Advocates Seek to Eliminate Foreclosure ‘Shadow Docket’

March 31, 2012 By Steve Dibert Leave a Comment

Andrew Keshner, New York Law Journal

Advocates of homeowners facing foreclosure are pushing for a change in court rules to remove an obstacle that has put many homeowners in a judicial limbo, unable to participate in settlement conferences to make their debt more manageable.

In particular, the advocates have proposed moving up the point at which attorneys for lenders must submit an affirmation attesting to the accuracy of court documents.

“If the whole point of the [affirmation] rule is to prevent plaintiff lawyers from knowingly filing false or inaccurate filings in foreclosure cases, make it a rule that the affirmation be filed when they file the complaint, and not wait until they file the request for judicial intervention,” said Jacob Inwald, director of foreclosure prevention litigation for Legal Services NYC.

Under current procedure, lenders can file a summons and complaint for a foreclosure action without triggering a mandatory settlement conference. A conference is scheduled only after proof that the summons has been served, a specialized request for judicial intervention and the attorney’s affirmation are submitted.

Since the implementation of the affirmation requirement in October 2010, advocates charge that lenders have delayed filing the request for judicial intervention so that they do not have to file the affirmation right away. That has created a “shadow docket” of cases that do not show up in official court statistics or trigger a settlement conference.

The courts recorded 46,572 requests for judicial intervention in 2010. In 2011, the first full year after the affirmation went into effect, there were only 16,156. Only 1,135 were received in the first month of the year.

Judge Judy Harris Kluger, chief of policy and planning for the court system acknowledged that “thousands” of unrecorded foreclosure actions may exist.

“We are looking at some different options as to how to address this inventory of cases. At this point, we’re not prepared to announce anything,” Judge Kluger said. “However, in the near future, we hope to present a plan.”

Judge Kluger expressed doubts about moving the affirmation requirement to the beginning of the foreclosure process. She pointed out that CPLR 305 governs what is included with the summons and complaint, and said that any additional filing requirements might require legislative action.

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Filed Under: Mortgage News, New York Tagged With: economic meltdown, financial crisis, foreclosure, foreclosure actions, foreclosure crisis, foreclosure defense, foreclosure help, foreclosure help new york, foreclosure prevention litigation, foreclosure process, foreclosure rescue, foreclosures, Housing Crisis, illegal foreclosures, illegal foreclosures in New York, loan modification, Loan Modifications, MERS press release, mfi-miami, mortgage backed securities, Mortgage Crisis, mortgage disputes, mortgage fraud, mortgage help, mortgages, new york foreclosure fraud, new york foreclosures, new york fraud, new york mortgage fraud

Steven J. Baum Agrees To Be Financially Spanked By Schneiderman

March 22, 2012 By Steve Dibert 1 Comment

Agrees To Pay $4 Million To New York AG’s Office

Carolyn Thompson, Associated Press

A New York law firm that was harshly criticized after pictures surfaced from a company Halloween party where people dressed as homeless has agreed to pay $4 million in a settlement with the state over some of the tens of thousands of foreclosures it filed, attorneys said Thursday.

The agreement settles allegations that the Steven J. Baum Firm, one of the state’s largest-volume foreclosure companies, engaged in “robo-signing” and other paperwork shortcuts to process a huge number of foreclosure cases for clients including Wells Fargo,JPMorgan Chase, Bank of America, HSBC and Citibank, according to Attorney General Eric Schneiderman’s office.

Schneiderman said his office has been investigating the suburban Buffalo firm since April 2011, months before the company drew withering public criticism over pictures from its 2010 Halloween party that were published in TheNew York Times.

They showed part of the office decorated to resemble a row of foreclosed homes. In one picture, a person had a sign around her neck that read: “3rd party squatter. I lost my home and I was never served,” apparently mocking the explanation of some homeowners facing foreclosure. The Times said a former employee provided the pictures.

The firm’s president, Steven J. Baum, who was labeled as insensitive and held up by the Occupy movement as a symbol of corporate greed, later apologized. The firm announced in November that it would close.

Between 2007 and 2010, Baum attorneys filed more than 100,000 foreclosure actions, about 40% of all of those brought in New York courts. Examiners determined the firm prepared complaints in “assembly-line fashion,” enlisting the services of an affiliated document processing firm, Pillar Processing. Pillar, which Baum started, also is named in the settlement, along with Brian Kumiega, the Baum firm’s managing partner.

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Filed Under: Mortgage News, New York Tagged With: economic meltdown, Eric Schneiderman, financial crisis, foreclosure, foreclosure actions, foreclosure crisis, foreclosure defense, foreclosure help, foreclosure help new york, Foreclosure Mill, foreclosure rescue, foreclosures, Housing Crisis, illegal foreclosures, illegal foreclosures in New York, MERS, mortgage backed securities, Mortgage Crisis, mortgage disputes, mortgage fraud, mortgage help, mortgages, New York Attorney General Eric Schneiderman, new york foreclosure fraud, new york foreclosures, new york fraud, new york mortgage fraud, Steven J. Baum

Judge Schack Tells Congress Illegal Foreclosures Create Constitutional Crisis

March 20, 2012 By Steve Dibert Leave a Comment

Kerri Panchuk, Housing Wire

A New York state judge known for taking it to the banking industry says foreclosures, in many cases, are riddled with shoddy document handling, assignment issues and ownership questions on mortgage notes.

