You can make a difference! Take action and make your comments to this report that can be found at http://www.floridasupremecourt.org/pub_info/foreclosure.shtml

Comments must be submitted on or before October 15,2009 to e-file@flcourts.org
Or you can read Roy Oppenheim and the law firm of Oppenheim Law’s comments concerning the mortgage foreclosure crisis.

Below is a copy of the official comments from Roy Oppenheim.

October 13, 2009

Chief Justice Peggy A. Quince
Florida Supreme Court
500 South Duval Street
Tallahassee, Florida 32399-1925

Re: Oppenheim Pilelsky, P.A.’s comments in response to the Final Report and Recommendations on Residential Mortgage Foreclosure Cases (the “Report”) by the Task Force on Residential Mortgage Foreclosure Cases to the Florida Supreme Court (the “Task Force”)

Dear Madam Chief Justice:

It is an honor for our law firm, Oppenheim Pilelsky, P.A., comprised in part of foreclosure defense attorneys, to provide the following comments concerning the mortgage foreclosure crisis. We appreciate the amount of time and effort that the Task Force and the Supreme Court have allocated to address these important matters. In reviewing the problems identified by the Task Force and the appropriate recommendations to such problems, our comments on the Task Force recommendations are as follows:

1. We strongly agree that having uniformity of forms and procedures statewide is important to a fair and just statewide judicial system. Thus the goal of establishing a uniformity of forms and procedures statewide is important and is endorsed by our firm.

2. Establishing a central information source and a statewide web site to provide centralized information for all parties involved with a foreclosure is a good idea. Our firm’s only concern is who will fund and manage the web site in light of economic realities. Further, it is important that the web site remain neutral and not favor banks or homeowners in connection with the information provided.

3. Foreclosure rescue scams both by attorneys as well as other parties is a growing problem in Florida and our firm does believe the Florida Bar should aggressively prosecute such attorneys for misconduct and provide an opportunity for the public to report all misconduct to the appropriate authorities; particularly the Florida Attorney General. In addition, non-attorneys involved in foreclosure rescue scams should be prosecuted for unauthorized practice of law.

4. Our firm also supports the critique that the Task Force made concerning the three major parties involved in foreclosure cases: the Plaintiff’s Bar, the Defense Bar and the Trial Judges. The Task Force had constructive comments for each group which our firm wholeheartedly supports. We do not believe that those comments need to be reiterated herein. Notwithstanding the constructive criticisms that were made by the Task Force concerning the three aforementioned groups, we believe that the Task Force was evenhanded concerning such comments and believes that the Supreme Court must address all three sets of comments concerning the plaintiff and defense attorneys and judges involved with the foreclosure process.

5. Because most banks typically allege that they have lost the promissory note when they file a foreclosure action and subsequently locate the note prior to the end of the litigation, our firm believes it is important that the banks verify their Complaints, if in fact they are going to continue to allege that the promissory note is lost, especially when it is likely that it is not lost or destroyed. The amount of time and effort utilized both by the judicial system and homeowners in responding to lost note claims is frivolous and thus verified complaints will eliminate this concern.

6. Because various counties already require mediation in foreclosure cases and the results of such mediations are quite promising, it is important that the Supreme Court implement and require a uniform mediation process for foreclosure on primary residences in all counties in Florida. In addition, our firm feels that it is also important to maintain uniform procedures throughout the state. While our firm believes that in a perfect world it would be appropriate for both the plaintiff and defendant to pay for the mediation costs, in reality the banks are in a far better position to pay for such mediation costs.

7. The idea that the loss mitigation package is assembled in advance of the mediation for purposes of both the plaintiff and the mediator is one our firm endorses. However, our firm is concerned that such information remains confidential and only be used for mediation purposes. Thus, the plaintiff should not have access to such information for post-judgment proceedings in the event that the lender subsequently decides to pursue a deficiency judgment.

8. The Task Force’s recommendation that a uniform information technology platform be established is a wise one. Too often, banks are claiming that documents that have been previously submitted are lost and have never been submitted. It is our firm’s experience that the overwhelming flow of documents that the banks need to review is being managed as the Task Force states, “on the fly”. Thus the idea of a uniform platform where documents are uploaded for both the plaintiff banks and defendants to use makes a great deal of sense. Again, however, such information must be deemed confidential and cannot be reused by the banks for any marketing purposes or for any post-foreclosure proceedings.

9. The Task Force’s idea of pre-filing foreclosure mediation is a good one. The Committee’s only concern is that the requirement of pre-filing mediation will only further lengthen the amount of time that it takes for a bank to foreclose.

