While it’s still taboo among most homeowners, it’s common behavior among corporations.
In December, Morgan Stanley, the nation’s sixth-biggest bank by assets, walked away from five San Francisco office buildings the $820-billion firm purchased as part of a landmark $2.43-billion deal near the height of the real estate boom. A group led by Tishman Speyer Properties gave up a 56-building apartment complex in Manhattan in January after defaulting on some $4.4 billion in debt. A spokesman for the California Public Employees’ Retirement System, the nation’s biggest municipal pension fund and one of several investors in the venture, told the Huffington Post that they “basically walked away from it.”
Fannie was effectively nationalized in September 2008. Taxpayers own 79.9 percent of Fannie and Freddie. The Obama administration announced on Christmas Eve that it would provide unlimited financial assistance to the firms, disregarding what was a $400 billion cap on taxpayer bailouts. Their debt is backed by the U.S. government.
The two firms, facing growing losses on sour mortgages in perhaps a worsening housing market, have already taken $145 billion from taxpayers. Fannie Mae is responsible for $83.6 billion of that bailout.
Freddie Mac did not say it would take a similar position on strategic defaulters.
“Such so-called strategic defaults, once rare, are now common enough to jeopardize the already-weak housing and mortgage markets,” wrote economists Celia Chen and Cristian deRitis of Moody’s Economy.com in an April 13 note. “If the trend continues, strategic defaults could both accelerate the pace of home foreclosures and also make it harder for new borrowers to obtain mortgages. Both factors would in turn worsen the decline in house prices.”
JPMorgan Chase, the nation’s second-largest bank by assets with more than $2.1 trillion, warmed investors last month that underwater homeowners may not continue to make their payments even when they’re able to, according to a May 10 filing with the Securities and Exchange Commission.
A top executive at Freddie Mac posted a note on the firm’s website pleading with homeowners to not intentionally walk away from their homes.
“Knowing the costs and factoring in the time horizon, some borrowers have made the calculation that it is better to purposely default on the mortgage. While I understand how that might well be a good decision for certain borrowers, that doesn’t make it good social policy,” Freddie Executive Vice President Don Bisenius argued in a May 3 note.
The firm warned investors and analysts about the risk of increased strategic defaults in March 2008. Referring to it as “ruthlessness,” Dick Syron, Freddie’s former chairman and CEO, said the firm was “seeing an increase in ruthlessness” that had “the potential for changing consumer behavior.”
Fannie Mae said Wednesday that borrowers who have “extenuating circumstances may be eligible for new loan in a shorter timeframe” than the seven-year period it’s warning about.
Republicans in the House recently tried to rein in the twin mortgage giants. Rep. Darrell Issa, the top Republican on the House Committee on Oversight and Government Reform, attempted Wednesday to amend the financial reform bill under consideration by the House and Senate to mandate that the federal government appoint an inspector general to oversee Fannie and Freddie. The mortgage behemoths’ federal regulator has been operating without an independent watchdog looking over it and Fannie and Freddie since 2008.
Republicans have also tried to amend the bill to subject Fannie and Freddie to the Freedom of Information Act so members of the public can keep tabs on the firms by compelling the disclosure of documents and records.
Both efforts were thwarted by House Financial Services Committee Chairman Barney Frank (D-Mass.), who ruled that they were not “germane” to the legislation under consideration.
Emails sent after normal business hours to spokesmen for the White House and Treasury Department requesting comment were not returned.
Ryan Grim contributed reporting. THE HUFFINGTON POST
Pursuant to our constitutional obligation to determine the state’s need for additional judges in Fiscal Year 2010-2011 and to certify “our findings and recommendations about that need” to the Legislature,[1] we hereby certify the need for additional judicial resources as follows.
