A partner at our firm, Robbie L. Vaughn, is quoted in this article from The New York Law Journal:  Check it out below!  As always we are here to answer any questions concerning this new court ruling at (516) 858-2620!

New Court Rule Says Attorneys Must Verify Foreclosure Papers

Andrew Keshner

New York Law Journal

October 21, 2010

“We feel we have an obligation to make sure the attorneys do their due diligence and come to us with credible papers because the consequences [of wrongful foreclosures] are so great,” Chief Judge Jonathan Lippman said in an interview, adding that the new filing requirement is the first in the nation.

See a sample of the affirmation attorneys will be required to provide.

Attorneys must now certify, “under the penalties of perjury,” that they have communicated with a representative of the plaintiff bank or lender and that they have personally reviewed all documents and records related to the case.

After making this review and “other diligent inquiry,” they must attest 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.”

The court system’s affirmation form notes that foreclosure filings in various courts around the nation have been subject to a variety of defects, including the failure of counsel to review documents and establish standings, bogus notarized affidavits and the “robosignature” of piles of documents by parties and their 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,” the court system warns.

“I think this makes clear to everybody the court system’s absolute commitment that we are not going to allow anything to interfere with the integrity of the court process,” said Judge Lippman.

Attorneys general in all 50 states and the District of Columbia are jointly investigating whether mortgage companies have violated state laws. In Maryland, an emergency measure approved this week by the state’s highest court outlines how state judges can review foreclosures and stop them if documents are invalid.

In New York, attorneys already have an obligation to ensure that the documents they present to the court are valid. For example, Rule 3.3 of the Rules of Professional Conduct states that lawyers should not knowingly “make a false statement of fact or law to a tribunal or fail to correct a false statement of material fact or law previously made to the lawyer.”

However, Judge Lippman told the Associated Press that forcing lawyers to sign something to certify that all papers have gotten a proper review will hold them accountable like never before.

“We want to make sure that everyone is focusing like a laser on these particular types of proceedings,” he said. “It puts them on notice. That’s what this is all about. We all have to make doubly sure that we are doing what we should be doing in the first place.”

Some New York judges have complained loudly about rampant errors of varying severity in legal filings by banks seeking to foreclose on record numbers of homeowners (NYLJ, Oct. 14).

Brooklyn Supreme Court Justice Arthur M. Schack, one of the judges who have pressed lenders to submit accurate paperwork, said the new Lippman rules are a “great idea,” which he hopes will allow defendants and judges to “get to the bottom of this mess.”

He said some lawyers appearing before him have admitted to signing documents at a rate of “hundreds a week and thousands a month, and the notary wasn’t even in the room.” The new rule may reduce inaccuracies, he said.

“I don’t know if it is unfair,” Justice Schack said. “You want to use the court system for relief, you have the burden of trying to have accurate paperwork and, based on your diligent inquiry, that it is true.”

Chief Administrative Judge Ann Pfau said she had judges with cases in which they refused to sign foreclosure orders without more documentation.

“There are particular issues in the foreclosure process that require us to be particularly diligent,” she said.

Judge Lippman said in a press release that “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.”

The New York State Bar Association welcomed the new requirement. Its president, Stephen P. Younger, said in a statement that “the chief judge has taken swift steps to address a nationwide problem in foreclosure actions. The New York State Bar Association applauds any effort to preserve and maintain the integrity of the foreclosure process.”

Mr. Younger said the affirmation form would be printed on the state bar’s Web site at www.nysba.org/foreclosureaffirmation.

Robbie L. Vaughn of Vaughn & Weber in Mineola, who represents homeowners in foreclosure matters, said that “anything that would help the veracity of the paperwork would help. We find so many problems, it’s a shame.”

Gale D. Berg is a solo practitioner who is also the director of Pro Bono Attorney Activities for the Nassau County Bar Association, which runs a monthly foreclosure clinic. Speaking personally, she said the new requirement could prove difficult for some attorneys hired by the banks. Such counsel sometimes are hired on a per diem basis and first learn of the specific cases they are to handle only on the day they are to appear.

