Devastating Portrait of Florida’s Rocket Docket Foreclosure Courts

This is a pretty amazing (incredible, unbelieveable???) story about the courts rubber stamping the banks foreclosure paperwork and more.  I could go on but it’s better to just read the story itself.  This is a synopsis/critique from CNBC on Matt Taibbi’s Rolling Stone Magazine story.  Follow the link and read the whole story.  Very interesting.  There is plenty of blame to go around for this insane housing and resulting economic crisis but you’ve just got to wonder about … well, just read the story and come to your own conclusions.  Then post your comments/thoughts.  Happy Monday!  Let’s all have a great week as we ponder what we are thankful for.

-Larry

Published: Saturday, 13 Nov 2010
Senior Editor, CNBC.com

The latest issue of Rolling Stone is out with a devastating portrait by Matt Taibbi of the foreclosure process in Florida. If it pierces the public consciousness the way Taibbi’s articles on AIG and Goldman Sachs [GS  165.83  -1.88  (-1.12%)   ] did, it could be a game-changer.

Justin Sullivan | Getty Images

The set-up is pretty simple. Taibbi goes down to Florida and sits in on one of the make-shift foreclosure courts Florida has set up to deal with the enormous volume of foreclosure cases in the state. It’s really just a small conference room run by a formerly retired judge who has been brought on to speed through foreclosures.

Taibbi discovers far worse than sloppy paperwork on the part of banks—although he discovers plenty of that too. He discovers that the foreclosure process is heavily skewed to favor the banks. If a homeowner doesn’t show up to defend himself or herself, the judge issues the foreclosure order. If the bank fails to send a representative, he just pushes back the date. When a bank submits a trail of ownership of the mortgage note that makes no sense, it just comes back later with a different set of ownership documents.

From Rolling Stone:

This is the dirty secret of the rocket docket: The whole system is set up to enable lenders to commit fraud over and over again, until they figure out a way to reduce the stink enough so some judge like Soud can sign off on the scam. “If the court finds for the defendant, the plaintiffs just refile,” says Parker, the local attorney. “The only way for the caseload to get reduced is to give it to the plaintiff. The entire process is designed with that result in mind.”

Is this a fair portrait of the foreclosure process? We have no idea. But it may well wind up changing the politics of foreclosure in a way that could make it far costlier for a bank to foreclose on a homeowner. Depending on your point of view, that could either convince banks to be more open to loan modifications or keep the housing market in turmoil for even longer. But poison or pure, this apple looks ripe for the picking.

By the way, Taibbi’s success at piercing through the public consciousness tends to bother financial reporters. (I’ve had occasion to duke it out with him in the past on the issue of naked short selling.) But he is a good story-teller and a thorough reporter who obviously takes time and effort to learn about his subjects. Importantly, he doesn’t let his stories get bogged down in technical jargon—one of the errors that makes so much financial journalism boring.

The complete Rolling Stone story is here

Matt Taibbi: Courts Helping Banks Screw Over Homeowners

Retired judges are rushing through complex cases to speed foreclosures in Florida

http://www.rollingstone.com/politics/news/17390/232611?RS_show_page=1

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