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Other details on HB/SB213 The Florida (un)Fair Foreclosure Act background

Other details on HB/SB213 The Florida (un)Fair Foreclosure Act background


By: Dawn Rapoport, Esq.

Subject: Background and some case law

The predecessor to this section dates back to 1993 and, in short, it effectively provided that a show cause hearing could be had for the benefit of the creditor for the purpose of determining whether the debtor could be forced to pay rent as a condition to maintaining its defense in a foreclosure suit.  A couple of bright attorneys challenged the statute as being unconstitutional on the grounds that it was a denial of procedural due process and that it unconstitutionally allowed the legislature to prescribe procedure which is an area reserved by the Constitution to the courts, thereby violating the separation of powers provision. (The version of the statute they attacked is attached above.)  The third DCA bought into the argument, but the Supreme Court reversed while having no problem in concluding that since the procedural aspects of the statute were directly intertwined to its remedial purpose, there was no separation of powers violation.  (See Caple v. Tuttle).  Based upon the strong negative case law concerning this issue, there is almost no chance of the defense bar likely winning a separation of powers argument.  The supreme court also dismissed the procedural due process arguments for reasons which are not that germane to the pending legislation.

Nevertheless, while we thought it might be worth speaking to the bright lawyers who initially prevailed in the 3rd DCA; one attorney is now a sitting judge on the 3rd DCA and out of bounds for purposes of discussion, the other, currently employed by Grey-Robinson. 

Which still leaves us with the question does the procedure provided by the pending legislation render it unconstitutional as a violation of procedural due process.  For those not familiar with the body of procedural due process law, the devil is always in the details.  First of all well over 99% of the law in this area involves state action where the government; be it Federal, State or local is one of the litigants.  The courts allow much wider latitude to the conduct of private parties so we start with a very uphill battle. Very rarely have the courts concluded that private actors have not been provided with procedural due process when it has been demonstrated that the allegedly aggrieved party was given notice of the hearing and the opportunity to present evidence.

However, we do think the facts of the foreclosure crisis coupled with some of the language available concerning procedural due process keeps us in the ballgame.

Subject: Draft to Start Public Awareness – Position Statement Bullet Points and Stats

Draft to Start Public Awareness on HB213:

Stats found at www.frauddigest.com by Lynn Szymoniak, Esq.

There are at least 5 legislators with a solid background in real estate transactional work.  Most Legislators and the Public think: 1) they have time to wait for a more consumer friendly bill before they have to take action and 2) they think that if these houses get back on the market then the market will turn around.  They are wrong.

During the course of the session, those legislators with a real estate background should be extremely amenable to persuasive arguments on title integrity being totally undermined by a judicial process which has minimal concern for ferreting out the truth.  They need to share their heightened awareness with their colleagues.

The Bill is past the point of making it more consumer friendly.  In light of the evidence that has surfaced regarding foreclosure abuses by banks, robo-signing, securitization, fraud (in the inducement too) our legislature should not even consider such a bill.  While the public in general feels that there are a lot of people milking the system and living two years or more for free, it is not because of the consumer, but the bank’s conduct.

The proposed legislation is bad for the common good.

As we see it:

·        If the Banks and HOAs get everything they wanted from the Legislature this spring there would be economic chaos, because the real estate markets would be flooded with more properties, driving prices down another 25% or more, thereby driving tax rolls way down and bankrupting local governments;

·        FACT: 95% of the foreclosure cases are not contested;

·        FACT: Yet, it still takes over 600 days for the average foreclosure case to wind its way through the court system;

·        The reality demonstrates that banks are the ones who numerically and statistically are the ones most responsible for the slowness in which foreclosure cases move through the system, and the legislation is completely unnecessary;

·        The process is already in place, if they followed it, they could have a foreclosure done in 75 -90 days;

·        Wholesaling our constitutional rights is not the answer; this creates a summary proceeding, it’s totally unnecessary if the procedures already in place were used properly;

·        The procedure provided by the pending legislation makes it unconstitutional as a violation of procedural due process;

·        Unfortunately, well over 99% of the law in the area of procedural due process involves state action where the government; be it Federal, State or local is one of the litigants.  The courts allow much wider latitude to the conduct of private parties so homeowners start off with an uphill battle. Very rarely have the courts concluded that private actors have not been provided with procedural due process as long as it has been demonstrated that the allegedly aggrieved party was given notice of the hearing and the opportunity to present evidence;

