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As the market burns, foreclosure listings pulled
By Michael Hinman
Tampa Bay Business Journal
Published: Oct 8, 2010

The soap opera that has become Florida's seemingly never-ending hate-hate relationship with home foreclosures took another turn this week when foreclosure listings started dropping off the local landscape.

Peter Murphy with Tampa's Home Encounter LLC said that since Monday, more than 10 percent of all active foreclosure listings have been pulled from the market, pending foreclosure sales have been canceled and new foreclosure filings have been halted on properties throughout Tampa Bay.

That's only the beginning. The number could grow over the next few days in light of accusations being made in court that point to alleged irregularities and outright errors found in foreclosures.

The latest name so-called "foreclosure mills” where thousands of documents are signed by a small groups of people temporarily given titles of vice president but not given the time to make sure what they're signing is correct, according the lawsuits.

At least one law firm accused of being a part of the "RoboSigning Scandal,” as Murphy calls it, is fighting back and winning.

Shapiro & Fishman LLP in Tampa won a ruling Monday in a South Florida court staying an investigative subpoena issued by Florida Attorney General and one-time gubernatorial candidate Bill McCollum. The court said McCollum lacked jurisdiction over the matter, and that his subpoena was overbroad, vague, inconsistent and unduly burdensome.

McCollum is investigating Shapiro & Fishman along with two other firms - the Law Offices of Marshall C. Watson PA in Fort Lauderdale and the Law Offices of David J. Stern PA in Plantation - over claims they were providing improper documentation to foreclosure cases, giving defense attorneys a chance to tie the cases up and bog down the already overloaded courts.

In fact, the Florida Supreme Court has said it won't intervene in cases where there may be inaccuracies or outright fraud allegations because it doesn't have the jurisdiction to do so.

Those both were wins for lenders and ancillary companies who are trying to collect on non-performing home loans, but it's not enough to make at least some banks step back and take another look at their filings.

On top of that, title insurers across the country are refusing to insure mortgages on foreclosures where there is believed to be problems with the filings.

"Without title insurance, there's no protection against a claim of ownership by a former owner to the property,” Murphy said in a statement. "Lenders won't lend, and buyers can't buy. The entire sales process grinds to a halt.”

As much as foreclosures have weighed down the housing market when it comes to sales prices, they also have been a help, accounting for 28 percent of all sales activity locally in August, Murphy said. Because of that, removing a large chunk of these distressed sales could have devastating effects on the fragile industry that has been built around foreclosures.

"Almost 20 percent of buyers had their hopes set on owning a foreclosure property,” Murphy said. "Entire real estate brokerages are built upon selling these foreclosures. Neighborhoods were depending on the sale of foreclosures to stabilize their communities. Municipalities were counting on foreclosures being sold to bolster their coffers.

"The ramifications of stopping foreclosure sales are far-reaching,” he said.

Tune in next time.



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