Foreclosures Plunge

On December 16, 2010, in Foreclosure, by John A. Weber IV, ESQ.

Robbie L. Vaughn, Esq. is quoted in the following New York Law Journal article written by Andrew Keshner.  Mr. Keshner details how the new Attorney Affirmation requirement has impacted recent foreclosure filings.

As stated in the article, we have seen a substantial decline in calls from homeowners seeking foreclosure defense representation. However, we have had an increase in calls from homeowners wishing to evict tenants.  The evictions seem to be driven by the homeowner’s desire to Short sale their property.  We’re not yet sure if lenders have become more willing to approve short sales, but we do find it interesting that foreclosure actions have declined and short sales seem to be on the rise.
The following article is from

Foreclosures Plunge as Lawyers Adjust to New Affirmation Rule

Andrew Keshner

New York Law Journal

December 16, 2010

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

Subscribe to New York Law Journal

As always, The Law Firm of VAUGHN & WEBER, PLLC is here to assist you. We are conveniently located in the heart of Nassau County, Long Island at 217 Willis Avenue in Mineola, NY 11501. You can Contact us at (516) 858-2620 to speak with an attorney.

Thanks for stopping by. All the best!

A partner at our firm, Robbie L. Vaughn, is quoted in this article from The New York Law Journal:  Check it out below!  As always we are here to answer any questions concerning this new court ruling at (516) 858-2620!

New Court Rule Says Attorneys Must Verify Foreclosure Papers

Andrew Keshner

New York Law Journal

October 21, 2010

“We feel we have an obligation to make sure the attorneys do their due diligence and come to us with credible papers because the consequences [of wrongful foreclosures] are so great,” Chief Judge Jonathan Lippman said in an interview, adding that the new filing requirement is the first in the nation.

See a sample of the affirmation attorneys will be required to provide.

Attorneys must now certify, “under the penalties of perjury,” that they have communicated with a representative of the plaintiff bank or lender and that they have personally reviewed all documents and records related to the case.

After making this review and “other diligent inquiry,” they must attest that “to the best of my knowledge information and belief, the Summons and Complaint and all other documents filed in support of this action for foreclosure are complete and accurate in all relevant respects.”

The court system’s affirmation form notes that foreclosure filings in various courts around the nation have been subject to a variety of defects, including the failure of counsel to review documents and establish standings, bogus notarized affidavits and the “robosignature” of piles of documents by parties and their counsel.

“The wrongful filing and prosecution of foreclosure proceedings which are discovered to suffer from these defects may be cause for disciplinary and other sanctions upon participating counsel,” the court system warns.

“I think this makes clear to everybody the court system’s absolute commitment that we are not going to allow anything to interfere with the integrity of the court process,” said Judge Lippman.

Attorneys general in all 50 states and the District of Columbia are jointly investigating whether mortgage companies have violated state laws. In Maryland, an emergency measure approved this week by the state’s highest court outlines how state judges can review foreclosures and stop them if documents are invalid.

In New York, attorneys already have an obligation to ensure that the documents they present to the court are valid. For example, Rule 3.3 of the Rules of Professional Conduct states that lawyers should not knowingly “make a false statement of fact or law to a tribunal or fail to correct a false statement of material fact or law previously made to the lawyer.”

However, Judge Lippman told the Associated Press that forcing lawyers to sign something to certify that all papers have gotten a proper review will hold them accountable like never before.

“We want to make sure that everyone is focusing like a laser on these particular types of proceedings,” he said. “It puts them on notice. That’s what this is all about. We all have to make doubly sure that we are doing what we should be doing in the first place.”

Some New York judges have complained loudly about rampant errors of varying severity in legal filings by banks seeking to foreclose on record numbers of homeowners (NYLJ, Oct. 14).

Brooklyn Supreme Court Justice Arthur M. Schack, one of the judges who have pressed lenders to submit accurate paperwork, said the new Lippman rules are a “great idea,” which he hopes will allow defendants and judges to “get to the bottom of this mess.”

He said some lawyers appearing before him have admitted to signing documents at a rate of “hundreds a week and thousands a month, and the notary wasn’t even in the room.” The new rule may reduce inaccuracies, he said.

“I don’t know if it is unfair,” Justice Schack said. “You want to use the court system for relief, you have the burden of trying to have accurate paperwork and, based on your diligent inquiry, that it is true.”

Chief Administrative Judge Ann Pfau said she had judges with cases in which they refused to sign foreclosure orders without more documentation.

“There are particular issues in the foreclosure process that require us to be particularly diligent,” she said.

Judge Lippman said in a press release that “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.”

The New York State Bar Association welcomed the new requirement. Its president, Stephen P. Younger, said in a statement that “the chief judge has taken swift steps to address a nationwide problem in foreclosure actions. The New York State Bar Association applauds any effort to preserve and maintain the integrity of the foreclosure process.”

Mr. Younger said the affirmation form would be printed on the state bar’s Web site at

Robbie L. Vaughn of Vaughn & Weber in Mineola, who represents homeowners in foreclosure matters, said that “anything that would help the veracity of the paperwork would help. We find so many problems, it’s a shame.”