New York State Supreme Court Judge Arthur Schack made those statements to the U.S. House of Representatives Committee on Oversight and Government Reform Monday.

Schack told the panel that foreclosure filings in Kings County, New York, soared from 3,500 filings or less per year to 7,000 annual filings after the housing bubble burst in 2007. The judge said opinions from his court and other benches need to be made in accordance with the law and not for the sake of “expediency.”

Schack highlighted the Second Circuit’s Bank of New York v. Silverberg decision, which held an assignee of a lender who never functioned as the actual holder or assignee of the note lacked standing to begin a foreclosure.

In discussing that case, Judge Schack said “the law must not yield to expediency and the convenience of lending institutions. Proper procedures must be followed to ensure the reliability of the chain of ownership, to secure the dependable transfer of property, and assure the enforcement of the rules that govern real property.”

In a 2009 profile on Shack in The New York Times said the judge “fashions himself a judicial Don Quixote, tilting at the phalanxes of bankers, foreclosure facilitators and lawyers who file motions by the bale.”

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Filed Under: Mortgage News, New York Tagged With: economic meltdown, financial crisis, foreclosure, foreclosure crisis, foreclosure defense, foreclosure help, foreclosure help new york, foreclosure rescue, foreclosures, Housing Crisis, HSBC, illegal foreclosures, illegal foreclosures in New York, illegal new york foreclosures, Judge Schack, loan modification, mortgage backed securities, Mortgage Crisis, mortgage fraud, mortgage help, mortgages, new york foreclosure fraud, new york foreclosures, new york fraud, new york mortgage fraud, robo-signers, robo-signing, U.S. House of Representatives Committee on Oversight and Government Reform

BofA Among Banks in $25 Million Deal Over N.Y. Mortgage Case

March 15, 2012 By Steve Dibert 1 Comment

David McLaughlin, Bloomberg

Bank of America Corp., JPMorgan Chase & Co. (JPM) and three other banks that reached a $25 billion national settlement over foreclosure practices have agreed to pay $25 million to New York to resolve some monetary claims over the use of a mortgage database.

New York Attorney General Eric Schneiderman sued Bank of America, JPMorgan and Wells Fargo & Co. (WFC) in February over their use of the mortgage registry known as MERS, accusing the lenders of deceiving homeowners and conducting improper foreclosures.

The state’s agreement with the three banks, as well asCitigroup Inc. (C) and Ally Financial Inc. (ALLY), was filed yesterday in federal court in Washington. The five lenders agreed in February to a $25 billion settlement with 49 states and the federal government to resolve claims of abusive foreclosure practices. That settlement requires a federal judge’s approval.

Bank of America, JPMorgan, Wells Fargo and Citigroup each agreed to pay $5.9 million to New York, according to the court filing. Ally agreed to pay $1.25 million. Ally and Citigroup aren’t named in New York’s MERS lawsuit. The nationwide foreclosure settlement preserves claims raised against the banks in the New York case and any similar claims that may be asserted against Citigroup and Ally, according to the court filing.

Delaware Attorney General Beau Biden, the first attorney general to sue MERS, reached a similar settlement with the five banks, according to court papers. Biden said in his complaint that the MERS registry, which tracks servicing and ownership rights in mortgages, is deceptive and harms consumers.

Banks Not Defendants

The banks, which weren’t named as defendants in the Delaware case, have agreed to pay a total of $2.5 million to the state to resolve claims for statutory penalties related to the MERS litigation, Ian McConnel, a deputy attorney general for the office, said in an interview.

Delaware’s agreement with the banks doesn’t prevent the state from pursuing claims against the lenders for damages suffered by homeowners as a result of their use of MERS, McConnel said.

Danny Kanner, a spokesman for Schneiderman, said in a phone interview that the New York agreement resolves some monetary claims against the banks. The core claims of the lawsuit will proceed, he said.

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Filed Under: Mortgage News, New York Tagged With: BAC, Bank of America, BofA, economic meltdown, Eric T. Schneiderman, financial crisis, foreclosure, foreclosure crisis, foreclosure defense, foreclosure help, foreclosure help new york, foreclosure rescue, foreclosures, Housing Crisis, illegal foreclosures, illegal foreclosures in New York, JPMorgan Chase, mortgage backed securities, Mortgage Crisis, mortgage fraud, mortgage help, mortgages, new york foreclosure fraud, new york foreclosures, new york fraud, new york mortgage fraud, predatory lending

Advocates Seek to Eliminate Foreclosure ‘Shadow Docket’

Steven J. Baum Agrees To Be Financially Spanked By Schneiderman

Agrees To Pay $4 Million To New York AG’s Office

Carolyn Thompson, Associated Press

Judge Schack Tells Congress Illegal Foreclosures Create Constitutional Crisis

BofA Among Banks in $25 Million Deal Over N.Y. Mortgage Case

Banks Not Defendants

Translation

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