A recent editorial in the St. Petersburg Times highlights the foreclosure malpractice crisis in the state of Florida. The heart of the mortgage fraud problem is whether banks and attorneys deliberately cut corners to push foreclosures through the courts as cheaply and quickly as possible. Documents contained fraudulent signatures and false notarizations, and were even, in some cases, fabricated to effect questionable mortgage assignments. This may have conduced to widespread deception and compromised the entire integrity of the foreclosure process. And because this corruption of the system was not limited to Florida, the legality and legitimacy of millions of mortgages have now been thrown into question. The consequences for the banks and the housing market could be dire and far-reaching.
The stakes in this crisis were raised even higher in early January when the Massachusetts Supreme Court in US Bancorp v. Ibanez invalidated certain foreclosures because the banks couldnâ€™t prove they had proper paperwork to foreclose. This was the first ruling by a state high court on the issue of whether banks can foreclose on homeowners if they, the banks, canâ€™t prove they hold the mortgages due to shoddy or incomplete documentation.
With dozens of similar cases in lower courts across the country, some experts opine that the Massachusetts decision may be a harbinger of things to come. According to at least one prominent news source, the implications of the Ibanez case may trigger another massive multibillion-dollar bailout for the banks and have adverse effects on principles of property law that have served our nation since its founding.
And if recent events in Southwest Florida are any indication, in the wake of precisely what was at issue in Ibanez, banks have dropped hundreds of foreclosure lawsuits rather than face defendants in trial. Whether this means banks are abandoning hopelessly flawed cases or simply stepping back to re-file with new evidence remains to be seen.
Please be advised that this article does not constitute legal advice nor does it provide any basis to form an attorney-client relationship. Nothing in this article should be copied without the express permission of the author.
Mr. Hounchell has a law degree from The University of Florida College of Law and he is a principal in The Law Offices Charles A. Hounchell, P.A., in Tampa, Florida. Mr. Hounchell earned his undergraduate degree from The George Washington University in Washington D.C. and he obtained his MBA in International Management from the American Graduate School of International Management (â€œThunderbirdâ€) in Glendale, Arizona.
Mr. Hounchell is a licensed title insurance agent and a real estate agent with Smith and Associates, Inc. http://www.smithandassociates.com/; http://www.livecasanova.com/. He has lived in many different countries, including Spain, Brazil, Argentina, Mexico and Germany and he speaks Spanish and Portuguese. A significant portion of Mr. Hounchellâ€™s law practice is concentrated on Real Estate Law. He can be reached at 813-230-3376 or firstname.lastname@example.org.