From Bloomberg:
New York state courts will require lawyers in residential foreclosure actions to certify they have taken “reasonable” steps to verify the accuracy of documents submitted to the court.
The new rule, released in a statement by the New York state Unified Court System, is effective immediately.
Chief Judge Jonathan Lippman introduced the requirement in response to disclosures of deficiencies in residential foreclosure filings nationwide, including notarization and “robo-signing” and affidavits that falsely state the signer has knowledge of the facts, the statement said.
“We cannot allow the courts in New York State to stand by idly and be party to what we now know is a deeply flawed process, especially when that process involves basic human needs — such as a family home — during this period of economic crisis,” Lippman said in the statement.
Update 10:50 PM: Hoisted from comments (thanks to helpful readers!), the first from La Caterina:
Here the form of affirmation the new rule REQUIRES to be filed in all new and pending foreclosures. I particularly like the little preamble:
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.
* * *[____________], Esq., pursuant to CPLR §2106 and under the penalties of perjury, affirms as follows:
1. I am an attorney at law duly licensed to practice in the state of New York and am affiliated with the Law Firm of __________________, the attorneys of record for Plaintiff in the above-captioned mortgage foreclosure action. As such, I am fully aware of the underlying action, as well as the proceedings had herein.
2. On [date], I communicated with [name and title], a representative of Plaintiff, who informed me that he/she (a) has personally reviewed plaintiff’s documents and records relating to this case; (b) has reviewed the Summons and Complaint, and all other papers filed in this matter in support of foreclosure; and (c) has confirmed both the factual accuracy of these court filings and the accuracy of the notarizations contained therein.
3. Based upon my communication with [person specified in ¶2], as well as upon my own inspection of the papers filed with the Court and other diligent inquiry, I certify that, to the best of my knowledge, information, and belief, the Summons and Complaint and all other documents filed in support of this action for foreclosure are complete and accurate in all relevant respects. I understand my continuing obligation to amend this Affirmation in light of newly discovered facts following its filing.
4. I understand that the Court will rely on this Affirmation in considering the
application.
This from MolemanUV:
Judge Lippman’s recent rule has several lauditory benefits. First, the onus falls on counsel to affirmatively confirm compliance. Ordinarily, the duty to ensure the accuracy of the contents of any civil pleading or motion paper filed in a federal court, for example, is not self-actuating. In other words, when opposing counsel suspects that his or her counterpart has knowingly filed a pleading that is not well grounded in fact, or in law, or both, then the aggrieved counsel may choose to proceed by way of Rule 11 to seek sanctions,after giving the alleged offender the opportunity to cure. A Rule 11 motion is very much a last resort rather than a first one. The attorney who files such a motion may well find himself or herself facing a retalitory Rule 11 motion in response.
Also, from my own 20 years of experience in various courts, I can say with some confidence that judges internally groan when presented with such motions as they are considered to be satellite litigation that is disruptive of the orderly flow of the underlying claims. A Rule 11 motion is considered the equivalent of a declaration of war and the possibility of future cooperation or even civility between counsel vanishes with the filing of such a motion. Judge Lippman’s approach avoids all of these problems while placing plaintiff’s counsel on notice of the court’s decidely dim view of a party materially misrepresenting any significant aspects of its claims.
Finally, the N.Y. Judge’s approach also raises the prospect of a perjury prosecution for those who knowingly violate the rule, which otherwise would be a extraordinarily remote prospect absent the new rule. On the whole, the approach is logical, cost efficient, self-executing and extraordinarily timely. Let’s hope other state courts act in such a timely fashion.
29 comments
Comments are closed.
I’m curious as to what they consider “reasonable” in this context.
Me too.
I think it means “more than is normally done now.” I read it as a prod to judges to be more skeptical, particularly if the borrower makes legitimate-sounding objections.
Right you are, Yves! Here the form of affirmation the new rule REQUIRES to be filed in all new and pending foreclosures. I particularly like the little preamble:
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.
* * *
[____________], Esq., pursuant to CPLR §2106 and under the penalties of perjury, affirms as follows:
1. I am an attorney at law duly licensed to practice in the state of New York and am affiliated with the Law Firm of __________________, the attorneys of record for
Plaintiff in the above-captioned mortgage foreclosure action. As such, I am fully aware of the underlying action, as well as the proceedings had herein.
2. On [date], I communicated with [name and title], a representative of Plaintiff, who informed me that he/she (a) has personally reviewed plaintiff’s documents and records relating to this case; (b) has reviewed the Summons and Complaint, and all other papers filed in this matter in support of foreclosure; and (c) has confirmed both the factual accuracy of these court filings and the accuracy of the notarizations contained therein.
3. Based upon my communication with [person specified in ¶2], as well as upon my own inspection of the papers filed with the Court and other diligent inquiry, I certify that, to the best of my knowledge, information, and belief, the Summons and Complaint and all other documents filed in support of this action for foreclosure are complete and accurate in all relevant respects. I understand my
continuing obligation to amend this Affirmation in light of newly discovered facts following its filing.
4. I understand that the Court will rely on this Affirmation in considering the
application.
