The pooling of home loans into securities has been practiced for decades and helped propel real estate prices in recent years as investors sought the higher yields that such mortgage trusts could provide.
A federal judge in Ohio has ruled against a longstanding foreclosure practice, potentially creating an obstacle for lenders trying to reclaim properties from troubled borrowers and raising questions about the legal standing of investors in mortgage securities pools. If the bank cannot produce the actual Promissory Note, the bank has to prove they are the 'Holder-In-Due-Course'. In other words, the bank has to PROVE they own the house.
If this is the case, you may see a loophole where people who face foreclosure ask the courts to prove bank ownership. has anyone else heard of this?
UPDATED: September 19,2010 - http://activerain.com/blogsview/1826725/homeowners-rebellion-could-62-million-homes-be-foreclosure-proof-
The Legal Problem of MERS and Mortgages: Could 62 Million Homes Be Foreclosure-Proof? http://www.yesmagazine.org/new-economy/homeowners-rebellion-could-62-million-homes-be-foreclosure-proof
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