As foreclosure cases continue to pour into courts, judges in New York are holding their fellow legal professionals accountable for their role in perpetuating foreclosure fraud.

Judges in the state say foreclosure lawyers have filed often ludicrous paperwork on behalf of their clients, which Nassau County District Court judge, Scott Fairgrieve, told the New York Times, “reflects poorly on the profession as a whole.” Another judge referred to a lawyer’s filings as “ludicrous,” among other jabs.

In response to lawyers filing shoddy and sometimes fabricated paperwork, New York, as well as Florida, courts are now requiring lawyers to swear that their foreclosure paperwork is accurate.

The New York bar association protested this measure. A common sentiment among foreclosure attorneys was expressed in the online legal publication, Law Forward:

“One attorney called the requirement “preposterous,” noting that if every criminal lawyer had to swear that their clients were telling the truth, “no one would practice criminal law.”

But some of the larger law firms may have overseen the signing of documents without sufficient examination or proper notarization, according to the New York Times.

This behavior was documented in Florida recently in a 98-page powerpoint presentation on foreclosure fraud by the Florida Attorneys General. That investigation found that some law offices functioned much like the robo-signing lenders they were representing, according to Daily Finance.

The measure has had an impact on the number of foreclosure claims attorneys have been filing in New York courts. In the month after courts began requiring attorneys to stand by their paperwork, foreclosure filings in New York dropped to 100 between December 6-12 from 800 between Oct. 18-24, according to Law Forward.

New York Judges Hold Foreclosure Lawyers Responsible For Filings – from The Huffington Post.

With judges looking ever more critically at home foreclosures, they are reaching beyond the bankers to heap some of their most scorching criticism on the lawyers.

In numerous opinions, judges have accused lawyers of processing shoddy or even fabricated paperwork in foreclosure actions when representing the banks.

Judge Arthur M. Schack of New York State Supreme Court in Brooklyn has taken aim at an upstate lawyer, Steven J. Baum, referring to one filing as “incredible, outrageous, ludicrous and disingenuous.”

But New York judges are also trying to take the lead in fixing the mortgage mess by leaning on the lawyers. In November, a judge ordered Mr. Baum’s firm to pay nearly $20,000 in fines and costs related to papers that he said contained numerous “falsities.” The judge, Scott Fairgrieve of Nassau County District Court, wrote that “swearing to false statements reflects poorly on the profession as a whole.”

More broadly, the courts in New York State, along with Florida, have begun requiring that lawyers in foreclosure cases vouch for the accuracy of the documents they present, which prompted a protest from the New York bar. The requirement, which is being considered by courts in other states, could open lawyers to disciplinary actions that could harm or even end careers.

Read the full article at New York Times.com: Foreclosure Judges Berate Lawyers.com.

One day after a reported settlement between Bank of America, JP Morgan Chase, Citigroup, Wells Fargo and Ally Financial with attorneys general across the U.S. in the foreclosure epidemic, Florida Attorney General Pam Bondi released a highly critical presentation detailing legal issues surrounding the crisis.

The presentation, titled “Unfair, Deceptive and Unconscionable Acts in Foreclosure Cases,” was provided by the attorney general’s economic crimes division during an early December conference of the Florida Association of Court Clerks and Comptrollers as an overview and was not representative of any specific misconduct.

The comprehensive presentation was compiled in exploration of foreclosure malpractice and condemns banks, mortgage servicers, and law firms for contributing to the crisis by cutting corners.

Although not aimed at a specific case, four of Florida’s largest foreclosure law firms are under investigation by the state. The Florida Default Law Group, the Law Offices of Marshall C. Watson, P.A.; the Law Offices of David J. Stern, P.A.; and Shapiro & Fishman, LLP, all have denied wrong doing.

Sweeping evidence of mortgage fraud was outlined in the 98-page presentation complete with copies of alleged forged signatures, false notarizations, bogus witnesses and improper mortgage assignments. Examples of alleged fraud and missteps made during the securitization process by major financial institutions when they wrote, packaged, and sold mortgages during the boom years was also provided.

The “Unfair, Deceptive and Unconscionable Acts in Foreclosure Cases” presentation meticulously documents cases of questionable signatures, notarizations that could not have occurred when claimed due to expired notary commissions and foreclosures filed by banks or law firms that lacked legal standing to foreclose on a particular property.

The presentation also focused largely on assignments of mortgage, a legal document that transfers ownership of mortgages from one bank to another. Mortgage assignments became an issue after the real estate boom, when mortgages were sold and resold, packaged into securitized trusts and otherwise transferred in a fashion that made tracking difficult.