Anthony A. Capetola, a Williston Park-based attorney, has been court referee in Nassau and Suffolk County foreclosure matters for about 35 years. He noted that many homeowners facing foreclosure cannot afford to hire a lawyer. Without someone to advocate for the homeowner, the new requirement was the court’s effort to “try to put somebody’s neck on the line,” he said.

“The merits of this rule are going to be in the details,” said Joshua Stein, a Manhattan commercial real estate attorney who watches the residential market. Mr. Stein said it might make sense to ask a lawyer to make reasonable efforts to assess the facts, but attorneys could not be expected to become a “guarantor” of those facts.

“Is this imposing some higher standard and if it does, what will the unintended consequences be?” said Mr. Stein, who is the chair of the education committee for the state Mortgage Bankers Association but was speaking for himself. He added that slowing down the foreclosure process was not a good idea. “It’s a slow enough process already,” he said.

Michael P. Smith, the president of the state bankers’ group, said his members have long worked with court administrators to bring a “fair and timely resolution to foreclosure proceedings.”

“While we have not yet analyzed the new rules, we reaffirm our support for efforts to provide further clarity to a process which already is subject to stringent state laws,” Mr. Smith said in a statement.

New York is one of 23 states that requires judicial approval of foreclosures. JPMorgan Chase has estimated that its average foreclosure takes 792 days, one of the longest rates in the nation.

JPMorgan was one of a few major banks that froze all foreclosures nationwide while they reviewed their filings for problems. Two of the biggest, Bank of America and GMAC Mortgage, resumed proceedings this week.

The rule requiring a signed affirmation applies to both new cases and the 78,000 foreclosure actions already under way in New York courts. (See Foreclosure Figures for New York State: 2010 Year-to-Date Foreclosures Filed and Pending by County, 2009 Foreclosures Filed and Pending by County and Number of Filings by County 2005-2009.)

Lawyers handling pending foreclosure actions will probably need to go back to their clients and verify that all proper steps were followed, Judge Lippman said. The form created by the court requires the lawyers to give the name of the bank employee who affirmed that the records were accurate and the date the conversation took place.

Because the process is so lengthy and there are so many pending foreclosures, attorneys will be allowed to submit their affirmations at one of several points in the process.

For new cases, the affirmation would have to be included for the file to be complete. For pending cases—which can be at any point between the initial filing and the final ruling—the new affirmation is required before the judge’s final signature on the decision.

Once an order is signed, the affirmation would be required before an auction sale of the property is held.

@|Andrew Keshner can be contacted at akeshner@alm.com. The Associated Press and Law Journal reporter Joel Stashenko contributed to this report.

The following article is from NY Attorney General Cuomo’s website. It calls for suspension of foreclosures by mortgage servicers engaged in “robo-signing” and offers sound advice to New York homeowners who are facing foreclosure proceedings.

ATTORNEY GENERAL CUOMO EXPANDS PROBE OF NEW YORK FORECLOSURE ACTIONS

Demands information from Bank of America, JP Morgan Chase, Wells Fargo and GMAC Mortgage/Ally ~ Calls for suspension of foreclosures by mortgage servicers engaged in “robo-signing” in New York until accuracy of court documents and integrity of process are assured

NEW YORK, NY (October 12, 2010) – Attorney General Andrew M. Cuomo today announced that he is seeking information from four major mortgage servicers – Bank of America, JP Morgan Chase, Wells Fargo and GMAC Mortgage/Ally – concerning the filing of affidavits that falsely attest the signer has personal knowledge of the facts presented in home foreclosure proceedings, a practice known as “robo-signing.”

In view of the prevalence of this practice in the industry, Cuomo also called on mortgage servicers engaged in “robo-signing” in New York to immediately suspend all foreclosure actions in the state until they correct their procedures to comply with New York law and can assure the public and the courts that integrity has been restored.

“I will not allow New Yorkers to lose their homes due to mortgage goliaths that buck the system by submitting affidavits signed without knowledge of the facts,” said Attorney General Cuomo. “Such conduct is a fraud upon our courts and a slap in the face of New Yorkers struggling to get by in this economy. My office will continue to root out these practices so homeowners receive the full protections afforded by our judicial system.”

