Bankruptcy

Bundled Mortgages and Dubious Fees Complicate Foreclosure Cases

By J. Michael McBride

Do you know you owns your mortgage? Are you sure? With all the notes being bundled and sold not even some of the banks are sure which they own. Ohio courts have recently dismissed cases where ownership of the mortgage has not been proved by lenders seeking foreclosure. Ohio Judge Boyko dismissed 14 cases last October stating, "[t]here is no doubt every decision made by a financial institution in the foreclosure process is driven by money. However, unchallenged by underfinanced opponents, the institutions worry less about jurisdictional requirements and more about maximizing returns".

An associate professor of law from the University of Iowa conducted a study of 1,733 foreclosures that began in 2006 and found that 40% of creditors foreclosing on borrowers did not show proof of ownership. In addition, she noted that almost half of the loans had questionable fees that had been added. In one case, a local accountant testified that the lender had added such questionable fees in the amount of $38,612 in its favor for bank attorney fees, foreclosure fees and those covering hazard insurance. The U.S. Trustee said last year that they would "move against" lenders who filed false or inaccurate claims or assess unreasonable fees.

You can read the entire article and about the battle of one family at: http://www.nytimes.com/2008/03/04/business/04auction.html?_r=2&oref=slogin&ref=business&pagewanted=print&oref=slogin

Chandra

Full post as published by Texas Lawyer Blog on March 06, 2008 (boomark / email).