Florida's dirty "rocket docket" courts are a gift to fraudulent lenders

Writing in next week's Rolling Stone, Matt Taibbi is incandescent on the fraud-riddled, corrupt, closed-door "Rocket Docket" courts set up in Florida to expedite the process of dirtbag lenders kicking people out of their homes without having to provide any real evidence that the banks own the note or that the homeowners are delinquent. Taibbi smuggles himself into the court and documents in ghastly, clinical detail the dirty process by which banks use (badly) forged documents and judges who don't give a damn about justice to steal peoples' houses, all the while making indignant noises about "people who don't pay their mortgages shouldn't be in those houses."

Now, months after its first pass at foreclosure was dismissed, the bank has refiled the case -- and what do you know, it suddenly found the note. And this time, somehow, the note has the proper stamps. "There's a stamp that did not appear on the note that was originally filed," Kowalski tells the judge. (This business about the stamps is hilarious. "You can get them very cheap online," says Chip Parker, an attorney who defends homeowners in Jacksonville.)

The bank's new set of papers also traces ownership of the loan from the original lender, Novastar, to JP Morgan and then to Bank of New York. The bank, in other words, is trying to push through a completely new set of documents in its attempts to foreclose on Kowalski's clients.

There's only one problem: The dates of the transfers are completely fucked. According to the documents, JP Morgan transferred the mortgage to Bank of New York on December 9th, 2008. But according to the same documents, JP Morgan didn't even receive the mortgage from Novastar until February 2nd, 2009 -- two months after it had supposedly passed the note along to Bank of New York. Such rank incompetence at doctoring legal paperwork is typical of foreclosure actions, where the fraud is laid out in ink in ways that make it impossible for anyone but an overburdened, half-asleep judge to miss. "That's my point about all of this," Kowalski tells me later. "If you're going to lie to me, at least lie well."

The dates aren't the only thing screwy about the new documents submitted by Bank of New York. Having failed in its earlier attempt to claim that it actually had the mortgage note, the bank now tries an all-of-the-above tactic. "Plaintiff owns and holds the note," it claims, "or is a person entitled to enforce the note."

Soud sighs. For Kessler, the plaintiff's lawyer, to come before him with such sloppy documents and make this preposterous argument -- that his client either is or is not the note-holder -- well, that puts His Honor in a tough spot. The entire concept is a legal absurdity, and he can't sign off on it. With an expression of something very like regret, the judge tells Kessler, "I'm going to have to go ahead and accept [Kowalski's] argument."

Matt Taibbi: Courts Helping Banks Screw Over Homeowners

(Image: no equity, a Creative Commons Attribution Share-Alike (2.0) image from thetruthabout's photostream)

• [Daemon]

  You’d think providing obviously forged documents to a court would be a crime or something…

  • [johnnyaction]

    It’s not a crime because Justice is for the rich, the laws are made by rich people for other rich people.

    America has one of the best justice system and healthcare systems for the rich.

    49% of congress is millionares, when was the last time they were on foodstamps or trying to make ends meet with a new baby and a 10k hospital bill.

    Income inequality is the worst its been since the 20′s and the middle class is on its last few gasps. Our nation is moving financially to look like Mexico.

    The average person still buys the american dream that if you work hard and smart you can make it. I personally feel thats dead.

    What offends me the most about our current situation is the inequalities in the way big money special interests get priority over the people.

    At current levels of job growth it will be 14 years before employment levels are back ilup to where they were before the crash.

    I personally lost my house due to being unemployed for 10 months.

• [hapa]

  after they __[past tense verb]__ voter suppression ten years ago and have __[past tense verb]__ rampant real estate fraud since the dawn of __[noun]__, florida throwing people out of their homes to satisfy __[adjective]__ bank claims is __[adjective]__.

• [Phlip]

  In Kapitalist Amerika, bank robs you! –Yakov Smirnoff

• [jungletek]

  Needs more hanging judges, and not in the traditional definition.

  I wouldn’t shed a tear if fuckers like these end up swinging from the end of a rope. Lord knows they deserve it for failing the people and failing up uphold the laws they swore to protect.

