By Sydney Sullivan
Deadly Clear’s Editor, Virginia Parsons, will be a guest this week on Hawaii’s premiere foreclosure defense radio program, THE FORECLOSURE HOUR (Sundays 3 pm HST / 5 pm PST / 8 pm EST on Honolulu KHVH radio), with Hosts and Honolulu’s dedicated defense duo – Gary Victor Dubin and former Gov. John Waihee discussing Attorney Affirmations.
Hawaii and New York are the first states to have made mandatory Attorney Affirmation legislation. Judges in New York first required the attorney affirmation in 2010 and it subsequently became law:
Governor Andrew M. Cuomo signed into law Chapter 306 of the Laws of New York, 2013 amending New York’s Civil Practice Law and Rules on July 31, 2013. The law addresses the “robo-signing” problem in residential foreclosure cases in which cases are filed based on false affidavits, lacking personal review to ensure the homeowner is in default and that the plaintiff is the proper owner and holder of the mortgage and note and possesses standing to sue. The new law went into effect on August 30, 2013. And New York went one step beyond the Attorney Affirmation, they now require a Affidavit of Plaintiff.
Although New York judges were using the Attorney Affirmation in 2010, Hawaii actually turned it into law a year earlier in 2012 and noted in HRS § 667-17:
“(1) All pending judicial foreclosure actions filed by mortgagees for residential property prior to the effective date of this Act [June 28, 2012]; and (2) All judicial foreclosure actions filed by mortgagees for residential property on or after the effective date of this Act [June 28, 2012].”
“Apparently, Hawaii judges don’t take the Attorney Affirmation as seriously as their colleagues in New York,” remarked Virginia Parsons, a veteran paralegal and litigation assistant. “I hear attorneys and homeowners constantly complaining that the Hawaii circuit court judges have let foreclosure attorneys off the hook, even when pressed by additional motions requesting the judge to make the affirmations in their required format mandatory. It’s a real problem because the paperwork in many, if not all, of these cases is obviously fabricated. I mean, how could a judge actually believe that a bankrupt lender could make an assignment of mortgage 2 years after it filed bankruptcy and began liquidating assets, without a bankruptcy court order or something from the bankruptcy trustee attached to it for validity? Or how could a 2010 assignment of mortgage to a 2006 New York securitized trust be considered valid?”
Maybe New York judges realize the obvious since the majority of mortgage-backed securities loan trusts operate under New York law. New York trust law voids any sale, conveyance or other act in contravention to the trust. See Part 2 – How to Challenge an Assignment of Mortgage on DeadlyClear.
“I think what bothers me most is the use of UCC Article 3:301, allowing a thief to hold a manipulated computer copy of a note and foreclose – and failing to be logical about this.” said Virginia, “First, and this is just research I’m not giving legal advice,” she continued, “if the plaintiff is a securitized trust trustee acting on behalf of the certificate-holders, then the trust must be actively trading – it’s still alive. That means certificates are issued against the revenue stream that are used for trading – so how could the note be considered negotiable? Securitization requires the mortgage loans to become static or passive until they are purchased out of the trust at face value. And if that’s the case, isn’t this actually a securities transaction issue and wouldn’t the documents have to reflect the securities requirements in UCC Articles 8 and 9? Well, Article 8:501(d) says that the financial instrument cannot be endorsed in blank…and, of course the securitized trust controlling documents mandate that all the endorsements – a full chain of endorsements be present in order to enter the trust.”
What Effect Does a False Affidavit Have on the Foreclosure Process?
Banks cannot legally foreclose on a house if the foreclosure paperwork is not in order. This means that if the affidavit a bank plaintiff submits is false — as any affidavit completed by a robo-signer would be — the foreclosure should not go through. Of course, as one attorney noted, “the reality is that banks have foreclosed on thousands of properties based on just such false affidavits.”
In the somewhat newly required attorney affirmations, foreclosure attorneys must now swear under the penalties of perjury that they have communicated with a representative of the foreclosing bank plaintiff and that they have personally reviewed all documents and records related to the case and made “other diligent inquiry” as necessary to confirm the accuracy of the documents. The attorney must swear that “to the best of my knowledge, information and belief, the Summons and Complaint and all other documents filed in support of this action for foreclosure are complete and accurate in all relevant respects.”
“If the affirmation submitted by a foreclosure attorney is discovered to be false, the attorney may be referred to the Attorney Disciplinary Committee, and depending on the severity of the offense and the attorney’s prior history of disciplinary violations, may result in the attorney being disbarred.
Disbarment, however, may be the least of the dishonest attorney’s problems. By signing a false affirmation, the attorney has committed the felony of perjury. If the attorney is guilty of perjury in a foreclosure case, he or she is also guilty of the felony of fraud (lying for the purpose of monetary gain) and the felony of attempted grand larceny for trying to take someone’s home under false pretenses without the legal right to do so. If the foreclosure is completed and the bank seizes the home, the felony of attempted grand larceny would give way to the more serious felony of grand larceny because the home was actually stolen. And let us not forget the constant companion of grand larceny, felony possession of stolen property.
Moreover, if anyone else is involved in the falsification of the attorney’s affirmation – such as the bank’s representative that supplies information to the attorney — the attorney, bank representative and other persons can be charged with the felony of conspiracy.
Proving that other persons were involved in the falsification of the attorney’s affirmation is not as difficult as it may seem. Once the dishonest attorney has been arrested and charged with three or four felonies (perjury, fraud, and either grand larceny or attempted grand larceny and possession of stolen property) and is facing a long prison sentence, the attorney will probably do absolutely anything to save his or her own hide. In exchange for immunity from prosecution for conspiracy and/or a reduced sentence for the other three or four felonies, the crooked attorney will jump at the chance testify against anybody that was even remotely involved, or appeared to be involved, in the crimes.
All of the above crimes committed when a foreclosure attorney signs a false affirmation are violations of both New York State and Federal criminal laws. Serious and repeated violations should be prosecuted in Federal Court where longer prison sentences are available.”
Mark your calendars and join Gary & Gov. John in a lively discussion this Sunday at 3 PM Hawaii time / 5 PM PST / 8 PM EST on THE FORECLOSURE HOUR. Honolulu KHVH-radio and Internet.