10. Our firm also endorses the Task Force’s recommendation to differentiate between three distinct categories of foreclosure cases: (1) homestead properties that are referred to mediation and are likely to resolve through the managed mediation program; (2) vacant and abandoned properties that can move through the courts quickly to expedite foreclosure processes and (3) other foreclosure cases which may include tenant occupied or non borrower occupied properties in which the borrower has been unable to communicate with the plaintiff to resolve the case. Particularly concerning Category 1, our firm feels that it is imperative that the system attempt to fulfill the objective of attempting to keep a homeowner in their home to the extent that a workable arrangement is created between the homeowner and the lender. Because of the lack of communication between the parties, frequently it is impossible for homeowners to modify the loan or work out other creative arrangements, such as rent-leasebacks, with the bank other than in mediation. It is equally important, under Category 2 where properties are vacant or abandoned, that the banks are able to quickly obtain control over such properties so that the properties do not become a major eyesore to the community as well as create the potential for urban or suburban decay. Category 3 requires a different approach because there may well be other issues associated with those cases. Thus, our firm believes that it is important that the judicial system acknowledge the different needs of the parties concerning the different types of foreclosure cases that are being adjudicated within the system.

11. Our firm agrees that most borrowers are unrepresented by counsel. To the extent possible, lawyers and bar associations should target pro bono efforts at dealing with borrowers in cases where such borrowers are unrepresented or underrepresented. Thus the Bar should allocate additional resources to such pro bono efforts. Currently the Bar only provides representation in the pre-foreclosure stage and has not begun actively representing people in foreclosure. Further, the Bar must work closely with the Attorney General’s Office of the State of Florida to ensure that any settlements with large institutions such as Countrywide are consistent with settlements in other states. While the State of Florida received approximately $21 million from a settlement with Countrywide, that amount is pennies on the dollar compared to the $3.5 billion that California settled for in a similar case. Moreover, only $4 million of the $21 million settlement with Countrywide was allocated to the Florida Bar Foundation for pro-bono foreclosure defense projects.

12. The Task Force recognized that over time language has been added to final judgments of foreclosure tailored to the needs of individual firms rather than the law of the case. Our firm agrees with the Task Force that final judgment language should be limited to actual issues pled and provided to the court.

13. The Task Force would prefer that plaintiffs not be able to unilaterally cancel foreclosure sales set in final judgment without explanation thereby not squandering limited judicial resources. Our firm takes no position on that recommendation in light of the fact that such cancellations may help the individual families by providing them additional time to stay in their home.

14. Finally our firm agrees wholeheartedly with the Task Force’s recommendation that judges receive special judicial education concerning foreclosure cases. In fact, the Florida Bar should coordinate with the judiciary to ensure that such education is fair and unbiased and provides the judges with an understanding of Florida law as it relates to judicial foreclosure, as well as taking notice of judicial and legal activities that are occurring in other jurisdictions that may be important to cases of first impression in the State of Florida.

Once again, our firm commends the efforts of the Supreme Court and the Task Force in addressing a matter of such great public urgency.

Sincerely,

Roy D. Oppenheim

RDO/gs

What: Free Real Estate Buying and Selling Workshop
Who: Homeowners and Realtors
When: Thursday, September 3, 2009, 6:00 to 7:00 PM
Where: 2500 Weston Rd Ste 404, Weston, FL 33331
Cost: Free with advanced registration
RSVP: To register email roy@oplaw.net or call 954.384.6114

The workshop will be split into three strategy segments: buying Florida real estate, defending Florida foreclosures, and investors looking for opportunities. Attendees will leave with Oppenheim’s Top 10 Tips to Survive in Today’s Florida Real Estate Market.

For example: In a recent article in the Daily Business Review about the Florida Supreme Court’s foreclosure task force Oppenheim commended the task force for recommending mandatory mediation.

“One of the big problems that borrowers have had is getting in touch with an intelligent human being who has authority at the bank,” Oppenheim commented in the article. “Most of the time you’re dealing with people just pushing paper.”

The 53-page report starts off by describing the Florida foreclosure crisis and recession as a massive traffic jam during rush hour, in a thunderstorm during hurricane evacuation with a lane closed due to construction.

“Today you need a tough set of armor to fight the battles whether you are buying or selling Florida real estate,” said Oppenheim, who has represented buyers and sellers through bust and boom markets for the past 20 years. “The red tape and unchartered territory makes this a brutal market for everyone from the court systems to the lenders to the homeowners.”

