More on the developments in the foreclosure fraud settlement in a minute. But first, I have to highlight this unbelievable bit of chutzpah for Florida Attorney General Pam Bondi, one of the settlement’s biggest cheerleaders.

Florida is the worst state in America in terms of the foreclosure crisis, or at least in the top 3. Yet Bondi has fired foreclosure fraud investigators and criticized other states for not accepting a settlement. And now, we have one of the most transparent gambits yet. Bondi undertook an investigation into and sought subpoenas on David J. Stern, a notorious foreclosure mill. But she did it under the Florida Deceptive and Unfair Trade Practices Act. There were other avenues available to her. But this is what Bondi went with. And a state Court of Appeals ruled that Bondi had no authority to investigate David J. Stern under that statute. Bondi attempted to appeal this to the Supreme Court, but the appeals court denied the request for review. And now, after all that, Bondi says her hands are tied and she can probably not investigate foreclosure fraud anymore.

An appeals court has denied Attorney General Pam Bondi’s request to allow the state Supreme Court to review a ruling she says limits her ability to fight foreclosure fraud. Because of this decision, seven pending cases are now threatened, Bondi said Thursday […]

“This decision poses a unique challenge, and the Attorney General’s Office will now assess each of its seven pending investigations into law firms for potential misconduct in foreclosure cases to determine whether there are other avenues through which the Attorney General’s Office can pursue foreclosure-related misconduct,” Bondi’s spokeswoman Jenn Meale said in a news release.

Well isn’t that convenient? Somehow, other states have figured out how to investigate both foreclosure mill law firms and the document processors that fed them phony documents. Nevada sued LPS, for example. Just yesterday Illinois sued Nationwide Title Clearing. But Bondi is just ever so frustrated and can’t see her way clear to any investigations. The two investigators fired by Bondi spell it out here:

But some foreclosure defense attorneys believe the move was a hollow gesture to appease critics.

Instead of looking to the Supreme Court, Bondi’s office could have issued subpoenas under a different statute, possibly criminal investigative subpoenas, (lawyer Thomas) Ice said.

“But the attorney general’s office hasn’t availed itself of that opportunity, which leads me to believe the certification request was a mere pretense for political purposes,” he said.

(Theresa) Edwards and (June) Clarkson, who were forced to resign in May despite exemplary evaluations, said the attorney general’s office is trying to make it appear it has no power. But Edwards acknowledged that taking on law firms is tricky and the legal avenues to pursue a case were in constant debate.

Still, with consumer complaints coming in daily, Edwards said they were frustrated by the lack of a clear course and tried to find a way to “shoehorn” the concerns into the 501 statute.

“Otherwise, here we are, the attorney general’s office, and we were unable to do anything,” Edwards said.

To be clear, Edwards and Clarkson were using the Unfair Trade Practices statute as well. What many in the foreclosure fraud community object to is the attempt to appeal to the Supreme Court rather than using other avenues.

So now Bondi can move on to a settlement that will do little for her constituents, because she just “can’t” prosecute the ongoing fraud.

David Dayen

David Dayen

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