Florida, elsewhere, find foreclosure flaws

TALLAHASSEE, Fla., Oct. 4 (UPI) -- Notices from Florida courts to lenders concerning faulty foreclosure paperwork have gone unheeded, the state's chief justice Lee Haworth said.

Symptomatic of a nationwide concern, Haworth said, "We have sent repeated notices to law firms (representing lenders) saying, 'You are not following the rules and if you don't clean up your act, we are going to impose sanctions on you. They say, 'We'll fix it, we'll fix it.' But they don't," The New York Times quoted the justice as saying Monday.

In recent weeks, Bank of America, JPMorgan Chase and GMAC Mortgage have begun reviewing their foreclosure paperwork, amid concerns the paperwork is so badly flawed courts will have no choice but to stop the proceedings or even resort to awarding the home to the homeowners.

"Suddenly they have a lot at stake and playing fast and loose is going to be more costly than it was in the past," said Kathleen Engel, a dean at Suffolk University Law School.

The paperwork problems range from a failure to validate the amount owed on a loan to having notary signatures that appear to be forgeries. Signatures of notaries on some paperwork have been found to be dated before the paperwork was complete, indicating the notary did not review the document as the signature implies.

Analysts say the root of the problem is that escalating numbers of foreclosures are straining resources at various banks, but judges say the banks still have to meet the legal requirements to proceed.

Haworth recently dismissed 61 foreclosure cases. In six states, including Florida, attorneys general have opened investigations on problems with foreclosure documentation, the Times said.