Chase demands Ben-Ezra & Katz turn over foreclosure files

The following article is brought to you by Christine Stapleton at The Palm Beach Post.

Chase Home Finance has filed a federal lawsuit against its former legal counsel, Ben-Ezra & Katz, accusing the firm of refusing to hand over foreclosure case files that contain over $400 million worth of original notes and mortgages “without which Chase will be unable to proceed with any of the pending cases.”

In the 11-page lawsuit filed Friday in federal court in Fort Lauderdale, Chase asked for a temporary restraining order and permanent injunction ordering the firm to return the files and pay Chase an unspecified amount of damages.

During its two-year contract with Chase, the law firm handled thousands of foreclosures throughout the state. According to the lawsuit, the contract requires the firm to immediately transfer case filees when the contract ends. Chase has made “repeated demands” for its files but “Ben-Ezra has not returned or released any of the Chase files.”

“Ben-Ezra refuses to release the Chase Files because it claims that it is owed over $5 million in fees and costs,” according to the lawsuit. Although Chase disputes the amount it owes the firm, it has offered to post a $2.8 million bond as security.

“Without the Chase files, especially the original executed promissory notes and mortgages, Chase cannot proceed with, transfer, or conclude any of the cases,” according to the lawsuit. “Moreover, the original, executed promissory notes and mortgages securing Chase’s interests cannot be reproduced.”

The law firm issued a statement Monday evening.

“We are working to resolve the issues raised in the suit. We do not believe at this point that the differences are insurmountable and we are seeking to reach a satisfactory conclusion.”

The Fort Lauderdale firm is one of eight firms being probed by the Florida Attorney General for its foreclosure practices. One firm has settled with the attorney general for $2 million.

The Chase lawsuit is the latest in a series of setbacks for the Fort Lauderdale law firm. On Feb. 10 federal mortgage giant Fannie Mae cut ties with the firm, claiming it had “become aware of certain document execution issues at the Ben-Ezra law firm,” said Fannie Mae spokeswoman Amy Bonitatibus.

A day later a Miami judge found the firm’s founding partner, Marc Ben-Ezra, in contempt of court for filing “sham” foreclosure documents and “wasting the court’s time.” On Valentine’s Day the firm laid off more than 236 employees. The firm then retained former state senator Dan Gelber to provide support with quality control.

A hearing has been set for Friday in Fort Lauderdale. Calls and an email to attorneys for Chase were not returned.

One of my favorite responses on this article is by an Andrew:

bs. If Chase wanted to foreclose on $400 million worth of homes, they would pay the additional $2.2 million in fees. Plus, if the sham lawyers that got into hot water really had the ORIGINAL promissory notes in the files, they would not have had to fabricate so many documents that created a fraud upon the court. Chase is basically setting up a false prophet. The lawyers never had the original notes and neither did Chase. Ever.

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