Sunday, December 28, 2008

Judges, Homeowner Attorneys Begin To Wonder How To Do A Loan Modification When Lender Can't Prove Ownership Of Promissory Note?

The New York Times reports:
  • WITH home prices in free fall and mortgage delinquencies mounting, pressure to modify troubled loans is ratcheting up. But lawyers who represent candidates for modifications say the programs are hobbled by the complexity of securitization pools that hold the loans, as well as uncertainty about who actually owns the notes underlying the mortgages.(1)


  • How can a loan be modified, these lawyers ask, if the lender cannot prove that it actually owns the note? More and more judges are asking the same thing about lenders trying to foreclose on borrowers.

For more, see A Mortgage Paper Trail Often Leads to Nowhere.

For posts that reference the failure of mortgage lenders and their attorneys to prove ownership of the promissory note when starting foreclosure actions, Go Here, Go Here, Go Here, Go Here, and Go Here.

(1) As the article points out, problems often emerge because these notes — which are written promises to repay the full amount of a mortgage — weren’t physically handled, legally transferred, or accounted for properly when they were bundled by Wall Street into pools or were subsequently transferred to other holders. Many of the notes are now missing. KappaMtgDocsMissing SloppyForeclosuresAlpha