Foreclosures May Be Undone by State Ruling on Mortgage Transfer

[kpete]

Source: Bloomberg

Foreclosures May Be Undone by State Ruling on Mortgage Transfer
By Thom Weidlich - Jan 5, 2011 9:01 PM PT

Massachusetts’s highest court is poised to rule on whether foreclosures in the state should be undone because securitization-industry practices violate real- estate law governing how mortgages may be transferred.

The fight between homeowners and banks before the Supreme Judicial Court in Boston turns on whether a mortgage can be transferred without naming the recipient, a common securitization practice. Also at issue is whether the right to a mortgage follows the promissory note it secures when the note is sold, as the industry argues.

A victory for the homeowners may invalidate some foreclosures and force loan originators to buy back mortgages wrongly transferred into loan pools. Such a ruling may also be cited in other state courts handling litigation related to the foreclosure crisis.

“This is the first time the securitization paradigm is squarely before a high court,” said Marie McDonnell, a mortgage-fraud analyst in Orleans, Massachusetts, who wrote a friend-of-the-court brief in favor of borrowers. The state court, under its practices, is likely to rule by next month.

Read more: http://www.bloomberg.com/news/2011-01-06/foreclosures-may-be-undone-by-massachusetts-ruling-on-mortgage-transfers.html

[Lucinda]

1. Book marking it to read when i come back

ty!

[customerserviceguy]

2. This is just a fight

between the banksters and the folks they sold the packaged loans to. If people cannot and have not paid their mortgages, it does not mean they get a free house.

[soryang]

4. Not always

If the MERS transfers don't meet state law requirements, and the mortgagor makes a motion to dismiss, the petitioner mortgagee loses. Repairing defective recordings of real estate interest transfers after the fact is quite difficult. In some jurisdictions MERS has no standing to petition for foreclosure and the business practices are so defective, attorneys and mortgage servicers have been committing fraud to make their case. The dismissals are without prejudice so if the proper party petitioner can come into court with a proper record, he gets a bite at the apple.
A lot of the successful foreclosure defenses in various states are reported at 4closurefraud.com.

[EFerrari]

5. Free houses aren't really the issue.

There are many, many people, who knows how many, who heard about the HAMP program to modify their screwed up loan. They weren't in foreclosure and they did what a responsible person is supposed to do, they called their lender and asked if and how they could get a modification.

Okay. They were told they had to be in foreclosure to qualify for that program.

Then, they began the process to apply for a mod. And it was strung out by the lender. These people send in their paper, cooperated in every way, they called to check on the progress of their new loan.

They were told, their paper was lost, send it in again. They were told no, they can't talk to the person handling the loan but their file looks fine. Excuse after excuse until the clock ran out and the next thing they knew, they'd lost their house. That's predatory loan servicing.

Alternately, after being strung along for a year or longer, they are suddenly told they have to make a huge balloon payment in order to get the new loan. They can't, of course, and they lose their house. That's predatory loan servicing.

Those people didn't want free anything. They just expected their lender to act in good faith as required by law. And they expected wrong.

[Demeter]

3. Please God, Let This Be the End of the TBTF Zombies

put them out of our misery.