Whatever this means for the state of our housing market, it is not good. Since the robosigning scandal of last fall, most banks put the brakes on new foreclosure csaes. It was time to re-assess, re-groug and re-scheme.
This lull in the foreclosure bonanza resulted in fewer bank-owned homes coming on the market, leading to leaner inventories and stronger demand. It has been good for REALTORS and sellers. Even short sales began to move along somewhat quicker, it appears the banks have been more amenable to a short sale when a foreclosure appears harder to accomplish.
In the last month there have been reports that the banks are ramping up their foreclosure fillings and. we may be in for another period of plummeting home values, skyrocketing inventories, sluggish sales and backlogged courts.
This month's Florida Bar News, in an article titled "Who Owns The Note? Paperwork Problems Still Plaque Foreclosure Actions" sites a study claiming that only 16% of foreclosure documents were valid! John O'Brien, the register of deeds for South Essex County in Massachusetts has referred to his office as a "crime scene" because of fraudulent paperwork.
Mr. O'Brien had a forensic audit performed on 2,000 documents that were filed in 565 mortgage assignments on 473 mortgage cases by J.P. Morgan Chase, Wells Fargo and Bank of America. Some of his findings revealed that the owners could be determined on only 60 of the properties. Of all the assignments only 16% were valid, 27% of the invalid assignments were fraudulent, 35% had been signed by robosigners, and 10% violated the Massachusetts Mortgage Fraud Statute.
"How can I record someting done by a robosigner?" O'Brien said. "This is a nightmare, and I honestly, " do not know what the solution is."
In Florida, the situation could be much worse. According to April Charney, a Jacksonville Area Legal Aid attorney and a recognized authority on foreclosure defense, "If you know what you're looking for, you can find fraud on the face of the document. It's systemic. It's like the paperwork HIV; everyone has the same virus because it was so systemic."
The Associated Press, Reuters and the St. Petersburg Times have all published recent articles claiming that the abuses in foreclosure paperwork, which the banks adamantly claimed were ended last year, are continuing regardless.
Michael Redman, a founding member of http://www.4closurefraud.com , a citizen-based group in Palm Beach County that assists homeowners fighting foreclosure, says there is no difficulty finding defective paperwork. One outstanding example pointed out by the site last year was a case where two different entities filed "wet ink" signed notes claiming to own the same mortgage. It was concluded that the copies were run through a computer to add the blue color and make them appear to be originals,
Many legal experts agree that this whole foreclosure mess is undermining the average individuals faith in our legal system. It appears that some entities are above the law and this does not bode well for any of us.
Who know where all this will end, I certainly don't. In the meantime, the housing market will be, in the words of a long ago mentor, "Unbelievable!"