'Court rules against banks in pivotal mortgage case'

Discussion in 'Economics' started by Wallace, Jan 7, 2011.

  1. "The highest court in Massachusetts ruled against U.S. Bancorp and Wells Fargo &
    Co. Friday in a pivotal mortgage foreclosure case that could spark more turmoil and
    uncertainty in a housing market already mired in depression.
    The Supreme Judicial Court affirmed a lower court judge's ruling invalidating two
    mortgage foreclosure sales because the banks, in their capacity as trustees for
    mortgage securities, did not prove that they actually owned the mortgages at the
    time of foreclosure.
    The decision, which highlights the failure of financial firms to adhere to the rules that
    govern mortgage-backed securities, is likely to lead more borrowers to sue bank
    servicers and trustees for wrongful foreclosures. It's unclear what the ruling means
    for people who were forced from their homes after defaulting on their loans or for
    those who purchased houses in foreclosure sales.
    "There are now thousands of these homes that have been purchased through
    foreclosures handled in a very similar fashion where the titles are defective," said
    Ward P. Graham"