Foreclosure - The Judiciary Can No Longer Turn a Blind Eye

Foreclosure - The Judiciary Can No Longer Turn a Blind Eye

In Maryland State a new rule has authorized judges to engage experts to scrutinize foreclosure documents. It has also been ordered that lawyers representing the lenders would have to swear to the authenticity of the papers being submitted in court.

The chief judge in New York State issued an order along similar lines mandating that the attorneys of the mortgage firms would have to sign affidavits confirming they have checked the particulars of the foreclosure documents under "penalties of perjury".

The judges of Cuyahoga County in Ohio also introduced similar rules. They judges of the county said they would allow the servicers 30 days to see that the documents were in order; if not the cases would be dismissed. Judge Eileen Gallagher the head of the court system of Cuyahoga County said, "Because the court is now on notice of the potential flaw in the system, we decided that we couldn't turn a blind eye toward that".

The most significant problem that the banks are facing currently is something beyond the robo signings; it is whether the firms foreclosing on borrowers have the right to do so. The chief judge of Kenton County in Kentucky ordered that each transfer of the mortgage starting from the original one would have to be documented in foreclosure suits.

For the mortgage firms this is a problem that will require a lot of time to be resolved. Each mortgage changed hands a minimum of three times. All the paperwork would now have to be tracked.

In many cases some of the papers might have vanished. Many of the mega mortgage companies listed the transfers with MERS (Mortgage Electronic Registration Systems) instead of the official deed offices. MERS is a computer operated tracking method that has been set up by Wall Street to expedite the process of mortgage transfers as these were packaged, sliced and sold over and over again to investors across the globe.

Going through the conventional method required writing on many forms something that required time and effort as well as expenses; each transfer required deposit of fees to the local office.

MERS is facing legal challenges across the country but the problem has not yet been resolved. Some of the courts have upheld the authority of MERS to deal with some transactions while other courts have ruled out its standing altogether. Nickles in the District clearly stated the requirement as per rules "is not satisfied by private tracking of mortgage interests through the Mortgage Electronic Registration Systems".

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