Once again a court ruled against MERS, The Mortgage Electronic Registration System, again due to lack of standing.
A California bankruptcy court says Mortgage Electronic Registration Systems cannot help a trustee establish legal standing to foreclose on a securitized mortgage unless the trustee already possesses an actual assignment of interest in the loan.
Read the story here.
Can a home buyer be the rightful owner a repossessed property if the bank that sold it didn’t have the right to foreclose on the original owner? Recent court rulings in Massachusetts have found that banks must be able to produce the original note to be able to foreclose.
In August, Long ruled that Bevilacqua wasn’t the property’s owner and didn’t have standing to inquire about claims. U.S. Bancorp, which sold Bevilacqua the property in 2006, conducted an invalid foreclosure because it didn’t properly own the mortgage at the time, Long said.
The mortgage transfer to U.S. Bancorp, which oversees the mortgage-backed trust containing the loan, happened after the foreclosure, Long said. All Bevilacqua had was a deed from an invalid foreclosure sale, the judge said.
Judge Long said that he had sympathy for the buyer, but that his claim was against the bank, not against the original owner.
Read More: http://www.bloomberg.com/news/2011-01-21/faulty-foreclosure-case-in-massachusetts-high-court-may-hurt-home-buyers.html
If you have been following the MERS involvement in the foreclosure crisis you are well aware of MERS and the robo-signer stories. Courts have been ruling against MERS and the banks. They have dismal record keeping procedures and the courts have ruled in favor of the homeowners.
The situation may have just come to a head in a case involving U.S. Bancorp and another involving Wells Fargo. Neither of these cases involved MERS. The Massachusetts Supreme Court, in a unanimous decision, ruled that neither Wells Fargo nor U.S. Bancorp have standing and consequently have no right to foreclose because they failed to show that they were holders of the mortgages at the time of foreclosure.
Justice Robert Cordy, in a concurring opinion, blasted the “utter carelessness” the banks demonstrated in documenting their right to own the properties.
This ruling is expected to slow down the foreclosures significantly and consequently significantly affect the entire home loan process and market place.
Massachusetts, like Nevada is a non-judicial foreclosure state. If the banks were playing fast and loose in Massachusetts, what is the likelihood that they would have operated differently here in Nevada?
Do we face the prospect of having foreclosures overturned here too?
A class-action law suit has been filed against Wells Fargo and its servicing company, American Servicing Company. The lawsuit, filed in the United States District Court for the Northern District of California, alleges that Wells Fargo and ASC induced borrowers to default on their mortgages.
The borrowers claim they were told that if they were current on payments they would not be eligible for a loan modification.
They further claim that this allows Wells and ASC to charge higher fees and late charges.
Read more here.
Banks have been trying to get out from under problems caused by the robo-signers and fraudulent documents filed in foreclosure proceedings. It appears, however that they might have moved too slowly.
The race is on for the banks to keep the scandal from metastasizing. Crisis management specialists are working around the clock to help banking executives stem the financial and public relations disaster. Shares of Bank of America, the biggest U.S. lender, are already down 21 percent for the year, making it the biggest laggard in the 30 stocks that make up the Dow Jones industrial average.
Now they are facing a blizzard of lawsuits seeking damages for homeowners that believe they were foreclosed illegally.
The class actions, which could be expanded nationally, seek damages for homeowners whose properties were illegally foreclosed upon by banks using fraudulent documents. Suits have been filed in Maryland, New Jersey and Massachusetts that target Bank of America Corp., Wells Fargo & Co., HSBC PLC and JPMorgan Chase & Co. In Florida and Maine, Ally Financial, formerly known as GMAC Mortgage, is also being targeted.
Congress is also beginning to stick its nose into the situation thinking they may find some votes. The problem is due to get much worse.
Read more here: http://www.msnbc.msn.com/id/40241849/ns/business-us_business