As though the foreclosure/mortage crisis isn't bad enough.
Bloomberg has a disturbing story about another potential crisis for the mortgage industry.
The S&P 500 Financials Index of 93 companies also dropped after Deutsche Bank AG, Germany's biggest bank, lost an effort to foreclose on 14 properties because a federal judge in Cleveland found the bank hadn't proved that investors in the underlying mortgages actually owned them.
The Oct. 31 ruling from U.S. District Court Judge Christopher A. Boyko in Cleveland could jeopardize efforts by lenders to foreclose. It also could mean that homeowners might get more time to resolve their debts while lenders handle the intricacies of getting custody of documents for mortgages that are rolled into securities and sold to investors.
The ruling, if adopted by other federal courts, may complicate efforts by investors in mortgage securities to foreclose on non-paying loans.
1 comment:
Unfortunately, this will not last for long. All the banks that are going for foreclosure need to do is have the paperwork handy. Next time the banks are going into court to foreclose they will make sure to have the needed documents prepared, and not be caught off guard.
- Mortgage Foreclosure Litigation blog
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