If Foreclosure Documents Have Not Been Recorded Properly the Investors of the Mortgage Securities Will Lose Tax Benefit

If Foreclosure Documents Have Not Been Recorded Properly the Investors of the Mortgage Securities Will Lose Tax Benefit

One of the robo-signers in the office of David Stern at Plantation, Florida was Cheryl Samons. Generally she inked in one day 1,000 affidavits. Sometimes she got so tired that she allowed others to sign her name. Kelly Scott another employee of Stern in a deposition said, "Cheryl would give certain paralegals rights to sign her name, because most of the time she was very tired, exhausted from signing her name numerous times per day".

The attorney general of Florida, Bill McCollum is probing into the operations of the firm of Stern it being one of the important foreclosure mills. The problem is now spreading beyond the boundaries of Florida.

The banks were in such a tearing hurry to lay hands on properties by foreclosing that they failed to keep record of the change of hands of mortgage notes. If and when questions arose a patchwork solution was offered by submitting affidavits meant to plug the holes.

Over 1,700 affidavits were submitted only in Broward County during the last two years to make up for the misplaced notes as per the findings of Legalprise. Lenders had started to outsource important assignment like finding out the exact amount owed by a borrower or locating the name of the entity that had the right to foreclose.

The investors who had purchased the mortgage backed securities are worried if the loans have been properly recorded. If this has not been done then the tax benefits would be erased leaving the investors weighed down with heavy tax bills.

For many years it had become a routing that the entities filing the foreclosure suits did not have to show their ownership rights via the note. Housing advocates and lawyers have been complaining about this for a long time. But things began to change when in 2007 October Judge Christopher A. Boyko (Federal District Court of northern Ohio) tossed out foreclosure cases numbering fourteen and placed notice on the lenders. Boyko ruled that those who had brought the cases could not proved their ownership of the notes and he came down heavily on the banks for thinking "less about jurisdictional requirements and more about maximizing returns".

Byoko also added that the attitude adopted by the bankers was that since they have been following this practice for a long time without being challenged then it equates to being incompliance with the law.

Original Post: If Foreclosure Documents Have Not Been Recorded Properly the Investors of the Mortgage Securities Will Lose Tax Benefit on US REO Properties

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