·        The facts of the foreclosure crisis, robo-signing, securitization, servicing problems, and fraud, coupled with some of the language available concerning procedural due process keep consumers in the ballgame;

·        Every case currently being litigated is under assault with this legislation;

TWO KEY FACTORS IN THE PENDING LEGISLATION THAT CONSUMERS SHOULD BE OUTRAGED AT:

·        Section 7 of the legislation provides:

Section 7. The amendments to ss. 702.10, Florida Statutes,  and the creation of s. 702.13, Florida Statutes, are remedial in  nature and shall apply to causes of action pending on the  effective date of this act. Sections 702.11 and 702.12, Florida  Statutes, created by this act, apply to cases filed on or after July 1, 2012.

·        Make no mistake about it paragraph (1)(a)5 is the dagger.  It provides:

State that, if any defendant files defenses by a motion, a verified or sworn answer, affidavits, or other papers or appears personally or by way of an attorney at the time of  the hearing, the hearing time shall be used to hear and consider the defendant’s motion, answer, affidavits, other papers, and other evidence and argument as may be presented by any defendant or any defendant’s counsel, and the court shall  then make a determination as to whether a preponderance of the evidence and the arguments presented support entry of a final judgment of foreclosure, and if so, the court shall enter a final judgment of foreclosure ordering the clerk of the court to  conduct a foreclosure sale.

STATISTICS OF BANK OWNED HOMES – as of January 28, 2012 by Lynn Szymoniak, Esq. on Fraud Digest – Evidence the banks owning more properties is not changing anything

·         Home ownership in Florida’s 33 counties with population of 100,000 or greater as of January 24, 2012 is partially set forth here. The 34 counties with populations under 100,000 have a combined population of 1,278,080, approximately the population of Hillsborough County. The home ownership of Hillsborough has been used to approximate the ownership in the 34 counties, you can find the stat on each county at www.frauddigest.com

·         FLORIDA HOMES OWNED BY 8 LARGEST BANKS: 22,112

·         FLORIDA HOMES OWNED BY FANNIE & FREDDIE: 7,170

·         FL HOMES OWNED BY BANK OF AMERICA: 5,143

·         FL HOMES OWNED BY WELLS FARGO: 4,727

·         FL HOMES OWNED BY DEUTSCHE BANK: 3,114

·         FL HOMES OWNED BY BANK OF NEW YORK: 2,855

·         In January, 2012, in Palm Beach County, Florida, for example, 11 banks, FANNIE and FREDDIE and one mortgage servicer were the biggest homeowners, with 2,907 homes owned in total. Palm Beach County is the third largest county, by population, in Florida.

·         The banks and servicer owned 2,284 homes; FANNIE & FREDDIE owned 623 homes.

·         Three of the banks, Bank of America, Wells Fargo and Deutsche Bank, owned more homes than FANNIE.

·         Wells Fargo (including Wachovia) was the largest homeowner, owning 551 homes.

·         Bank of America and Deutsche Bank were close second and third largest, owning 496 homes and 454 homes, respectively. (The Bank of America total represents homes owned by Bank of America, BAC Home Loans Servicing and Countrywide.)

·         FANNIE owned 441 homes; FREDDIE owned 182 homes.

·         1 – MIAMI-DADE COUNTY (pop. 2,496,435)
HOMES OWNED BY 8 MAJOR BANKS, FANNIE & FREDDIE

o   BANK OF AMERICA: 650
BANK OF NEW YORK: 367
CHASE: 254
CITIBANK: 222
DEUTSCHE BANK: 676
FANNIE: 515
FREDDIE: 213
HSBC: 324
U.S. BANK: 121
WELLS FARGO: 579
BANKS: 3,193/F & F: 728

·         2 – BROWARD COUNTY (pop. 1,748,066)
HOMES OWNED BY 8 MAJOR BANKS, FANNIE & FREDDIE

o   BANK OF AMERICA: 624
BANK OF NEW YORK: 479
CHASE: 157
CITIBANK: 99
DEUTSCHE BANK: 445
FANNIE: 712
FREDDIE: 188
HSBC: 205
U.S. BANK: 489
WELLS FARGO: 493
BANKS: 2,991/F & F: 900

·         3 – PALM BEACH COUNTY (pop. 1,320,134)
HOMES OWNED BY 8 MAJOR BANKS, FANNIE & FREDDIE

o   BANK OF AMERICA: 497
BANK OF NEW YORK: 338
CHASE: 180
CITIBANK: 111
DEUTSCHE BANK: 454
FANNIE: 441
FREDDIE: 182
HSBC: 175
U.S. BANK: 196
WELLS FARGO: 551
BANKS: 2,502/F & F: 623

