As we all know about the “robo signing” and the possibility many homeowners lost their homes without the lenders following the right foreclosure process. In a possible landmark decision, in the highest court in the state of Massachusetts, the Supreme Judicial Court this past Friday January 7, 2011, U.S. Bancorp and Wells Fargo erred when they seized two homes and foreclosed on the homes in 2007. The court reversed the foreclosures and has returned ownership back to the homeowners. This coming as a warning to other big lenders, the courts will not tolerate short cuts and foreclosures cannot be based on improper or incomplete paperwork.
This will cause a wave of homeowners wondering if they lost their house do to faulty paperwork. It certainly leaves the door open for other possible lawsuits, and other cases to be reviewed. However, legal experts state while this ruling did not set a precedent for other states, the outcome will closely be watched across the country and because it is the first such ruling from a state’s highest court, the banks certainly view this as bad news.
Foreclosures are supposed to occur only when lenders can prove they own the note underlying the property. For obvious reasons there is a breakdown in the process, and now it has impacted families and hard working Americans by displacing them out of their very home.
So what can be done to ensure this doesn’t continue to happen? Making sure the chain of title is 100% without fault. Before the house can be sold or foreclosed on the lender is suppose to have ownership of the property before they can even evict anyone.
Lenders have been under scrutiny since the “robo signing” became evident in the past few months. As the 50 state investigation has continued to probe deeper into the foreclosure mess, we certainly hope this isn’t a wide spread problem. It will certain leave a ripple of distrust for years to come.
