New York Requires Attorneys to Verify Residential Foreclosure Pleadings in Response to National Foreclosure Freeze
On October 20, 2010, Chief Judge Jonathan Lippman of the State of New York announced that lender’s counsel in residential foreclosure actions will now be required to file an affirmation certifying that they have taken reasonable measures to verify the accuracy of documents submitted in connection with the action. The new rule is effective immediately. The New York State Unified Court System has provided a sample affirmation that was released with Judge Lippman’s statement.
Under the new rule, there are three specific instances when an affirmation needs to be submitted:
- For new cases, with the Request for Judicial Intervention;
- For pending cases, with either the proposed order of reference or the proposed judgment of foreclosure; and
- 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 referee, and a copy filed with the court, no later than five business days before the scheduled auction.
Finally, there is a “continuing obligation” to file an affirmation if an attorney learns of new facts after the initial filing.
The new rule, the first in the country, is a reaction to the recent “robosigning” controversy, which has halted residential foreclosures nationwide and prompted a massive investigation by all fifty state attorney general offices in the United States into the practices of several major financial institutions. In addition, at least one state, Florida, has also announced an investigation of a law firm that has been prosecuting foreclosure actions.
In announcing the new rule, 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.
Given the apparent scope and visibility of the residential foreclosure problem, it is likely that other state court systems will follow New York’s lead.