Voluntary Dismissals and Foreclosure Paperwork Irregularities Examined
Written by Emil Fleysher | July 3, 2012 | Bankruptcy
The Florida Supreme Court has been asked to prevent lenders from escaping sanctions for using fraudulent documents by filing voluntary dismissals. The issue is whether courts have the authority to reject the voluntary dropping of the case and instead impose sanctions, including dismissing the foreclosures with prejudice. Attorneys asking for dismissal with prejudice argue that the current system allows every party who comes before the courts to lie, cheat, or steal knowing if they are caught they can simply voluntarily dismiss and clear themselves of that fraud.
The banks argue that when a party has not been harmed then that party cannot seek to undo a voluntary dismissal. They agree that sanctions are justified if a submission to the court is improper. To deter improper conduct, courts have many punishments. Lawyers and parties already face a variety of sanctions if they use fraudulent documents.
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This ruling could have a major effect on the state’s backlog of foreclosure cases as well as future lending practices. A change of this scale would impact general credit and lending practices as well as the backlog of foreclosure cases in the court system. The threat of sanctions would force lenders to continue litigating unstable cases, rather than cure defects in a new proceeding.