On December 20, New Jersey Supreme Court Chief Justice Stuart Rabner released a trio of bold initiatives aimed at ending the “robo-signing” practices of the six largest mortgage foreclosure banks in New Jersey and investigating the 24 other lenders that have filed at least 200 home foreclosures in the past year. The orders cover 75 percent of all residential foreclosures in the state, according to the judiciary’s press office.
The first is an "order to show cause" signed by Judge Mary Jacobson, directing the Big Six of admitted robo-signers -- GMAC, Bank of America, JPMorgan Chase, Wells Fargo, CitiBank and OneWest -- to appear in her Trenton courtroom on January 19 and explain why she should not suspend judicial processing of all “uncontested foreclosures” (where the homeowner has no attorney) until these banks persuade her they have given up robo-signing.
In short, the Big Six face a possible foreclosure moratorium.
The same order names Edward Dauber, former director of the civil division in the Attorney General’s office, to "respond to the submissions" by the banks and to "present argument supporting appointment of a Special Master and the suspension of foreclosure processing."
As a result, Dauber, now in private practice, steps into the shoes of the Attorney General and the Public Advocate (abolished by Gov. Chris Christie) to defend the rights of homeowners against fraudulent practices.
This brings up the question: Where is Attorney General Paula Dow in all of this? (Her press officer declined all comment except to say that no one from her office will be in court on January 19.) In October, amid some fanfare, she announced New Jersey was joining 49 other states in a national inquiry into banks accused of robo-signing.
Robo-signing occurs when lenders assign a low-level employee, sometimes crowned as a “Vice President,” to sign hundreds of affidavits attesting to the accuracy of the banks’ claims against a homeowner, assuring the court that the mortgagor is in default, the bank owns the mortgage, and specifying the amounts due.
The courts relies on these affidavits when issuing foreclosure and sheriff sale orders. They treat them as conclusive evidence because of the penalty for "false swearing" -- which is the same as perjury.
In other words, robo-signers and their masters could go to jail.
In a second order issued the same day, the Administrative Director, Judge Glenn Grant, recounted the robo-signing abuses of the Big Six, which impelled the judiciary to act decisively to put a stop to the practice.
Bank of America’s robo-signer has publicly admitted to blazing throught “about 400 documents per day” -- more than one a minute for a full workday -- even though she didn’t know what was in them. JPMorgan’s signers “executed 18,000 affidavits per month, "doubtless risking carpel tunnel syndrome," without reviewing them "to determine the factual accuracy" of the sworn statements a court will use to remove families from their homes.
Citibank used an employee of another company to do its dirty work for it. This robo-signer for-hire handled thousands of affidavits "he did not review... for substantive correctness."
Judge Grant noted that this for-hire signer "could not even explain what an assignment of mortgage was. He had no background in the mortgage industry... and never reviewed any books, records, or documents before signing affidavits."
The robo-signer for Wells Fargo admitted to affirming "50 to 150 documents per day, including mortgage assignments, and affidavits related to foreclosure... without checking the information." He and others "could sign as Vice Presidents for Loan Documentation... but were not otherwise officers of the company." Another Wells Fargo VP admitted to “spending about two hours a day signing 300 to 500 documents."
The third order addressed the law firms filing these foreclosure suits. Chief Justice Rabner adopted "emergent amendments” to the Court Rules -- binding on all judges and lawyers -- pointedly reminding them of their ethical duties. Stripped of the legalese, these rules tell lawyers that it is their duty not simply to tell the truth to every court but to ensure the truthfulness of any evidence they submit to support a foreclosure.
All in all, it was a busy and proud day for our Supreme Court, which has had its share of bad publicity of late. By issuing these orders, Justice Rabner shows he is acting in the best tradition of his predecessors, who were unafraid to brave the wrath of those decrying "judicial activism" when they led the courts into the legal vacuum left by the elected branches of government.