Foreclosure Mill's Affidavit Alterations Lead Judge To Slam Brakes On 1700 Cases; Outfit Ordered To Vacate All Judgments & Completed Judicial Sales

In Chicago, Illinois, the Chicago Tribune:

• A Cook County Circuit Court judge has taken the unusual step of temporarily halting at least 1,700 mortgage foreclosures after a law firm told the court that the cases contained altered documents, the Tribune has learned.

• Fisher and Shapiro LLC, one of the top three law firms used by mortgage servicers to handle their local foreclosure actions, reported to the court that, in a breach of protocol, affidavits in the cases were changed. Among other things, fees were added after the documents were signed by servicers. As a result, Moshe Jacobius, presiding judge of the Circuit Court's Chancery Division, has stayed the cases.

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• The admission to the court by Fisher and Shapiro does not involve rubber-stamping of documents but rather removing the signature page, altering the affidavit's content and reattaching the signature page, the court said. The changed contents included the addition of attorneys' fees, insurance costs, preservation costs, inspection costs and taxes on the property, costs that may have been incurred before or after the servicer signed the original affidavit, Jacobius said in his order dated March 2.

• The firm's admission signals a note of caution to purchasers of distressed homes, which represent about 50 percent of local home sales, because of potential lingering legal issues if the title transfer process was faulty. It's uncertain why the documents were altered or who ultimately bears responsibility. It's also unclear whether affected homeowners and servicers, as well as housing counselors, are aware of the court's decision: As of Friday, some were not.

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• Fisher and Shapiro was ordered to vacate all judgments of foreclosures and any judicial sales that have occurred and refile those motions with the court.

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• "It's similar to robo-signing in that it's a high-volume pattern and practice of cutting corners, expediting the process through making false representations," said Daniel Lindsey, an attorney at the Legal Assistance Foundation of Metropolitan Chicago,(1) which is not directly involved in the matter.

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• Most of the foreclosure cases identified by Fisher and Shapiro were filed within the past three years, but a few date to 2001, and some appear all but closed. Most, but not all of the cases, are of residential properties. Actions to vacate judgments and resolve the affected cases will not begin until April 4, the court said.

• The Illinois attorney general's office said it was aware of the order. So was the Illinois Department of Financial and Professional Regulation, which confirmed it is investigating the matter because of concerns that mortgage servicers may be signing legal documents before they are completed to speed the foreclosure process.

For the story, see Altered documents halt some Cook County foreclosures (Judge suspends 1,700 actions after law firm admits affidavits were changed).

(1) Legal Assistance Foundation of Metropolitan Chicago is a major provider of free civil legal assistance to tens of thousands of low-income and elderly individuals in Chicago and suburban Cook County.