Florida Supreme Court Hears Landmark Foreclosure Suit: Hundreds Of Thousands Of Foreclosures May Be Undone
The Florida Supreme Court heard arguments on Thursday in a landmark lawsuit that could undo hundreds of thousands of foreclosures and open up banks to severe financial penalties in the state where they face the bulk of their foreclosure-fraud litigation.
Legal experts say the lawsuit is one of the most important foreclosure fraud cases in the country and could help resolve an issue that has vexed Florida’s foreclosure courts for the past five years: Can banks that file fraudulent documents in foreclosure proceedings voluntarily dismiss the cases only to refile them later with different paperwork?
The decision, which may take up to eight months, could influence judges in the other 26 states that require judicial approval for foreclosures.
The case at issue, known as Roman Pino v. Bank of New York Mellon, stems from the so-called robo-signing scandal that emerged in 2010 when it was revealed that banks and their law firms had hired low-wage workers to sign legal documents without checking their accuracy, as is required by law.
If the state Supreme Court rules against the banks, “a broad universe of mortgages could be rendered unenforceable,” said former U.S. Attorney Kendall Coffey, author of the book, “Foreclosures in Florida.”
One issue in Pino’s case was an allegedly fraudulent mortgage assignment, the legal document that binds a loan to a lender.