This Court acknowledges that Florida and our country remain in an economic recession. Like all sectors of our society, the judicial branch is coping with the impact these economic forces are having on the daily operations of our courts, which are faced with increased workloads, reduced resources, and ever-increasing demands on judges and staff. Together, these factors impede the proper administration of justice.For our trial courts, fewer resources and no new judgeships for the last three fiscal years have slowed case processing times and negatively impacted clearance rates. Justice in many instances is delayed.[2] Moreover, the mortgage foreclosure crisis continues unabated with a second wave of foreclosures forecast.[3] These foreclosures have implications for homeowners, lending institutions, neighborhoods, the courts, and Florida’s economy. Further, budget reductions and the resultant loss of supplemental judicial resources, such as case managers, magistrates, and staff attorneys, continue to impact the courts’ ability to respond effectively to the needs of children, families, the business sector, and the public. Although the central purpose of this opinion is to fulfill our constitutional obligation to discuss specifically the certification of judicial need, we must place the consideration of judicial need in a larger justice system context. Therefore, this Court first addresses recent developments in court system funding and the loss of non-judge resources before directly addressing the implications for judicial certification.
STATE COURTS REVENUE TRUST FUND
Because of the economic crisis and as part of its ongoing effort to seek stable funding for Florida’s State Courts System, the Supreme Court has worked with legislative leaders to identify a stable funding source for Florida’s courts. In response, during Special Session A 2009, the Legislature created the State Courts Revenue Trust Fund. The fund supports most court operations with the exception of some judicial salaries which remain general revenue funded. The primary revenue stream supplying the trust fund became effective July 1, 2009. The Supreme Court is grateful to the Legislature for the establishment of this fund, which we believe will help stabilize Florida’s court system. The creation of the State Courts Revenue Trust Fund is also consistent with the Seven Principles of Court Funding advanced through the State Courts System’s Funding Justice initiative.[4] Nevertheless, while the new trust fund appears to promise greater long-term stability, it has not yet impacted the budgetary reductions experienced by the judicial branch over the last two fiscal years. The budget reductions, coupled with no new judgeships for the last three fiscal years, have combined to create an environment of increased judicial workload, caseload backlog, and court delay.
BUDGET REDUCTIONS
Since July 1, 2007, the State Courts System has experienced a ten percent budget reduction. These reductions have come from our operating budget, including expense dollars, contractual dollars, and the loss of positions throughout the state. Strict hiring and travel policies have also been in effect for the last two years. These restrictions were necessary to comply with overall reductions to our budget. Nonetheless, they come at a price. Court operations have been significantly hampered by the loss of positions that provide direct support to our judges. In order to comply with the legislative request to reduce its budget, Florida’s court system over the last three budget years has lost or eliminated 103.25 case managers, 23.75 magistrates and associated administrative staff, 38.5 law clerks, 18.5 due process positions (i.e., court reporters, court interpreters, and expert witnesses), and 106.5 positions from court administration, appellate clerks’ offices, and appellate marshals’ offices. Of the 290.5 total positions lost in the judicial branch, 249 trial court positions have been eliminated throughout the state. Also substantially reduced were contractual dollars used to hire Civil Traffic Infraction Hearing Officers (CTIHO). As a result, much work previously performed by CTIHOs was absorbed by our county court judges.
