NJ Chief Justice Rabner: SHOW CAUSE OR SUSPEND FORECLOSURES

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WHAT IF ALL THE FORECLOSURES ARE WRONG?

The target lenders are

• Bank of America/
• Bank of America Home Loan Services,
• Allied Financial, formerly GMC;
• J.P. Morgan Chase/Chase Home Finance,
• Wells Fargo/Wells Fargo Bank/
• Wells Fargo Financial of New Jersey,
• Onewest Bank FSD, and
• Citibank.

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BY TOM HESTER SR. NEWJERSEYNEWSROOM.COM
In an effort to ensure that home foreclosure documents submitted to the New Jersey courts by 30 banks and lenders are accurate and put an end to so-called robo-signings, state Supreme Court Chief Justice Stuart Rabner Monday ordered the lenders to prove the paperwork is correct.
The action follows a report submitted last month to the Administrative Office of the Courts by Legal Services of New Jersey on so-called “robo-signing” irregularities by mortgage lenders and how other states are responding to the issue. Robo-signings occur when a lender’s employee signs off on foreclosure documents without knowing the full facts of the matter. The action has been found to be widespread in the United States.
General Equity Judge Mary C. Jacobson, who sits in Trenton, has been designated by Rabner to oversee foreclosure matters. She has signed an order directing six lenders and service providers who have been implicated in irregularities in connection with their foreclosure practices to show cause on Jan. 19 why the processing of uncontested residential mortgage foreclosure actions they have filed should not be suspended.
The six lenders are Bank of America/Bank of America Home Loan Services, Allied Financial, formerly GMC; J.P. Morgan Chase/Chase Home Finance, Wells Fargo/Wells Fargo Bank/Wells Fargo Financial of New Jersey, Onewest Bank FSD, and Citibank.

N.J. courts move to ensure integrity in home foreclosure process

Together, the six lenders have filed 29,000 foreclosure cases this year.
Under Jacobsen’s show cause order, the 24 other lenders who have all filed a total of 19,000 residential foreclosure actions in 2010 — or more than 200 each — must demonstrate within 45 that there are no irregularities in their handling of foreclosure proceedings, via submissions to retired Union County state Superior Court Judge Walter R. Barisonek, who has been recalled to temporary judicial service and assigned as a special master.
“Today’s actions are intended to provide greater confidence that the tens of thousands of residential foreclosure proceedings underway in New Jersey are based on reliable information,” Rabner said. “Nearly 95 percent of those cases are uncontested, despite evidence of flaws in the foreclosure process.
“For judges to sign an order foreclosing on a person’s home, they must first be able to rely on the accuracy of documents submitted by lenders,” the chief justice said. “That step is critical to the integrity of the judicial process.”
At the direction of Rabner, Judge Glenn A. Grant, acting administrative director of the courts, has issued an administrative order that details the scope of the problem and orders certain procedures to safeguard the mortgage foreclosure document preparation and filing process.
Grant has also notified the New Jersey Bar Association of the adoption of amendments to the Rules of Court that require the lenders’ attorneys in all residential foreclosure actions to file certifications confirming that they have communicated with a lender’s employees who have personally reviewed a foreclosure document and confirmed the accuracy of all court filings, and which remind the attorneys of their obligations under the court’s Rules of Professional Conduct.
The number of foreclosure cases handled by the courts this year total 45,759, with the greatest number of homes lost in Essex County, 4,428, and Middlesex County, 3,376. Salem County has had the least foreclosures with 390.

Grant said it take about a year from the time a homebuyer falls four months behind on a mortgage until a foreclosure action is settled in court.
In 2009, there were 66,717 foreclosure cases. In 2008, the number was 51,626, in 2007, it was 36,360, and in 2006, the number was 24,857.
Together, the figures show that 225,316 New Jerseyans, couples or families lost their homes in the past five years.
Rabner and Grant said that New Jerseyans who have already lost their homes and feel the lenders treated them unfairly should obtain legal counsel to press their specific cases.
Rabner said that 95 percent of foreclosure cases handled by the courts are uncontested by people who are losing their homes.
“It is our hope these three steps provide greater confidence that foreclosure filings are proper,” Rabner said. “It is important that the judiciary ensures that judges are not rubber stamping documents that may not be reliable.”

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