Christmas Miracle in New Jersey: Order to Show Cause Issued to Mortgage Banksters

photo: davidshankbone via Flikcr

New Jersey’s Chief Justice appointed Judge Mary C. Jacobson in Trenton to oversee foreclosure matters in the state.  Judge Jacobson did something amazing on Monday; she issued an Order to Show Cause, sui sponte, against six of the biggest mortgage fraudster banks.

An Order to Show Cause is a fast-tracked motion where the non movants have to show cause why the court should not order the relief spelled out in the OSC. Sui sponte is when the court itself is the moving party, rather than let’s say, a homeowner.

The relief spelled out in the OSC is eye popping:

A. Direct the Office of Foreclosure to suspend processing Orders and Judgments of Foreclosure in all uncontested cases involving the banksters named in the OSC.

B. To not issue writs of execution (evictions and seizure of the home by the Sheriff) on any judgments held by the named Banksters

C. Issue a Stay stopping all Sheriff’s sales of homes already seized pursuant to any judgments obtained by the named banksters

D. Appoint a Special Master to investigate the business practices of the named banksters, the law firms and the document forgers and robo signers and make a report back to the court about whether any of the documents offered by the named banks can be considered trustworthy, and to propose remedial action that  might make the it possible to resume foreclosure (assume there is a remedy, and I’m not sure what that might be), and to monitor the future compliance of the named banksters with the remedial plan—oh yeah, and to propose sanctions on the banksters, the law firms and document mills.

E. To make the named banksters pay the costs of the work of the Special Master.

F. To make the named banksters reimburse the Office of Foreclosure for the costs of doing the foreclosures over (assuming there is some remedial plan that makes that possible)

G. Forcing the named banksters to give the Office of Foreclosure a complete up to date list of all the foreclosures in process.

I’m not so sure the Special Master will be able to devise a remedy for shredded, never created, twice sold and therefore missing paperwork, so it’s somewhat doubtful that there can be a “do over” foreclosure. Moreover, can you imagine how long it will take for the Master to complete this investigation and report? And that whole time no uncontested foreclosures go forward? Yowzers!

This will light a fire under the state’s attorney general, who will now be in a footrace with the Master to be the one who cracks the foreclosure case. I guess the judicial branch is getting fed up waiting for the do-nothing legislative branches (remember cramdown?) and the make matters worse executive branches (who can’t seem to find a fraud case to bring) and are taking matters into their own capable hands.

The NJ courts press release is here. The hearing on the OSC is currently scheduled for January 19th in Trenton. It could be a interesting New Year for NJ homeowners. This is a nice Christmas gift for them.

[You can find FDL’s coverage of the mortgage crisis and foreclosure fraud at this link.]

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