Monday, July 30, 2012

More On Trouble With Land Titles Arising Out Of Wrongful Foreclosures

Albany Law School Professor Elizabeth Renuart writes in Public Citizen's Consumer Law & Policy Blog:
  • [T]here is growing evidence that the parties to securitization deals handle and transfer the legally important documents that secure the resulting investments — the loan notes and mortgages — in a careless and, at times, fraudulent manner.

    Consequently, the foreclosing parties frequently do not possess the right to foreclose and the resulting sales may be unlawful. Defective sales harm homeowners when they lose their homes to the wrong party. Moreover, they could use the extra time afforded by a delayed or jettisoned foreclosure to find another solution, such as a loan modification or short sale.

    Wrongful foreclosures affect another important group, the purchasers. If title to the property is flawed as a result, those parties potentially buy nothing and can transfer nothing. Clear title to real property in the United States may be in jeopardy. The problem is most acute in non-judicial foreclosure states because doctrines of finality do not apply and state law may permit post-sale challenges.
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