A bankrupt New Jersey foreclosure law firm has filed a lawsuit blaming part of its financial predicament on Wells Fargo’s delay in correcting “robosigning” problems.
The Oct. 14 suit (PDF) filed by Zucker, Goldberg & Ackerman claims Wells Fargo was slow to correct foreclosure procedures involving robosigning of documents and foreclosure notices that were called into question by a New Jersey Supreme Court order to show cause in December 2010. The Wall Street Journal(sub. req.) has a story.
The court order required lenders to submit their foreclosure procedures to a special master for review. The order barred banks from proceeding with residential foreclosures until the special master found that the policies ensured robosigning would not occur.
UNITED STATES BANKRUPTCY COURT DISTRICT OF NEW JERSEY
ZUCKER, GOLDBERG & ACKERMAN, LLC,
WELLS FARGO BANK, N.A.,
18. The Supreme Court began an investigation of certain mortgage servicing practices, including the execution and submission to the Supreme Court of certain evidentiary pleadings. Ultimately, the Supreme Court came to suspect that there were serious problems with the submission of various pleadings. On or about December 20, 2010, the Supreme Court issued an Order to Show Cause against certain servicers, including Defendant, requiring each to show cause as to why pending uncontested residential foreclosures should not be suspended. These servicers, including Defendant, were also required to submit their policies and procedures for review by a Special Master. Those servicers were prohibited from proceeding with their residential foreclosures until such time as the Special Master reviewed and approved their policies and procedures so that “robosigning” would not occur.
19. Independent of the investigation into mortgage servicing practices, case law developed which called into question the validity of more than 80% of all Notices of Intention to Foreclose (“NOI”) used in New Jersey’s pending foreclosures actions. ZGA had previously warned Wells that its NOIs may not have been compliant with state law, but Wells continuously refused to address the deficient and non-compliant NOI issue. An NOI is the state-mandated demand letter that must precede the initiation of a residential foreclosure in New Jersey.
20. As a result, Defendant was forced to correct its NOI process and to issue corrective NOIs in those cases requiring such a correction. 21. It took Defendant several years to rectify its robosigning and NOI problems. 22. Defendant falsely represented and promised to ZGA that Defendant’s robosigning and NOI problems would be resolved imminently…