This morning on Bloomberg I heard someone (I apologize, I was only listening as I brushed teeth so I do not know who it was) saying that the procedure for conveying interest in property is sooooooo arduous, inefficient, and outdated — we reeeeeally need to bring it into the 21st century by making it electronic etc. etc. Is this going to be the bank’s new strategy?
Also I see that the self-imposed moritoria are kaput. They can’t but be proceeding despite the issues — it can’t be fixed so fast. More PR? “See, it was nothing, we’re back to work already.” Were they assured that no action would be taken before the election, or perhaps assured that Congress will steamrol the states?
Like MERS? Ha!
Here’s a great one:
http://www.nytimes.com/2010/10/21/nyregion/21condos.html?partner=rss&emc=rss
Contrast the attention to technicalities of contracts here with what’s happening around the slipshod filings in foreclosures.
Lawyers are already under a duty to take reasonable steps to verify the accuracy of the documents they submit in court.
Yes but the foreclosure mills en masse didn’t do that. Their submission of improper affidavits ought to be sactionable.
Since a lot of lawyers seem not to be doing their job, the judges need to be alert. Hence this action.
Judge Lippman’s recent rule has several lauditory benefits. First, the onus falls on counsel to affirmatively confirm compliance. Ordinarily, the duty to ensure the accuracy of the contents of any civil pleading or motion paper filed in a federal court, for example, is not self-actuating. In other words, when opposing counsel suspects that his or her counterpart has knowingly filed a pleading that is not well grounded in fact, or in law, or both, then the aggrieved counsel may choose to proceed by way of Rule 11 to seek sanctions,after giving the alleged offender the opportunity to cure. A Rule 11 motion is very much a last resort rather than a first one. The attorney who files such a motion may well find himself or herself facing a retalitory Rule 11 motion in response. Also, from my own 20 years of experience in various courts, I can say with some confidence that judges internally groan when presented with such motions as they are considered to be satellite litigation that is disruptive of the orderly flow of the underlying claims. A Rule 11 motion is considered the equivalent of a declaration of war and the possibility of future cooperation or even civility between counsel vanishes with the filing of such a motion. Judge Lippman’s approach avoids all of these problems while placing plaintiff’s counsel on notice of the court’s decidely dim view of a party materially misrepresenting any significant aspects of its claims. Finally, the N.Y. Judge’s approach also raises the prospect of a perjury prosecution for those who knowingly violate the rule, which otherwise would be a extraordinarily remote prospect absent the new rule. On the whole, the approach is logical, cost efficient, self-executing and extraordinarily timely. Let’s hope other state courts act in such a timely fashion.
This makes me proud to live in NY. From what I’ve read on 4closurefraud.org, the NY courts have been among the best in refusing to tolerate gross frauds…. even before this. :-)
We may have a crappy legislature and a crappy governor, but we have good appeals courts.
I recently won a wrongful eviction case in the court of appeals. When I produced evidence at trial that the servicer’s attorney submitted a false affidavit–that the servicer owned the home–and that he had made the same false allegations in over 100 other eviction actions, the ensuing dialogue took place at the trial:
THE COURT: Well, Mr. Sherman, looking at your
complaint, you do state that plaintiff is the owner in fee
simple of the real property.
MR. SHERMAN: I made that allegation feeling very
comfortable about fulfilling my Rule 11 duties, Your Honor.
Upon my information and belief at the time, that’s what,
that’s what I thought.
The trial court not only ruled in the servicer’s favor, but awarded it several thousand dollars in attorney fees.
A year later, despite vacating the trial court’s judgment, the appeals court sadly chose not to address the Rule 11 issues. Apparently, as long as the lawyer can claim with a straight face to feel “very comfortable” about his due diligence, courts do not feel the need to go any further.
Oh ugh. Which state were you in, perchance?
far as I know, yo, knowing submission by an attorney to the court of a document which contains a misstatement of law or fact is sanctionable.
How does one verify these documents, Chief Judge Lippman? The only way to truly verify is to look at the original documents. Where are the originals? Chief Judge, do you expect the lawyers to verify their information against the original documents?
The most recent foreclosure-mill deposition released in Florida said that when any missing documents were needed, the assistant would disappear into the office and then re-appear with the documents an hour later. Looking beyond the clear illegality of that particular maneuver, where was the person getting the information to create the documents?
Of course, the banks’ computer systems. All home ownership records are now what the banks say they are. Chief Judge Lippman fully understands that, he’s just trying to break the idea gently to his constituents.
The note in the collateral file, which the trustee must have on behalf of the trust, has to have original wet ink signatures.
Given that every printer in the US for the last 10 years has ID codes embedded in every page printed, one could ALSO prove fabrication.
The attorneys for the borrower increasingly demand access to the collateral file.
re “every printer…has ID codes embedded in every page printed”:
A citation for that? Certain color printers were found to generate such codes, but not all of them, and no black-and-white printer that I’ve ever seen. (The color printers used the yellow pigment, with a naive dot pattern, that would have been noticeable in black and white. A more complex scheme, perhaps based on slight warping of the image, would be possible on monochrome printers, but I’ve never seen any report that it’s been done.)
