Maryland is considering an emergency measure that would broaden the courts’ power in foreclosure proceedings after initial audits have shown hundreds of false statements were filed in proceedings across the state.
The move is in response to a national investigation into unfair foreclosure practices that may have illegally evicted families from their homes. The 50 states and District of Columbia are combing through documents to see if state laws have been broken by mortgage servicers in the rush to kick borrowers out of their homes.
Alan M. Wilner, chairman of the Maryland judiciary’s Standing Committee on Rules of Practice and Procedure, said preliminary audits show hundreds of such “bogus affidavits” have been filed in Maryland courts.
“The judges are alarmed at this development, which is an assault on the integrity of the judicial process,” Wilner, a former court of appeals judge, said in a memo Thursday.
The committee on Friday is scheduled to take up an emergency proposal that would allow a judge to dismiss a case if there is reason to suspect an affidavit filed in the foreclosure is invalid.
The judge could order the person who signed the affidavit to appear in court and attest to the validity of his written testimony under penalty of perjury.
The rule also proposes creating a special examiner to screen foreclosure proceedings. Attorneys could be subject to sanctions if an illegal affidavit is filed.
If approved by the Rules Committee, the proposal would head to the Court of Appeals on an emergency basis at its Tuesday rules meeting.
The emergency measure is just one of many that some economists say could delay the housing rebound. While the number of foreclosures filed in the region declined in the most recent quarter, states’ efforts to mediate the process combined with the national probe into foreclosure documents will take its toll.
“If the documentation issue cannot be quickly resolved and expands to more lenders we could see a chilling effect on the overall housing market,” said James Saccacio, CEO of RealtyTrac, an online firm that tracks foreclosure filings.
Maryland’s foreclosure rate is the 15th-highest in the country; Virginia ranks 20th.
