Creditslips.org has posted an article a recent instance in Pennsylvania that is very reminiscent of robosigning. Goldbeck, McCafferty and McKeever, a PN foreclosure mill, was using people who weren’t lawyers to do all the paperwork in foreclosure cases. A licensed attorney wasn’t even called in to review the paperwork. This isn’t a big problem in small claims court, but is a huge deal when it comes to foreclosures.
Because attorneys never looked at any paperwork from Goldbeck, McCaffert and McKeever, every foreclosure filing done by the firm “appears to be facially defective because of a failure to include the note with the complaint.”
The law in Pennsylvania requires that an action based on paperwork include a copy of the paperwork. A foreclosure is basically based on two things: a security instrument and a note.
Adam Levitin, writer of the article, says that:
This means that a well-pleaded foreclosure case in Pennsylvania should include the note, the mortgage, and any assignments thereof as part of the complaint. (There’s even case law on this, not just statute.) Many Pennsylvania foreclosure filings properly include all of the required writings, but I have never seen any notes included in Goldbeck, McCafferty & McKeever foreclosure filings.
The law in Pennsylvania allows for “incorporation by certain public records, which might permit incorporation of the mortgage by reference.” The note is almost never a public record therefore it can’t be incorporated by reference. If a foreclosure is only seeking the title to a property and not any monetary gain, it still doesn’t change the requirements for submitting the note. The mortgage can only be enforced if a default on the note “and the ability to cure depends on acceleration,” which is all granted in the note.
The real scandal, I think, is that courts (or really court clerks) aren’t tossing out these filings, irrespective of whether the borrower contests. Some judges are often reluctant to ensure proper process, especially if there is no pushback from the borrower. Indeed, one ex-judge, at least, has expressed a really Philistine view that if there’s a default on the mortgage, sanctity of contract demands a foreclosure, procedure be damned. Somehow insisting on procedural rights is borderline unethical. Never mind that procedure was part of the contract and litigation risk was priced into it.
The main reason foreclosure firms turn to methods like this and robosigning is because of the “economics of foreclosure litigation.” Firms are generally paid small fixed-fees for foreclosures. The only way for them to make more money is to cut costs and this leads to cutting legal corners. If the same job that’ supposed to be done by an attorney can be done by a non-attorney for a much lower price, then foreclosure firms see no problem in breaking the law to save money.
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