Nearly 7,000 stagnating foreclosure cases lie dormant in Palm Beach County

Kimberly Miller, Palm Beach Post

Zombie foreclosures haunt Palm Beach County

Nearly 7,000 stagnating foreclosure cases lie dormant in Palm Beach County’s courts, creating a payment-free limbo for some homeowners but a stain of vacant and abandoned homes in deteriorating neighborhoods.

These sleeper files, which have remained inactive for a year or longer, date as far back as 1997, according to documents provided to The Palm Beach Post by the clerk of courts.

But most are from the early years of the housing crash when lenders feverishly sought to repossess homes, unaware that the frenetic pace would cause a second crisis based on faulty documents and unlawful corner-cutting.

While an unknown number of dormant files are mistakes, such as one party forgetting to request a dismissal after an agreement is reached, others remain open but unmoving because of homeowner bankruptcy, loan modification negotiations or bank neglect.

“I have no idea what’s going on and I’m not pushing it,” said Robert Feinson, a Jupiter resident whose case has sat idle since November 2010, more than two years after his lender initially filed for foreclosure against him. “Right now, we’re just waiting to see who is going to make the next move.”

The 6,927 zombie files make up about 17 percent of Palm Beach County’s 39,252 foreclosure cases.

The banks with the largest number of dormant cases include Bank of America (670), JPMorgan Chase (602) and Deutsche Bank (546).

After 10 months of inaction, a homeowner, or the court itself, can seek a dismissal of the foreclosure based on non-prosecution . If the bank fails to react within 60 days, the case can be thrown out and the bank forced to start over.

It’s a move Palm Beach County Chief Judge Peter Blanc said might begin in earnest this summer after a one-time bump in state funding allows him to hire additional judges to tackle foreclosures and get rid of “deadwood.”

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Thousands of foreclosures in limbo one year after Stern firm’s collapse

April 1, 2012 By Steve Dibert Leave a Comment

Kimberly Miller, Palm Beach Post

The so-called foreclosure king of Florida knew his reign was over four months before his law firm’s doors would officially shutter.

“There’s nothing left for you here. There’s nothing left for me here. We’re done. And that’s the end of the story,” one of David J. Stern’s chief employees remembers him telling her in November 2010, according to her deposition.

The conversation followed what Stern characterized in his own deposition as the “unexpected catastrophic event” of being fired by the two biggest clients of his massive home repossession empire.

On March 31, 2011, he closed the firm, leaving as many as 100,000 Florida foreclosures, or nearly a third of the state’s backlog, in limbo.

A year later, thousands of his company’s former cases are still sputtering through the courts, sometimes stalled as new attorneys get their bearings or even dismissed so fresh paperwork can be filed, foreclosure defense attorneys say.

In fact, in the year since the epic collapse of Stern’s firm, much is unresolved.

• Despite 377 complaints to the Florida Bar related to foreclosure fraud, not a single attorney has been sanctioned. Stern remains a member in good standing.
• The attorney general’s investigation into foreclosure mills withered this year when the state’s power to subpoena them was quashed.
• A required mediation program ordered by the Florida Supreme Court for lenders and homeowners died in December after a lack of participation and cooperation rendered negotiations impotent.

And the 368,000-case backlog in the state’s foreclosure courts has grown as the Stern firm’s wayward files added to the logjam, some attorneys said.

“Let’s face it : Florida was struggling with foreclosures in the first place,” said Sylvia Ayalon, a former analyst at the Consumer Mortgage Audit Center in Fort Lauderdale, who now works for Fembi Mortgage in Miami. “That combined with a defective process, the large footprint of the Stern firm, and the backlog just continues to grow.”

Still, there has been some progress in the foreclosure courts since the unprecedented rise and fall of The Law Offices of David J. Stern.

Repairs to the Stern files, where necessary, leave stronger legal claims that could protect future home buyers from having to defend title to their home, said foreclosure defense attorney Frank Albear of LaBovick Law Group in Palm Beach Gardens.

Also, Florida’s courts have started paying more attention to allegations of fraud and the defenses of homeowners, said Roy Oppenheim of Oppenheim Law in Weston.

“The entire chapter before the collapse was one of the darkest hours in the history of the Florida Bar and jurisprudence,” Oppenheim said. “But now, arguments we’ve been making are resonating, we’re getting cases dismissed, and judges are no longer taking at face value everything the banks say.”

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