Lack of standing means that the lender does not have a legal right to foreclose. In recent years, attorneys (including myself) have asserted this defense in foreclosure and/or bankruptcy court. Gretchen Morgenson of the NY Times reports on the latest here.

“The disarray stemming from flawed foreclosure documents could threaten major banks with billions of dollars in losses, deepen the disruption in the housing market and hurt the government’s effort to keep people in their homes, according to a new report from a congressional watchdog . . . ” Read the AP article.

Much like Congress did with Chapter 7 bankrutpcy, the NY courts have now enacted a rule that puts a huge burden on plaintiff side foreclosure attorneys. They must now certify that their papers – most of which come from their lender clients – are accurate and complete in residential foreclosure actions. In the face of the recent disclosures about lenders and robo-signing of court papers, this is a scary prospect for plaintiffs’ counsel. It may create more defense and counterclaim opportunities for homeowners. Here is the rule. Here is a Wall St Journal article about this.