The Florida Supreme Court heard oral arguments on May 10 in a landmark mortgage foreclosure case that could have far-reaching consequences.
The justices took up Pino v. Bank of New York Mellon, a Palm Beach County case in which drywall hanger Roman Pino accused his bank of fraudulently backdating documents used against him in foreclosure proceedings. The bank’s original lawyers were the law firm of David J. Stern, which has gone out of business for questionable foreclosure practices.
The bank dropped the case, corrected the paperwork, and re-filed the foreclosure paperwork five months later. The parties reached a settlement, but justices still wanted to rule on whether a plaintiff’s right to drop a case trumps the court’s obligation to penalize for fraud.
A decision — which could take several months to render — could affect hundreds of thousands of homeowners in Florida, and could also influence judges in the other 25 states that require lawsuits in foreclosures. As of January 30, 2012, the Florida Supreme Court estimates that 373,539 foreclosure cases are pending in Florida state courts.
This is the first time Florida’s highest court has taken up a foreclosure case since the housing collapse.
Florida’s foreclosure mess is made murkier by what analysts and lawyers involved in the process say are questionable practices by some law firms that are representing banks. Such tactics — backdating documents, re-filing documents, retroactive assignments and outright fraud — have drawn out the foreclosure process significantly in the Sunshine State, making it extremely lucrative for lawyers and more problematic (and costly) for homeowners.
This case, and the legal implications it carries, has the entire banking system shaking in their boots. If the justices rule in Pino’s favor, the case could impact thousands of homeowners facing foreclosure and make foreclosure more costly for the banks.
What the Pino case is really about is the court protecting the integrity of the judicial system and protecting the constitution. Moreover, it’s imperative for the court to rule against Bank of New York Mellon to keep its own integrity above repute.
Readers where do you stand on this case? Do you agree with Bank of New York Mellon? Or is Roman Pino right?
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