New Jersey Supreme Court Chief Justice Stuart Rabner has laid down the law for the top mortgage lenders and servicers. He has given them the burden of showing "why the processing of uncontested residential foreclosure matters they have filed should not be suspended," reports Bloomberg.

"It's important that the judiciary ensures that judges are not rubber-stamping documents of questionable reliability," Rabner told reporters.

Six companies--including Bank of America, Ally Financial, Citigroup, Wells Fargo, OneWest Bank and JPMorgan Chase--face a suspension in foreclosure activity if they cannot satisfy the order, according to the financial news service . 

This appears to be the first time a state court has imposed such a burden on banks and servicers. We may well see more state courts move in this manner. That really complicates the picture for banks, as does the move by specific states to enter deals with specific institutions.

Some have suggested that a global solution would work best to end the backlog and get the industry moving ahead again. But specific actions by state judges and state attorneys general may not allow that.

It's possible that the banks can satisfy the judges. Then again, it may not be possible in a conventional sense. Think of all the banks that were forced in other states to provide missing document affidavits. You get the feeling that in New Jersey there's a deep skepticism of the banks on this issue. Robo-signing just isn't going to work any more. So the morass only gets thicker.

For more:
-here's the Bloomberg article

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