The Oppenheim Law workshop provides insight for homeowners on their options during real estate troubles including: foreclosure defense, Florida mortgage modification, deed-in-lieu, short sale advice, bankruptcy, deficiency judgments, and counterclaims against the banks.

by Lisa Buyer, Oppenheim Law public relations

Specifically, they are requiring mandatory mediation for all homestead property in every county in the State of Florida. Right now, only a few counties including Miami Dade and Palm Beach County have mandatory medication. The report states that in those counties where there has been mandatory mediation, approximately 75 percent of all cases are settled in mediation. Further, the Task Force is recommending that there be pre-suit mediation in order to reduce the clogging of the court system. The Task Force is also requiring that the banks– not the borrowers— pay for the mandatory mediation.

The Report also mentioned that mortgage modifications are becoming more effective. In fact, they mention that in those loans that have recently been modified, there has been a drop in the re-default rate by 31 percent. Further, they indicated that loan modifications overall increased 55 percent from the fourth quarter of 2008 to the first quarter of 2009 and increased 173 percent over the past year.

The Task Force also took great issue with a number of tactics that have been used by the banks’ attorneys. Specifically, in relevant part, the Task Force stated: “A leading plaintiff’s lawyer and a major plaintiff’s law firm have been the subject of a public reprimand and sanctions due to untruthful filings with the courts. Judges continue to see affidavits of amounts due and owing signed by law firm employees, and cost affidavits charging very high service of process fees for process serving firms owned by the law firm principals. To some extent, it is fair to be concerned whether the press of the caseload is interfering with a judge’s ability to police the conduct of the firms before them in these usually uncontested, unopposed foreclosure cases.”

In essence, the Task Force is stating that because of the sheer volume of cases, judges have not been able to necessarily fulfill their judicial responsibilities to the fullest extent under the law. In fact, the Task Force stated, “Judges should also recognize their responsibility to ensure that in uncontested cases the necessary evidentiary basis has been laid for the entry of Summary Judgment. In particular, judges should take every step to insure that the original note is produced, that the note is held in due course by the plaintiff with a right under the note to foreclose, and that the note is canceled upon entry of the final judgment. … Further, judges should to the fullest extent possible, control the behavior of lawyers before them through sanctions and attorney fees where there has been noncompliance with the Rules of Civil Procedure and with local rules requiring communication.” Thus, the Task Force is further acknowledging that judges must do a better job to police the conduct of lawyers before them.

LOST NOTE CLAIM AND REQUIRED VERIFICATION OF COMPLAINT

Probably the biggest change in addition to the mandatory mediation will be the requirement that the banks verify their complaints. That means that the banks must under oath state that the facts in the complaint are true. Simply put, the banks can no longer say that their note is lost or stolen if in fact they subsequently are able to find it. Since they have verified the complaint they will not be able to continue such a business practice. In fact, the Task Force states that such a pleading of a lost note is effectively a “prophylactic” which is filed in most actions by the banks’ attorneys who are handling a high volume of foreclosure cases. The Task Force took umbrage with this practice and stated, “This practice leads to confusion among defendants because they may not recognize the entity suing or be aware that this entity now owns or services the loan.”

In essence, the Task Force may be suggesting that continuing to plead a lost note when a note in fact is not lost may be an unfair and deceptive trade practice. While it is unclear if the banks have been pleading the lost note because they are not sure if they own the note or rather because they have tried to create confusion may or may not be relevant. What may be relevant is the fact that they knew or should have known that making a lost note claim, when the note in fact is not lost is a systemic, unfair and deceptive trade practice.

So now it is up to the Florida Supreme Court to adopt the final report and recommendations on residential mortgage foreclosure cases by the Task Force. I am hopeful that based on the diligent work that has been done by the task force that the Florida Supreme Court now does what is right and best both for the court system in the State of Florida as well as for all those of us who have property interests in Florida.

Well the early statistics are in http://bit.ly/RsUIQ. As expected, we are finding in Florida that the likelihood of completing a loan modification is much higher if conducted with a mediator under court supervision. That’s why it’s likely why we can anticipate that the Florida Supreme Court will require mandatory mediation in every foreclosure action. In fact, in the few Florida counties where mediation is already required a whopping 50% of the foreclosures are settling usually with a new loan amount, a decreased interest rate and with a new lower payment.

It is just unfortunate that borrowers need to take the lenders to the wall before they get the bank’s attention. We are seeing and hearing too many times when the banks just won’t cooperate with a modification until the person is in foreclosure and defended by competent counsel.

I’m not sure if it’s because the borrowers can’t get someone with authority to talk with and negotiate with until they get to mediation or if it is because the banks are just too overwhelmed in the first place.

In any event let’s just hope that the Florida Supreme Court Task Force sees the trend as we do and does the right thing by implementing unified mandatory mediation rules for mortgage foreclosures throughout all of the Florida judicial circuits.