Here are four articles that will help explain where we are.
- Foreclosure sales in limbo over title issue
- Lawmakers show worry over U.S. dollar’s dwindling status
- Show Me The Money
- Profits for Buyout Firms as Company Debt Soared
Foreclosure sales in limbo over title issue
A court decision expected as soon as today could negate the validity of sales of thousands of foreclosed homes in Massachusetts, causing havoc for buyers and sellers and further stalling the housing market’s recovery in hard-hit areas.
At issue is proof of ownership at the time of a foreclosure sale. During the housing boom, millions of mortgages were bundled into bonds and sold to investors, a process that resulted in lengthy and twisted paper trails that can obscure ownership. Many lenders believed they could complete foreclosure transactions and later produce formal proof they held the mortgage.
That changed in March when Justice Keith C. Long of Massachusetts Land Court found that two foreclosures in Springfield were invalid because ownership of the mortgages was not clear at the time of the foreclosures.
Long’s ruling, which came as a shock to many who deal with distressed properties, called into question the ownership of hundreds if not thousands of foreclosed homes in Massachusetts, prompting some lenders to delay sales out of fear they could later be voided, title companies to balk at insuring them, and nonprofits to steer away from certain foreclosed homes altogether.
“There are thousands and thousands of titles that have gone through foreclosures with these late filed’’ ownership records, said Lawrence Scofield, an attorney with Ablitt Law Offices in Woburn, who represented plaintiffs in three consolidated Springfield cases ruled on by Long. “Judge Long is saying you don’t really own it. That is the real, overwhelming, economic effect.’’
Two of the plaintiffs asked Long to reconsider the ruling, and a decision is imminent.
Comments: There may not be enough lawyers, judges, and courts to deal with the housing mess. The fastest way to solve this, I predict, will be emergency revocations of or alterations to existing title and ownership laws.
The problem is simply that decades of legal standing and rock-solid precedent, varying slightly from state to state, has established what constitutes legal proof of ownership. When it comes to seizing control of an asset with disputed ownership, we can all be glad that the laws are quite specific and detailed. Otherwise, it would all be something of a mess.
by bluestone