At the Clearwater court, lenders as of yesterday had canceled more than half of the 84 hearings to approve foreclosures that were scheduled for today, according to Ron Stuart, a court spokesman. Half of the 110 hearings originally set to take place tomorrow were canceled as well.
Among the alleged defects the banks are examining are lender affidavits signed by people, often described as "robo signers," who repeatedly failed to verify the accuracy of the information in the documents.
In December, an employee at Ally's GMAC Mortgage unit said his team of 13 people signed about 10,000 documents a month without verifying their accuracy, according to a deposition taken in a foreclosure case filed in West Palm Beach.
False Affidavits
Ally has been accused of committing fraud by submitting hundreds of false affidavits in foreclosure cases, according to a lawsuit filed last week by Ohio Attorney General Richard Cordray. Ally said in a statement that it "believes there was nothing fraudulent or deceitful about its foreclosure practices."
"Every homeowner that's in foreclosure now should be questioning," said Matthew Weidner, an attorney in St. Petersburg who defends homeowners in foreclosure cases. "Every homeowner that's already been foreclosed and lost their home should be questioning. Anybody who's behind in their mortgage should be questioning. This entire system is now a great big question mark."
Florida Attorney General Bill McCollum, meanwhile, is investigating four law firms in the state that specialize in foreclosure cases on behalf of lenders, according to Ryan Wiggins, his spokeswoman. Yesterday, McCollum said he requested meetings with firms including Bank of America, JPMorgan and Goldman Sachs Group Inc. unit Litton Loan Servicing to "discuss ways to promptly and effectively redeem the integrity of the foreclosure process."
'Unfair And Deceptive'
McCollum accused law firms of "unfair and deceptive actions" and said thousands of foreclosures that had been approved by judges may have been the result of improper actions by law firms. He said the firms appear to be "fabricating and/or presenting false and misleading documents."
Florida state Judge Janette Dunnigan in Bradenton fined a Fort Lauderdale law firm, Smith, Hiatt & Diaz PA, $49,000 and ruled it was in contempt of court after finding it was repeatedly unprepared or failed to show up for foreclosure hearings in her court.
The law firm operates "in utter disregard for the consequences to other litigants," the judge said in a Sept. 2 order. "Their disobedience of court orders is constant and flagrant."