  Justice isn’t some quaint legal concept. We demand it, and we will get it, even if we have to do it ourselves.

  • [wrybread]

    After what we let Florida get away with in the 2000 election, I’d say we and our “outrage” have zero credibility. Maybe just maybe if it impacts us personally and has an easy target, like the TSA, we’ll do something about it. In this case we may have gotten lucky by having the story in Rolling Stone, but short of that lets be honest: we’ll do absolutely nothing about it.

    “Take justice into our own hands.” Ha.

    • [jungletek]

      Speak for yourself if you’re too apathetic to do anything, but don’t assume that you know me, or what I will or won’t do.

      If some bank lied, cheated, and ‘legally’ stole my house out from under me, I don’t think that I’d be able to restrain myself from doing something stupid but satisfying. What’s the alternative? Try and go through the rigged and broken ‘legal channels’?

      I would give my life for true justice and equality, even for apologetic boot-lickers such as yourself.

      • [wrybread]

        Keyboard warriors such as yourself are so cute.

        Ok, if you’re not apathetic, you can probably list a few works of activism you’ve performed lately. You know, in response to your government torturing people in your name, killing hundreds of thousands of people in a sham war, that sort of thing.

      • [wrybread]

        Also, note that I wasn’t talking about you specifically, but rather Americans. And I mean it constructively, as in “come on people let’s get outraged and do stuff about it”. I think this whole tsa kerfuffle is great and could be a good example of new-style, modern, blog-led activism, which beats the hell out of no activism.

• [lesbianjesus]

  jungletek #3

  And yet you guys (At least the Americans we see on tv) are at each others throats, Democrat vs Republican, Christian vs Atheist, Rural vs Urban.

  That’s gotta make these guys laugh pretty hard even if they didn’t cause it themselves.

• [resontate]

  These posts actually make me feel sorry for big banks. My god, these homeowners haven’t paid their mortgage for over 2 years and are using bs claims like missing doc stamps as an excuse to not pay. There is a whole industry of lawyers offering to push your foreclosure out for 1 to 2 years for $300 a month in Florida.

• [lesbianjesus]

  resontate

  “it is better that ten innocent men suffer than one guilty man escape;

• [gwailo_joe]

  A fool and his money are soon parted. Never give a sucker an even break. He who has the gold, makes the rules.

  Our economy is a crooked casino that counterfeits its’ own money. . .

  The super-rich get richer on the backs of the workers: credulous pawns muddling through a financial and legal system so Byzantine that this type of nefarious theft is allowed, If not tacitly approved.

  Our capitalist system is (was?) the envy of the world. . .but there are cracks.

  I hope to not be around and behold the Reckoning. A hard rain will fall that day. . .

• [eeyore]

  reasontate#6
  Let’s look at the larger picture, shall we. Those same banks you feel sorry for were routinely issuing loans that resulted in first payment defaults. In case you don’t know what that means, they issued mortgages where the people were incapable of even making the *first* payment.

  Those same financial institutions were actively and aggressively selling refinance loans to people who WERE responsible home owners with balloon interest rates and terms that were calculated to make them insolvent.

  Those same financial institutions have used these broken courts to foreclose on thousands of homes where they had *never* been in arrears.

  This is the problem with naked, darwinian capitalism. The banks have no moral authority, and people ( reasonably ) expect them to behave unethically. The banks’ willingness to abandon responsible, ethical business in exchange for legalistic amorality means that the people they serve can play these games without guilt.

  When you have to deal with the devil, you don’t have to play fair.

• [Simper]

  The court system is just as screwed up for renters. A good friend of mine paid to get out of her lease early as her lease stipulated. She was given a receipt to show she had paid all of her rent and the fee to break the lease. 7 years later she was served with papers for a 15,000 lawsuit for back rent and legal fees. Fast forward almost 2 years later and the suite is dropped but not before she had to pay out 5,000 in her own legal fees.

