Queens Foreclosure Defense 411: How To Use Robo-Signing In A Queens Foreclosure Defense

People ask me all the time about Robo-signing. So, It’s time to talk about Robo-signing in this installment of Queens Foreclosure Defense 411.

A foreclosing lender must demonstrate three things in order to foreclose. The first being that they must prove the homeowner has defaulted on the mortgage. Secondly, the amount of debt they are attempting to collect is correct. Lastly, they also have to prove they have legal standing to enforce the mortgage and the note. 

The lender must include the requisite facts in a New York foreclosure complaint. They must also include documents such as the mortgage, any mortgage assignments, and the note. 

The law firm handling the foreclosure must also include an affidavit stating they believe the facts to be true. The idea is to prevent the lender from foreclosing on homes when they cannot prove that it owns the mortgage. 

Queens Foreclosure Defense 411: What Is Robo-Signing?

After the financial collapse, it was revealed that several large banks routinely used affidavits signed by contractors who did not personally review the documents. These contracting firms had no basis for believing that the homeowner was in default or that the bank owned the loan.

Most of them have testified that they signed many thousands of affidavits and mortgage assignments a month. They claim they also only spending about 30 seconds on each affidavit.

The notaries and signers admitted they didn’t have a clue regarding the veracity of the affidavit or mortgage assignments in question. Hence, the birth of the name “Robo-signing.

Robo-signing has since become an ambiguous term used everytime a signature on a document doesn’t look right. You can also make Robo-signing claims on note endorsements.

Queens Foreclosure Defense 411: What Effect Do False Affidavits Have On The Foreclosure Process?

Lenders cannot legally foreclose on a house if the foreclosure paperwork is not in order. This means that if the affidavit or any other foreclosure documents a bank submits are false the foreclosure cannot go through. The lender’s lawyers could also face sanctions from the court.

The reality is that banks have foreclosed on thousands of properties using false or doctored documents. 

Judges began taking a closer look at the affidavits and paperwork after Robo-signing came to light. They began refusing to sign off on the foreclosures if the paperwork wasn’t in order.

Queens Foreclosure Defense 411: Challenging a Foreclosure Based on a Faulty Affidavit

Robo-signing called into question the integrity of foreclosure paperwork. This caused the courts to scrutinize bank foreclosure affidavits and documentation. Judges became more willing to entertain homeowner claims of fraudulent documents.

You can challenge your foreclosure of your home in New York based on faulty documents. However, the process depends on what court you are in. 

New York State Court: 

New York courts do not consider faulty or fraudulent documents an affirmative defense. However, you can use it question the legal standing of the lender by arguing they acquired the loan through fraudulent means. In addition, you may also be able to file a countersuit against the lender overstanding.

Bankruptcy:

Homeowners may also challenge foreclosures in Chapter 13 bankruptcy. In a Chapter 13 bankruptcy, lenders must file a claim to secure payments on their mortgage under the repayment plan. Homeowners may oppose the claim in Chapter 13 BK based on the lender’s inability to provide the correct documents. 

Delays in Processing Foreclosures

Lenders have stopped using Robo-signers because they began losing cases. They also starting catching heat by state regulators. Lending executives must now spend time reviewing the property file and loan papers before signing the affidavit. Wall Street and the banks have insisted Robo-signing is a mere technicality. However, it is not a mere technicality. Lenders have been caught submitting false or legally faulty paperwork to the court. 

Opportunities to Negotiate

As a result of the Robo-signing scandal, courts are more inclined to believe that foreclosure paperwork is faulty. As a result, a homeowner can use this to their advantage. Lenders may be more inclined to offer some type of mortgage modification. Especially if the homeowner can establish a high level of fraudulent activity. A lender would rather take a hit and collect the mortgage insurance. This beats the embarrassment of being berated by a judge on the public record.

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