LOST RESOURCES AND CASE PROCESSING TIMES
The budget reductions and loss of positions sustained by the State Courts System over the last two fiscal years continue to be felt in every judicial circuit. We cannot overstate the causal relationship between the loss of supplemental resources and the increases in case processing times. When judges must absorb the workload of case managers, staff attorneys, or hearing officers, case processing times inevitably worsen. The net result is court delay. Moreover, having judges perform the work of subordinate staff is not a prudent use of higher level judicial resources. Judicial time is best spent adjudicating cases, and the loss of supplemental resources has consequences for litigants across all case types. While Floridians continue to access their courts initially through filings, they are being forced to wait inordinate periods of time for final resolution of their cases while judges find it more and more difficult to advance their dockets and clear out backlogged matters.[5]
CIRCUIT COURT IMPACT
Children and families are especially at risk when resources become scarce. In particular, the loss of case managers in our family divisions directly threatens the level of justice afforded to children and families. Case managers are acutely needed in matters involving custody, visitation, paternity, child support, dependency, delinquency, termination of parental rights, and domestic and repeat violence. Many families involved in such cases have limited means and represent themselves in court. Additionally, many of these families have multiple cases which require coordination to eliminate duplicate hearings and orders. Typically, our family law case managers shepherd cases through the court system by performing intake, screening, evaluation, monitoring, coordinating, scheduling, and referral activities. These activities enable cases to proceed smoothly and timely through the court process. When these positions are eliminated, these tasks fall on the presiding judge. This scenario creates case processing delays, non-referrals, or the minimization of judicial time spent helping children and families. In addition to losing our case management support, our court system has also lost magistrates and attendant administrative staff statewide during this period. Magistrates support the adjudicatory process in the trial courts by performing certain quasi-judicial functions that are routine, computational, or managerial in nature under the authority of the court. Frequently, they are assigned to family law divisions and assist judges by hearing matters related to paternity, dissolution, custody, child support and visitation. They frequently establish attorney fees and costs, submit recommended orders to a judge, and ensure the collection of fines. Their availability enables judges to focus their time on more contentious and complex issues requiring judicial expertise. This division of labor has proven to be both effective and economical. When magistrates are either reduced or eliminated from the case processing equation, judges must then absorb their work. This inevitably contributes to case processing delays. The loss of staff attorneys and law clerks similarly has affected judicial workload and impeded the movement of cases especially in post-conviction criminal cases. Law clerks provide basic legal research assistance to judges, including the preparation of legal memoranda and drafts of court orders. Their work enhances the adjudication of cases because they are able to identify and analyze relevant laws and cases before the court. Without this resource, a judge’s ability to process cases in a manner that ensures both quality and efficiency is diminished because the judge is retrieving materials and unable to delegate basic and routine legal research. Other factors contributing to circuit court workload include the mortgage foreclosure crisis previously mentioned which continues to overwhelm Florida’s court system. Although the dramatic increase in mortgage foreclosure filings is expected to abate at some future date and therefore may not be a part of the long-term sustained net need, there is evidence that a second wave of foreclosures is now entering the court system and that this workload issue will persist. Various media reports note that many of these new foreclosures are fueled by double digit unemployment, declining housing prices, and the lingering recession. Over a 36-month period (Fiscal Year 2005-2006 to Fiscal Year 2007-2008), real property/mortgage foreclosure filings increased by 396 percent in our trial courts. During the same time period, the clearance rate for real property/mortgage foreclosure cases decreased by 52 percent, from 94 percent in Fiscal Year 2005-2006 to 42 percent in Fiscal Year 2007-2008. According to Realty Trac,[6] Florida has the third highest rate of mortgage foreclosures in the country with one in every 158 housing units in foreclosure. Condominium foreclosures are contributing to the crisis.
COUNTY COURT IMPACT
As reflected in dropping clearance rates, no other resource has hindered the operations of county courts more than the loss of a substantial portion of the Civil Traffic Infraction Hearing Officer (CTIHO) monies. CTIHOs are members of The Florida Bar who contract with the courts to preside over civil traffic infraction hearings.[7] They are an economical and effective resource dedicated to the disposition of civil traffic infractions. Their availability enables county court judges to adjudicate county criminal and civil matters in a timely manner. In several circuits, the availability of CTIHOs has also enabled county court judges to assist with judicial workload in circuit court. Therefore, the loss of this resource is two-fold: (1) county judges now provide diminished assistance in circuit court, and (2) county judges must now spend a far greater portion of their time presiding over traffic matters. The cascading effect is less time spent assisting circuit court judges, less time focused on more complex county court criminal and civil matters, and more time spent on traffic cases. The net result is case delay and backlog in circuit and county court. Although this opinion is constitutionally required to discuss judicial need, this Court finds it important to advise the Legislature that the elimination of case managers, law clerks, magistrates, court reporters, and court interpreters, coupled with no new trial judges in three years, has long-term structural implications for the court system. If the Legislature is unable to provide new judgeships due to the economic crisis, we encourage it to consider all the more seriously restoring positions lost over the last two years, as has been requested in our annual legislative budget request.
