You Own My Mortgage? Prove It

June 2, 2011

Delinquent home owners are finding a wild-card in saving their home from foreclosure. In court, more home owners are successfully arguing that their mortgage companies can’t prove they own the loan and don’t have the right to foreclose on them.

The Wall Street Journal reports: “In some cases, borrowers are showing courts that banks failed to properly assign ownership of mortgages after they were pooled into mortgage-backed securities. In other cases, borrowers say that lenders backdated or fabricated documents to fix those errors.”

In a few cases, home owners have even had their foreclosures reversed as courts blame lenders’ sloppy paperwork.

Some argue that borrowers are using “arcane legal rules” to get free houses when not paying their bills. Banking industry lawyer Laurence E. Platt at K&L Gates in Washington says "the real assault on the legal system" are efforts by judges and local officials to not give lenders their rightful ownership and make foreclosures nearly impossible.

However, attorney Thomas Ice in Royal Palm Beach, Fla., argues that borrowers shouldn’t have to tolerate incomplete or falsified evidence by lenders.

Source: “Banks Hit Hurdle to Foreclosures,” The Wall Street Journal (June 1, 2011)

Read more:

Mass. Court’s Ruling Could Be a Harbinger of More Foreclosure Hold Ups