Florida Case May Have Widespread Effect
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A lawsuit currently in the Florida Supreme Court has the potential to undo “hundreds of thousands of foreclosures and open up U.S. banks to severe financial liabilities in the state,” Reuters News reports.

This week the court heard oral arguments over whether banks filing foreclosure lawsuits using documents that were discovered to be fraudulent can dismiss the cases and then refile the cases with different paperwork.

Analysts say that the judges’ ruling on the case — which could still take eight more months to decide — has the potential to influence judgments in 26 other states that require lawsuits in foreclosures.

"If the Florida court takes a strong stand, it sends a strong signal to the mortgage servicing industry in the rest of the country," says Tom Cox about the case, Roman Pino vs. Bank of New York Mellon. Cox is a foreclosure attorney who in the past is known for bringing about one of the first foreclosure lawsuits in the country.

This current case, he says, has the potential to cause other judges to start overturning more foreclosure lawsuits.

"A broad universe of mortgages could be rendered unenforceable," former U.S. Attorney Kendall Coffey told Reuters News. “The cost to the financial industry is difficult to estimate, but it could be substantial."

The case has its roots in the robo-signing scandal, which rattled throughout the country in 2010 when banks were found to be approving foreclosure documents in mass numbers without conducting proper reviews.

Source: “Florida Foreclosure Case Could Slam Banks,” Reuters News (May 9, 2012)