HOA Nut House

By EVE SAMPLES, Palm Beach Post Staff Writer

Arianne Fernandez could not believe what showed up in her New York City mailbox in early June.

It was an official-looking envelope with her name on it, and inside, notice of a foreclosure hearing.

She was named in the suit. So was her mother. So was her sister. Her aunt, too.

But none of them owned the home in question. None even knew they were being sued, they say.

The family recognized the property address. It belonged to the Port St. Lucie condo once owned by Fernandez's late grandfather. But they had sold the home a year earlier, and they didn't know the new owner, who also was targeted in the suit.

"We were just stunned because we didn't understand how we were named as defendants for a property that was no longer ours," said Fernandez, a 28-year-old art history graduate student in New York.

At first, their lawyer, Virginia Sherlock of Stuart, didn't understand it either.

After several calls to the lender's law firm, Shapiro & Fishman of Boca Raton, she finally spoke to a lawyer familiar with the case. The explanation she says she got: The Fernandez family was sued because family members' names showed up in a title search on the property.

If Fernandez hadn't noticed the mishap, she and her family probably would have ended up with a judgment of foreclosure on their credit records. "Why on earth would you expand the net to include more people in this devastating procedure?" Sherlock said.

She ended up getting the Fernandez family dropped from the suit two weeks ago by proving they no longer owned the property. But Fernandez worries about other people who might be in her position without even realizing it.

Consumer lawyers have similar concerns.

"We're seeing a lot of quality-control problems," said April Charney, a consumer lawyer for Jacksonville Area Legal Aid.

She's seen a few cases in which former owners were named in foreclosure lawsuits. Even if they ultimately are dropped from the suit, their names will remain in court records as original defendants.

"I've never been named as a defendant in a lawsuit where I wasn't supposed to be - and that would scare me," Charney said. "I'm not privy to what their staffing is at these foreclosure-mill firms, but I've seen a lot of mistakes lately."

St. Lucie Circuit Judge Ben Bryan has presided over thousands of foreclosure cases, including the one involving the Fernandez family.

He thinks many lawyers with large foreclosure firms don't even look at the paperwork before the hearings - which most attend via telephone.

"These firms just handle them by the hundreds, if not the thousands," Bryan said. "They've just got it down to a routine, and that's why they do get some of these things messed up."

So far this year, St. Lucie County courts have processed more than 5,400 mortgage foreclosure filings. In all of 2006, the county saw 1,329.

Volume is key to making money for firms that specialize in foreclosures. Bryan estimated they charge $1,200 or so per case, a fraction of what he said attorneys used to get paid for such work 25 years ago.

But why would a former owner be named in a suit?

"I think their philosophy is: If in doubt, name them. Because it's better from their perspective to name them and let them get out," Bryan said.

Shapiro & Fishman, part of the Shapiro Attorneys Network, is one of the state's biggest players in foreclosure lawsuits. The firm could not be reached for comment about the Fernandez case.

When Fernandez got the notice of foreclosure hearing in the mail, her first reaction was fear. She was concerned about how a foreclosure judgment would affect the student loan she had recently applied for.

She and her family appear to have escaped unscathed (Sherlock didn't charge them for the work she did to get them dropped). But she's concerned others might not.

"It's really scary," Fernandez said. "They could just do this without anybody knowing."

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