Foreclosure Mess Could Get A Lot Worse

Some of the clerks handling foreclosures have been signing more than 10,000 foreclosure documents a month. These are notarized documents whose notary was often not even in the same room. They have often not been adequately verifying the accuracy of these documents.

Now What?

There are serious questions about the legality of the foreclosure procedures taken by the banks and even about the title of the new owners of the foreclosed properties. Many banks have put a complete moratorium on further foreclosures. Some have even stopped the sale of foreclosed houses already in contract to the new owners.

Foreclosed homeowners are getting ready to sue, purchasers of foreclosed homes are going to sue, bond holders are suing, mortgage service companies are suing and being sued, and title companies are going to be pulled into the mess.

Here is a quote from “So far, the judges have been determining that the banks didn’t have clear title to the homes they repossessed and therefore shouldn’t have been able to sell them. Bummer for the homeowners who were foreclosed upon; bad news for the people the banks sold their homes to; and the banks are looking down the dark abyss. It’s a mess, for sure.”

I haven’t heard of any of this affecting Alaska yet, but I’m sure it will. What do we tell potential buyers of foreclosed homes? Will the title companies even insure the title? I’m not sure. But I’m going to ask my clients to read up on the situation for themselves.

If you want to do more reading…see below.

Inman News
Yahoo Finance…BofA extends to all 50 states
Business Week
Columbia Journal Review
Las Vegas Sun
Zero Hedge