Foreclosure mess: A litigator's dream?

Sales at some of the Gulf Coast's busiest courthouses have slowed considerably while attorneys general from all 50 states crawl through the offices of major banks and foreclosure law firms.

Questions about whether documents have been properly reviewed in thousands of foreclosure cases recently prompted large banks to temporarily halt sales of these properties. The problem is particularly acute in Lee and Pinellas counties, two areas that have seen huge volumes of foreclosures in the recession.

“This has all the trappings of litigators,” says Lee County Clerk of Court Charlie Green, whose “rocket docket” model has expeditiously cleared thousands of cases.

In Lee County, for example, one-third of the 400 to 500 weekly auctions have been cancelled so far. Green isn't sure what the outcome is going to be, but he suspects litigators are behind the furor. “It's overblown only if you can make a buck over it,” quips Green.

The auction halt also affected foreclosure filings because banks slowed those too. In Pinellas County, for example, courthouse clerks processed only 86 filings in a recent week, one-third the normal caseload. “The banks are holding off to see what happens with the paperwork issues,” says Colleen Ford, director of court and operational services of the Pinellas County Clerk of Circuit Court.