Monday, February 15, 2010

Judge Schack: A 'Little Judge' Who Rejects Foreclosures, Brooklyn Style

By Nicholas M. Moccia
Law Offices of Robert E. Brown, P.C.

Having spent some time now reading the legal documents churned out by foreclosing bank attorneys, I have come to appreciate the controversial handling of foreclosure cases by Kings County Justice Arthur M. Schack.  Predictably, any attempt on the part of borrowers  to defend on the merits in a foreclosure action  is met with the following incantation, or some variation thereof:   "defendant is engaging in stall tactics" or “borrower is making frivolous claims to avoid foreclosure." These Wall Street mercenaries seem to suggest, perhaps not surprisingly, that it would be judicially and economically more efficient for Main Street borrowers not to defend at all and capitulate without contest to the bonus-ensconced bankers who seek to dispossess whole communities of their homes.  One Manhattan based bank attorney, in a climax of sarcasm, wrote the following when a borrower from Brooklyn attempted to raise a cross-claim for predatory lending and Truth-In-Lending Act ("TILA") violations:

Given [Main Street borrower's] impending foreclosure, she brought these frivolous claims in an effort to stall the foreclosure of her primary residence.  [Main Street borrower] has already been successful at that, but nonetheless the cross-claims should be dismissed against [Wall Street bank] as barred by the documentary evidence.

In addition to showing a remarkable insensitivity to individual misfortune, this particular bank attorney displays an obtuse insensitivity to the strong public policy in Kings County for keeping foreclosure defendants in their homes.  This policy has taken expression in the words of Justice Schack, who, during an interview with Times reporter Michael Powell, admonishes bank attorneys thus, “If you are going to take away someone’s house, everything should be legal and correct…I’m a strange guy — I don’t want to put a family on the street unless it’s legitimate.”   Michael Powell, “A ‘Little Judge’ Who Rejects Foreclosures, Brooklyn Style,” New York Times (August 30, 2009).  Nor should bank attorneys be tempted to dismiss Justice Schack’s admonition as the ideological idiosyncrasy of some “outer-borough”, activist judge.  Obviously, this policy is grounded not merely on some warm and fuzzy sentimentality for Main Street homeowners, but has immense practical import, both for the individual homeowner and for Main Street. 
Clearly, an individual homeowner should have an opportunity to resolve disputes on the merits and raise any counterclaims or cross-claims he or she may have.  See Salch v Paratore, 100 A.D.2d 845, 474 N.Y.S.2d 85 (2d Dep’t 1984); Ahmad v Aniolowiski, 814 N.Y.S.2d 666 (2d Dep’t 2006) (Given the strong public policy in favor of resolving cases on the merits, a lack of a willful default and the lack of prejudice to the plaintiff, the trial court should have granted the motion to vacate a default judgment); Home Ins. Co. v Meyers Parking System, Inc., 186 A.D.2d 497, 589 N.Y.S.2d 322 (1st Dep’t 1992) (vacatur was warranted by strong public policy in favor of disposition on merits and lack of prejudice to plaintiff).   Moreover, the strong policy in favor resolving disputes on the merits is especially pertinent in the mortgage foreclosure context where so very often a resolution on the merits is not obtained due to the indigence of the typical foreclosure defendant.  There can be no doubt that the equities weigh heavily in favor of resolving foreclosure disputes on the merits where possible, especially where, as here, several meritorious defenses may be asserted.
In addition to a rightful concern for the equities of the individual case, the spill-over effects of mass foreclosures in New York generally provide an additional justification for the duration of the foreclosure process which has the salutary effect of keeping people in their homes.   It is well documented that foreclosures have a destabilizing effect on communities.  Spill-over effects include increased inventories of abandoned or vacant properties, demolitions, building code violations, prolonged situations of “legal limbo” (untidy property deeds, liens, etc.), diminished property tax rolls or unpaid property taxes, blighting effects  (graffiti, property crimes, overgrown lawns, accumulated debris) and additional policing in neighborhoods with vacant homes.
Clearly, the usual accusation against borrowers as engaging in “stall tactics” in the rare instances when borrowers have the resources to challenge a foreclosure is myopic and self-serving.  Indeed, bank attorneys often have only themselves to blame for the many delays and increased costs.  Every week, the nation’s mightiest banks come to court seeking to take the homes of New Yorkers who cannot pay their mortgages, and nearly as often they file foreclosure papers speckled with errors evidencing a sloppy disregard for the procedural requirements of commencing and maintaining a foreclosure action.  “Lenders should not lose sight,” Justice Schack wrote in a 2007 case, “that they are dealing with humanity, not with Mr. Potter’s ‘rabble’ and ‘cattle.’ Multibillion-dollar corporations must follow the same rules in the foreclosure actions as the local banks, savings and loan associations or credit unions, or else they have become the Mr. Potters of the 21st century.”

For list of Justice Schack's more noteworthy opinions use the following link:


  1. Of substance and very well stated...this at a time of crisis for very real people, too.

  2. I worked for him. He is an excellent judge and even more importantly, and excellent person.