December 21, 2010

On this first day of winter, the New Jersey Supreme Court has published and forwarded to members of the New Jersey Bar a series of new rules and regulations requiring foreclosing Plaintiffs and their attorneys to file a series of documents with the courts as to not only new foreclosure filings, but also pending actions where no judgment has been entered and as well in cases where judgment has been entered but no sale has taken place. The rules follow practices in other states such as Florida, where the Supreme Court required all residential foreclosure actions filed as of February 12, 2010 to be verified.

The New Jersey Rules, however, go much farther. To quote the “Notice to the Bar” from the Acting Administrative Director of the Courts in his Notice of December 20, 2010:

             “In light of irregularities in the residential foreclosure practice as reported in sworn deposition testimony in New Jersey and other states, the Court has adopted, on an emergent basis, amendments to Rules 1:5-6, 4:64-1, and 4:64-2. These amendments are effective December 20, 2010.”

             “The rule amendments require plaintiff’s counsel in all residential foreclosure actions to file with the court (a) an affidavit or certification executed by the attorney that the attorney has communicated with an employee or employees of the plaintiff who (a) personally reviewed documents for accuracy and (b) confirmed the accuracy of all court filings in the case to date; (2) the name(s), titles(s), and responsibilities of the employee(s) of the plaintiff who provided this information to the attorney; and (3) an affidavit or certification executed by the attorney that all the filings in the case comport with all requirements of Rule 1:4-8(a).”

      Note that these rules, which came about in part due to the information revealed as to “robo-signers” and other fraudulent documents filed in foreclosure actions, require the identity of the employee(s) of the PLAINTIFF who provided the information. As such, in actions where a securitized trustee bank is the plaintiff, the servicer could arguably not provide the information as the servicer is not the plaintiff. The reverse would be true where the servicer is the plaintiff. 

      The Rules also provide that these documents are required to be filed not only in new foreclosure cases, but in pending actions as well including actions where judgment has already been entered:

       “Plaintiff’s counsel shall file such documents (1) immediately upon the commencement of any new residential foreclosure action filed after the effective date of the new rule and amendments, as to the accuracy of the information contained in the complaint, as set forth in Rule 4:64-1(b)(1) through (13); (2) within 60 days in any residential foreclosure action today pending and awaiting judgment, as to the accuracy of the complaint and of any proofs submitted; (3) within 45 days in any residential foreclosure action in which judgment was entered but no sale of the property has occurred; and (4) with the motion to enter judgment in all future foreclosure actions in which judgment is sought, as to the accuracy of any proofs submitted pursuant to Rule 4:64-2.”

       These sweeping rule changes now force New Jersey foreclosure mills such as Phelan Hallinan & Schmeig and Zucker Goldberg to verify their filings and proofs under oath. As the rule changes also apply to a series of pending, pre-sale foreclosure actions as well, we expect to see borrower challenges to existing foreclosure actions if the required documentation is not filed as required. Further, by forcing the foreclosing Plaintiffs and their law Firms to disclose the identity of representatives, this will streamline discovery including depositions.

      Finally, the Court has also scheduled a hearing for January 19, 2011 at 9:30 a.m. in Trenton at which time certain named foreclosure mills such as Phelan Hallinan and Zucker Goldberg must appear before the court to show cause why the court should not order certain prohibitive actions in foreclosure cases.

      FDN’s New Jersey attorneys will thus be undertaking action in their pending foreclosure cases in connection with these new Rule changes.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

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