STATE ATTORNEY, PUBLIC DEFENDER, REGIONAL COUNSEL, AND CAPITAL COLLATERAL REPRESENTATIVE STAFFING
This Court also remains concerned about the staffing levels of state attorney and public defender offices, the Offices of Regional Counsel, and the offices of the Capital Collateral Representatives. The need persists to reconcile the certification of new judgeships with sufficient staffing for these entities. This is a systemic issue and should be approached as such. We encourage the Legislature to consider the needs of the state attorneys, public defenders, Offices of Regional Counsel, and Capital Collateral Representatives if new judgeships are authorized for our criminal divisions, particularly in light of the staffing reductions they have experienced in recent years.
TRIAL COURT CERTIFICATION
For some time, this Court has used a case-weighting system based on accepted standards of measurement in determining the need for additional judges.[8] The case weighting system distinguishes different types of cases and assigns different amounts of time that must be spent on cases of each type, producing a total judicial need for each circuit. Additionally, we adjust for differing jury trial rates in each circuit and county and consider the actual number of judges requested by the chief judge in each circuit. The resulting certification is an objective statement of what the trial courts need to meet their workload. Over the last ten years, we have conducted a continuous evaluation of the certification process. As noted in last year’s opinion, we are now applying the use of sustained judicial need into our methodology. Sustained judicial need is the minimum of the calculated net need over a three-year period. Each year this three year “window” moves forward a year, considering the current year’s net need and the previous two years’ net need in the sustained need calculation. Any new judges received during the previous year’s session are factored into the current year’s net need.[9] From Fiscal Year 2006-2007 to Fiscal Year 2007-2008 total filings have increased by 21 percent in circuit court. Growth in civil filings by 85 percent is the main contributing factor to the statewide increase in circuit court. Real property and mortgage foreclosure case filings have more than doubled from the previous fiscal year, representing an increase of 171,426 filings. Product liability, condominium, and contract and indebtedness case filings have also risen considerably, by 267 percent, 117 percent, and 29 percent respectively. Substantial growth in filings in felony case types also contributed to an overall rise in circuit court filings from Fiscal Year 2006-2007 to Fiscal Year 2007-2008. The largest felony case type in terms of number of filings, property crime (including burglary, theft, worthless checks, and other felonies) increased by five percent. Additionally, capital murder and robbery case filings also rose by a considerable percentage, six and 15 percent respectively. County court filings experienced significant growth from Fiscal Year 2006-2007 to Fiscal Year 2007-2008 as well, with statewide filings increasing by five percent (excluding civil traffic infractions). Growth in civil filings was also the main contributing factor to the statewide increase in county court, with overall civil filings rising by 14 percent. Those cases involving small claims (up to $5,000), civil ($5,001 to $15,000), and evictions increased by 16 percent, 20 percent, and six percent, respectively. Further, the overall statewide circuit court clearance rate[10] from Fiscal Year 2006-2007 to Fiscal Year 2007-2008 has decreased by ten percent. Clearance rates in all divisions dropped in Fiscal Year 2007-2008, with the lone exception of the circuit criminal division. The chief judges of the trial courts are ensuring that all due process (e.g., speedy trials) and other constitutional requirements related to felony proceedings are being met. This often requires the redeployment of judicial resources from other court divisions. The circuit civil division experienced a significant clearance rate decline of nineteen percent, statewide. Similarly, the county court clearance rate decreased by four percent with the county civil division declining by five percent. The sustained impact of the mortgage foreclosure crisis is even further compromising the clearance rates in circuit civil divisions for all circuits in Florida. In many jurisdictions, circuit civil judges cannot keep pace with the volume. As a result, homeowners and lending institutions are subject to increasingly long delays for resolution to their cases.[11] In view of the foregoing considerations, this Court certifies the need for 37 new circuit court judges for Fiscal Year 2010-2011, distributed as follows:
1. Five additional circuit court judges each for the First and Fifth circuits;
2. Three additional circuit court judges each for the Seventh, Nineteenth, and Twentieth circuits;
3. Two additional circuit court judges each for the Fourth, Sixth, Ninth, Tenth, Fourteenth, and Fifteenth circuits; and
4. One additional circuit court judge each for the Second, Eighth, Eleventh, Twelfth, Thirteenth, and Eighteenth circuits.
