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Robert Trigaux

Foreclosure tales: When a home is seized without owner knowing, when judges know too much

9

November

michaelcarlsondunedinhomeforelcosure2010carriepratt.jpgWake up and good morning. How many permutations of the screwed-up foreclosure world can there be? St. Petersburg Times reporter Kris Hundley details the Florida tale of Dunedin's Michael D. Carlson (photo, below, right), who recently filed a motion in Pinellas Circuit Court seeking to undo a foreclosure judgment against him from 2008, saying he never knew about the legal proceeding until it was over.

As part of the motion, Hundley reports, the 42-year-old divorced father of three also wants his home in Dunedin back. The problem is, Carlson's lender, Bank of America, sold it more than a year ago to another couple, who thought they had bought the foreclosed property free and clear.  (Photo: Michael Carlson's Dunedin home, by Carrie Pratt of the St. Petersburg Times.) 

michaelcarlsonmugdunedinforeclosure2010.jpgLegal experts say that in trying to reverse a foreclosure after the home has been sold to a third party, Carlson's case may be the first of its kind — but it's unlikely to be the last. Read the full story here.

This story of massive bank bungling dovetails with another story in today's Washington Post about a cluster of New York judges on Long Island that are especially tough on mortgage lenders that fail to get their foreclosure documentation right. In one case, a Long Island Judge Jeffrey Spinner concluded that a mortgage company's paperwork in a foreclosure case was so flawed and its behavior in negotiations with the borrower so "repugnant" that he erased the family's $292,500 debt and gave the house back for free.

Writes the Post: "While the level of tolerance for document mistakes varies from judge to judge, the group as a whole has a reputation for ruling against mortgage companies when paperwork issues or other problems arise. At least one bank, J.P. Morgan Chase, requires document processors to separate foreclosures cases from these three counties from those in the rest of the country. A high-ranking executive of the company is specially assigned to sign off on the area's foreclosure filings."

Here's where the story gets educational for us in Florida. Judge Dana Winslow of Nassau County tells the Post he's thought a lot about why judges in his area are more apt to question filings.

He said it comes down to one thing: Lack of trust for Wall Street. In that region, in the shadow of Wall Street, judges have seen a lot of inaccurate filings from the financial sector. Trust "of the lending institutions and Wall Street has eroded in some areas of the country more than others," Winslow tells the newspaper. Read the full story here.

Bottom line? Judicial ignorance is bliss. Those judges who see the most foreclosure activity and witness the greatest shenanigans by banks and their law firms are least tolerant of the shoddy handling of seizing homes from people behind on their mortgages. This is not like repossessing someone's car. A house is a whole different level. It may be entirely appropriate and correct to foreclose on many homes, but the banks need to get it right.

Nor is this a one-sided debate. Both sides need to play fair. Here's a South Florida Sun Sentinel story about Peter Ticktin, a Florida lawyer we noted in Monday's Venture blog posting, who is under investigation by the Florida Bar for allowing distressed homeowners to take out second mortgages in order to pay his fees. Read more here.

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UPDATE: Here are a few more good links on the foreclosure front, starting with this Sarasota Herald-Tribune story. Also, check out the blogs of St. Petersburg defense lawyer Matt Weidner here and Tampa defense lawyer Mark Stopa here.

-- Robert Trigaux, Times Business Columnist

 

 

 

 

 

[Last modified: Tuesday, November 9, 2010 1:44pm]

    

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