Foreclosure Mills Disregarding Post-Robo-Signing Requirements

[soryang]

Some Foreclosure Mills Disregarding Post-Robo-Signing Requirements - 12/17/2010 - Yves Smith

http://www.nakedcapitalism.com/2010/12/some-foreclosure-mills-disregarding-post-robo-signing-requirements.html

As much as a whole bunch of bank executives and securitization industry types have given Congressional testimony in which they maintained that they were duly concerned about “technical” errors like robo signing and would clean up their act, it appears that follow-through has been less than stellar.

New York State responded relatively promptly and imposed new requirments. On October 20, it issued a new rule requiring attorneys in foreclosure actions to certify that they have taken reasonable steps to verify the accuracy of documents they submit to the court. Although that might sound a tad redundant (aren’t they supposed to be doing that now?), the preamble to the new requirement discussed some of the practices that were cause for concern:

N.B.: During and after August 2010, numerous and widespread insufficiencies in foreclosure filings in various courts around the nation were reported by major mortgage lenders and other authorities. These insufficiencies include: failure of plaintiffs and their counsel to review documents and files to establish standing and other foreclosure requisites; filing of notarized affidavits which falsely attest to such review and to other critical facts in the foreclosure process; and “robosignature” of documents by parties and counsel. The wrongful filing and prosecution of foreclosure proceedings which are discovered to suffer from these defects may be cause for disciplinary and other sanctions upon participating counsel.

Today, StopForeclosure.com published that a single judge, Peter Cohalan, had denied 127 foreclosures under this new provision. Although the site did not offer any commentary, it appeared to regard this development as positive.

more at link

[phasma ex machina]

1. "There is no simple 'do-over' for false testimony"

The big mortgage servicers and financial firms continue to demonstrate their belief that they do not need to play by the same rules as everyone else who uses our court system. The suggestion by Wells Fargo and its colleagues at several other national firms that they can cure fraudulent testimony by simply refiling new affidavits and continuing to proceed toward foreclosures shows they do not recognize the seriousness of the problem they have created. There is no simple 'do-over' for false testimony that will be likely to avoid sanctions and penalties imposed by the courts. Their brazen efforts to minimize their financial exposure by sweeping these problems under the rug are an insult to the justice system in this country. These disclosures by Wells Fargo will now become the focus for a new prong of our on-going investigation." - Ohio Attorney General Richard Cordray.

It's my understanding that Attorneys General in all fifty states are now conducting their own investigation of banksters.

[soryang]

2. Professionals don't get do overs

Although a lot of summary dismissal orders on these corporate wrong doers are "without prejudice" it is extremely difficult to repair a lack of standing based upon a defective chain of assignment of mortgage or note interest on the foreclosure plaintiff's side. That is why specialization in real estate law is a reality. Once the title is screwed up, it's screwed up. What they have been trying to do is create phony affidavits and complaints with assertions of correct assignment and recording formalities and then say when caught misrepresenting the facts to the court, "Oh I didn't know Judge. Hey Judge, I didn't even look at the file, you know, I do 2000 of these filings a week, my assistant just stamps my signature on a form complaint. I didn't see it."

Some judges may put up with that. They're not about to offend the powers that be. Even so, it's nigh on impossible to fix a broken chain of interest in real estate where the formalities haven't been complied with. It used to be that a board certified real estate attorney could take care of these matters for $500-$1000 a property, but when the MBS mills decided to minimize these costs by skipping assignment, transfer and recording formalities to save time and money, they created a diaster. Trying to Taylorize the legal business is unethical and has diastrous human and financial consequences. "Hey 90 percent of the cases will default, the judge will never know, right?"

Wrong!