Further, we certify the need for 53 new county court judges for Fiscal Year 2010-2011, as follows:
1. Eight additional county court judges for Duval County;
2. Six additional county court judges each for Miami-Dade and Broward counties;
3. Five additional county court judges for Palm Beach County;
4. Three additional county court judges for Hillsborough County;
5. Two additional county court judges each for Pinellas, Volusia, Orange, Polk, and Lee counties; and
6. One additional county court judge each for Okaloosa, Columbia, Citrus, Lake, Marion, Alachua, Osceola, Highlands, Manatee, Sarasota, Bay, Brevard, Seminole, St. Lucie, and Collier counties.
In addition to the judges certified above, we also have reviewed the following requests, which we deny for the following reasons. We have specifically reviewed the requests from chief judges to certify three circuit court judges in the Ninth Judicial Circuit and Eleventh Judicial Circuit and note that the sustained judicial need is less than the judgeships requested.[12] Accordingly, we deny those requests. We have also reviewed the chief judge’s requests for an additional county court judge for Pasco County. We have determined that in the absence of special circumstances, we must also deny this request. We emphasize that in addition to mathematical calculations, our staff performs extensive analysis of each circuit’s request in order to analyze the availability of supplemental resources and any special circumstances justifying an exception.
DISTRICT COURTS OF APPEAL
Like the trial courts, the district courts have also experienced the loss of supplemental support staff due to the economic crisis. During Fiscal Year 2008-2009 a total of 25.5 FTE were lost due to reductions in the district courts’ collective budget. As with the circuit courts, the loss of staff attorneys and law clerks in the district courts has affected judicial workload and impeded the movement of cases. Staff attorneys provide legal research assistance, prepare legal memoranda, and assist in drafting opinions. The absence of staff attorneys and other court support staff that were lost has contributed to more lengthy case processing times and diminished clearance rates in the district courts. Under the weighted caseload per judge threshold set forth in rule 2.240(b)(2)(B), Florida Rules of Judicial Administration, “[t]he court will presume that there is a need for an additional appellate court judgeship in any district for which a request is made and where the relative weight of the cases disposed on the merits per judge would have exceeded 280 after application of the proposed additional judge(s).”[13] Only the Second District requested a judgeship, citing numerous workload factors including increased filings, decreasing clearance rates, post-conviction appeals, reduced staffing complements, and limited judicial availability. Although qualified to receive a judgeship last year, they did not request one, citing the economic climate within the state. While we are sympathetic to the workload in the Second District, using our certification methodology, they do not currently qualify for an additional judgeship after the methodology is applied. Therefore, their request is denied.
DISTRICT COURTS OF APPEAL CERTIFICATION
In keeping with our policy of not requesting judgeships unless qualified and requested by the chief judge of a district court, we do not certify the need for any additional district court judges.