Recent reports indicate that employees of these mortgage servicers routinely signed affidavits submitted in foreclosure proceedings without personal knowledge of the underlying facts or verification of loan file information, and without even reading the documents they signed. This practice, known as “robo-signing,” has tainted the integrity of the foreclosure process by which homeowners in New York lose their homes. Bank of America, JP Morgan Chase and GMAC Mortgage announced that they were temporarily halting pending foreclosures, while Wells Fargo has not suspended foreclosures despite the deficiencies uncovered.

Attorney General Cuomo is calling on these mortgage servicers to submit documents and information to his office concerning how foreclosure documents are prepared, verified, attested to and notarized, and how required notices are provided to New York homeowners. The letters request that the mortgage servicers stop re-filing foreclosures that had been suspended (and in Wells Fargo’s case, cease proceeding with pending foreclosures) until the Attorney General’s Office is assured that reliable and fair procedures are in place and that accurate, trustworthy documentation will be submitted to the New York courts. The letters also request that the mortgage servicers refrain from filing any new foreclosures until they can provide assurances that their procedures comply with New York law and are neither tainted nor inaccurate.

Because of the gravity of these transgressions and the high volume of foreclosures, Attorney General Cuomo is calling on all mortgage servicers engaged in “robo-signing” in New York to immediately suspend all pending foreclosure actions in the state, including evictions and foreclosure sales. Cuomo is also requesting that the mortgage servicers not file any new foreclosures until the companies correct their procedures.

Tens of thousands of New Yorkers have been devastated by the foreclosure crisis. In fact, the foreclosure rates in Nassau and Suffolk Counties rank among the ten highest in the nation. More than 60,000 New York homes are currently in foreclosure, and 130,000 New York homeowners have received pre-foreclosure notices this year after falling behind on their mortgage payments.

In addition to his office’s review of Bank of America, Chase, Wells Fargo and GMAC Mortgage/Ally, Attorney General Cuomo is working with other state attorneys general, banking regulators and other interested parties to assess the veracity of servicers’ foreclosure filings and ensure the fairness and accuracy of their processes.

Attorney General Cuomo advises New York homeowners who are facing foreclosure proceedings to do the following:

  • Contact the court to find out the status of your foreclosure proceeding.
  • Seek representation or advice from a qualified attorney. If necessary, contact your local bar association or legal services office for a referral. If you are unable to retain counsel, carefully review any documents filed thus far with the court to ensure their accuracy.
  • If you have not done so already, immediately contact your lender or servicer to discuss available alternatives to foreclosure such as a loan modification.
  • For a general description of the foreclosure process, refer to www.nyprotectyourhome.com/fc_timeline.html.
  • Consult with a government-approved housing counseling agency. To find counselors approved by the U.S. Department of Housing and Urban Development (HUD) in your local area, call 800-569-4287 or visit www.hud.gov. A list of housing counselors also can be found via the NYS Banking Department.
  • Call HOPE NOW at 1-888-995-HOPE. HOPE NOW is an alliance of housing counselors, mortgage companies, investors and other mortgage market participants that provides free foreclosure prevention assistance.
  • If you live in New York City, call 311 to schedule free foreclosure counseling sessions at the Center for New York City Neighborhoods.

New York homeowners who believe their homes were foreclosed based upon false or inaccurate documents filed in court by their lender or servicer should seek representation from an attorney. They may also file a complaint with the New York Attorney General’s Bureau of Consumer Frauds & Protection by calling 800-771-7755 or visiting www.ag.ny.gov.

The investigation, led by Special Deputy Attorney General for Consumer Frauds & Protection Joy Feigenbaum, is being handled by Special Counsel Mary Alestra, Assistant Attorney General Brian Montgomery and Deputy Bureau Chief Jeffrey Powell of the Bureau of Consumer Frauds & Protection under the direction of Executive Deputy Attorney General for Economic Justice Maria Vullo and Deputy Attorney General for Economic Justice Michael Berlin.

