No stemming the tide of Md. foreclosure cases

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W. Michel Pierson, the judge overseeing the foreclosure docket review for the Baltimore City Circuit Court, apologizes to visitors in his chambers for the files stacked around his office, including some featuring the now-infamous corrective affidavits. To say he has been busy recently would be an understatement.

In addition to his coordinator duties, Pierson has reviewed and presided over cases himself and has met with lender and borrower attorneys. He is also a member of the state’s Standing Committee on Rules of Practice and Procedure, which last month recommended an emergency rule approved by the Court of Appeals giving circuit courts more power to deal with mortgage foreclosure irregularities.

The city circuit court had already been reviewing foreclosure filings for problems, however. The civil masters’ office, at Pierson’s direction, has been on the lookout for deficiencies since Maryland‘s new foreclosure mediation law went into effect July 1. They’ve found plenty of mistakes.

“It’s no secret that orders of deficiencies were being issued in a large percentage of cases,” said Pierson.

It’s also no secret that courthouses across the state were awash in foreclosures even before it was discovered that lawyers in at least two firms had not personally signed affidavits that bear their names in foreclosure proceedings — an action dubbed “robo-signing.”

Piles of files

The review time in all jurisdictions was affected by the flood of foreclosure filings leading up to enactment of the foreclosure mediation law in July. Some jurisdictions saw filings drop by 95 percent from June to July.

As a result, Prince George’s County had 10,500 pending foreclosures at the end of September; at the end of October, Baltimore City had 5,700, Baltimore County had more than 2,000, Howard County had 1,400 and Worcester County had 300.

Those involved in the foreclosure business fear it’s only a matter of time before the new laws and rules compound the problem and drown courthouses in filings.

“It becomes an implementation issue,” said Jennifer Larrabee, manager of the Foreclosure Prevention Pro Bono Project. “The existing court resources are insufficient.”

But many circuit courts say the new rule simply codifies the procedures already in place as they continue to play catch-up.

“I don’t think it’s overwhelmed the judiciary, [but] obviously it may have changed some priorities in taking the time to review the files,” said Judge Diane O. Leasure, chairwoman of the Conference of Circuit Judges. “There are a lot of cases, so I think generally the foreclosure filings have been overwhelming.”

Independent review

The new foreclosure rule, enacted three weeks ago, allows circuit courts to appoint independent lawyers to review foreclosure documents for problems.

Administrative judges in four counties — Baltimore, Howard, Prince George’s and Worcester — along with Pierson in Baltimore City told The Daily Record they have not yet needed outside help. All are relying on courthouse personnel for the time being.

In Worcester County, for example, law clerks are giving extra scrutiny to signatures as part of their regular reviews of foreclosure filings, adding items to a checklist they already use to review all foreclosure filings, Judge Thomas C. Groton III said.

“If we reach a point where it was overwhelming us, I know we could rely on the Worcester County Bar,” Groton said.

Added Leasure, administrative judge in Howard County: “I don’t know what kind of volunteers would be worthwhile because you have to have a very specific understanding of the cases.”

Baltimore County had masters reviewing foreclosure filings even before the foreclosure mediation law went into effect, Administrative Judge John Grason Turnbull II said. Foreclosures that did not pass a checklist of requirements were forwarded to him.

While the number of rejected filings has increased in recent weeks, Turnbull so far has declined offers from lawyers to serve as outside reviewers.

“That might change in the future depending on how things go,” he added.

Show-cause hearings

The new rule also allows judges to summon lawyers and notaries public into court when the authenticity of a signature or the veracity of an attestation to the accuracy of a document’s contents is in question.

Prince George’s County Circuit Court will begin holding show-cause hearings in December for lawyers who have filed corrective affidavits, Judge Sheila R. Tillerson Adams said. Foreclosure proceedings for any file with a corrective affidavit “absolutely” will not go forward, she added.

“We’ve had to increase our resources in the foreclosure area,” she said. “We have to make sure justice is dispensed fairly.”

Other jurisdictions are in the process of scheduling show-cause hearings or have not needed to call for them yet.

Neither Turnbull nor the four Baltimore County judges assigned to foreclosures have requested a show-cause hearing.

“We’re not putting a hold on [robo-signing foreclosure] cases, but we are carefully reviewing them and we will be issuing show-cause orders,” Howard County’s Leasure said. “The review itself may take some time, but we’re not technically putting a hold on them.”

Rules committee Chairman and retired Court of Appeals Judge Alan M. Wilner met with administrative judges after news of the robo-signings came to light. Of all the options discussed, including doing nothing, the judges were in favor of “doing something and doing it quickly,” Wilner said.

“It was an attempt to put out front in the rules that which they could do anyways,” he said. “It was to have the Court of Appeals bless this so the circuit courts had a comfort level.”

