NY To Make Foreclosure Lawyers Verify Paperwork

The chief judge in New York Wednesday ruled that lawyers handling foreclosures will have to verify that all paperwork is correct.

Lawyers are already legally obligated to ensure the documents they give to the court are accurate, but New York Chief Judge Jonathan Lippman says forcing them to sign an additional piece of paperwork specifically saying the paperwork is valid will hold the lawyers feet to the fire.

The form will also require the lawyers to put down the name of the bank worker who verified the documents were correct, as well as the date they spoke with them.

The ruling could provide a model for other states as the nation grapples with the fallout surrounding testimony by former foreclosure mill workers who “robo-signed” thousands of foreclosure documents a day.

In other news, states are cutting down on accidents by making drivers sign a piece of paper promising that they won’t run over anyone.

NY to hold lawyers accountable on foreclosures [AP] (Thanks to Laurel!)

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  1. DJ Charlie says:

    That will go over well. “OMG An ADDITIONAL piece of paper to sign! Now e REALLY have to make sure our forged paperwork is correct!”

    • Loias supports harsher punishments against corporations says:

      No, what it does is create a very obvious and clear presence of liability against the attorney who is taking someone’s home away. It places the liability squarely on the person who SHOULD have the most liability – the person standing in front of a judge stating the information is true and correct.

    • Thyme for an edit button says:

      I think it might help. The lawyers are not going to want to risk their licenses over this.

    • GMFish says:

      If an attorney files an affidavit which turns out to be false, he’s not responsible. The client might be, but chances are the attorney would not.

      However, once you but an obligation on the attorney to independently verify documents such as affidavits, suddenly he is on the hook. He can personally be sanctioned or even have his licensed pulled.

      It may be trivial to you, but if an attorney treats it trivially, he’s going to get reamed.

  2. apd09 says:

    I bet that cat has a bunch of weird things in its dungeon. You have encountered a giant bag of catnip, earn 10 experience points. You and your guild have encountered a den of rats, do you wish to attack or run? While crossing the bridge you fell into the water, run around meowing and lose 20 experience points.

  3. jtheletter says:

    I still haven’t seen any stories that explain how all of these thousands of mortgage reviews were submitted fraudulently and no one has been prosecuted for at least perjury. Isn’t there some document in all of that paperwork which includes something along the lines of “Under penalty of perjury I, the undersigned, admit that to the best of my ability all of the information presented here is factually correct.”? This clause has been somewhere in just about every mortgage-related document I have ever signed.

    A handful of forged reviews might get under the radar of a perjury clause as being simple mistakes. But we have strong (I would say irrefutable) evidence that thousands upon thousands of such documents were knowingly and willingly forged/falsified/etc. There should be hundreds of folks (mostly low level I’m sure) who signed such perjury clauses up for prosecution for many of counts of perjury each.

    We can argue about the fairness of charging underpaid low-level robo-signers with perjury but SOMEONE needs to be convicted to give weight to that clause. Otherwise what’s the point when it can be violated at will thousands of times without consequence?

    • DJ Charlie says:

      This is exactly what I mean. The paperwork already says that, but it’s not enforced. So adding a single piece of paper is suddenly going to enforce it? Sounds too much like “legal theater” to me.

      • jtheletter says:

        I think the additional piece of paper in this case is moving things in the right direction. As I understand it, this formally puts the responsibility of accuracy on the lawyer in the court. Previously that lawyer could hide behind the submitting agency and point the finger at them without much consequence. Since maintaining their legal credentials is essential for the lawyer’s career this will hopefully force them to pay attention to detail as it will now be their butt on the line.

    • Loias supports harsher punishments against corporations says:

      I totally agree. At least with what NY is doing, they are also giving perjury to the person who actually appears in court. This becomes much easier to prosecute. It does take away blame from the robo-signers, which I disagree with, but it does make it more possible to fight fraud, which I DO like!.

    • Duke_Newcombe-Making children and adults as fat as pigs says:

      You haven’t seen it because the courts have a too-cozy relationship with the banks, and are now “fast tracking” their submittals and hearings, even to the extent of disallowing challenges by defendants, or scheduling these submittals for foreclosure to the court in an assembly-line, “five minutes per submittal” method–essentially acting as a rubber-stamp for the banks.

