ANNAPOLIS — Maryland’s highest court approved a new rule Tuesday that heightens the courts’ scrutiny over foreclosure filings after judges said thousands of foreclosures in the state may have been illegally processed.
The rule, which was approved unanimously by the state’s Court of Appeals, will allow judges to require anyone who submits a written statement in a foreclosure proceeding to appear in court and testify to its validity. That includes banking officials, borrowers, notaries and lawyers.
The move is in response to recent revelations that thousands of documents filed in Maryland foreclosure proceedings appear to have been falsified by foreclosure attorneys.
“Some judges are concerned that what we have discerned so far is only the tip of the proverbial iceberg,” said Alan M. Wilner, chairman of the Maryland judiciary’s Standing Committee on Rules of Practice and Procedure.
In Montgomery County, the circuit court’s administrative judge, John W. Debelius III, who helped draft the proposed rule, found at least 400 “corrective affidavits” filed by two attorneys who apparently allowed others to sign their names to court documents.
Prince George’s County courts are reviewing 14,500 pending foreclosure cases and so far 4,400 similar affidavits have been found, Wilner told the Court of Appeals.
False affidavits include documents that state the status of homeowner debt and that affirm all foreclosure notices were served, Wilner said.
Nationwide, the 50 states and District of Columbia are combing through foreclosure documents to see if state laws have been broken by mortgage servicers in the rush to kick borrowers out of their homes.
But not everyone who has lost a home during the foreclosure crisis wants the state to crack down — a process that real estate agents say will drag out the foreclosure process and delay recovery.
Tangerine Levy, a Germantown resident who lost her home to foreclosure in 2007, testified before the appellate court that judges already had the option of dismissing a foreclosure case.
If a document is falsified, she argued, judges should require the foreclosing party to refile — not be given another chance, she said.
“You need to consider all the issues involved or it will come back to haunt you,” she told the judges.
The Maryland Bankers Association and officials from the state Department of Labor, Licensing and Regulation testified in support of the rule.
