Bank lawyers prosecuting the 80,000 foreclosure cases in New York are all but admitting that the cases they have filed over the past number of years have been riddled with fraud.
In the three weeks-plus since New York State Chief Judge Jonathan Lippman put the foreclosure lawyers on notice that any fraud in foreclosure paperwork would be met with severe penalties — he is making lawyers sign affirmations promising they took “reasonable” steps to make sure the legal papers are true — practically no new foreclosure cases have been filed, The Post has learned.
And existing cases have ground to a halt, a source close to the state’s foreclosure practice said.
“Banks do not want to be the first to test the new rules,” the source said.
The virtual shutdown of New York’s foreclosure business comes despite chest-thumping, bravado-filled statements made by some banks in October that they had nothing to be afraid of when it came to foreclosure fraud and that the lawsuits aimed at kicking delinquent homeowners from their houses would continue shortly.
It seems lawyers pressing the foreclosure cases are not willing to bet their law licenses on such claims.
The foreclosure fiasco will be the subject of Senate hearings tomorrow and a House hearing Thursday, when execs from major lenders like Bank of America and JPMorgan Chase are expected to testify.
“Foreclosure should be the last option and we need to examine barriers to mortgage modifications,” Sen. Tim Johnson (D-SD), expected to lead the Banking Committee next year, said in an e-mailed response to Reuters.
While many banks are not prosecuting foreclosures, they are still preparing those cases by sending paperwork to law firms on new homeowners who are behind on payments. The cases are just not being filed in court.
“The spigot has not been shut off much, to my surprise,” a foreclosure industry insider told The Post, of the bank’s sending of the foreclosure paperwork to their lawyers.
Meanwhile, the New York State Bar Association, which believes it should have been included in the rule-making discussion, is asking Lippman for a review. “The thought is the rules will stay in place and be modified over time,” the source said. The NYSBA did not return calls.
Over the past four years the number of homes in foreclosure in New York has grown to 80,000 from 20,000, according to statistics compiled by the Mortgage Bankers Association.
In Gotham, it now takes plaintiffs almost two years to repossess properties, double the time it took in 2006, the statistics show.
Lawyers may look to increase the roughly $600 fee for prosecuting foreclosures to compensate for the risk and time in pressing cases. Banks who pay those fees would likely tack them on to mortgage balances, the source said.
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(Source: NY Post)
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One Response
Any way to charge Mexico for all those illegals they send here to exploit our system to the point of ruining it the way crows ravage through a corn field that does not belong to them?
Maybe we can help out citizens instead of illegal immigrants? No more benefits or privileges for illegals. We can put the money it cost to educate bilingual illegal kids to help pay for foreclosures.
Maybe we can raid the countless homes and apartments of known Mexicans and put them on the books and charge them back taxes. They should have the money since we all know what wonderful, hard-working, people they are.
THEN…we should send them back.