Via Naked Capitalism.
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.
I see it as the reverse. Despite some jurisdictions taking a tougher stand and banks piously saying that they had cleaned up their “procedural” problems, it appears relatively little has changed on the ground. Rather than file the required certifications, the lawyers on these cases apparently figured they’d proceed as usual, which puts the onus on the judge to enforce. Or perhaps they are simply playing the odds, and assuming this issue will come up only on contested foreclosures, and those are few enough in number that the cost of delays in those cases is more than offset by the savings on the ones that are rubber stamped by the court. …
Read the rest of the Naked Capitalism blog here.