Following on the heels of a New York ruling that lawyers must sign affidavits attesting to the truthfulness and thoroughness of their foreclosure filings, a Florida judge has found one of Fannie Mae’s former law firm’s partners in contempt for “sham” foreclosure documents that wasted the court’s time. Marc Ben-Ezra, a founding partner of Ben-Ezra & Katz, received the contempt charge. Even though he was not the direct attorney handling the case that led to the charge – a foreclosure case in which the original note and original mortgage were claimed to be lost, then filed, then revealed to be not only improperly signed and notarized, but also for a different property than the one in foreclosure – the judge ordered the owner of the firm to appear in court, and so Ben-Ezra did so. At that time, the foreclosure case was dismissed and the lender was prohibited from re-filing the case. Fannie Mae dismissed the firm last week due to “execution issues,” and Ben-Ezra & Katz responded, saying that although it was in the process of correcting “technical paperwork issues…Fannie Mae did not give us the chance to execute that plan.”
Cases like this are likely just the tip of the iceberg. In New York last October, a judge ruled that all foreclosure cases must be accompanied by a sworn statement from the lawyer handling the case “certifying to the best of their knowledge, bank paperwork contained no false statements”. In the ensuing scramble in that state to procure such paperwork – and the subsequent impossibility of getting such a statement in many cases – the area has experienced a 59 percent drop in foreclosure filings, and many attorneys report that homeowners previously facing foreclosure are now in negotiations with their lenders.
In Florida and around the country, many lenders are having trouble finding anyone to represent them. Fannie Mae is having particular difficulties in Florida, where replacement lawyers are unwilling to take on new cases and, in many cases, unable to do so because Fannie Mae’s previous law firms, David J. Stern and Ben-Ezra & Katz among them, have not turned over paperwork. In fact, many foreclosure cases remain lawyer-less, and one Royal Pam Beach firm has started asking judges – with some success – to dismiss lawyer-less cases and just wait to see if they are re-filed.
How many times do you think a lender should be able to re-file a foreclosure if some type of “fraud” is at the root of the suit?
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