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LI judge tells Congress about the mortgage crisis

State Supreme Court Justice F. Dana Winslow, based

State Supreme Court Justice F. Dana Winslow, based in Mineola, is expected to provide one of the few perspectives from the bench in the latest series of congressional hearings on the foreclosure crisis, this time before the House Judiciary Committee. (Oct. 25, 2010) Credit: Howard Schnapp

At a hearing titled "Foreclosed Justice," a state judge from Nassau County says he will tell members of Congress Thursday about mortgage lenders sidestepping loan standards and sloppy documentation submitted against delinquent homeowners.

State Supreme Court Justice F. Dana Winslow, based in Mineola, is expected to provide one of the few perspectives from the bench in the latest series of congressional hearings on the foreclosure crisis, this time before the House Judiciary Committee.

He says he plans to point out the biggest problem he sees: that many lenders can't prove they own a resold mortgage because they cannot produce a loan note or detail the chain of title after the original loan. Without such proof, they have no standing to foreclose, he says.

"There is an underlying problem that is infinitely more substantial and pervasive than we have ever understood," said the 13-year veteran of the bench. "There are so many mortgages . . . that have deficiencies that may not be correctable but are going through the processes, and people are losing their houses even though the mortgage companies do not have the ability to show all of the required documents."

The mortgage industry has been criticized for selling and reselling loans so often and so quickly that the necessary documentation could not be maintained to indicate who held mortgages.

Winslow said he and a few New York judges were contacted by committee officials in early November. That was on the heels of the "robo-signing" scandal, in which workers for three major lenders said they signed thousands of foreclosure-related papers monthly without verifying details.

He's not shy about kicking out cases and says he's not scared about lenders appealing his decisions. Winslow has presided over more than 1,000 foreclosure cases and has been assigned about 150 such cases so far this year. He said he's been dismissing or freezing 20 percent of his cases this year due to evidence disputes.

In one case thrown out this year the judge wrote that the mortgage holder started foreclosure in June 2007, but a document gave conflicting dates on when the loan was purchased - one date was six months after the case started.

In a September decision he froze interest charges against a borrower when he asked the plaintiff's attorney, "Do you represent the lender or the servicer," and the attorney replied "I don't know."

Winslow is not alone. Other Long Island judges have frozen or dismissed foreclosure cases because of problems with the documentation.

He says he'll be frank about how judges may have "inadvertently" contributed to foreclosures. In the pre-crisis era, he concedes, he and other judges, attorneys and borrowers were "more inclined" to accept the lenders' word: "We did not take the time and failed to say, 'Show me.' "

But two months after the subprime-loan collapse in 2007, Winslow had a special rubber stamp made, one that told lenders to file details in their cases, such as a five-year payment history on the loan.

Lately, he's been troubled by the direction of mandated court settlement conferences, which have focused on what borrowers can pay instead of first finding out if lenders have standing to sue.

The judge wants to share with Congress the big picture from the bench, what he describes as an off-kilter housing sector, unable to get well because foreclosures keep rolling through. "It's certainly going to be adrenaline-raising," Winslow said. "I want to leave them with the appropriate impression of the problems."

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