The 'Judicial Don Quixote' on the Foreclosure Frontlines
This morning the Times ran a profile of Brooklyn State Supreme Court Judge Arthur M. Schack, who “fashions himself a judicial Don Quixote, tilting at the phalanxes of bankers, foreclosure facilitators, and lawyers who file motions by the bale.” Schack is known for tossing out foreclosure motions on technicalities: “Justice Schack, like a handful of…
This morning the Times ran a profile of Brooklyn State Supreme Court Judge Arthur M. Schack, who “fashions himself a judicial Don Quixote, tilting at the phalanxes of bankers, foreclosure facilitators, and lawyers who file motions by the bale.” Schack is known for tossing out foreclosure motions on technicalities: “Justice Schack, like a handful of state and federal judges, has taken a magnifying glass to the mortgage industry. In the gilded haste of the past decade, bankers handed out millions of mortgages—with terms good, bad and exotically ugly—then repackaged those loans for sale to investors from Connecticut to Singapore. Sloppiness reigned. So many papers have been lost, signatures misplaced and documents dated inaccurately that it is often not clear which bank owns the mortgage. Justice Schack’s take is straightforward, and sends a tremor through some bank suites: If a bank cannot prove ownership, it cannot foreclose.” Schack, who is Brooklyn born and bred, began crossing swords with banks over foreclosures in 2007, when they started to spike here. “Banks had given out loans structured to fail,” he says.
A ‘Little Judge’ Who Rejects Foreclosures, Brooklyn Style [NY Times]
Photo by steakpinball.
It might be wrong to talk about “the bank” here.
The Times links to Schack’s decisions didn’t show a bank filing against a deadbeat borrower. The loans were originated by a subprime lender notorious for falsifying documents (using the Coke machine as a light table) that has since gone out of business.
The loans were securitized by Citigroup and Merrill Lynch. Two years later, the delinquent loans were sold to Goldman Sachs.
When the trustee, Deutsche Bank, filed for foreclosure, Schack noted that Goldman Sachs should be filing instead. He also pointed out that all parties to the transfer using the same address in Florida could be a sign of fraud.
It’s not clear that the borrower ever made a payment on the mortgage. It’s not clear that the borrower ever even existed. Fraud was endemic to subprime mortgages. Do we really miss the “banks” that originated $1 trillion subprime loans?
hmmm.
It’s perfectly reasonable to say that everyone should honor their obligations all the time, but it doesnt always work that way.
I’ve actually been in front of J. Schack (albeit a few years ago) and have read a good number of decisions. For some mortgages, it’s not even clear who has the authority to make a deal. His decisions force the banks to figure out those issues. I wouldnt be surprised if he is using his authority to force banks to make a deal. I doubt the mortgages will go away entirely, but the uncertainty he has created forces banks to re-evaluate their positions. Likewise, if any homeowner goes for the grand prize of a free house, I expect he or she will end up disappointed.
I lookd through a lot of these rulings on the link that i disagree gave us. a lot of them were dismissed without prejudice, I think that means that the bank can file again when they have the paperwork THEY WERE PAID TO DO IN THE FIRST PLACE in order. In a couple of cases he dismissed the default petition because there was NO RECORD THAST THE BANK EVER OWNED THE MORTGAGE. What’s he supposed to do, say OHHHHHH you’re a BIGGGGGG BANK that peed a lot of government money down the toilet, so we HAVE TO believe what you say over the word of some schmo….of course we should…banks and their lawyers should be paid hundreds of millions of dollars in servicing fees and legal fees so that when they don’t bother to do their jobs we get the taxpayer to cover their losses and giver their lawyers a free ride in court….please…where’s What when you need him???!!!
Denton, if we could argue a case through dueling keyboards, I might stand a chance. Otherwise…..
No, I have not read the opinions, and I don’t care to. I also did not write a potentially misleading piece of populist nonsense in a large national newspaper.
this is not about fixing a little mistake between friendly opposing counsel. in this country, in order to force a change from the status quo, generally speak, the person who is trying to force that change is the one with the burden of proving he’s entitled to it. if you can’t provie it, then you are out of luck. what is so hard about that to understand? it is no more of a “policy decision” to uphold the law against a corporation than it is to uphold the law against an individual.
jail bait, have YOU read the opinions? if no, have at it. link here: http://homeequitytheft.blogspot.com/2008/07/brooklyn-trial-judge-nixes-rubber-stamp.html
ENY, lechacal’s opinion isn’t crazy. Lawyers make mistakes very often and opposing counsel generally will let you fix your mistake/ re-execute a document because we all understand that mistakes happen when your job is so incredibly tedious.
The article says that the judge has rejected 46 of the 102 foreclosure motions that have come before him in the last two years. Because this article is a blowjob piece and not real journalism, the author did not actually read these decisions to see whether the judge was being tough but fair in holding the mortgage companies to the letter of the law, or if he was just pushing his own agenda. I strongly suspect he was pushing his own agenda. No matter how you feel about “predatory” lending or big corporations in general, it is not a judge’s business to make policy decisions.
It’s been dropped for a while, but the idea that any legal document will be 100% correct is an absolute fantasy. Does signing in the wrong place really justify letting somebody keep hundreds of thousands of dollars without having to pay it back? Think about that one.
No, actually I think Eli Manning is a Super Bowl MVP.