Saying that he “can’t look a constituent in the eye and tell them who owns their mortgage,” a troubled register of deeds in South Essex County, Massachusetts, reports that his department has found 26,000 fraudulent mortgage documents on record in his area of jurisdiction. John O’Brien accuses lenders of “filing fraudulent documents to take [homeowners’] homes away from them” and applauds Massachusetts attorney general Martha Coakley’s lawsuit against the top five U.S. banks for deceptive loan-servicing practices and illegal foreclosures. However, critics of Coakley’s suit argue that her complaint is actually “way over the top…given the thin substance behind the allegations”. Much of the complaint hinges on the fact that lenders used the mortgage electronic registration system (MERS) to handle foreclosures and, in the process, sometimes got ahead of the system by “assuming they would receive title before they actually obtained it.” Although this was certainly “a little shoddy,” as one analyst phrased it, until a recent Massachusetts Land Court decision it was entirely legal. Critics of Coakley are calling for her to stop the theatrics and get back to negotiations with lenders along with her peers in Washington, D.C.
Do you think that Coakley did the right thing by stepping away from the negotiating table and taking on the lenders on her own? Bear in mind that Ally Financial will no longer make loans in her state, according to the AG because they cannot follow the legal lending processes she demands. Is she showboating or does Coakley have her constituents’ best interests at heart?
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