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Our Miami bankruptcy law blog has previously discussed how foreclosure filings in Florida have slowed down after it was discovered last year that thousands of faulty foreclosures were being filed in the state and across the nation. Since last fall, lenders and banks have been required to review their policies and procedures regarding foreclosures in order to ensure that filings are valid and that homeowners are no longer put at risk of losing their property to a faulty foreclosure or wrongful repossession.

In March, 14 loan servicers even promised federal bank regulators to conduct internal investigations regarding robo-signing and faulty documentation practices. The banks and lenders also promised that the flawed practices had ended once they were discovered and that some homeowners who were affected would even be reimbursed.

However, in a recent investigation conducted by Reuters, it was discovered that some of these loan servicers and other lenders are still processing foreclosures without proper signatures or documentation in order to speed up filings.

Investigators reviewed recent foreclosure filings in several states including Florida. More than 1,000 mortgage assignments were questionable. Investigators discovered that the mortgage assignments were missing signatures and that many of the foreclosure filings did not provide correct information.

In one case, a Florida woman who was delinquent on her mortgage received a notice that her home had entered foreclosure. However, prior to filing the foreclosure notice, the lender had failed to properly record the mortgage indicating that the lender legally owned the mortgage. Under state law, lenders and other mortgage service providers cannot legally file a foreclosure unless they legally own the mortgage on the property.

In Florida and across the United States, consumers and property owners are protected under certain laws. Although an individual may be delinquent on his or her mortgage payment, lenders should not be allowed to foreclose or repossess a home without following the correct legal steps for doing so. “Foreclosure is a powerful act with significant consequences, and [the law] has always required that it proceed strictly in accord with the statutes that govern it,” commented one justice of the Supreme Court.

Florida homeowners who are struggling to make their mortgage payments and risk losing their homes to foreclosure may want to consider filing for bankruptcy protection. By filing bankruptcy, homeowners may choose to keep their property or liquidate their property without the risk of losing their homes in faulty foreclosures.


Reuters: “Special Report: Banks still robo-signing, filing doubtful foreclosure documents,” Scot J. Paltrow, 18 July 2011