Community association’s boards, management and legal counsel actively monitor the status of mortgage foreclosures within their association. As some may be aware, in November 2011, Legal Services of New Jersey issued a report finding that many mortgage foreclosure pleadings contained false certifications, irregularities in documents, forged signatures and false notarization of papers.
On December 20, 2010, Judge Jacobson, a judge in Mercer County, New Jersey, issued an Order for mortgage servicers to show cause as to why foreclosures should not be halted. Since the December 20, 2010 Order was entered many Court rules relating to foreclosures were changed, which in effect, put pending uncontested foreclosure actions on hold.
Some of the changed included new certifications attesting to the fact that legal counsel for the mortgage companies communicated with the mortgage companies to ensure the authenticity of their documents. The rules also require that any papers filed by an attorney must attach evidentiary support.
Another Order was entered by Judge Jacobson on March 29, 2011, requiring the mortgage companies to address their record-keeping practices, to implement procedures for making sure that any Court-filed documents are accurate, and to implement a process for interacting with attorneys. The March 2011 Order also provides for the mortgage companies to be monitored by having random files reviewed one year after the uncontested foreclosures restart.
Last week, five of the six largest mortgage servicers received approval to continue with their uncontested foreclosure actions. The five mortgage servicers are Bank of America, CitiBank, JP Mortgage, Chase Bank and Wells Fargo. These mortgage servicers were found to have implemented better practices. Ally Financial, formerly GMAC Mortgage, is the only mortgage servicers whose uncontested foreclosure actions remain on hold for the time being. Associations will now begin to see the mortgage companies completing their existing foreclosure actions.
If you have questions regarding how these Orders may affect you, please feel free to contact me here in my firm’s Lawrenceville, New Jersey office.