Gale D. Berg is a solo practitioner who is also the director of Pro Bono Attorney Activities for the Nassau County Bar Association, which runs a monthly foreclosure clinic. Speaking personally, she said the new requirement could prove difficult for some attorneys hired by the banks. Such counsel sometimes are hired on a per diem basis and first learn of the specific cases they are to handle only on the day they are to appear.

Anthony A. Capetola, a Williston Park-based attorney, has been court referee in Nassau and Suffolk County foreclosure matters for about 35 years. He noted that many homeowners facing foreclosure cannot afford to hire a lawyer. Without someone to advocate for the homeowner, the new requirement was the court’s effort to “try to put somebody’s neck on the line,” he said.

“The merits of this rule are going to be in the details,” said Joshua Stein, a Manhattan commercial real estate attorney who watches the residential market. Mr. Stein said it might make sense to ask a lawyer to make reasonable efforts to assess the facts, but attorneys could not be expected to become a “guarantor” of those facts.

“Is this imposing some higher standard and if it does, what will the unintended consequences be?” said Mr. Stein, who is the chair of the education committee for the state Mortgage Bankers Association but was speaking for himself. He added that slowing down the foreclosure process was not a good idea. “It’s a slow enough process already,” he said.

Michael P. Smith, the president of the state bankers’ group, said his members have long worked with court administrators to bring a “fair and timely resolution to foreclosure proceedings.”

“While we have not yet analyzed the new rules, we reaffirm our support for efforts to provide further clarity to a process which already is subject to stringent state laws,” Mr. Smith said in a statement.

New York is one of 23 states that requires judicial approval of foreclosures. JPMorgan Chase has estimated that its average foreclosure takes 792 days, one of the longest rates in the nation.

JPMorgan was one of a few major banks that froze all foreclosures nationwide while they reviewed their filings for problems. Two of the biggest, Bank of America and GMAC Mortgage, resumed proceedings this week.

The rule requiring a signed affirmation applies to both new cases and the 78,000 foreclosure actions already under way in New York courts. (See Foreclosure Figures for New York State: 2010 Year-to-Date Foreclosures Filed and Pending by County, 2009 Foreclosures Filed and Pending by County and Number of Filings by County 2005-2009.)

Lawyers handling pending foreclosure actions will probably need to go back to their clients and verify that all proper steps were followed, Judge Lippman said. The form created by the court requires the lawyers to give the name of the bank employee who affirmed that the records were accurate and the date the conversation took place.

Because the process is so lengthy and there are so many pending foreclosures, attorneys will be allowed to submit their affirmations at one of several points in the process.

For new cases, the affirmation would have to be included for the file to be complete. For pending cases—which can be at any point between the initial filing and the final ruling—the new affirmation is required before the judge’s final signature on the decision.

Once an order is signed, the affirmation would be required before an auction sale of the property is held.

@|Andrew Keshner can be contacted at The Associated Press and Law Journal reporter Joel Stashenko contributed to this report.

The following Press Release is from the NYS Unified Court System:

New York Courts First in Country to Institute Filing Requirement to Preserve Integrity of Foreclosure Process

NEW YORK – The New York State court system has instituted a new filing requirement in residential foreclosure cases to protect the integrity of the foreclosure process and prevent wrongful foreclosures. Chief Judge Jonathan Lippman today announced that plaintiff’s counsel in foreclosure actions will be required to file an affirmation certifying that counsel has 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. The new filing requirement was introduced by the Chief Judge in response to recent disclosures by major mortgage lenders of significant insufficiencies – including widespread deficiencies in notarization and “robosigning” of supporting documents – in residential foreclosure filings in courts nationwide. The new requirement is effective immediately and was created with the approval of the Presiding Justices of all four Judicial Departments.

Chief Judge Lippman said, “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.”

Under the new requirement, plaintiff’s counsel in foreclosure matters must submit the affirmation at one of several stages. In new cases, the affirmation must accompany the Request for Judicial Intervention. In pending cases, the affirmation must be submitted with either the proposed order of reference or the proposed judgment of foreclosure. In cases where a foreclosure judgment has been entered but the property has not yet been sold at auction, the affirmation must be submitted to the court referee, and a copy filed with the court, five business days before the scheduled auction. Counsel is also obligated to file an amended version of the affidavit if new facts emerge after the initial filing.

View the affirmation form.

As always, The Foreclosure Defense Law Firm of VAUGHN & WEBER, PLLC is here to assist you. We are conveniently located in the heart of Nassau County, Long Island, at 217 Willis Avenue in Mineola, NY 11501. Contact us at (516) 858-2620 to arrange a consultation with a foreclosure defense lawyer.

Please visit our Foreclosure category to learn more about foreclosure issues.

The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation. This website is Attorney Advertising. It does not form an attorney-client relationship. We are a debt relief agency and a law firm that helps people file for bankruptcy relief under the U.S. Bankruptcy Code – Title 11. Prior results do not guarantee a similar outcome. Proudly assisting residents of Long Island, Nassau county, Suffolk county, New York City, Queens, Brooklyn, Bronx, Staten Island, Manhattan