Law Suits & Courts

Robo Signer Update

Posted on Thursday, November 4, 2010

The expanding investigation into Florida's foreclosure crisis has turned up a new problem that may involve a number of cases: Individuals hired by law firms to notify struggling homeowners when their foreclosure cases are to be heard in court may have filed faulty or false documents.

Foreclosure defense attorneys and consumer advocates say they have documented a number of foreclosure cases where "process servers" filed questionable paperwork. State investigators who are examining foreclosure documentation problems -- involving law firms that employed "robosigners" to rapidly process claims -- are also taking a close look at process servers, court documents show.

According to lawsuits filed on behalf of homeowners, some individuals appear to have violated the rules of process serving: the personal delivery of legal papers, required by law, notifying people that a foreclosure action has been filed against them. Like "robo-signing" -- the mass signing of foreclosure documents without review by loan servicers -- it's an alleged practice that is putting lenders, and the foreclosure law firms serving them, under fire.

Recent Florida foreclosure defense cases claim property owners never received a court summons even though they still were living in their home, or that servers never took required steps to find them. Some claim the servers lied, filing false court affidavits about to whom or when they delivered the papers.

Bad service, once rare, has become more common in foreclosures as lenders and their attorneys tried to speed tens of thousands of cases through the "rocket docket" court processes, designed to clear a huge backlog , said consumer advocates and attorneys defending homeowners.

"With the foreclosure zoo, it's become a lot more complicated," said Margery Golant, a foreclosure defense attorney with offices in Pompano Beach and Boca Raton. "They're all in a huge rush. They usually get paid by the piece so the more they can say they've served, the more they make."

A report released this week by the state office overseeing the courts found there were 462,339 foreclosure cases pending as of June 30, with one-fifth of them in Broward and Palm Beach counties. But over the next three months, the Broward courts disposed of 9,585 cases and Palm Beach county, 9,846 cases.

The thousands of homeowners involved in foreclosures are required to receive a court summons, delivered in person by a process server. If no one is at the address, servers are required to repeatedly try to make face-to-face contact before getting the court's permission to publish a legal notice instead.

But some have cut corners, Golant said. One server recently claimed she couldn't find Golant's client, facing foreclosure on a second home in Orlando, despite doing extensive record checks even though the mortgage paperwork clearly gave his primary home address in Connecticut.

The Attorney General's Office has been asking questions about process serving as it investigates alleged sloppy or fradulent practices by the four law firms handling the vast majority of foreclosures for lenders and loan servicers: the law offices of David J. Stern in Plantation, Marshall C. Watson in Fort Lauderdale, Shapiro & Fishman in Boca Raton, and the Florida Default Law Group in Tampa.

The firms farm out most of their summons delivery work to large process serving companies, that in turn contract with private independent servers.

Tammie Lou Kapusta, a former paralegal in Stern's office, said in her deposition that summons serving procedures there were a "complete mess," with homeowners routinely complaining they never received their summons. She and another former employee, Kelly Scott, said their managers told them move forward with the foreclosures anyway.

Jeffrey Tew, the Miami attorney representing Stern, said former employees didn't give any specifics so he couldn't respond to the allegations. "Obviously, the firm doesn't authorize anything inappropriate," he said.

State investigators also quizzed staff at Stern's firm regarding billing practices that involved serving multiple parties at an address and billing for each one. Tew said the practice has been common at most law firms for years, as its often not known who is living in a home when the summons request is prepared.

Good process service is critical, Golant said. She has heard of property owners missing their court hearings,and losing their homes, because they never got their summons.

Patrick Jeffs, a Jacksonville homeowner whose foreclosure was initiated by the Watson firm, claimed his mother never was handed a court summons in the case, even though the server indicated she delivered one on the required court affidavit. What led the court to cancel Jeffs' foreclosure was the fact that the server also reported she delivered the papers hours before the case even was filed – and signed them in the presence of a notary from Tampa, more than 100 miles away.

A Duval County judge ruled the summons was counterfeit and voided the foreclosure.

Foreclosure defense attorney David Goldman represents a Jacksonville homeowner who challenged her foreclosure when a server sent by ProVest, which does work for South Florida's major foreclosure law firms, said she gave the summons to a 140-pound white woman at her address. His client weighs more than 200 pounds, is African American and lives alone, Goldman said.

While a court summons must be accepted by an adult, state law does not require it to be given the property owner. And no one has to sign the document, verifying it's been received, "which makes it easier to lie and say the person was served," Golant said.

Laws governing court summons vary from state – and, in Florida, are different from one judicial district to another. There is no statewide licensing or regulating body for process servers, and Broward and Palm Beach County courts do not keep statistics on foreclosure summons.

Tampa-based ProVest, one of the largest and in 10 states, has support staff stationed at the law offices of David J. Stern in Plantation and Shapiro & Fishman in Boca Raton for convenience. But the law firms have no ownership in the company, ProVest officials said. Marshall C. Watson also uses ProVest.

ProVest declined to comment on specific cases. In a written statement, ProVest president James M. Ward said the company "utilizes properly licensed or authorized independent contractors" and requires them to "fully comply with state and local guidelines."

Diane Lade South Florida Sun-Sentinel

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