New York to Require New Foreclosing Filing Certification

New York has become the first state in the nation to implement a new filing requirement for residential foreclosures. Lenders’ counsel are now going to be required to file an affirmation with the NY courts certifying they have reviewed and verified the accuracy of the papers being filed for the foreclosure actions.  The goal of the New York courts is to prevent wrongful foreclosures. New York is one of the judicial foreclosure states.

Chief Judge Jonathan Lippman introduced the new filing requirement in response to the robo-signers scandal by major mortgage lenders and servicers such as Bank of America, GMAC Mortgage and JPMorgan Chase. This scandal that many are calling ForeclosureGate, is having new details come to light on a daily basis that proper procedures may not have been followed.

This new requirement will be effective immediately and was done with the approval of the presiding justices of all four judicial departments.

Said Chief Judge Lippman in a statement, “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. 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.”

Here’s how it works…

For new cases, the affirmation must accompany the Request for Judicial Intervention.

For pending cases, the affirmation will have to be submitted with either the proposed order of reference or the proposed judgment of foreclosure. For cases where a foreclosure judgment has been entered but the property has not yet been sold by auction, the affirmation must be submitted to the court referee and a copy filed with the court, within five business days before the scheduled auction. Attorneys will also have to file an amended version of the affidavit if new facts emerge after the initial filing. This latter requirement seems like an interesting check and balance and one the banks are sure to hate having to do, because new facts do often emerge during the process of a foreclosure.

Will the other 22 states which practice judicial foreclosures follow New York’s example? And will this new foreclosure filing certification work or will the big box banks simply find ways to end-run around this?

To Your Short Sale Success!