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willbeurdaddy -> RE: The continuing saga - fraud of massive and epic proportions (10/11/2010 11:27:20 AM)
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quote:
ORIGINAL: tazzygirl
My only question is this... if they are fraudulent foreclosures, what remedy do those who were foreclosed upon have?
In the long run its meaningless, unless the original lien paperwork was lost. The homeowners still owe the money, and they have false hope about their options and delay payments, running up more attorneys fees and late charges. Meanwhile the houses will sit there on public records as pending foreclosure sale, people will not buy houses in those markets until the foreclosures clear, further dampening the housing recovery and the economy overall.
There is one potential upside for homeowners though. The banks will continue to sit there with non-performing loans on their books, and face the prospect of them staying there for much longer periods of time. That may encourage them to actually consider modifications for those loans that were properly underwritten in the first place at higher interest rates than prevail today. "Loan modifications", even those supposedly Federally sponsored, are a sham.
There will also be a burgeoning market for attorneys who will investigate the paper trail of loans that have been sold and resold. There will be instances of shoddy paperwork where the lien is no longer valid or was improperly written in the first place. Those homeowners may wind up with offers of significant reductions in principal if they will agree to a new lien without a court battle. Those who take it to court could wind up owning their homes outright. If the attorneys take those cases on contingency and they become commonplace it could hurt some financial institutions badly. I dont think many homeowners would pursue it in court on a time and expense basis.
Bottom line is whether or not their is actual "fraud" in the foreclosure process, this can only prolong the recession.
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