  4. Blueskylaw says:

    Is this for real? A court has to ORDER the big banks to follow the law? Why do they have to be forced to sign an additional piece of paperwork specifically saying the paperwork is valid when it should have been filled out legally in the first place and every time?

  5. ArcanaJ says:

    Hey! That’s my picture up there! :D

    Also, ALL lawyers handling foreclosures in EVERY state should have to verify that all paperwork is correct.

  6. jessjj347 says:

    It’s not uncommon for lawyers to have terabytes worth of documents…
    I don’t see how this is feasible, without the lawyers getting more IT people involved to OCR the crap out of the documents and go through each one.

    • Evil_Otto would rather pay taxes than make someone else rich says:

      What’s wrong with hiring more IT people? Oh wait, the lawyers might get 4 kajillion dollars in bonus instead of 5.

      Sounds like a good way to get people back to work, to me.

  7. YouDidWhatNow? says:

    My buddy the habitual drunk, who got into all kinds of DUI trouble, had to be on probation for a while. One of the provisions of his probation was that he was not to violate any laws.

    …and I was like “really? So once you’re off probation, you can just have at it?”

    • TheWillow says:

      um. they are getting a warning in lieu of jailtime, and if they break any other laws they will go to jail for the crime that gave them probation ON TOP OF anything else even if the new law they broke is unrelated to what they had probation for.

      … that’s pretty much just the definition of probation.

      • YouDidWhatNow? says:

        Yeah, I get that…but I find it strange that they have to stipulate that you have to not break any laws. Since, you know, you’re not supposed to break any laws anyway – regardless of whether or not you’re on probation.

        • TheWillow says:

          but it’s just stipulating if they break any other laws, it counts against him for *this* offense. I don’t get what you don’t get.

  8. Skeptic says:

    “In other news, states are cutting down on accidents by making drivers sign a piece of paper promising that they won’t run over anyone.”

    Not analogous. By driving you aren’t claiming that certain paperwork is valid.

  9. Aedilis says:

    A quote from the article:

    “In New York state, attorneys already have an obligation to ensure that the documents they present to the court are valid. But New York Chief Judge Jonathan Lippman said having them sign something affirming that all papers got a proper review will hold them accountable like never before.”

    So, even though the state of NY has a law on the books that makes attorneys vouch that the documents they present to the court are valid, suddenly this redundant rule will make them ‘accountable like never before’? Please…

    My solution is twofold:

    - Extend this existing requirement to financial institutions holding mortgages. If you wish to foreclose, you must vouch that the documents you have are accurate and valid.

    - Modify the existing law that provides for penalties double damages incurred by the invalid documentation provided to the court, to be split equally amongst all offending parties.

    Take that $250,000 house away from a person who not only didn’t have a mortgage with the bank you represent but had the house free and clear? You’ll get $500,000 from the financial institution and the attorney representing them.

    There’s plenty of similar instances in this where this type of situation has worked out perfectly. For example, in Wisconsin, landlord-tenant laws state that when a tenant moves out, the landlord has 21 days from the last day of tenancy (or last of the month depending on the vacancy termination) to provide the tenant with their security deposit or a itemized list of damages. Failure to do so is an automatic penalty of double the security deposit to be given to the tenant.

    Instead, what we’re left with right now is essentially, “OK, we REALLY mean it this time. Please try to make sure these documents are at least mostly valid or we will be forced to give you a warning or something. Seriously guys, come on, we mean it this time. Seriously? Promise this time? Cross your heart?”

  10. mdoneil says:

    If Sarbox can make CEOs sign off on the work of the staff when preparing financial records, I see no problem with lawyers having to sign off on a similar document.

    I am a NYS lawyer. I don’t practice in that field.

  11. NydiaGeben says:

    Okay. Just a matter of a little more time before the foreclosure is done.

  12. segfault, registered cat offender says:

    Orange tabbies are the ugliest cats…

  13. haggis for the soul says:

    Now they can hire robo-verifiers to check the robo-signers.