Wall Street Journal On Stalled Foreclosures, Legal Standing & Sloppy Paperwork

The Wall Street Journal reports:

• A cadre of state-court judges scrutinizing foreclosure actions in a string of recent rulings have discovered flaws in documents that borrowers may be able to use to keep their homes. The judges, including a committee from the Kings County Supreme Court in Brooklyn, N.Y., are highlighting shortcuts taken by mortgage companies in court filings, which borrowers might be able to exploit when facing foreclosure.

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• About six judges from the supreme court in Brooklyn, the state's lowest court, which handles most of the New York City borough's foreclosure actions, have been digging into the problem and finding new issues that they can use to dismiss cases.

• The work of the Brooklyn court -- which formed a committee to discuss foreclosures about five years ago, long before the housing crisis emerged -- looks prescient now as it has rejected dozens of foreclosure actions since the crisis began by identifying mistakes or suspicious information. Among the most energetic members of the Brooklyn committee is Justice Arthur Schack,(1) 63 years old. Justice Schack says barely any of the foreclosures he has denied eventually are completed.(2)

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• Elsewhere, in Suffolk County on Long Island, several judges have taken up scrutiny of mortgage documents. Justice Jeffrey Arlen Spinner wrote recently in a ruling that he found "glaring discrepancies and unexplained issues of substance" in a foreclosure lawsuit filed last year by GMAC Mortgage LLC.(3)

For more, see Some Judges Stiffen Foreclosure Standards.

See also, Wall Street Journal Law Blog: Subprime Legal: Judges Scrutinize Mortgage Docs, Deny Foreclosures.

For a story on the efforts of the Brooklyn judiciary in search of an effective approach to deal with the local foreclosure problem, see Brooklyn Daily Eagle: Brooklyn Justices Fight Foreclosure Crisis From All Angles.

(1) Go here for list of links to over thirty of Justice Schack's decisions denying foreclosure.
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(2) Among Justice Schack's colleagues on the Brooklyn court who haven't hesitated to deny foreclosure when the paperwork was screwed up are the Honorable Donald Scott Kurtz (see LaSalle Bank NA v Smalls, Jan. 3, 2008; PHH Mortgage Corp v Barber, Jan. 15, 2008; US Bank NA v Villaruel, Feb. 1, 2008; Wells Fargo Bank NA v Hampton, Jan. 3, 2008); and the Honorable Jack Battaglia (go here for links to his cases where foreclosures were denied).
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(3) For another of Justice Spinner's rulings denying foreclosure, see Wells Fargo Bank NA v Whitworth, Jan. 2, 2008. Not to be outdone, Justice Spinner's colleague on the Suffolk County court, the Honorable Joseph Farneti, has issued a couple of foreclosure denials of his own. See Aurora Loan Services v MacPherson, March 11, 2008; and CitiMortgage Inc. v Brown, March 13, 2008.