This article in the New York Times suggests that courts may no longer allow lawyers to blame paperwork issues and inaccuracies on their clients. Now, some New York state court judges are requiring lawyers representing lenders to vouch for the accuracy of the client’s representations.
This is a judicial reaction to the frequent reports mortgage lenders relying on incorrect, incomplete, and unverified documents to take action against borrowers. This is an attempt to place some responsibility on the creditor’s attorney to vet the accuracy of his or her client’s documents, instead of leaving it all up to the court system.
As you’d expect, the article quotes foreclosure attorneys who dislike this practice, especially in the face of potential fines in the event the documents are erroneous.
The Rules of Professional Conduct already require an attorney to do a due diligence review of any client’s claims, and this practice could restore some level of faith in the foreclosure process. As it stands now, most borrowers believe that the “robo-signing” issues are indicative of the entire industry, not just a few sloppy lenders.
Any system that introduces only a few basic safe-guards into the process should be welcomed by counsel for foreclosure lenders.