·         4 – HILLSBOROUGH COUNTY (pop: 1,229,226)
HOMES OWNED BY 8 MAJOR BANKS, FANNIE & FREDDIE

o   BANK OF AMERICA: 220
BANK OF NEW YORK: 116
CHASE: 40
CITIBANK: 30
DEUTSCHE BANK: 152
FANNIE: 265
FREDDIE: 83
HSBC: 84
U.S. BANK: 138
WELLS FARGO: 197
BANKS: 977/F & F: 348

·         5 – ORANGE COUNTY (pop. 1,145,956)
HOMES OWNED BY 8 MAJOR BANKS, FANNIE & FREDDIE

o   BANK OF AMERICA: 278
BANK OF NEW YORK: 31
CHASE: 102
CITIBANK: 49
DEUTSCHE BANK: 130
FANNIE: 500
FREDDIE: 126
HSBC: 83
U.S. BANK: 120
WELLS FARGO: 216
BANKS: 1,009/F & F: 626

·         6 – PINELLAS COUNTY (pop. 916,542)
HOMES OWNED BY 8 MAJOR BANKS, FANNIE & FREDDIE

o   BANK OF AMERICA: 166
BANK OF NEW YORK: 99
CHASE: 16
CITIBANK: 28
DEUTSCHE BANK: 113
FANNIE: 47
FREDDIE: 0
HSBC: 40
U.S. BANK: 143
WELLS FARGO: 181
BANKS: 786/F & F: 47

·         Bank of New York, the trustee for hundreds of Countrywide trusts, owned 338 homes.

·         U.S. Bank, the trustee for many Bear Stearns trusts, owned 196 homes

·         HSBC bank, the trustee for almost all of the Deutsche Bank Securities trusts, owned 175 homes.

·         JP Morgan Chase, including the homes owned by Chase Mortgage, and the Chase subsidiaries, Homesales, Inc. and Homesales of Delaware, Inc., owned a relatively low 174 homes.

·         Aurora Loan Services, keeper of most of the Lehman Brothers loans, was in 10th place among the large homeowners, with 149 homes.

·         Citibank, including Citimortgage, was the only other bank owning over 100 homes, with 111 homes.

·         Suntrust owned 82 homes; IndyMac/OneWest owned 54 homes; and GMAC owned 31 homes.

THE HB 213 BILL Pending Below

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BOMBSHELL! RED ALERT! THE ATTACK ON CITIZENS OF FLORIDA BEGINS….HB 213

BOMBSHELL! RED ALERT! THE ATTACK ON CITIZENS OF FLORIDA BEGINS….HB 213


VIA: MATT WEIDNER

Here it is folks, the bomb that we knew was coming.  The draft of legislation that shows The State of Florida has been sold out to the banksters.

702.12 Attorney fee as sanctions for raising unsupported 1177 claims or defenses; exceptions; service of motions; damages for 1178 delay of litigation.— 1179

(1) In any mortgage foreclosure action, upon the court’s 1180 initiative or motion of any party, the court shall award a 1181 reasonable attorney fee, including prejudgment interest, to be 1182 paid to the prevailing party in equal amounts by the losing 1183 party and the losing party’s attorney on any claim or defense at 1184 any time during a civil proceeding or action in which the court 1185 finds that the losing party or the losing party’s attorney knew 1186 or should have known that a claim or defense when initially 1187 presented to the court or at any time before trial: 1188

(a) Was not supported by the material facts necessary to 1189 establish the claim or defense; or 1190
(b) Would not be supported by the application of then-1191 existing law to those material facts. 1192

(2) At any time in any civil proceeding or action in which 1193 the moving party proves by a preponderance of the evidence that 1194 any action taken by the opposing party, including, but not 1195 limited to, the filing of any pleading or part thereof, the 1196 assertion of or response to any discovery demand, the assertion 1197 of any claim or defense, or the response to any request by any 1198 other party, was taken primarily for the purpose of unreasonable 1199 delay, the court shall award damages to the moving party for its 1200 reasonable expenses incurred in obtaining the order, which may 1201 include attorney fees, and other loss resulting from the 1202 improper delay. 1203

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PASSED Texas HB 213 requiring new disclosure requirements for mortgage servicing

