Courts Cracking Down on Banks and Foreclosures

While we wait to see what happens with the Mortgage Modification Bill we’ve been tracking in Congress, we’re happy to report that courts have stepped in to crack down on banks and foreclosures.

A recent New York Times article describes Arthur M. Schack, a 64-year old judge in Brooklyn who gives banks seeking to foreclose upon homeowners a major run for their money.  Judge Schack simply reviews the foreclosure documents submitted by the banks, and rejects the ones with mistakes.

And there are many with mistakes.  One foreclosure request by Deutsche Bank was accompanied by an affidavit by the bank’s representative, who claimed to be the vice president of two different bank.  Further, the representative’s office is in Kansas City, Mo., but the signature was notarized in Texas.  And to cap it all of, the bank did not even own the mortgage when it began to foreclose on the homeowner.

Request denied.

Judge Schack explains:  “If you are going to take away someone’s house, everything should be legal and correct.”  “I’m a strange guy,” he adds.  “I don’t want to put a family on the street unless it’s legitimate.”

It seems that this approach is becoming a trend.  According to a recent article in ProPublica, judges have started to scrutinize mortgage servicers’ records, and have found that these services “regularly mess up basic accounting, improperly credit payments and charge unwarranted fees.”

Experts in consumer credit law are not surprised.  “To the extent that judges examine these papers, they find exactly the same errors that Judge Schack does,” commented Professor Katherine M. Potter from the School of Law at the University of California, Berkeley.  “His rulings are hardly revolutionary; it’s unusual only because we so rarely hold large corporations to the rules.”

Contact Haines and Krieger today for a free consultation at 702-880-5554.

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