As always, The Foreclosure Defense Law Firm of VAUGHN & WEBER, PLLC is here to assist you. We are conveniently located in the heart of Nassau County, Long Island, at 217 Willis Avenue in Mineola, NY 11501. Contact us at (516) 858-2620 to arrange a FREE consultation with a foreclosure defense lawyer.

Please visit our Foreclosure category to learn more about foreclosure issues.

The following is from the NY Banking Department’s website:

October 8, 2010

To the Institution Addressed:


Recent events surrounding the foreclosure process of several mortgage loan servicers and the use of individuals identified as “robosigners” to execute affidavits without proper verification have raised considerable concerns for the Banking Department.

As you may be aware, on September 20, 2010, Ally Financial halted foreclosures in several states after discovering that faulty affidavits were filed in foreclosure cases.  Specifically, Ally indicated that certain individuals executed affidavits without personal knowledge of the allegations contained therein.  Subsequently, JP Morgan Chase and Bank of America made similar announcements concerning documents filed in foreclosure actions.

Given the extent and severity of the issues raised, the Department is requesting that [Institution Addressed] conduct an internal review of its foreclosure practices in New York and provide a response by October 22, 2010 to the following:

  • The steps you are taking or have taken to review your foreclosure process in New York;
  • The results of your review, including a description of the process for verifying affidavits submitted in support of foreclosure actions in New York and which, if any, of your employees or agents have executed foreclosure documents without direct personal knowledge of the facts or with other irregularities;
  • The corrective action, if any, you have taken or intend to take in response to the results of your internal review;
  • The measures taken to ensure that affidavits filed in New York foreclosure actions are executed in compliance with New York law; and
  • The status of pending foreclosure actions (including foreclosure sales and evictions) in New York and the measures taken to suspend such actions pending your review and corrective action.

In the interim, we are requesting that [Institution Addressed] suspend foreclosure actions in New York until such time as it has conducted a thorough analysis of its foreclosure practices and determined that such practices are in compliance with New York law.

Please visit our Foreclosure category to learn more about foreclosure issues.

News: BOA Halting Foreclosure Sales In All 50 States

On October 8, 2010, in Foreclosure, Message/News Board, by Robbie L. Vaughn, Esq.

The Wall Street Journal reports that Bank of America (BOA) is placing a moratorium on all “foreclosure sales” across the U.S. (see below). However, BOA hasn’t halted all foreclosure proceedings (see our earlier post Major Banks Halting Foreclosures in NY?). Additionally, it appears that a BOA spokesperson is implying that BOA’s completed foreclosures were proper.

Bank of America Corp. said it is placing a moratorium on all foreclosure sales across the U.S., amid political pressure on U.S. banks to examine foreclosure-documentation problems.

The nation’s largest bank by assets is the first financial institution to stop all foreclosure sales amid revelations that the banking industry had used “robo signers,” people who sign hundreds of documents a day without reviewing their contents, when foreclosing on homes. Bank of America, J.P. Morgan Chase & Co. and Ally Financial Inc. (parent of GMAC Mortgage) last week postponed foreclosures in 23 states where a court’s approval is required to foreclosure on a home.

Bank of America also decided Friday to review the affidavits being used in foreclosure proceedings in the rest of the 50 states so the accuracy of the documents can be assessed.

Thus far “our ongoing assessment shows the basis for our past foreclosure decisions is accurate,” a Bank of America spokesman said.

The decision by Bank of America to extend its postponement to all 50 states takes effect Saturday. The bank doesn’t intend to lift the moratorium on foreclosure sales until its assessment is complete, a spokesman said. The bank hasn’t halted all foreclosure proceedings, however. If a borrower is delinquent, the bank is still issuing notices of default and pursuing efforts to modify certain mortgages, the spokesman said.

On Thursday, Rep. Edolphus Towns (D., N.Y.), chairman of the House oversight committee, became the latest lawmaker to call for a nationwide moratorium on foreclosures.

Please visit our Foreclosure category to learn more about foreclosure issues.

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