Foreclosures slow down as systematic document flaws exposed

The foreclosure machinery that has forced millions of Americans out of their homes is beginning to seize up as some lenders and their lawyers are accused of cutting corners in their pursuit of rapid home repossessions.

Evictions are expected to slow sharply, housing analysts said, as state and national law enforcement officials shine a light on questionable foreclosure methods revealed by two of the country’s biggest home lenders in the last two weeks.

Even lenders with no known problems are expected to approach defaulting homeowners more cautiously and look more aggressively for resolutions short of outright eviction…

GMAC has acknowledged legal missteps in processing mortgages, and JPMorgan Chase has acknowledged the possibility of missteps, and both have suspended all foreclosures in the 23 states where they need a court’s approval. That’s 56,000 in the case of Chase alone; GMAC declined to provide a number…

The federal government has been the majority owner of GMAC since supplying $17 billion to prevent the lender’s failure during the financial crisis…

Taxpayers provided the capital; but, no one kicked a sufficient number of Bush-era pickpockets out of management.

The missteps stemmed from the affidavits the lenders file as they seek a quick or summary judgment in thousands of foreclosure cases. The affidavits state certain facts about the case, including the amount owed, which the signer indicates he has personal knowledge of. Without the affidavit, the lender would have to prove the facts at trial…

Defense lawyers say the disclosures are symptomatic of the carelessness, if not outright fraud, that lenders have been exhibiting for years in their rush to file cases. Many necessary documents have disappeared, with defense lawyers saying the lenders often do not even have standing to foreclose…

“The way the plaintiffs’ lawyers have handled this has corrupted our legal system,” said Thomas Cox, a Maine lawyer whose deposition of a GMAC executive in June helped prompt the current disclosures. “They tried to manufacture foreclosures the way you’d manufacture cars, on an assembly line. It can’t be done that way…”

Now, as the lenders are pressed to examine more closely their filings, those foreclosure starts are likely to fall, prolonging the owner’s time in limbo. Many borrowers use this period, when they are living in their home but not paying for it, to try and get their financial house back in order.

RTFA. Long, detailed recounting of slipshod procedures typical of the same lousy banking methods these clowns got away with for over a decade. They’ve had a couple years to reform – and haven’t. They took more than a few years to dig the hole they’ve gotten themselves into. They want us to tolerate lousy practices so they can get free in a few months.

The aid provided by taxpayers is fiscal. Changing ethics and oversight is up to the banks involved – and the Feds who are now supposed to be watching.

2 comments

  1. keaneo

    Though I haven’t much confidence in many of those foreclosed at this stage actually having had qualified for the mortgages – there’s still one simple procedure that stops the foreclosure dead in its tracks. Especially if the mortgage was made in the heyday of no oversight and “mortgage-based instruments”.

    You have a right to require the foreclosing bank to produce the original note. Unh-unh. Not especially likely they can come up with it for a spell – if ever.

    Your debt was sold and resold more time than you can believe and that little piece of paper rarely made it to the last stop. Watch ‘em squirm and try to find it.

  2. E Trams

    Stolen houses, now that is a topic I could discuss with great ease, knowledge, and accuracy. Not exactly stolen by mortgage companies but definitely involving money (shall I say) managers/court abusers. Sad situation when Judges are duped and the innocent are victimized over and over and over.

    Hopefully truths and justice will emerge one day and those who had their homes illegally stolen from them will get them back.

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