Another Upstate New York Foreclosure Mill Garners Attention For Role In Filing Dubious Documents In Recent Brooklyn Case

The Buffalo News reports:

• A State Supreme Court justice in Brooklyn is threatening sanctions against the chief executive officer of HSBC Bank USA, blaming her personally as head of the bank for filing what he called false and misleading documents involving “robosigning” in a home foreclosure case.



• In a complex decision issued in early July,(1) Justice Arthur M. Schack denounced what he called the “frivolous conduct” and the submission of fraudulent paperwork by HSBC and the attorney representing it in the case, Frank M. Cassara of Shapiro, DiCaro&Barak LLP in Rochester.



• He said the documentation submitted to the court by Cassara and HSBC to support the foreclosure is full of defects and “material factual statements that are false.” And he criticized their case as a “waste of judicial resources.”



• Schack threw out the foreclosure case itself, declaring that HSBC lacked the legal right to foreclose on a woman’s home because it did not own the loan.



• But in an unusual move that went further than other judges, Schack threatened to impose fines or other actions against Cassara, his law firm and HSBC Bank USA CEO Irene Dorner. He cited cases in which fines of up to $10,000 were found to be appropriate for making a “frivolous motion.”



• And he ordered a separate hearing that was held July 15 to review the conduct of HSBC and the law firm, and to give both entities and the two individuals a chance to appear before him to argue why they should not be penalized.



• “Courts have limited resources,” Schack wrote in his decision. “This conduct . . . must be deterred.”



• Schack justified his threat by citing a new statewide requirement for attorneys in foreclosure cases to certify, under penalty of perjury and sanction, that they have taken reasonable steps to verify the accuracy and correctness of documents submitted to the court.

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• Dorner did not appear at the hearing, but the bank and law firm were each represented by attorneys. Schack has not issued a ruling on any sanctions, but said he hopes to do so by Labor Day.

For the story, see Judge threatens to sanction CEO of HSBC for ‘robo-signing’.

(1) HSBC Bank USA, N.A. v Taher, 32 Misc 3d 1208, 2011 NY Slip Op 51208(U) (N.Y. Sup. Ct. Kings Cty. July 1, 2011).