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Fighting a foreclosure suit? Hope for the right judge.

April 18, 2011, 9:21 PM UTC

By Abigail Field, contributor

FORTUNE — Since last fall, the judicial system has been confronting foreclosure fraud across the country. As the scale of the problem became publicized, it’s been increasingly hard for judges not to notice that the banks have consistently filed robo-signed documents and other problematic files in many of their foreclosure cases.

Not all judges are confronting the issues in the same way. Many are adopting procedures to stop any fraudulent behavior by the banks and are investigating questionable documents submitted in their cases. Other judges are turning a blind eye, at best.

Several state Supreme Courts have adopted procedures to stop fraud statewide, including New York, New Jersey, Florida and Maryland. For example, last October New York’s chief justice started requiring the banks’ attorneys to personally swear they had examined the banks’ claims and verified that they were true. As a result, foreclosure filings plunged in New York, and many have been dismissed for failure to file the required certification.

While the anti-fraud efforts typically are aimed at foreclosing banks, since the robo-signing scandal has tarred pretty much all the players, New Jersey took the unusual step of demanding that the six biggest mortgage servicers explain why the court shouldn’t simply shut down all their pending foreclosures and stop them from filing new ones. The banks targeted were Ally Financial, Bank of America (BAC), JPMorgan Chase (JPM), Wells Fargo (WFC), OneWest, and CitiMortgage (C).

In other states, groups of judges or even individual judges have adopted procedures to end the fraud. For example, last November, three Franklin County, Ohio judges, (John Bender, Kimberly Cocroft, and Guy Reece) adopted a New York-style procedure, and ordered attorneys representing foreclosing banks to verify the accuracy and authenticity of the their documents.

In bankruptcies, the problems surface when the bank asks the court for permission to foreclose. Some bankruptcy judges have been so frustrated with the problematic documents they have done deep investigations into the processes behind their creation.

The most recent example of this kind is a decision on April 6 by Judge Elizabeth Magner in Louisiana. Judge Magner investigated how the documents submitted by Option One were in fact created by a company called Lender Processing Services (LPS), and how LPS’s practices were so bad, the documents constituted a “fraud perpetrated on the Court.” Judge Magner sadly noted that she wasn’t shocked by the fraud because “One too many times, this Court has been witness to the shoddy practices and sloppy accountings of the mortgage service industry.”

Judge Magner was largely right to conflate the mortgage servicing industry with LPS because of LPS’s size. LPS is the biggest contractor managing defaulted mortgages for banks, and its robo-signed documents have showed up across the country as a result. Although LPS’s default services client list isn’t public, all of the 50 biggest banks use one or more of LPS’s services.

People in jurisdictions protected by these judicial efforts to stop foreclosure fraud should be grateful, because the consequences of foreclosure fraud can reach far past the individual homeowner. Most problematically, it leaves land records in jeopardy.

But not all homeowners are so fortunate. One of the most common types of fraud is when documents purport to show that the bank has the right to foreclose. If the bank is allowed to foreclose, but didn’t really have the right to do it, the property’s title becomes clouded. Clouded titles damage the real estate market in profound ways. The only way to limit the damage that already has occurred is to stop further fraud in its tracks.

Such is the case of a kangaroo court set up in Lee County, Florida. A recent ACLU lawsuit asks a Florida Appeals Court to declare the special mass foreclosure court in Lee County unconstitutional. As the suit details, the Lee County system emphasizes speed to such an extent that it prevents homeowners from having a chance to save their homes, regardless of bank fraud or any other legitimate defense.

Things are so bad, according to homeowner attorney Todd Allen’s affidavit, which partially supports the ACLU lawsuit, three Lee County judges have apparently decided that being in default on your mortgage payments is indefensible, no matter what. Those judges routinely deny homeowners’ requests to investigate the banks’ evidence after asking if the homeowner is in default, and being told yes. It’s the ultimate in judicial activism: the outcome is pre-determined by the judges’ bias.

Lee County isn’t blind to the problems its process creates. A few months ago, the clerk of the Lee County Courts admitted that clouded titles were a real problem but said it was one for the legislature to fix.

Lee County, Florida isn’t the only place where judges aren’t standing up to the banks’ fraud. I’ve talked to various attorneys who say some, even many, of the judges they practice before don’t want to hear about fraudulent documents.

That’s sad, and wrong. The judiciary is the first and perhaps most potent line of defense against the systematic fraud the banks and their foreclosure attorneys have been perpetrating nationwide. At a time when the big banks seem to have undue influence over Congress and the Executive Branch, shaping policy to their own interests, it’s crucial that the Judiciary stands up to bank power.

Or as Rachael Goodman, attorney with the ACLU Racial Justice program put it, “It’s imperative that the courts are not asleep at the wheel. The courts must ensure that the due process rights of homeowners are protected and that they have a fair shot at protecting their homes.”

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