Foreclosure Cases Give Homeowners Second Chance

The robo-signing foreclosure saga continues for homeowners in New York, who claim to have been wrongly foreclosed on due to shoddy paperwork. But this time around, judges are throwing out foreclosure cases where lenders won't swear up and down that their foreclosure procedures were accurate. Effectively, homeowners in cases where the banks' lawyers won't confirm that the foreclosure process was conducted by the book are getting a second chance at keeping their homes. Could this "affirmation rule" set a precedent in other areas? Abigail Field, a writer for our sister site Daily Finance, has the full story.

On Oct. 20, New York state courts cracked down on robo-signing by ordering attorneys for foreclosing banks to swear that they had personally confirmed that the documents they are submitting are true and accurate. So far, attorneys haven't been able to file many of the necessary affirmations.

Now, Judge Arthur M. Schack of Brooklyn has taken things a step further. Since the banks in cases before him have yet to begin complying with the new court rules, he has started throwing out foreclosure cases. But the question isn't whether the banks will now choose to start complying with the rule: The question is: Will they even be able to?