September 7, 2009

The Importance of Foreclosing Properly

New York Supreme Court Justice Arthur M. Schack has a motto taped on the wall near the entrance to his chambers – “Be sure brain in gear before engaging mouth.” This is good advice for us all. The New York Times recently featured a profile of this fiery jurist, who has denied 46 of the 102 foreclosure motions that have come before him over the last 2 years. His hard-nosed approach reflects the reality that more judges are scrutinizing foreclosure actions and holding them to a higher standard.

In Justice Schack’s courtroom, if a bank can not prove ownership in a foreclosure action, the case is over. This is a problem because many mortgage documents can no longer be found. It is often unclear which bank owns a mortgage. “If you are going to take away someone’s house, everything should be legal and correct,” he maintains. “I’m a strange guy — I don’t want to put a family on the street unless it’s legitimate.”

Condominium and homeowners associations should scrupulously follow the appropriate legal procedures when pursuing foreclosure actions. This will maximize their potential for success.