Several mortgage holding companies have suspended all foreclosures in the last week because evidence is emerging that many of the tens of thousands of legal actions taken against homeowners may have to be done over because of shoddy legal work as well as questions about who actually owns the foreclosed home.
There's no polite way to put this. A growing cancer is infecting the backlogged legal process of foreclosing on hundreds of thousands of homes in Florida.
It's endangering the legal and economic stability of this state. And it's exposing an appalling lack of leadership, first for allowing such a breakdown in the legal system and, now, for failing to own up to this mess and get it fixed.
How bad is it? Laws governing who actually owns a foreclosed home are becoming so suspect a new buzzword is emerging: blighted titles. Even the tepid rebound of Florida's economy may face crippling delays in resolving hundreds of thousands of foreclosures in the Sunshine State.
What's wrong? The accuracy and truthfulness of an immense flood of legal documents and affidavits some lenders and their hired lawyers use to foreclose on homes have come under such critical attack that some major banks are suspending their court cases pending internal reviews.
"Sheer volume allowed perversions in the legal system to be overlooked," says Mark Stopa, a Tampa lawyer who helps people fight foreclosures.
Human error may be one big reason for this mess.
GMAC employee Jeffrey Stephan said he and a team of 13 others signed an estimated 10,000 foreclosure-related documents a month. Similarly, Erica Johnson-Seck, an employee of OneWest Bank, estimated she signs about 750 foreclosure-related documents a week and spends about 30 seconds on each document.
A bad situation seems about ready to get a lot worse.