November 15, 2007
Foreclosures Hit a Snag for Lenders
By GRETCHEN MORGENSON
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A federal judge in Ohio has ruled against a longstanding foreclosure practice, potentially creating an obstacle for lenders trying to reclaim properties from troubled borrowers and raising questions about the legal standing of investors in mortgage securities pools.
Judge Christopher A. Boyko of Federal District Court in Cleveland dismissed 14 foreclosure cases brought on behalf of mortgage investors, ruling that they had failed to prove that they owned the properties they were trying to seize.
The pooling of home loans into securities has been practiced for decades and helped propel real estate prices in recent years as investors sought the higher yields that such mortgage trusts could provide. Some $6.5 trillion of securitized mortgage debt was outstanding at the end of 2006.
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Interesting?
The concept of “standing” is something that everyone learns to deal with when even contemplating legal action. Prove to me by evidence that you are the injured or the injuring party.
I have no doubt that with some effort the “bank” can meet their burden sooner or later. But, there’s always the possibility of a misfile, blunder, or error.
Just goes to show, never assume anything when you’re in trouble.
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Reinke Faces Life 