CONCLUSION
Florida’s court system remains under duress. The state and national recession of the last two years and the resulting budget reductions for the courts are taking a sustained toll on Florida’s judges, court staff, and most importantly those who are accessing our courts. Case filings are up and clearance rates are down. Judicial dockets are full, scheduling is problematic, and case processing times are delayed. Florida’s court system has now gone three years without the authorization of any new judgeships despite a demonstrated and sustained need. The absence of new judgeships is now being felt by all sectors of our society who seek justice through the court system. We submit this opinion recognizing that it is difficult for the Legislature to fund the many competing critical issues confronting our state given the fiscal crisis the state is enduring. If funds become available, we encourage the Legislature to authorize those judgeships certified in our circuit and county courts. Additionally, while we have identified our judicial need in this opinion, we are equally concerned with the allocation of adequate court support staff and supplemental resources in the statutorily defined court elements that will enable the courts to respond effectively to the needs of children, families, the business sector, and the public. Without these court support staff and supplemental resources, the administration of justice is undermined. It is so ordered. PARIENTE, LEWIS, CANADY, POLSTON, LABARGA, and PERRY, JJ., concur. [1] Article V, section 9 of the Florida Constitution provides in pertinent part: Determination of number of judges.—The supreme court shall establish by rule uniform criteria for the determination of the need for additional judges except supreme court justices, the necessity for decreasing the number of judges and for increasing, decreasing or redefining appellate districts and judicial circuits. If the supreme court finds that a need exists for increasing or decreasing the number of judges or increasing, decreasing or redefining appellate districts and judicial circuits, it shall, prior to the next regular session of the legislature, certify to the legislature its findings and recommendations concerning such need. [2] See Office of the State Courts Administrator, Clearance Rate Dashboard, Quarter Ending September 30, 2009 (Data as of November 5, 2009), http://www.flcourts.org/gen_public/stats/bin/ClearanceRateDashboard.pdf. [3] See Mortgage Bankers Ass’n, Delinquencies Continue to Climb in Latest MBA National Delinquency Survey, Nov. 19, 2009, http://www.mbaa.org/NewsandMedia/PressCenter/71112.htm; Seeking Alpha.com, Seasonal Bump in Case-Shiller Home Price Index Abates, Nov. 29, 2009, http://seekingalpha.com/article/175233-seasonal-bump-in-case-shiller-home-price-index-abates; Realty Trac, Job Losses Foreshadow More Foreclosures, Risk, http://www.realtytrac.com/contentmanagement/realtytraclibrary.aspx?channelid=8&accnt=0&itemid=7727 (last visited February 23, 2010). [4] See Florida State Courts, Funding Justice, http://www.flcourts.org/gen_public/funding/index.shml (last visited Feb. 23, 2010). [5] A 2008 study by the Washington Economics Group, Inc., has estimated delay in case processing mortgage foreclosure cases costs Florida’s economy $17 billion a year. Washington Economics Group, The Economic Impacts of Inadequate Funding for Florida’s Courts (2008). [6] Realty Trac is an online realtor website that tracks mortgage foreclosures by state and may be found at www.realtytrac.com. [7] In Fiscal Year 2007-2008, Civil Traffic Infraction Hearing Officers presided over approximately 489,162 cases in Florida. [8] This system was developed in response to the proviso language of the 1998 General Appropriations Act, in which the Legislature directed that the judicial branch employ a certification methodology that relies on case weights and calculations of available judge time to determine the need for additional trial court judges. See Ch. 98-422, § 7, at 3963, Laws of Fla. Pursuant to this direction, the judicial branch undertook an extensive project to design and implement a weighted caseload system, assisted by the National Center for State Courts and endorsed by the Office of Program Policy Analysis and Government Accountability. [9]In re Certification of Need for Additional Judges, 3 So. 3d 1177, 1181-82 (Fla. 2009). [10] The “clearance rate” is a calculation of the number of cases disposed of divided by the number of cases filed in the same year. The clearance rate has a reasonable ease of calculation, is a useful measure of the responsiveness of a court to the demand for services, and is nationally recognized as a measure of court performance. [11] See Florida Supreme Court Task Force on Residential Mortgage Foreclosure Cases, Final Report and Recommendations on Residential Mortgage Foreclosure Cases (2009), available at http://www.floridasupremecourt.org/pub_info/foreclosure.shtml. [12] Total judicial need is the total number of judges required to complete all expected workload. Net judicial need is the difference between the total judicial need and the number of existing judges. Sustained net need is defined as constant need over time. [13] The number established in the rule, 280, does not represent the filings per judge but is a weighted threshold calculated according to the process described in the DCA Workload Report issued in 2005 by the Commission on District Court of Appeal Performance and Accountability. See Supreme Court of Florida Commission on District Court of Appeal Performance and Accountability, DCA Workload Report to the Supreme Court (2005), available at http://www.flcourts.org/gen_public/court-services/bin/2005DCAWorkloadReport.pdf.
