Effect of Claims of Fraud & Perjury by Banks On Mortgage Modification

On January 11, 2011, the New York Times reported that “ In numerous opinions, judges have accused lawyers of processing shoddy or even fabricated paperwork in foreclosure actions when representing the banks. … The role of lawyers is under scrutiny in the 23 states where foreclosures must be reviewed by a court. The situation has become especially heated for high-volume firms whose practices mirror the so-called robo-signing of some financial institutions; in these cases, documents were signed without sufficient examination or proper notarization.” In New Jersey foreclosure complaints are filed and proceed in the Chancery Division of the Superior Court. The Court has issued and Order that requires that the attorneys representing the banks listed below Show Cause Why the Processing of Certain Uncontested Residential Mortgage Foreclosure Action Should Not Be Suspended pending an investigation of allegations which include the use of fraudulent documents and perjured affidavits to obtain foreclosure judgments. * The question for homeowners seeking mortgage modification is will the mounting evidence of the use systematic fraud and perjury to obtain foreclosure judgments by banks push them to agree to mortgage modification.

* Entered by the Hon. Mary C. Jacobson, Superior Court of New Jsersey, Mercer County on December 20, 2010 F.–059553–10. The Order requires that Ally Financial (f/k/a GMAC), Bank of America/BAC home loans servicing LP, J.P. Morgan Chase/Chase home finance , Wells Fargo, one West Bank (f/k/a IndyMac) and Citibank/City residential lending, to appear at a hearing on January 19, 2011 and show cause why the court should not suspend the processing of all foreclosure matters to review their past and proposed foreclosure practices. 
Depending on it terms, length, and requirements, the suspension, it would greatly change foreclosure proceedings in New Jersey.


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