  In that time we learned that the leasing company had actually changed hands and she was being taken to court by the new owners. Their false claims were laughable. They claimed that she had not only failed to pay the last 6 months of her rent (after she paid to get out of the lease and had already moved out of state ) but that she had lived there an additional 6 months past her lease end date and had refused to leave the apartment. They claimed that they had served her a legal summons notifying her of the lawsuit in person in a city that she did not live in years before she had been actually served. Stating they flew to the city in person, tracked her down at an address she did not live at and a phone number that was not hers and handed her the paperwork themselves.

  They also temporarily claimed that their employee that signed all of her paperwork had never work for them. The judge assigned to her case would not read the motions that her lawyer filed. The judge regularly answered motions with completely irrelevant information completely not related to the motions her lawyer filed. We also found out the leasing company had already filed 2,000 other lawsuits in the first few months of that year using the same lawyer with the same claims of owed back rent.

  She eventually “won” because the lawyer dropped the case because it was either that or admit that his law office and the leasing agency had committed fraud and perjury.

  In other words, no one is safe from the legal shenanigans and that was not even in Florida.

• [Akshay]

  A big round of applause to Taibbi! Unlike resontate, read the article!

• [Wormman]

  But regulating banks is tantamount to . . . communism !

• [millie fink]

  Wow, what an awesome piece of journalism. Passionate, detailed, muckracking, incendiary, and righteous. Scary too–like looking over the edge into the apocalypse.

  When is the rest of the corporate media going to expose all this shite!?

  And um, yeah, when is the revolution going to arrive?

  • [dw_funk]

    My question exactly. But there’s no revolution coming.

    This is a complicated issue. Taibbi does a really excellent job of explaining the mortgage crisis (one of the better efforts I’ve seen, actually), but can you imagine this explained in a <15 minute segment on a cable news channel? How about the legal aspects of international law as it relates to the Bush administration’s torture policies? Or any of the other innumerable ways in which the world is miserably fucked up, with America hemorrhaging as its leaders bitch about earmarks?

    No. The closest thing we get to a revolution is a big, ineffective backlash against the TSA because people don’t like strangers touching their junk. Not that enhanced pat-downs and all the rest of it isn’t bad, but getting my dick rubbed at the airport is a pretty small inconvenience compared to the disgusting injustices constantly being perpetuated by my government.

    Ugh.

• [Anonymous]

  If you don’t actually own your home, you are hardly a homeowner.

  • [Anonymous]

    Silly rabbit, our entire system is based on convincing ordinary voters and workers that they’re all part of the owning class. Of course it’s all as ambiguous and contradictory as possible.

• [sdmikev]

  Thanks for making a full post of this.
  I think it’s extremely important journalism and the full story of what went on behind the scenes within the financial markets should be known by everyone.
  This was full on theft. A transfer of wealth, plain and simple and right out in the open.

  For those that may have heard about “[the] great vampire squid wrapped around the face of humanity” but have not read the article, I implore you to read it:

  http://www.rollingstone.com/politics/news/12697/64796

  Then read the following:

  http://www.rollingstone.com/politics/matt-taibbi/blogs/TaibbiData_May2010/217520/83512

  http://www.rollingstone.com/politics/matt-taibbi/blogs/TaibbiData_May2010/233953/83512

• [Anonymous]

  “The law, in its majestic equality,
  forbids rich and poor alike
  to sleep under bridges,
  to beg in the streets, and to
  steal their bread.”
  -Anatole France

• [Anonymous]

  lesbianjesus– But these are CIVIL courts, not criminal ones. So the standard is “preponderence of evidence.”, not “beyond a reasonable doubt.”

  There are three question that the courts are trying to determine.
  1.) Did the borrower borrow money from the lender?
  2.) Was the house promised as security if the agreed upon payments were not made?
  3.) Has the borrower been making the payments agreed to?

  Usually the difficulty is in proving that the entity suing for foreclosure is indeed the lender in (1) and that they have propper paperwork proving (2). Sadly, (3) is rarely in dispute. These loans are not going to be repaid. If there is a victim here, it is those who bought the AAA rated bonds made from these mortgages based on the assurances of the bond rating agencies.