In courtrooms across the country, judges are foreclosing on homes based on improperly prepared documentation, some of which may even be fraudulent. At the heart of the problem are entities like Mortgage Electronic Registration System (MERS), which itself is owned by many of the largest financial institutions in the U.S. If MERS and other similar firms acting as foreclosing entity were required to show legal proof of mortgage assignment, the documentation offered could reveal a lack of capitalization that would make the bank bailout look like lunch money.
Imagine you are a judge in a state court mortgage foreclosure part, or maybe in a bankruptcy court.
Your experience and training tells you what is supposed to happen. An originator of a mortgage, with the actual wet ink documents in hand and full knowledge of the transaction, makes MERS the nominee for the holder of the mortgage and records the mortgage in MERS’s name and gives physical custody of the wet ink documents to MERS. The originator then assigns the mortgage and note to Bank. Bank, with full knowledge of the assignment transaction, may assign it further, perhaps into a trust to back up Residential Mortgage Backed Security (RMBS). All of this would be done with proper notice to MERS who would always be up to date on who is the most recent assignee of the mortgage. When the time comes to foreclose, MERS would release the wet ink documents to the lawyers for the last assignee, who would use those original documents to foreclose.
Now comes into your court, a party claiming to be the lender—or at least the lender’s successor in interest—saying that it has acquired the homeowner’s mortgage by assignment. The homeowner took out the mortgage 5 or 6 years ago from XYZ originator, but the loan was recorded at the county clerk’s office or local land office as being in the hands of MERS.. I have explained about MERS and other issues relating to sloppy mortgage document handling in prior posts.
Attached to the complaint is a document which, on its face, appears to be an assignment of the mortgage from MERS to plaintiff. It is signed by a person with an official looking title at MERS. So, would you be safe in assuming that the person who signed the assignment:
1) went and fetched this mortgage out of a file room at MERS;
2) checked it over to make sure it was properly assigned from the originator to MERS; and
3) that the party to which the assignment was about to made had paid for the right to own the mortgage, before executing the assignment?
No, you would not.
In the Aughts, during the rush to make loans and generate all those origination fees, front line lenders and mortgage brokers would zoom through paperwork and flip the mortgages immediately over to trusts and servicers. They didn’t always complete the paperwork to assign the mortgage over to either MERS or to the trust. The mortgage may have been filed with the county clerk as belonging to either MERS or to some mortgage back securities trust, but the actual assignment papers might never have been executed. And although money moved around from the servicers, originators and investors, paperwork indicating payment for the transfer of a particular mortgage was not always provided.
Nonetheless, servicers acted as if the loans had actually been paid for and properly assigned and sent out notices to homeowners saying that payments on a particular mortgage were now to be directed to this servicer. The homeowners paid the servicers who presumably forwarded on a net amount, less their servicing fees, to the investors in the Residential Mortgage Backed Securities (RMBS).
Then one day, the homeowner goes into default. The trustee for the trust that is supposed to be holding the mortgage for the benefit of the investors in the RMBS, springs into action and want s to foreclose. Well, actually, the servicer springs into action using the name and consent of the trustee — the servicer makes tons more in fees from foreclosure than it does from mortgage modification.
The servicer hires a law firm. The law firm will need an assignment document as proof that the trustee owns the note and has standing to foreclose. Where does the law firm get this assignment? Does the trustee contact MERS and ask for assignment? Does the trustee have to pay somebody to buy the note? Does MERS prepare the document and send it over?
