The New York State court system today instituted a new rule regarding residential foreclosures in light of the ongoing robosigning accusations.
Going forward, plaintiffs will be required to file an affirmation form certifying that they have taken “reasonable steps – including inquiry to banks and lenders and careful review of the papers filed in the case – to verify the accuracy of documents filed in support of residential foreclosures.”
“We cannot allow the courts in New York State to stand by idly and be party to what we now know is a deeply flawed process, especially when that process involves basic human needs – such as a family home – during this period of economic crisis,” said Chief Judge Jonathon Lippman, in a statement.
“This new filing requirement will play a vital role in ensuring that the documents judges rely on will be thoroughly examined, accurate, and error-free before any judge is asked to take the drastic step of foreclosure.”
The affirmation form must be submitted for both new and pending cases, so it could lead to the overturning of foreclosure decisions or simply delay the inevitable for others.
The issue focuses on the use of so-called “robosigners,” employees and agents who signed off on hundreds or thousands of foreclosure documents in a short amount of time on behalf of mortgage lenders nationwide, essentially proving they didn’t do their due diligence or follow protocol.
These widespread deficiencies led all 50 state AGs to launch a national foreclosure probe, and resulted in various foreclosure moratoria, including a nationwide foreclosure freeze by Bank of America and a partial ban by GMAC.
However, both have already announced their intention to restart foreclosures after an internal review of their processes revealed no wrongdoings.