Meet Judge Arthur Schack, Foreclosure Watchdog
Posted Jul 28, 2008 5:56 AM CDT
By Debra Cassens Weiss
In pending foreclosure cases, Judge Arthur Schack of Brooklyn, N.Y., doesn’t always wait for an opposing lawyer to raise issues about the ownership of mortgages. He investigates the problem himself and dismisses most cases sua sponte.
Schack, a former counsel to the Major League Baseball Players Association, is one of an increasing number of judges who are raising questions about the ownership of mortgages in foreclosure. Often it is difficult to sort out the answers since many mortgages have been pooled, securitized and sold to investors.
Schack has refused to allow foreclosure in 13 out of 14 published decisions since Jan 1, dismissing 12 cases without prejudice because of unproven ownership, according to the Times.
The Wall Street Journal highlighted three of the cases in which lenders that said they were acting as trustee for securitized mortgages sought foreclosure. In June, Schack dismissed two cases filed by a unit of Wells Fargo & Co. after doing his own online public-records search and finding the company didn’t own the loans.
In another case, Schack dismissed an action by a unit of HSBC Holdings, noting that court filings listed the same Florida address for HSBC and a loan collector—the same address that had also been listed by other banks in court filings.
"The court ponders if Suite 100 is the size of Madison Square Garden to house all of these financial behemoths or if there is a more nefarious reason for this corporate togetherness," he wrote in his decision.
Schack explained his motivation to the Times. “If you are going to take away somebody’s house, you have to do it the right way,” he said. “You have to have due process, and the law has to be followed.”