We are now handling over 20 "bad affidavit" cases in the courts, and mostly in the bankruptcy court. Ten of them have been filed within the last three months. The most common question I get from my in-house friends is "why now?" and "why this claim?"
The trustees are counting on a positive outcome in the Maryland Court of Appeals case we call "Ameriquest." One issue in that case is whether the Curative Act, which says certain document drafting errors are self-curing if not challenged by a party to the instrument within 6 months, actually means what it reads. If the Court of Appeals does not make a clear statement that the statute is clear and unambiguious on its face, then the bankruptcy trustees can argue to avoid millions of dollars in encumbrances on real property.
Now, this will not dispose of the underlying debts. After all, the lenders will continue to participate in the estates as large, if not the largest, unsecured creditor. But it would give the trustees a toehold from which they will negotiate for some payment of tribute in order for the lender to keep its lien.
Until then, we are checking the docket, daily!
