PALM BEACH — More than a year before lenders, law firms and document companies began owning up to widespread paperwork problems with their foreclosure filings, Lisa Epstein and Michael Redman already knew that something was wrong — very wrong.
Redman, a former online automobile consultant, got his first taste of the problem in early 2008, when he tried to help a relative who was facing foreclosure.
As he tried to determine which of three or four supposed lenders held the note, Redman, 35, realized that not only did he not know the answer, neither did any of the companies that were asking for payment.
Epstein, a nurse who cares for cancer patients, also is going through foreclosure. But she got her baptism in the world of shoddy foreclosure paperwork in the summer of 2009, when she tried to help a brain tumor patient keep her home.
Epstein helped draft a letter challenging the foreclosure because, as in Redman's case, it was unclear from court papers who owned the home's mortgage.
For Epstein, who often helped her patients navigate disputes with their health insurance companies, the role of advocate wasn't new — but the thrill of a courtroom victory was.
"It was like something struck inside me, like this is what I'm compelled to do. I can be a nurse for people caught in this foreclosure crisis," Epstein said. "I remember thinking, 'I'm not an attorney, and there are definite obstacles, but maybe there's a role for me.' And I ran back to the hospital like I had wings. I felt like this is my purpose."
Within a year, she and Redman — who didn't know each other at the time — would leave their respective jobs to pursue their passion for helping others and exposing injustice in the foreclosure industry.
After meeting late last year at a foreclosure fraud seminar, they teamed up to become two of the nation's most influential civilian beat cops for the beleaguered foreclosure industry.
Equal parts agitators, activists and advocates, Redman and Epstein have made their presence felt in Florida and nationally through their respective websites, 4closureFraud.org and foreclosurehamlet.org.
Under a sun-drenched sky recently, Redman proudly perused his Web log to see recent visits from the Internal Revenue Service, the Homeland Security Department, the Justice Department, Fannie Mae, the Housing and Urban Development Department and the CIA, among others. Someone from the executive office of the president took a recent look, too, he said.
Major banks also are peeping at Redman's frequent postings and snarky analysis of embarrassing documents that appear to show foreclosure industry fraud.
Two weeks ago, he posted a deposition from a clerk at one of four Florida law firms that the state attorney general is investigating on suspicions that they're using fabricated documents to evict thousands of homeowners. She told investigators that the firm's employees regularly signed affidavits without reading them and put incorrect dates on documents. "This kind of stuff goes on all the time, and it's everywhere," Redman said.
Problem foreclosure documents are the latest chapter in the housing crisis that triggered the Great Recession.
After a record 347,420 foreclosure filings and 102,134 bank repossessions in September, the United States is on pace to top 1.2 million foreclosures this year, up from about 1 million last year, according to new data from RealtyTrac, which collects and analyzes real estate records from across the country.
In foreclosure cases nationwide, bank officials have signed sworn affidavits, supposedly verifying their knowledge of the matters in question. However, after several bank officials told investigators they'd signed thousands of affidavits without reading them, the nation's foreclosure process has ground nearly to a halt as officials investigate the practice known as "robo-signing."
Major lenders JPMorgan Chase and Ally, formerly GMAC, have stopped evictions to check for bad paperwork in Florida and 22 other states that require court orders to seize property. Bank of America has halted foreclosures while it reviews paperwork in all 50 states.
On Wednesday, Iowa Attorney General Tom Miller said he'd lead the new Mortgage Foreclosure Multistate Group's investigation of the problem and propose possible remedies. The bipartisan group includes state attorneys and state banking and mortgage regulators from all 50 states.
In Florida, where one of every 56 homes was in foreclosure proceedings in the third quarter of this year, Redman and Epstein have shone a light on efforts to ram cases through courts without much fact-checking.
Foreclosure defense attorney Chris Immel of Palm Beach County said the ongoing scandal was changing that practice nationally and in Florida.
"A lot of that has to do with the activism of people like Mike and Lisa. They get a lot of attention, and a lot of people look to them because they're very active with their blogs and their activism," Immel said.
Whether they're being courted by print media or interviewed on cable television news shows, doing conference calls with state officials or protesting on courthouse steps, Redman and Epstein are consumed by their roles. They've filed briefs with the Florida Supreme Court and sent questionable documents to state investigators, the FBI, the Justice Department and numerous banking regulators.
Earlier this year, they led two busloads of people to the state capital in Tallahassee to protest a proposed change in Florida law that would have allowed foreclosures without court orders. The measure was defeated.
When it appeared several weeks ago that President Barack Obama might sign legislation that could weaken fraud protections in foreclosure cases, Redman and Epstein posted an action alert, urging people to call the White House and voice their opposition.
"At one point, so many people were calling (the comment line) that you couldn't even get through. I absolutely think our silent army is not being silent anymore," said Karen Pooley of Seattle, a 48-year-old building material saleswoman who credits Epstein's website with teaching her how to find evidence of fabricated paperwork. She ended up finding suspicious documents that helped a friend get his foreclosure sale canceled.
"Not postponed, but canceled," said Pooley, who's also fighting her own foreclosure and organizing local volunteers to look for more bad documents. "Lisa was very helpful in teaching me how to search and get this army started."
Andrew Delaney, who's fighting the foreclosure of his home in Ashburnham, Mass., drove all the way to Florida in the spring to meet with Redman. He said Redman's advice on checking court documents for flawed paperwork has allowed him to avoid foreclosure for more than two years as banks try to prove who holds his note.