New Ruling Means Banks Could Have Tough Time Foreclosing

There’s big ramifications to a federal court’s dismissal of 14 foreclosure cases because the bank couldn’t prove that they owned the mortgage note, reports NYT.

Part of the mortgage boom and bust was the mortgages getting chopped up, put into pools of thousands and then became investment vehicles that were sold to Wall Street. All of this financial three-card-monte means it’s hard to prove who owns the mortgage note at what time…

“The institutions seem to adopt the attitude that since they have been doing this for so long, unchallenged, this practice equates with legal compliance. Finally put to the test, their weak legal arguments compel the court to stop them at the gate,” wrote Judge Christopher A. Boyko in the decisive case.

If mortgage lawyers jump on this ruling and banks are forced to prove they actually own the note on the date of the foreclosure notice, a lot more people will get to keep sleeping under their own roofs.

Foreclosures Hit a Snag for Lenders
[NYT] (Thanks to Brandon!)
(Photo: zeorb)