We had questioned the cheery assumption of the major banks regarding their robo signing abuses, namely, that they could simply resubmit their improper court documents and proceed as if nothing had happened.
Improper affidavits are a fraud on the court, and robo signing is the mass, deliberate production of fraudulent submissions. Some jurisdictions, like New York and Florida, are requiring that attorneys certify the accuracy of documents presented in foreclosure. New Jersey is going one step further by having a Supreme Court justice demand an appearance by six major servicers to explain why their foreclosure operations should not be suspended. I suspect the sort of sanctimonious explanations we’ve seen in Congressional hearings, “We act to correct mistakes as soon as they come to our attention,” would not go over well.
From Associated Press (hat tip April Charney and Lisa Epstein):
Six lenders who have combined to file nearly 30,000 foreclosure actions in New Jersey this year face the possible suspension of their operations next month under a court order announced Monday by state Supreme Court Chief Justice Stuart Rabner.
OneWest and five other lenders were ordered to appear in state Superior Court in Trenton on Jan. 19 to demonstrate why the state shouldn’t suspend their foreclosure actions. The others are Ally Financial, formerly GMAC; BAC Home Loan Servicing, a subsidiary of Bank of America; JP Morgan Chase’s Chase Home Finance; Wells Fargo Financial New Jersey and CitiResidential Living, a subsidiary of Citibank.
“It’s important that the judiciary ensures judges are not rubber-stamping documents that may not be reliable,” Rabner said in a conference call Monday….
He said he believes New Jersey is the first state to take such action against mortgage lenders, a view echoed by Ira Rheingold, an attorney and executive director of the Washington-based National Association of Consumer Advocates, which has tracked the foreclosure crisis.
“To have a state Supreme Court haul in these lenders, it’s something I have not seen reach this level,” Rheingold said…
Rabner announced that 24 other lenders will be required to submit documentation to a special master, retired state Superior Court Judge Walter R. Barisonek, to demonstrate that there are no irregularities in their handling of foreclosure proceedings. Rabner stressed that that group of lenders has not been accused of wrongdoing and was selected because each had processed at least 200 foreclosures this year.
The six lenders scheduled to appear in court next month have processed more than 29,000 foreclosures in New Jersey this year, Rabner said. The other 24 have filed about 16,000. The total represents nearly three-quarters of the 65,000 foreclosures filed in New Jersey, a number that has tripled since 2006, Rabner said.
More problematic, he said, is that 94 percent of the foreclosures have been uncontested, often due to homeowners’ inability to afford legal counsel.
“That means there’s no meaningful adversary process to protect them,” Rabner said.
The Supreme Court on Monday also issued an order requiring attorneys in all residential foreclosures to certify that lenders have reviewed documents for accuracy and confirmed the accuracy of all court filings.
Given the level of abuses, and the continued malarkey coming from banks, in particular their insistence that there were no errors in their foreclosure processes, when media reports have found numerous examples to the contrary, this sort of measure is long overdue. I hope the New Jersey measure emboldens the supreme courts of other states to take similar measures, since the banks have made it abundantly clear that they will do no more than make pro forma changes. We’ll know real change is on the way when we see attorneys disbarred over abuse of court procedures in foreclosures.