“The Attorney General’s Office has a long standing commitment to fighting mortgage fraud and is dedicated to continuing this critical effort,” said Florida Attorney General Pam Bondi. “Since 2008, our office has started over 150 formal mortgage fraud investigations, 70 which remain active, 21 that resulted in civil lawsuits, and over 50 companies in review.”

As the foreclosure crisis mounted, banks and law firms appointed people to create assignments, of which tens of thousands were executed by robo-signers who failed to properly verify the claims in which they were swearing upon.

In one example, the signature of an individual named Linda Green appears — in varying styles — on hundreds of thousands of mortgage documents from dozens of banks and mortgage companies.

In another example, the signature of Scott Anderson, an employee of West Palm Beach-based Ocwen Financial Corp., appears in four styles on mortgage assignments.

Paul Koches, executive vice president of Ocwen, has acknowledged that the signatures were not all Anderson’s, “but that doesn’t mean they were forged,” he said. “Certain employees were given authorization to sign for Anderson on mortgage assignments.” Once the robo-signing crisis was revealed, Ocwen stopped allowing other employees to sign for Anderson.

“For the sake of expediency, no one bothered to verify or otherwise validate these assignments and affidavits prior to signing them,” says Carlos J. Reyes, a foreclosure defense attorney with the Reyes Law Group in Fort Lauderdale. “In some cases, courts have found that banks did not have standing to foreclose on the property sued upon.”

Foreclosure fraud: AG releases critical report.

PHOENIX — An array of federal and state investigations into the way banks foreclose on delinquent homeowners has contributed to a sharp slowdown in foreclosures across the country, especially in hard-hit cities like this one.

Over the last several months, some banks have been reluctant to seize homes from distressed borrowers, economists and government officials say, as they face scrutiny from regulators and the prospect of sanctions when investigations wrap up in the coming weeks and months.

The Obama administration, in its most recent housing report, said foreclosure activity fell 21 percent in November from October, the biggest monthly decline in five years. Here in Phoenix, foreclosures fell by more than a third in the same period, reflected in the severe drop in foreclosed homes being auctioned on the courthouse plaza.

“There’s no product, just nothing to buy,” complained Sean Waak, an agent for investors, during a recent auction.

The pace of foreclosures could be curtailed further by courts. In a closely watched case, the highest court in Massachusetts invalidated two foreclosures in that state on Friday. The court ruled that two banks, U.S. Bancorp and Wells Fargo, failed to prove they owned the mortgages when they foreclosed on the homes.

If the slowdown continued through this month and into the spring, it could be a boost for the economy. Reducing foreclosures in a meaningful way would act to stabilize the housing market, real estate experts say, letting the administration patch up one of the economy’s most persistently troubled sectors. Fewer foreclosures means that buyers pay more for the ones that do come to market, which strengthens overall home prices and builds consumer confidence in housing.

“Anything that buys time, that reduces the supply of houses coming onto the market, is helpful,” said Karl Guntermann, a professor of real estate finance at Arizona State University.

It is not that borrowers have stopped defaulting on their mortgages. They are missing payments as frequently as ever, data shows. But the lenders are not beginning formal foreclosure proceedings or, when they are, do not complete them with an auction sale. And in the most favorable outcome for distressed borrowers, some lenders are modifying loans so foreclosure becomes unnecessary.

The drop in foreclosures began in late September when some lenders were revealed to have been using so-called robo-signers to process thousands of foreclosures without verifying the accuracy of the data. As the investigations into the problems proceeded, the uncertainty caused many lenders to become more cautious.

Their foreclosure procedures, the banks have repeatedly said, are sound. But preliminary results of several of the investigations have indicated substantial problems. Coordinating many of the inquiries is the Financial Fraud Enforcement Task Force, established by President Obama.

Banks Become Reluctant to Foreclose

Stocks fell Friday after a court ruling in a foreclosure case prompted investors to pull out of bank stocks, adding to weakness after a lackluster jobs report.

ven with the decline, however, the Standard & Poor’s 500-stock index and the Dow Jones industrial average recorded their sixth consecutive week of advances.

Wells Fargo and U.S. Bancorp lost a ruling by the Supreme Judicial Court of Massachusetts, which said the banks failed to show they held the mortgages at the time they foreclosed.

The court decision is the latest on the validity of foreclosures conducted without full documentation, and the mortgage fiasco could prove costly for the banks. The news turned the market lower, but some said the reaction was overdone.

“Financials have really been a leader in the market in recent weeks — this could close that sector out,” said Nick Kalivas, senior equity index analyst at MF Global in Chicago.

Shares of Wells Fargo fell 65 cents, or 2 percent, to $31.50, and US Bancorp eased 20 cents, or 0.76 percent, to $26.09. The KBW Bank index lost 0.9 percent.

A Court Ruling and Weak Jobs Report Hurt Shares.