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Foreclosure Fraud is causing the Attorney General to investigate some Florida-based law firms to determine whether clerical error or intentional fabrication is the cause of growing problem. Foreclosures have been soaring since the economic downturn, however some of these foreclosures are said to be the product of fraudulent paperwork filed by banks seeking to prematurely foreclose on a property.
According to the St. Petersburg Times, law firms working for the banks fabricated necessary documents, including backdating assignments and falsifying notary seals in order to expedite the foreclosure process on many of their clients. Sandi Copes, spokesperson for the Florida AG is quoted in the Florida Times Union, "Our primary concern is that Florida homeowners have access to due process."
In backdating assignments, law firms are essentially assigning the bank a loan note that they are not entitled to. The effect of these falsified foreclosures is far reaching, as the firms are providing the necessary paperwork to seal a final foreclosure on a piece of property -- shortening the window that a homeowner has to pay their back mortgage payments and save their house. Each firm under investigation has been asked to provide documents relating to certain foreclosure cases. Florida AG is certain that they will be able to find the fraudulent offenses among the sea of paperwork.
In the case of law firms connected with the foreclosure fraud, not only are there criminal penalties but there are also major consequences from the state bar, including fines, suspension, and even disbarment. The St. Petersburg Times reports that one lawyer under investigation has already been reprimanded by the Florida Bar for misleading and overcharging homeowners and his own clients.