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BY JOE TYRRELL

NEWJERSEYNEWSROOM.COM

Accepting representations from four of six major lenders, the New Jersey courts will allow them to resume foreclosing on homes here.

Bank of America, Citibank, JP Morgan Chase and Wells Fargo won permission from Judge Mary Jacobson to launch what could be a tidal wave of foreclosures following a delay prompted by incidents of fraud and false swearing.

Johnson based her rulings on reports from retired Judge Richard Williams, appointed in March as special master to ensure the companies adopt procedures to prevent future false representations in foreclosure proceedings.

In issuing her rulings Monday, Jacobson also released a series of reports from Williams, who agreed with the four lenders that their they have "procedures in place which, if adhered to, will ensure" their future representations in court are accurate.

The jurists were silent on two remaining national lenders, GMAC and One West Bank, whose practices were also addressed by chief Justice Stuart Rabner in December and included under oversight by Jacobson and Williams.

One West filed a certification in the case a week ago, after the other banks, while GMAC's latest filing included several exhibits about servicing of mortgages backed by governmental or government-established agencies, and reviews of document preparation.

Bank of America alone, through its BAC Home Loans Servicing subsidiary, has 25,000 home loans awaiting foreclosure in New Jersey, according to Williams. BAC is the former Countrywide, a major force behind the housing bubble of the last decade.

When the bubble collapsed, Countrywide found itself overextended after years of making poorly secured loans. When Countrywide's share price plummeted by 90 percent at the end of 2007, Bank of America, bought it to save it from bankruptcy.

A report last fall by Legal Services of New Jersey highlighted shoddy practices and missing documentation in foreclosure cases here and elsewhere in the country. In response, Rabner said the review was necessary because almost 95 percent of New Jersey foreclosure cases are uncontested.

Under those circumstances, there are no protections if a lender does not provide documentation, or provides false documents.

For example, one of the Legal Services cases involved Wells Fargo's attempt to take a Westwood house although the homeowner had dealt with another lender. An appellate court found Wells Fargo never acquired the loan.

Cases across the country often depend on false swearings, colloquially termed "robo-signings," by bank officials who tell courts they are familiar with the facts of a mortgage loan without actually reviewing the documents.

But Williams stressed that his reviews cover only the lenders' newly adopted policies and procedures, did their past practices or the status of the tens of thousands of pending foreclosures in New Jersey.

"Nothing in this report is intended ... to prejudge or comment on issues concerning a plaintiff’s standing to foreclose in an individual case," he wrote.

Still, under a settlement agreed to by Jacobson and the lenders in March, Williams is entitled to "sample" documents from cases as foreclosures resume. That will be a future phase of the process, he said.

Joe Tyrrell may be reached at  This e-mail address is being protected from spambots. You need JavaScript enabled to view it