Ohio County Takes a Stance Against Robo-Signed Foreclosures

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Last month, the New York court system acted to protect its integrity by requiring banks filing foreclosure cases to submit special sworn statements aimed at eliminating robo-signing, the fraudulent practice of pretending to have reviewed and verified hundreds of legal documents a day. Now the judges in Cuyahoga County, Ohio, which includes Cleveland, are following suit.

The Cuyahoga County judges' foreclosure committee has come up with an anti-robo-signing affidavit it wants submitted with every foreclosure case pending or filed in the county. It has notified all 34 judges that the magistrates will be following this policy in all cases as of Monday.

Affirmations have to be sworn by the attorneys for the foreclosing lenders. They must attest that they have spoken with the foreclosing bank (naming the person they spoke to) and made sure that individual personally reviewed the information being used to justify the foreclosure and confirmed its accuracy. Then attorneys must further attest to the fact that they have conducted "other diligent inquiry" to verify the information.

The language is very similar to the New York rule, and will likely have similar consequences. New York attorneys expect that the new rule will be easy for foreclosure attorneys to file in non-securitized mortgage cases where the foreclosing attorney represents a small creditor. But compliance will likely require a months-long procedural overhaul for attorneys representing the robo-signing banks, so those cases are basically on hold.

Because the foreclosure committee has no power to tell the other judges how to run their courtrooms, committee chair Judge Eileen T. Gallagher explained that any of the judges can opt out of the policy just by telling the magistrates that they wish to. Chief Magistrate Steve Bucha explained that typically judges don't opt out of recommended policies and so far no judges have opted out of this one. Although he noted the policy was formally announced last Friday and took effect today so there hasn't been much time for them to opt out yet.

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Even if all the Cuyahoga judges follow the new policy, however, it's just one county in a state hard hit by foreclosures and homeowners in other places aren't similarly protected. Attorney General Richard Cordray is seeking an injunction that would prevent one lender from using the documents of one robo-signer statewide. But given the apparent ubiquity of the robo-signing problem and the multiple people robo-signing documents, that effort, too, would have a limited effect -- even if the injunction is issued.

Nonetheless, Cuyahoga county residents should feel good that their judges are defending the integrity of the court system. At least from now on those judges can have some confidence that the filings before them are true and foreclosures are being properly pursued. Of course, as Judge Nancy Margaret Russo noted, the new policy doesn't affect the cases that have already been completed.

In those that have but haven't yet gone to sale, she's conducting hearings to have the lender demonstrate the truth of its documents, like she did today. But what about the foreclosed properties that were taken with fraudulent documents and sold already? That's a mess that can't be addressed by the new policy, or Judge Russo's hearings. No suits have yet been seen in Cuyahoga County charging that an already sold foreclosure is wrongful, but Bucha expects to see them soon.
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