Foreclosure Environment "A Total Mess" As Loan Servicers Fail To Address Allegations Of Sloppiness, Fraud

Bankrate.com reports:

• Revelations of bank errors and allegations of fraud have created a "total mess" surrounding today's foreclosures, says Walter Dees, a housing counselor for ClearPoint Credit Counseling Solutions in Los Angeles. "It's a huge paperwork problem," he says. "Banks are overwhelmed, and so are homeowners."

• Overwhelmed might be an understatement. Lawyers who work with homeowners to fight foreclosure say there are more questions than answers right now. Problems with foreclosure documents run the gamut from mistakes to outright fraud, according to Chicago attorney Joseph McCaffery.

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• Lawyers say there are numerous other recurring issues. Bankrate spoke with nearly a dozen lawyers around the country, and they mentioned errors such as:
  
  a) Failure of the foreclosing party to show clear title to the note.
  b) Misapplication of funds submitted by homeowners.
  c) Mortgage notes without proper endorsements.
  d) Backdating of paperwork, especially with respect to assignments.
  e) Forging key documents, such as assignments and affidavits of bank officers.
  f) Filing affidavits without signatures.
  g) Inflated legal fees associated with foreclosure.
  h) Lost or missing promissory notes.(1)

• Can you spot them? While some errors are relatively simple to spot, identifying others -- especially technical deficiencies -- will require a lawyer, McCaffery says. Nonetheless, homeowners can do preliminary assessments on their own -- and in many cases, they should be able to spot egregious errors.

For more, see Fighting common foreclosure errors (Homeowners should be able to spot egregious errors; Technical deficiencies, other errors require a lawyer's help; Foreclosure delays cannot solve bigger homeowner problems).

(1) And, at least in Florida, you can add to the list promissory notes intentionally destroyed by the lender after converting them into electronic form, according to this Florida Mortgage Bankers' 'confession' to the Florida Supreme Court (at page 4). See also Naked Capitalism: FUBAR Mortgage Behavior: Florida Banks Destroyed Notes; Others Never Transferred Them.