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Pants on fire, but not burned

By Holden Lewis · Bankrate.com
Tuesday, May 8, 2012
Posted: 9 am ET

Let's say you borrow money from a friend, and you lose your job and don't repay the loan. Your friend sues you.

And let's say the friend misfiled the promissory note. He searches his house for 15 minutes and can't find it. "Don't worry," his attorney tells him. "We'll just print out another promissory note and forge the borrower's signature. No one will notice."

When your former friend gives the fabricated document to the court, you do notice that it's forged. You complain to the judge. The plaintiff hastily dismisses the case, but keeps the right to refile the lawsuit later, after he finds the original paperwork.

Do you have a right to complain? Should your former friend be punished for filing fraudulent papers with the court?

It's true that you borrowed the money and didn't repay it. Does that make it OK for your legal opponent to fabricate a document and forge your signature and try to fool the judge?

The above scenario happened at least once, and probably thousands of times, in Florida during the period when robosigning was rampant in foreclosure cases. In Florida, the lenders have a right to dismiss foreclosure lawsuits and refile them later. And that's what lenders did, many times, when borrowers challenged the validity of legal documents that the lenders had filed.

As the Palm Beach Post reports, a trial court and an appeals court ruled that, once a foreclosure case is voluntarily dismissed by the lender, the borrower can't ask the judge to punish the plaintiff's attorneys for filing flawed or fraudulent documents. But the appeals court asked the state Supreme Court to review the case.

The Mortgage Bankers Association and Florida Bankers Association say that, if lenders and their attorneys can be punished for filing fabricated documents in foreclosure cases, there could be "potentially devastating" economic consequences.

What do you think? Should we allow banks to file fraudulent documents in court to keep our economy afloat?

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5 Comments
Ron Jackson
May 09, 2012 at 4:15 pm

Hold the Bank responsible as they had just been sworn in to "tell the truth and swear to the truth". These are only words to too many people today. this is a Godless country and should be brought to their knees.I am so sorry for the grandchildren and younger adults who were not a part of this. God will have his way and I hope those responsible will be prepared to face the ultimate penalty.

Too bad.. Just like out Government.....they think they are dictacting to us. All the while they are digging their own graves. People....God will bring down the wrath upon us at any time. Stop!! Think about what you are doing.

BobW
May 09, 2012 at 3:00 pm

The unpaid debt and the forged note are two separate issues. The lender should definitely be punished for the criminal act of forgery. However, that does not absolve the borrower from paying the debt, should the real note be found later.

Pamela
May 09, 2012 at 12:17 pm

If this is allowed, then it opens the door to lenders doing this across the board...right or wrong...and invites fraud on a devastating scale. This is an industry that shot itself in the foot with its own greed. It should NOT be allowed to harvest its ill-gotten gains by using fraudulent documents. If they can do this when they technically (but not morally) are in the right, what is to stop them from doing it when they're just plain WRONG? Lenders whose work and business ethics are so shoddy that they not only prey on people like vultures but can't even keep track of their own paperwork should NOT be rewarded by allowing them to file fraudulent documents with impunity. To even ask if this should be allowed is not only ridiculous but an indicator of just how much the moral fiber of those running the country (Corporate America) has decayed. This is, in the end, simply another form of *bailout* to an industry that is choking the life out of the People and caused its own woes. I think it's already been established that the *too big to fail* concept was epic fail.

So the answer is NO, they should NOT be allowed to file fraudulent documents with the same flimsy excuse that it's to keep our economy afloat. It's to keep THEIR economy afloat, PERIOD. Once this has been discovered, the mortgage should be immediately canceled, the deed given to the homeowners and the lenders prosecuted. As long as we continue mollycoddling these vultures, they will continue to prey. Hold them responsible and force them to do business in an honorable and honest way. Seriously, why does this even have to be explained???

Jason, American Hardship Group
May 08, 2012 at 3:01 pm

If the tactic is used as a manipulative and deceitful tool then the forged document should be allowed to be entered as a criminal case if nothing else as an indicator that showed the willingness to deceive, in my opinion...

I believe the missing document should have been a valuable item to the lender and therefore should have been stored with care. If the document is not found and the lender can not prove their rights of ownership why should we trust they have made a legitimate offer to the client¿?¿

Why should the borrower have to worry how the lender "lost" the document that supposedly says they are responsible to the debt¿?¿

If the lender does not have the proper document in which to collect from the supposed debtor then they should try and work out a new agreement with the "borrower" and they may find that humble and honest people would be willing to re-originate the terms.

If the "borrower" does not want to agree with the new terms offered and is not presented with the original documents they should not be punished and in fact should pursue the dissolution of "portrayed agreement"...

I don't agree that the burden of proof should be left to the borrower.

With all the funds available to the large institutions, they should have the document process down to a science and I can not feel sorry for their economic troubles...let them fail...maybe their lobbyist can create TARP 2.0 using more taxpayers money

They don't seem concerned with their clients troubles.

I say put the burden of proof on the lender and allow homeowners the benefit of the doubt and a fresh start.