In many instances, an employee of the servicer, or of a document mill executes hired by the servicer, creates and signs the assignment from the originator, indicating that he or she is an officer of the originator. Sometimes an employee of the law firm executes an assignment from MERS indicating that he or she is an officer of MERS.
In neither case, is it likely that the person executing the assignment has ever clapped eyes on the mortgage documents. Rarely, if ever, does the signer have any direct knowledge of whether any money has actually changed hands to effectuate the purchase of this mortgage by the entity which will be receiving it and foreclosing upon it. In order for someone to acquire rights under a note, they must be a “purchaser for value”.
Let me say this again. People who are not actually employees or officers of the originator, sign as if they are. People who don’t actually know if a loan was ever paid for, are executing documents as if they do. They are purporting to transfer mortgages from the originator to either MERS, or to an entity called the “depositor” who deposits the mortgage into a RMBS trust, or directly to a RMBS trust. People who are not employees of MERS are executing documents purporting to transfer mortgages — which may or may not have actually been properly transferred into MERS — from MERS to RMBS trusts.
AND NOBODY IS TELLING THE JUDGES OR THE HOMEOWNERS THAT THESE DOCUMENTS HAVE NO ACTUAL KNOWLEDGE BEHIND THEM.
I am not accusing the people who sign these things of deliberately lying, in the sense that you tell a deliberate falsehood knowing it to be false. I’m sure they “hope” the documents are accurate; they just have no way of knowing.
Click here to read about a law firm that creates, and has its own employees sign, assignments from MERS that it uses as exhibits in the cases it brings. Click here to read about a group of people signing on behalf of many different originators simultaneously.
Having read these articles about created assignments and a “clone army” of officers signing documents, courts should pay attention to the fact that the signatories are pretending to work for the GRANTOR — the original lender or someone in the chain. However, they are really being paid by the GRANTEE — the mortgage servicer working on behalf of the trust. Talk about your conflict of interest.
The signers have no personal knowledge as to the accuracy of anything they are representing.
So, when you, the judge, are presented with this complaint and the documents which purports to effect various assignments, how do you know if any of it is real? You don’t.
Washington Post Staff Writer
Friday, March 12, 2010
The housing market is facing swelling ranks of homeowners who are seriously delinquent but have yet to lose their homes, and this is threatening a new wave of foreclosures that could hit just as the real estate market has begun to stabilize.
The housing market is facing swelling ranks of homeowners who are seriously delinquent but have yet to lose their homes, and this is threatening a new wave of foreclosures that could hit just as the real estate market has begun to stabilize.
About 5 million to 7 million properties are potentially eligible for foreclosure but have not yet been repossessed and put up for sale. Some economists project it could take nearly three years before all these homes have been put on the market and purchased by new owners. And the number of pending foreclosures could grow much bigger over the coming year as more distressed borrowers become delinquent and then, if they can’t obtain mortgage relief, wade through the foreclosure process, which often takes more than a year to complete.
What will they do now since the Commericial Real Estate is just beginning to see it’s side to defaults? AMERICA BRACE ThySELF! This is one roller coaster ride ith NO end in sight.
As these foreclosed properties add to the supply of homes for sale, they could undercut housing prices, which have increased modestly through December, according to the most recent figures in the S&P/Case-Shiller home prices index. That rise partly reflected a slowdown in the flow of foreclosed homes onto the market.
The rate at which J.P. Morgan Chase seized properties, for example, peaked in the middle of 2008 and fell steadily last year, according to a February investor report. But the bank expects repossessions to increase this year, nearly doubling to 45,000 by the fourth quarter.
No. SC10-320.
In courtrooms across the country, judges are foreclosing on homes based on improperly prepared documentation, some of which may even be fraudulent. At the heart of the problem are entities like Mortgage Electronic Registration System (MERS), which itself is owned by many of the largest financial institutions in the U.S. If MERS and other similar firms acting as foreclosing entity were required to show legal proof of mortgage assignment, the documentation offered could reveal a lack of capitalization that would make the bank bailout look like lunch money.
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