Housing Lawyers To Lawmakers: Flood Of Phony Foreclosure Documents Have Created Chaos In The Courts!

Bloomberg News reports:

• Mortgage lenders and their servicers, by flooding courts with falsified foreclosure documents, have created chaos in the judicial system, housing lawyers told lawmakers. “As we allow the mortgage loan industry to circumvent the rule of law, we show that corporate interests can get away with such massive dishonesty,” said Thomas A. Cox, a foreclosure- defense lawyer. “We thereby encourage more of it.”

• Cox, who works for Maine Attorneys Saving Homes, a legal aid service in Portland, made his remarks in written testimony prepared for a House Judiciary Committee hearing(1) on the causes of the foreclosure crisis. He and other witnesses scheduled to testify today described a chaotic system in which mortgage lenders routinely committed perjury and covered up mistakes. “There is a persistent refusal in the servicing industry to be honest about its conduct,” Cox said.

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• James A. Kowalski, a Jacksonville, Florida, foreclosure defense lawyer, described a homeowner who is facing simultaneous foreclosure lawsuits filed by two different trustees both claiming to own the same loan. [...] In separate court filings Kowalski provided to the committee, Wells Fargo and U.S. Bank each claimed that [a Kowalski client's] loan had been signed over to them. “It’s a bedrock securitization problem,” Kowalski said in an interview before today’s hearing. “Once we allowed the securitization model and the concept of the securitized trust servicer to run the show, we ended up going down this road.” Cox said mortgage-backed securities have created “utter chaos” and raised doubts about who has the right to foreclose.

• Judge F. Dana Winslow, who has presided over more than 1,000 foreclosures as a New York State Supreme Court justice, said judges might have “inadvertently contributed to the creation of the foreclosure crisis by accepting, without question, the submissions of lending institutions seeking foreclosure.” That could be changing, Winslow said in his prepared testimony. “Courts have come to recognize the need to scrutinize the evidentiary submission of lenders and their agents,” Winslow said.

For the story, see Lapses in Home Foreclosure Documentation Said to Cause `Chaos' in Courts.

(1) For more on this congressional hearing, including the link to the webcast video, see Foreclosed Justice: Causes and Effects of the Foreclosure Crisis.

Prepared testimony from witnesses on the chaos cretaed in the courts by lenders, their loan servicers, and their out-of-control foreclosure mill law firms:

• Hon. F. Dana Winslow, Nassau County Supreme Court Justice, New York State Supreme Court, Mineola, NY;
• James A. Kowalski, Jr., Law Offices of James A. Kowalski, Jr., PL, Jacksonville, FL;
• Thomas A. Cox, Volunteer Program Coordinator, Maine Attorneys Saving Homes Project, Portland, ME;
• Vanessa G. Fluker, Vanessa G. Fluker, Esq., PLLC, Detroit, MI;
• Christopher L. Peterson, Associate Dean for Academic Affairs/Professor of Law, S.J. Quinney College of Law - University of Utah, Salt Lake City, UT.