05.02.08
Judge Fines Law Firms $150K for Listing Wrong Lender
A federal bankruptcy judge in Massachusetts sanctioned two law firms with $150,000 fine for incorrectly claiming that their client owned a mortgage that had been reassigned at least twice according to the ABA journal
The judge found that lawyers at both law firms, had continually represented that Ameriquest was the holder of a mortgage, when in fact it had been assigned to Norwest.
The judge held:
“At a time when mortgages and notes are bought and sold at a pace so swiftly that the assignor and assignee cannot keep up with the paperwork, had the attorneys at the firm checked the firm’s file, they would have seen that Norwest was perhaps the real party interest. . . . The firm cannot shield itself from institutional knowledge.”
I have to agree that it is pretty difficult to keep track of who’s on first right now. With all the foreclosures, assigning of mortgages, and documents under wrap inside of MERS, who knows who’s on first. And with the phenomenal volume of foreclosures these days, the attorneys, it seems, seem to be cranking them out like hotcakes. Foreclosures are NOT that simple, that they should be turned over to inexperienced staff. It makes it especially important, I think, for law firms to rely on abstractors and title companies to at least get the latest correct information as filed at the Courthouse.
In a related event, A Wall street journal blog, says a bankruptcy judge admonishes that Wells Fargo “turned all responsibilities over” to a mortgage servicer and was willing to “turn a blind eye” to the servicer’s mistakes. Had WFC” shown even a modicum of oversight or review” of the servicer’s behavior, “it should have been able to correct the misrepresentations” made to the court. He stated “This court will not allow Wells Fargo or any other [mortgage holder] to shirk responsibility by pointing fingers at their servicers.”