PASSED Texas HB 213 requiring new disclosure requirements for mortgage servicing


The Texas House of Representatives passed a bill that requires new disclosure requirements for mortgage servicing:

By: Rodriguez, Keffer, et al. H.B. No. 213
A BILL TO BE ENTITLED
AN ACT
relating to the duties of a mortgage servicer of certain
residential mortgage loans.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1.  Title 5, Finance Code, is amended by adding
Chapter 397 to read as follows:
CHAPTER 397. RESIDENTIAL MORTGAGE SERVICERS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 397.001. DEFINITION. In this chapter, “mortgagee” and
mortgage servicer” have the meanings assigned by Section 51.0001,
Property Code.
Sec. 397.002. APPLICABILITY. This chapter applies only to
a loan secured by a first lien on residential real property that:
(1) is not a federally related mortgage loan, as
defined by 12 U.S.C. Section 2602; and
(2) is serviced by a mortgage servicer other than the
mortgagee of the loan.
[Sections 397.003-397.050 reserved for expansion]
SUBCHAPTER B. DEBTOR REQUESTS FOR INFORMATION
Sec. 397.051. RECORDKEEPING. A mortgage servicer shall
maintain written or electronic records of each written request for
information regarding a dispute or error involving the debtor’s
account until the loan is paid in full, otherwise satisfied, or
sold.
Sec. 397.052. PROVISION OF GENERAL INFORMATION ON REQUEST.
(a) A mortgage servicer shall provide the following to a debtor in
response to a debtor’s written request:
(1) a copy of the original note or, if the original
note is unavailable, an affidavit of lost note; and
(2)  a statement that:
(A) identifies and itemizes all fees and charges
assessed under the loan transaction and provides a full payment
history identifying in a clear and conspicuous manner all of the
debits, credits, application of and disbursement of all payments
received from or for the benefit of the debtor, and other activity
on the loan, including any escrow or suspense account activity; and
(B) covers the two years preceding the receipt of
the request or the period for which the servicer has serviced the
loan, whichever is shorter.
(b) If the mortgage servicer claims that delinquent or
outstanding sums were owed on the loan before the two-year period
preceding the receipt of the request under Subsection (a) or before
the servicer began servicing the loan, whichever is shorter, the
servicer shall provide an account history beginning with the
earliest month for which the servicer claims outstanding sums were
owed on the loan and ending on the date of the request for
information. For purposes of this subsection, the date of the
request for information is presumed to be not later than the 30th
day before the date the servicer receives the request.
(c) A mortgage servicer must provide a statement under
Subsection (a) on or before the 25th business day after the date the
servicer receives a written request from the debtor that:
(1) includes or otherwise enables the servicer to
identify the name and account of the debtor; and
(2) includes a statement that the account is or may be
in error or otherwise provides sufficient detail to the servicer
regarding information sought by the debtor.
Sec. 397.053. PROVISION OF INFORMATION REGARDING DISPUTE OR
ERROR. (a) A mortgage servicer shall provide a written statement
to a debtor in response to a debtor’s written request for
information regarding a dispute or error involving the debtor’s
account that includes the following information, if requested:
(1) whether the account is current and an explanation
of any default and the date the account went into default;
(2) the current balance due on the loan, including the
principal due, the amount of any funds held in a suspense account,
the amount of any escrow balance known to the servicer, and whether
there are any escrow deficiencies or shortages known to the
servicer;
(3) the identity, address, and other relevant
information about the current holder, owner, or assignee of the
loan; and
(4) the telephone number and mailing address of a
servicer representative with the information and authority to
answer questions and resolve disputes.
(b) A mortgage servicer must provide a statement under
Subsection (a) on or before the 10th day after the date the servicer
receives a written request from the debtor that:
(1) includes or otherwise enables the servicer to
identify the name and account of the debtor; and
(2) includes a statement that the account is or may be
in error or otherwise provides sufficient detail to the servicer
regarding information sought by the debtor.
[Sections 397.054-397.100 reserved for expansion]
SUBCHAPTER C. REMEDIES
Sec. 397.101. ENFORCEMENT GENERALLY. The Department of
Savings and Mortgage Lending, the attorney general, or any party to
a loan to which this chapter applies may enforce this chapter.
Sec. 397.102. ACTION BY DEBTOR. In addition to any other
legal and equitable remedy available, a debtor injured by a
violation of this chapter may bring an action for recovery of actual
damages, including reasonable attorney’s fees.
SECTION 2.  This Act takes effect September 1, 2011.
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