Statewide filings of new foreclosures plummeted after Chief Judge Jonathan Lippman on Oct. 20 required attorneys for lenders to submit affirmations attesting to the accuracy of their court submissions, state figures show.
There were 797 residential foreclosure filings during Oct. 18-24, the week of the chief judge’s announcement of the requirement, according to the Office of Court Administration. There has been a precipitous decline since then; only 100 filings were recorded during the week of Dec. 6-12.
The drop-off has been particularly stark in counties where lenders have been especially active in seeking foreclosures. For example, filings fell to six from 274 in Suffolk County and to two from 53 in Brooklyn between the week Judge Lippman made his announcement and last week. Only in Queens have filings remained at a relatively high level, falling to 48 from 88 during the same period.
Attorneys and court officials anticipate the decline will be temporary and that foreclosures will start rising again as lenders and their attorneys become familiar with the new requirements and adjust their procedures.
“I assume it’s a blip in the process,” said Paul Lewis, chief of staff to Chief Administrative Judge Ann Pfau. “It’s a breather, it’s not an end to foreclosure in the court system.”
For the moment though, lenders and their attorneys are still struggling to come to grips with a system that requires attorneys to communicate with named representatives of their clients and to assure the courts that the papers they file contain “no false statements of fact or law” (NYLJ, Oct. 21). Violation of the requirement could lead to disciplinary action.
Mr. Lewis said he had expected a slowdown as attorneys studied the affirmation. However, he called the actual statistics “surprising.”
“I knew there’d be a drop off, but not of this magnitude,” he said.
“The pace of foreclosures has slowed considerably as both law firms and their clients work on procedures to comply with the new affirmation requirements,” said Steven J. Baum in an e-mail. Mr. Baum’s Amherst-based law firm represented lenders in more than 20,000 actions statewide last year.
A Long Island attorney who represents lenders but declined to be named for fear of antagonizing court officials, said that she has signed a few affirmations in cases involving smaller banks. But her firm has canceled all sales and is waiting for direction from its larger bank clients on how to proceed.
“They really put a finger in the dam so that nothing’s moving,” she said of the courts action.
The dynamic was highlighted in a decision Monday by Brooklyn Supreme Court Justice Arthur Schack (See Profile) in Citimortgage v. Nunez, 2558-2009. Noting that Citimortgage’s counsel did not have an affirmation because the bank did not have procedures in place to comply with Judge Lippman’s order, Justice Schack dismissed the foreclosure action without prejudice.
“The Court does not work for CITI and cannot wait for CITI, a multi-billion dollar financial behemoth, to get its ‘act’ together,” the judge wrote. He later added, “Continuing the instant action without moving for a judgment of foreclosure and sale is the judicial equivalent of a ‘timeout,’ and granting a ‘timeout’ to plaintiff CITI is a waster of judicial resources.”
‘It Just Stopped’
Paul Riordan is a court referee who oversees the settlement conferences in Monroe County. Before the Oct. 20 announcement, the county was averaging between 100 and 150 residential foreclosure filings a month.
“It just stopped,” he said.
Mr. Riordan said that the few affirmations filed have come from locally owned banks and private deals, not from any national banks. He noted that the lenders’ attorneys he speaks with are resigned to submitting the affirmation but just need to figure out how to do so.
Christopher Palmer of Brooklyn-based Cullen and Dykman said he has signed about 10 affirmations, with other colleagues signing even more.
“It’s a little bit scary, but certainly is serving its purpose” of insuring that court papers are accurate, he said.
But the Long Island attorney said she considered the requirement “preposterous,” observing that in no other area are lawyers required to submit written pledges that clients are being truthful.
“If every criminal lawyer had to swear that their clients were telling the truth, no one would practice criminal law,” she said.
In a November interview, Judge Lippman said the affirmations, which came against a backdrop of publicity about “robosigning” and other negligence in foreclosures, underscored the importance of full and accurate paperwork in proceedings where the stakes for homeowners are so high.
“And, I might say, if the lawyers feel in some way by asking them to do what they should be doing anyway in some way makes them adversarial with their clients or slows down the proceeding, then so be it,” he said.
In Erie County—where Buffalo is located and where there have been only two foreclosure filings since Nov. 8—Supreme Court Justice Timothy J. Walker (See Profile) said he wrote to attorneys in some 220 pending cases on Dec. 9 to caution them that their matters would be dismissed if the required affirmations were not filed within 45 days. Given the financial stakes for the banks and with the attorneys’ reputation on the line, Judge Walker said he anticipates that most will comply.
“Eventually they are going to get things right. They have to,” he said.
Meanwhile, Suffolk Supreme Court Justice Peter H. Mayer (See Profile) issued a number of orders in pending foreclosure actions, such as Citimortgage v. McGee, 25292-2009, saying affirmations must come with “any and all stages of new and pending foreclosure proceedings.”
Mr. Lewis, Judge Pfau’s chief of staff, said he has fielded between 40 and 50 calls from attorneys about the affirmation’s language, application and when it could be submitted.
He said the attorneys’ difficulties have been increased by the fact that many are working with hard-to-reach out-of-state clients.
“I don’t think they have the infrastructure for conferences and affirmations,” he said of the banks.
Mr. Lewis contrasted that situation to that prevailing in personal injury and medical malpractice cases where an insurance adjuster is on standby to authorize any settlement.
“You don’t have that with the banks. Banks have to come up with a system,” he said.
The filings have affected some foreclosure defense attorneys too. Robbie L. Vaughn of Vaughn & Weber in Mineola has noticed at least a 50 percent drop in new foreclosure defense business since late October. Of the approximately 40 to 50 active foreclosure cases the firm is now handling, about five have been started after October.
“It’s good if they’re taking their time to make sure the paperwork is in proper order,” he said, later adding that the slowdown is just temporary. “I think they are going to come back full force,” he said.
@|Andrew Keshner can be contacted at firstname.lastname@example.org.