Mortgage Servicers, Foreclosures, Legal Standing & Proving Ownership Of Promissory Note

In Iowa, The Des Moines Register reports:

• Figuring out which company to deal with during a foreclosure can be daunting. Even if the original mortgage was with a company recognized by the borrower, that company may not be the one acting against the borrower in court. For example: Wells Fargo filed more than 3,600 foreclosure lawsuits in Iowa from January 2005 to February 2008, more than any other company identified in Iowa court data. But the company could be taking legal action because it processed payments for another mortgage company or acted as a trustee for investors - not because it's the original lender.

• Two company names that often appear on Iowa foreclosures - Deutsche Bank and Mortgage Electronic Registration System, or MERS - can be even more puzzling to borrowers.

***

• University of Iowa law professor Katherine Porter led a national study of 1,733 foreclosures and found that 40 percent of the creditors filing the lawsuits did not show proof of ownership [of the promissory note]. [...] Companies, she said, have been "putting the burden on the consumer - who is bankrupt - to try to decide whether it's worth it to press the issue."

• Max Gardner III, a bankruptcy attorney in North Carolina and a national foreclosure expert, said the trend is spreading to other states. "You have to prove in North Carolina that you have the original note," he said. "Judges have not (asked for) that very often, until the last five or six months."

For more, see Firm pursuing foreclosure might not be your lender.

For Katherine Porter's report examining mortgage companies frequent non-compliance with law in consumer bankruptcy cases, see Misbehavior and Mistake in Bankruptcy Mortgage Claims.

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 beta