Has any judge in any state forgiven a mortgage, just because the note was missing?
Not sure what you mean, “note was missing”. Someone has to have the note (the idea that notes were destroyed as routine practice is not correct. A note has clear monetary value, it would be like burning cash). Once in a while, notes are lost (that isn’t supposed to happen but the foreclosing party can use a “lost note affidavit” in that case).
What I think you mean “the party that is foreclosing fails to produce the note when asked for it.”
In general, when borrowers challenge foreclosures, and judges find the party trying to foreclose has an impediment (the most common issue is lack of standing), they dismiss the case “without prejudice”. That means the parties that were trying to foreclose can come back and try again if they get their act together.
Once in while, when the parties trying to foreclose engage in behavior that is clearly fraudulent, judges have dismissed the case “with prejudice”. That means those parties can never come back to try to foreclose.
That does NOT mean some other party still can’t try to foreclose IF it is indeed the proper party.
Judges are not in the business of giving away free houses.
Yves, you may not be QUITE on top of things:
“(the idea that notes were destroyed as routine practice is not correct. A note has clear monetary value, it would be like burning cash)”
While this may be the case for most companies, apparently the infamous Countrywide claimed in court in 2007 that they routinely destroyed notes “after entering them in MERS”. I suggest you dig that case up. So it may have been routine practice for at least one lender.
How about giving the same treatment to the renters? I guess he thinks that the renters are the parasites.
Is he willing to give the same treatment to poor motorist fighting the traffic tickets, which sometime are more expensive than the rent?
I think it is time to ask the judge – when was the last time he wrote his own opinion. That is what the law clerks do.
I know this may be off topic, but I just had to vent. In many ways, I’ve never been more proud to be an American, but articles like this not only make me ashamed, but deeply hurt, embarrassed, and disgusted at the same time.
http://www.huffingtonpost.com/2010/10/20/obama-foreclosures-donovan-whose-problem_n_770591.html
Weren’t the “investors” the indirect beneficiaries of bailouts? Fannie Mae being pumped with billions is to basically protect the investor-looter class. When you buy a house those people should be under contract to the benefit of the buyer, I know what’s been tried, and lending dried up in that state, But the investors are the ones partly to blame for this whole disaster, neither they or the banks have inordinately suffered. Real families have.
Yves … have you heard anything about non-delinquent borrower actions? If title chains are broken, are lenders entitled to receive payments? How will all these clouded titles impact past, current and future real estate transations with a mortgage on the sell side…
Seems like the courts are trying to patch this up very quickly. I expected such but the rapid pace since last weekend is still surprising and a little scary.
I think the banks may get more flack from the fraud committed upfront on their investors.
Free is a bit like winning the lottery, the point is to force the sons of bitches to modify. Nothing like living rent free for a few years though, one would hope Judges (as human beings) wouldn’t hurl accusatory rhetoric at po’folk, but they sure as hell do. Even when the owner-squatters are taking care of the property, paying utility bills and so forth. The amount of contempt from the Banks is mind blowing.
A million miles away from these recent discussions about shoddy paperwork, or fraud, was the manipulation of housing prices to begin with. A bipartisan effort to totally deregulate, to allow Fannie Mae to buy the most worthless shit that would never be paid back. Unfortunately, the class war is being won by the side that has profited the most. The goddamn investors get to hide while people are thrown out of there houses.They are relentlessly protected by our Government, funneled huge amounts of taxdollars. The homeowners are treated like shit. There was a time when loan sharks were dealt with outside of the court, no judge, just a rural bridge with a nice beam for a rope.
Finally the NYTimes gets a clue …
Next Stop in Foreclosure Fight May Be Courtroom
http://www.nytimes.com/2010/10/21/business/21standoff.html?_r=1&hp
“We did a thorough review of the process, and we found the facts underlying the decision to foreclose have been accurate,” Barbara J. Desoer, president of Bank of America Home Loans, said earlier this week. “We paused while we were doing that, and now we’re moving forward.”
Some analysts are not sure that banks can proceed so freely. Katherine M. Porter, a visiting law professor at Harvard University and an expert on consumer credit law, said that lenders were wrong to minimize problems with the legal documentation.
“The misbehavior is clear: they lied to the courts,” she said. “The fact that they are saying no one was harmed, they are missing the point. They did actual harm to the court system, to the rule of law. We don’t say, ‘You can perjure yourself on the stand because the jury will come to the right verdict anyway.’ That’s what they are saying.”
Efficiency is not the be all and end all of financial transactions.
It might be more efficient for some third party to break open an ATM machine and pass out money to the banks depositors. No harm would be done, after all it is the depositor’s money to withdraw as they see fit! Isn’t it?
If these notes and mortgages could not be handled fast enough than they should have found some other asset to securitize.
Stripped of the layers of passion, emotion and pathos; the folk are getting wacked for their poor judgment – poor Judgment in gauging price levels, in gauging appropriate leverage and in choosing to deal with slime. That does not go away regardless of procedural & other crimes.
Can you really blame them for not realizing that every major bank in the country was slime? Even if they did realize, what other options did most of them have?….