Maryland Court of appeals adopts new foreclosure rule

Posted: 8:27 pm Tue, October 19, 2010
By Steve Lash
Daily Record Legal Affairs Writer

ANNAPOLIS — Maryland’s highest court on Tuesday approved an emergency rule designed to identify and weed out irregularities in the mortgage foreclosure process.

The new rule, which takes effect immediately, allows circuit courts to appoint independent lawyers to review foreclosure documents for problems. If a problem with the lender’s paperwork is detected, it has 30 days to show — at its own expense — why the foreclosure should not be dismissed.

Judges may also summon lawyers and notaries public into court when the authenticity of a signature or the veracity of an attestation to the accuracy of a document’s contents is in question.

While the changes may seem far-reaching, retired Judge Alan M. Wilner, head of the committee that drafted the new rule and presented it to the Court of Appeals, said the rule simply consolidates existing powers.

Judges have “the inherent authority” to require attorneys to answer questions regarding their affidavits and to “show cause” why a case, including a foreclosure action, should not be dismissed, he told the court.

The rule merely provides “a template for the courts to follow,” added Wilner, who chairs the Standing Committee on Rules of Practice and Procedure.

In addition, passing the rule will put the high court’s “imprimatur” on it and make clear to litigants, lawyers and the public that foreclosure documents will be scrutinized, he said.

Lawyers who are appointed to scrutinize the documents (known as special masters) can do so on a pro bono or no-cost basis, but only if they agree to do so, the rule provides.

‘The proverbial iceberg’

The adoption of the rule followed revelations that attorneys in at least two Maryland law firms had not personally signed affidavits that bear their names in foreclosure proceedings. Notaries public who validated those signatures have had their commissions revoked by the Maryland secretary of state.

The questioned signatures that have come to light so far are merely “the tip of the proverbial iceberg,” and there are probably more, Wilner told the high court.

Such signatures are “at worst fraudulent, at best irregular,” and call into question the validity of a lender taking possession of a home and reselling it, Wilner said.

The two law firms currently implicated in the signature scandal are Covahey, Boozer, Devan & Dore PA in Towson and Bierman, Geesing, Ward & Wood LLC of Bethesda.

Attorneys Thomas P. Dore and Jacob Geesing subsequently filed corrective affidavits — that is, an admission that the lawyer whose signature appears on the document did not, in fact, sign it.

Neither Dore nor Geesing returned telephone messages seeking comments on the rule and on their corrective affidavits.

Howard County Circuit Administrative Judge Diane O. Leasure, who attended the Court of Appeals vote, said 1,400 foreclosure cases are pending in her Ellicott City court, including 150 cases that involve corrective affidavits

And Prince George’s County Circuit Administrative Judge Sheila R. Tillerson Adams said 10,000 foreclosure cases are pending in her courthouse in Upper Marlboro. Adams said she did not know offhand how many involved corrective affidavits.

Attorney Michael Gregg Morin has filed a class-action lawsuit in federal court in Greenbelt against the Bierman firm on behalf of 8,000 homeowners in foreclosure.

Morin submitted a statement to the high court Tuesday, in which he praised the rule and expressed the belief that more pending foreclosures are tainted by invalidly signed affidavits.

“I do not believe that the Rules Committee or this court appreciates the nuances at the trial court level of the foreclosure bars’ efforts to avoid Maryland statutes, Maryland Rules, the Rules of Professional Conduct and common decency,” wrote Morin, an Annapolis solo practitioner.

No foreclosure attorneys testified before the high court as it considered the rule Tuesday.

But as Wilner’s committee pondered the rule Friday, attorney Mark Wittstadt urged the panel not to punish the overwhelming majority of foreclosure attorneys based on the misbehavior of relatively few.

“Bad facts make bad law and we are in a bunch of bad facts right now,” said Wittstadt, of Morris|Hardwick|Schneider in Baltimore.

The court’s consideration of the rule on Tuesday drew such a large crowd that the session was moved from the judges’ conference room to the courtroom, where the judges donned their robes and took their seats on the bench. Though the nearly hour-long session had the feel of oral arguments, the judges remained largely silent as Wilner made his case for the rule’s adoption.

Judge Sally D. Adkins was the only member of the Court of Appeals to miss the session and the vote. She was sidelined by illness, said Chief Judge Robert M. Bell.

The other members of the court adopted new Rule 14-207.1 by a 6-0 vote.

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