The tide has turned. The homeowner is right. The home is paramount. We will protect the disadvantaged.


Law is like a seesaw and today is the homeowner's day. Just this week, New York became the first state to require lenders to vouch for the accuracy of their mortgage documents. In fact, the assurance must come in the form of an attorney certification by way of affirmation. The affirmation must state that counsel has taken reasonable steps to verify the accuracy of documents filed in support of residential foreclosures. Such residential foreclosures appear to include condos, 1-4 family homes, private homes, but no owner-occupied requirement appears, which is broader than the other requirements to date in this field.

According to a Press Release Issued by the Unified Court System:
Plaintiff's counsel in foreclosure matters must submit the affirmation at one of several stages. In new cases, the affirmation must accompany the Request for Judicial Intervention. In pending cases, the affirmation must be submitted with either the proposed order of reference or the proposed judgment of foreclosure. In cases where a foreclosure judgment has been entered but the property has not yet been sold at auction, the affirmation must be submitted to the court referee, and a copy filed with the court. five business days before the scheduled auction. Counsel is also obligated to file amended version of the affidavit if new facts emerge after the initial filing.

It seems no foreclosure auctions will be happening this week in the wake of the 5 day rule.

To see a copy of the required affirmation, click here. To view the law, click here. Fore more generalized info about residential foreclosures, click here.

Yet, this is not all, it gets better: A new law allows homeowners to recoup legal fees in foreclosure cases proclaims the New York Times in an article on October 21, 2010. To read the article, click here.
The law - Access to Justice in Lending Act - which can be found by clicking here, provides attorneys fees to defendants who are successful in a foreclosure action.

The stated purspose of the law is as follows:
The purpose of this bill is to allow borrowers in a foreclosure proceeding access to legal representation by providing that mortgage agreements which allow a prevailing lender to recover attorneys fees in a foreclosure proceeding shall be read to allow prevailing borrowers to recover attorneys fees as well, thereby enabling borrowers with meritorious defenses to foreclosure to obtain the legal representation necessary to assert those defenses.

So, mortgagors its time to get your ducks in a row. Lets clean out the cannons. Gather your troops. Its time for war.

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http://myemail.constantcontact.com/NEW-CE-Class--FORECLOSURE-FILIBUSTERS--Southold-and-Bethpage-Openings-.html?soid=1103454891678&aid=uHHMY5d46Io

So what does this all mean to you? The key issue in law is called standing to sue. Meaning, do the banks have the right to sue? Before anyone goes to Court they must be aggrieved in some way. The issue is that the banks cannot substantiate that they are the correct bank that is owed the debt on the mortgage. Now that the issue is in the limelight creative names like "robo-signers" are all abound in the headlines, but the truth is that this has been a big issue for years within the foreclosure industry. Well before the national media took hold of this issue, many in the foreclosure defense world have long been expressing that the bank's paperwork does not substantiate their right to sue. In fact, one of the main ways that people defend a foreclosure is through discovery demands that the bank cannot fulfill followed by a motion to dismiss.

This post is not meant to minimize the issue. Instead, just the opposite is intended. Yet, my hope is that the national politics don't minimize the issue either. Its plain, its easily understood, it should not be open to debate - If a bank cannot show through competent evidence that it owns the mortgage (a big big problem), its foreclosure action should be dismissed and in this individual's opinion, the bank and its attorneys should face sanctions for filing a frivolous lawsuit. My point is this, over the past week I have seen many pundits come out on both sides of a moratorium on foreclosures. This sidesteps the issue. Instead, the issue must be only: Does the bank seeking to foreclosure on the homeowner have documentation that it owns the mortgage? Its as simple as a person who wants to sell their car having the title to the car. This is not a fitting topic for national debate. Instead, this is a fitting topic for national dismay. How can banks not have clear paperwork that they own the mortgages? (I will explain how this mess happened in a future blog, which involves the distinction between servicers and investors coupled with the secondary market and MERS).

Additionally, there is no need for a moratorium on foreclosures. Instead, homeowners facing foreclosure should be vigilant in making the banks prove that they have the requisite documents and that they have been signed by someone with knowledge (can be tested by discovery demands inclusive of a good Demand for Discovery & Inspection coupled with a Notice to take an Examination Before Trial of the signatory). If this doesn't work, readers should pay attention on Tuesday of this week when its expected that many State Attorney Generals will uniformly announce an investigation of the the robo-signer epidemic. Click here to read a Reuters article addressing the expected announcement.

Bank of America became the third servicer to freeze their foreclosures, to learn more click here.