Two lawyers, hundreds of cases

Many of the reviews will focus on alleged robo-signed foreclosures filed by Thomas P. Dore of Covahey, Boozer, Devan & Dore PA in Towson and Jacob Geesing of Bierman, Geesing, Ward & Wood LLC in Bethesda. Geesing and Dore were discovered to have not personally signed affidavits bearing their names in multiple proceedings.

Approximately 40 percent of the pending foreclosures in Prince George’s County involve Dore, Geesing or members of their firms, according to Tillerson Adams. Groton said a third of Worcester County’s open cases involve the two firms.

In Baltimore County, Judge Turnbull has been rejecting between 15 and 20 foreclosure filings a week since the Court of Appeals’ new rule was put in place. Most are from Covahey Boozer and Bierman Geesing, he said.

More than a quarter of the pending foreclosures in Baltimore City are Dore’s or Geesing’s, Pierson said. As of the end of October, Geesing had filed a corrective affidavit in only four of his open cases, while Dore has filed such affidavits in 69 of his cases that are still pending.

Overall, Geesing has filed corrective affidavits in 250 cases, while Dorr has filed 152 of the affidavits, Pierson said.

“I would presume that a show-cause order is going to be appropriate in those cases,” Pierson said of the open cases featuring corrective affidavits.

Pierson called the corrective affidavit issue “the last war.”

“We’re trying to be a little proactive as well,” he said. “We’re really scrutinizing all the new filings pretty closely.”

A project for pro bono

What happens related to foreclosure filings in the weeks and months to come is anyone’s guess.
Wilner and others said circuit courts would not have money to pay outside lawyers to review filings if they were needed.

Larrabee, with the Foreclosure Prevention Pro Bono Project, said many of its 1,100 volunteer lawyers are now training to handle foreclosure mediations but could be used to review filings or anything else to best achieve the goals of the new laws and rules.

“How do you tee up the issue for the courts?” asked Larrabee, of the Pro Bono Resource Center of Maryland. “I think it’s going to be up to projects like ours to come up with a mechanism for implementation.”

Larrabee cited as an example the lawsuits filed in late October by Civil Justice Inc. and the University of Maryland School of Law’s Consumer Protection Law Clinic to create defendant classes and then dismiss the foreclosure cases because of alleged robo-signing by employees of GMAC Mortgage and Wells Fargo.

Buried in the backlog

John Gabel, who represents foreclosure defendants, said he has brought up questionable signatures in court and even filed a motion to stay or dismiss a foreclosure based on signatures.

“The new rule has afforded me an opportunity to raise the issue,” said Gabel, a Bowie solo practitioner. “It’s opened various courts’ ears that affidavits might not be valid.”

At the same time, Gabel is still receiving calls about foreclosures filed in June, evidence of the backlog. The new laws and rules might have been necessary, he said, but they have extended what is already a lengthy and costly process.

“As soon as courts begin to figure out how to handle things, that will be two weeks after large foreclosure mills figure out how they want to handle this, and the courts will be buried again,” he said. “I don’t think the court has a way to handle the backlog before they are buried again. And it will happen soon.”

Jeffrey B. Fisher would agree with Gabel on the latter point. Fisher, who represents banks and lenders, said his clients were just figuring out how to file under the new mediation law when the robo-signing controversy flared up not just in Maryland but across the country. The volume of filings will pick up once everything gets straightened out.

“I don’t know how the courts are going to keep up because they don’t have the resources,” said Fisher, of The Fisher Law Group PLLC in Upper Marlboro.

Heightened scrutiny

Fisher called the robo-signing issue an “affront to the court.” His firm is making sure all signatures are legible or that a name is printed clearly near a potentially illegible signature.

The problem, Fisher said, is the rule has courts assuming every affidavit is robo-signed. Other foreclosure lawyers made similar points as the rule was being debated, arguing the majority was being punished for the actions of the few.

The heightened scrutiny means that, for now, it might make more sense for lenders to start new foreclosure proceedings rather than file a corrective affidavit, Fisher said. Over time, however, the courts will use its review powers only when necessary, he added.

“They’ll look for a visible anomaly before invoking the rule,” he said.

Wilner, the rules committee chairman, said no further rules changes related to foreclosures are planned, although that could change if either Congress or the General Assembly pass new legislation when they reconvene in January.

“The whole mess may not escape their attention,” he said.

The latest rule’s short-term impact, then, simply might be slowing down the “crush” of foreclosure filings by lenders, said Groton, the Worcester County judge.

“It’s put them on notice they have to dot their ‘I’s’ and cross their ‘T’s’ before they can get approval,” he said.

It’s also put the courthouses on alert.

“It’s kept us busy, I can definitely say that,” said Leasure, the Howard County judge. “I think any time there’s press about any type of suggestion that procedures weren’t followed, certainly from the public standpoint there might be concern about the integrity of the court.”

Brendan Kearney, Steve Lash and Danielle Ulman also reported on this story.