New Jersey Courts Propose Agreement With Banks to Restart Uncontested Foreclosures

Uncontested foreclosures in New Jersey have been effectively halted in New Jersey since December 20, 2010 when the court in The Matter of Residential Mortgage Foreclosure Pleadings and Document Irregularities, issued an Order to Show Cause freezing the vast majority of such actions.  The Order specifically directs Bank of America, JP Morgan Chase, CitiBank, Ally Financial, One West Bank, and Wells Fargo to show cause why processing of uncontested residential mortgage foreclosure actions they have filed should not be suspended. Chief Judge Stuart Rabner initiated the inquiry after each of these banks had been implicated in "Robo-Signing" - the assembly line execution of affidavits supporting foreclosure proceedings despite the signer's lack of personal knowledge that the contents are true or correct.  "For judges to sign an order foreclosing on a person's home, they must first be able to rely on the accuracy of documents submitted by lenders. That step is critical to the integrity of the judicial process," said Rabner.

Now, the court appears to have reached an agreement with the banks.  Under a recommended stipulation proposed by the court on March 18, 2011, the banks will be required to file papers by April 1, 2011 demonstrating that they have cleaned up their practices. Further, the court will appoint a special master, retired Judge Richard Williams, to oversee the banks' compliance and improved practices.  In addition, the banks will be required to comply with the heightened standards issued by the court on December 20, 2010 requiring the banks' attorneys to file an affidavit confirming the veracity of the banks' affidavits, certifications, and documents.
 
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