Last week, the Massachusetts Supreme Judicial Court (SJC) handed down what bodes to be a landmark decision not just for homeowners facing foreclosure, but for lenders throughout the country and homebuyers and note-buyers everywhere. In the decision, the SJC determined that two foreclosures enacted by US Bancorp and Wells Fargo were invalid because the two lenders had not adequately proved that they actually owned the mortgages in question, which had been bought and sold multiple times before the foreclosures. During the bulk-buying and -selling process, mortgages are packaged in groups and may not be individually reassigned from seller to buyer, particularly when they are bought and sold rapidly as is the norm. Since the lenders were unable to prove unequivocally that they had the right to foreclose because the two mortgages in question were not reassigned to their new owners properly, the SJC rendered those foreclosures invalid.
Now that the precedent has been set, class action suits that were literally waiting in the wings – and one that went on hold to await the decision – are gearing up. One such suit in Massachusetts has resumed immediately: a “statewide class action in which Massachusetts homeowners accuse US Bancorp and Ally Financial, Inc. of faulty foreclosures”[1]. The lawyer for the borrowers, Kevin Costello, file a motion yesterday to restart evidence gathering now that the decision is in and believes that “it’s going to bring relief to all of the people who are dispossessed homeowners in many instances.” Costello and others like him hope to “unwind” the illegitimate foreclosures and either force loan workouts or compel originators to buy back the problem loans. Either way – and even if a foreclosure still ultimately results – homeowners are likely to receive a massive “stay” on the entire process as the lawsuits and the unwinding could add months or years to the process.
Do you think that these class action suits will help or hurt homeowners and home buyers in the long run?
Thank you for reading! Your comments and questions are welcomed below.
[1] http://www.bloomberg.com/news/2011-01-10/massachusetts-foreclosure-class-action-to-resume-update1-.html
This may give those of us who are just trying to sell our home , a chance to do so! If all of these foreclosures hit the market, everyone loses in the long run. The foreclosed upon, the homeowner who isn’t in default loses all their equity, too many properties for sale at one time will cause values to diminish even more and may cause even more people to walk. Lets just hope these homeowners who have been @#$%%^ by the banks,can come to some type of settlement , so this mess can be resolved quickly, instead of years of litigation.
Sounds like it could mean a couple of years of payment free housing for a lot of people who should have never gotten the loans in the first place but can now live rent free. But if the banks aren’t playing by the rules to foreclose, then more power to the people to stay in their homes. It sure will have a negative impact on any housing recovery. What investor would buy in this state?
If they try to unwind those foreclosures…….that could cause some serious hurt of innocent people…especially if you bought a foreclosure recently.
Is there insurance for that?
Ok, so you walk into the bank and sign for a mortgage.
Then, a number of things happen that render you unable to pay your mortgage…or maybe, you just decided it’s not equitable for you to pay for something that is not worth what you paid for it.
So either way, you stop paying.
18-24 months down the line, you go to court and you can’t prove that you have paid your mortgage, because… you have not paid it.
Clearly, you have not held up your end of the bargain.
But wait ! the bank can’t find a piece of paper…so your off scott free !
I LOVE AMERICA !
kiss kiss kiss hug hug hug.
Thanks !
I personally don’t like my HOME LOAN shuffled among different Companies (some of them I dislike
and would never do business with) and that is exactly what happened…I started out with a nice clean Loan and then it got moved to a Scam Loan Company that I would never do business with.
The Solution to this problem is SIMPLE: No movement of the Loan to any other company without the written approval of the Home Owner.
The Mortgage Insurance is Top Down Junk and is just another fooler….I tried to get a disclosure of ALL Insurance on an REO and it was flat out Refused to be shown by the Bank Side. (Most REO’s get broken into and they definitely need to SHOW INSURANCE~!!)
The NEW NMLS Licensing doesn’t stop the SCAM LOAN PROGRAMS because they originate
deep within the Banks themselves. Again, the problem is deep within the banking system.
Problems, Problems, Problems….I am glad to see that a Judge that can finally see where it is all coming from…
How was a clean title issued if the note couldn’t be assigned properly from owner to owner?
I HAVE A QUESTION TO GOV’T AND BANKS.
For instance,An investor negotiates a short sale per all legal & ethical guidelines, like many of us do,actually purchase property from the lender,then offer said property to end buyer.Then in turn in the middle of this process we find the courts call INVALID FORECLOSURE JUDGEMENT.What is to happen to our REPUTATION,MONEY ON INVESTMENT,TIME SPENT ON AND MONEY SPENT ON EMPLOYEES TIME in the end.It seems we get clocked out,and eventually lose our business AND!!!!!!!!reputation AND!!!!!relationships.So much for us trying to help people, because in the end,nobody remembers us except we might have been in on it.Are we in for scrutiny too?The banks & gov’t need to remember, WE TRUE LEGIT INVESTORS ARE THE ONLY >>>>>>>ONES TO BAIL THIS OUT!!!!!!!!!!!!!!!!!
Every single one needs to be prosecuted, put in prison ,if not exiled to CHINA!!! If it were me that pulled this FRAUD,That’s where I would end up.Let BofA and rest guilty drop like a hot rock. They are doing nothing but bringing this country down.BUMP THEM!!!
Sorry for the rant ,BUT, then again no I’m not. I STILL live in AMERICA!!!
We had a modification done and ended up paying more than we were paying and interest never changed.
I spoke to a repersentive regarding Obama plan and was told our interest rate should have been put back to 2% and payments lowered When talking to our mortgage Co. They told me I was wrong. Am I?? And can we do anything to change This.
Thanks