Massachusetts Judge Stops Securitizers from Foreclosing
A Massachusetts judge has ruled that securitizers cannot foreclose on properties if they do not have key paper work in their possession to establish their ownership of the property. This ruling will likely go to the Supreme Court.
Wells Fargo and US Bankcorp had 2 foreclosure cases that were packaged into securitizations. A lower courts ruling was supported. 2 foreclosure sales of homes were voided because the lenders could not prove that the loans had been assigned to them through mortgage backed securities (MBS).
Are banks mishandling foreclosures?
The ruling will not prevent foreclosures on loans that have been securitized. Legislation is sure to follow.
We have all been hearing for the last couple of years from foreclosure prevention companies and some attorneys that the missing paper work could be used as a foreclosure defense. We have also all been to seminars by attorneys who said that this defense would never work.
We will keep an eye on how this plays out when it goes to the Supreme Court.
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