Judges Begin To Hammer "Foreclosure Mill" Law Firms For Trampling On Homeowners' Rights

In a recent article that should be "must reading" for any judge (state or Federal) who presides over foreclosure cases, The Wall Street Journal reports:

• Law firms handling thousands of foreclosure cases on behalf of mortgage lenders and servicers are drawing criticism from judges, who say roughshod filing practices are trampling borrowers' rights.

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• Lately, judges are faulting law firms for what has become a common practice: filing a foreclosure suit, in states that require them, without showing proof that the plaintiff actually holds the mortgage and has the right to foreclose. (Such plaintiffs are often banks that act as trustees for investors of securities backed by mortgages.) The situation occurs in part because mortgage documents and the contracts between borrowers and lenders may change hands multiple times and may not be assigned to the plaintiffs at the time the suits are filed.

In addition to the recently reported dismissal of foreclosure actions by Ohio Federal judges for lack of proper paperwork, WSJ reports three separate incidents where law firms were fined $65,000, $75,000, and $125,000 by judges in foreclosure actions for what amounts to "playing fast and loose" with the court system. There's also a fourth incident reported where a judge is currently considering imposing sanctions on the attorney.

For more, see Judges Tackle 'Foreclosure Mills' (High-Volume Firms That Cut Corners Are Rebuked, Fined) (subscription required; if no subscription, try here).

For other posts that reference the failure of some mortgage lenders and their attorneys to file the required loan documents when starting foreclosures, Go Here, Go Here, Go Here and Go Here. missing mortgage foreclosure docs alpha ForeclosureMillAttorneysAlpha