The first proposal would require that attorneys for the lenders submit a "certificate of merit" at the start of the action, which would swear that all paperwork was proper at that time instead of just requiring such a sworn statement post settlement conferences, as is now most common. This would have been beneficial because now lenders and borrowers are engaged in a lawsuit that often is put on hold as the lenders' attorneys attempt to verify the propriety of documents without success and borrowers are stuck in limbo while they await if the lender was even the proper party to the action.
The second proposal would have created a criminal penalty for the submission of fraudulent foreclosure documents, such as robo-signed assignments of the note and mortgage. This proposal would have heightened the level of caution applied to lenders submissions of foreclosures and also would have prevented the incorrect lender from prosecuting a foreclosure action.
While both proposals are not moving forward, the importance of these proposals having had been made should not be lost on the reader. The key is that many eyes are watching the unscrupulous conduct of lenders and that this fact, alone, puts the banks in check when attempting to foreclose on a homeowner's residence. Yes, lenders of defaulted loans have a right and should be permitted to obtain the security for the payment of their loan; the house. Yet, taking someone's home should be only undertaken under a proper legally defensible claim as the impact is far reaching and devastating to the homeowner.
These results may have done more good than one may think. Now, all borrowers' attorneys are on notice that they should be even more vigilant in forcing a lender to prove their case in foreclosure. Do not just accept that the lender is in the right. Instead, question their claims and tactics before waiving the white flag of defeat. Only than is justice served.
