It's been about nine months since several federal judges in Ohio issued the
widely-read foreclosure dismissals that shined a light on sloppy paperwork
done by companies that specialize in handling foreclosures.
Since then, the
WSJ reports tonight, other judges across the country have
caught on and are carefully scrutinizing mortgage documents filed as part of
foreclosures and dismissing cases based on mistakes they're finding, which
borrowers might be able to exploit when facing foreclosure. (For another good
read on judges and lawyers working to staunch foreclosure, click here for a
Among the issues hitting snags among the judges, according to WSJ:
"Backdated" mortgage assignments: Assignments, documents that
transfer ownership of the mortgage, are executed after the foreclosure
process has begun but state that they are "effective as of"
a date prior to the foreclosure action. Some judges are dismissing those
cases, saying attempts to retroactively assign the mortgage aren't valid.
Suspicious multiple hats: Employees for mortgage companies are signing
they are employees of one company, but other mortgage documents say they work at
another firm. In some cases, an employee claims to work for companies on both
sides of a transaction, prompting one skeptical judge to ask for that
work history for the last three years.
Shared office space: In foreclosure filings, one judge has found that numerous
mortgage-related companies, including units of Wall Street banks, all
claim to share the same address: a suite of a West Palm Beach, Fla., building.
"The Court ponders if Suite 100 is the size of
Madison Square Garden to house all of these financial behemoths or if
there is a
more nefarious reason for this corporate togetherness," the judge
wrote in a
Brooklyn Crusader: The judge making Madison Square Garden references is
Brooklyn's own Arthur M. Schack of Kings County Supreme Court, who
has dismissed dozens of foreclosures sua sponte because of shoddy documents
or suspicious patterns he notices in the filings. Schack, 63, a former
counsel to the
MLB Players Association who is known for peppering his rulings with pop culture references such
as Bruce Willis movies, says barely any of the foreclosures he has denied
eventually are completed.
In one of his foreclosure dismissals, Schack (Indiana, New York Law School)
cited the film
"It's a Wonderful Life" to make the point that homeowners
now deal with "large
financial organizations, national and international in scope, motivated
primarily by their interest in maximizing profit, and not necessarily
by helping people."
In an interview, Schack, a Brooklyn native, told WSJ: "Taking away
someone's home is a serious matter. I'm a neutral party and in
reviewing papers filed with the court, I have to make sure they're