The Foreclosure Sleuth

New Republic |  June 29, 2016    New Republic contributor David Dayen’s book Chain of Title focuses on three individuals in South Florida—cancer nurse Lisa Epstein, car dealership worker Michael Redman, and Lynn Szymoniak, a lawyer specializing in insurance fraud—who stumbled upon the biggest consumer fraud in American history. They did so after they fell into foreclosure, and realized that all the documents they were sent by their mortgage companies—the evidence being used to kick them out of their homes—were fake. It turned out that the industry broke the chain of title—the chain of ownership, really—on millions of securitized mortgages, and were using false documents to cover it up.   Read more here.

Foreclosures: What Role Should a Trustee Play?

Huffington Post |  April 29, 2016      It’s one of those questions that seems pulled from a final exam at the Harvard Business School but if you’re a homeowner caught in the foreclosure wringer it’s something worth thinking about. Now, if you’re seeking an answer about the trustee’s role from any of the parties suing to extricate you from home and hearth the response, no doubt, will be an unequivocal “no.”

When it comes to snatching houses current banking wisdom goes something like this: mortgages (most of them) are held in securitized trusts which in turn hire servicers to collect monthly payments and if something goes awry — say the homeowner defaults on monthly payments — the servicer can initiate a foreclosure action on behalf of the investors in the trust. The role of the trustee — whose name usually appears as “plaintiff” in a foreclosure lawsuit — is simply that of a passive custodian storing the original mortgage documents (“wet ink,” in the vernacular).  Read more here.

California Supreme Court Lets Borrowers Challenge Wrongful Foreclosures

National Mortgage News |  February 18, 2016     The California Supreme Court on Thursday ruled that borrowers may challenge a wrongful foreclosure on the grounds that the assignment of the deed of trust was invalid.

The decision in Yvanova v. New Century Mortgage Corp. has the potential to radically increase the number of lawsuits brought by borrowers, particularly on loans that were pooled into securitized trusts, experts on both sides of the issue said.

"There will be a flood of litigation only because the lending industry was not diligent in doing its paperwork during the housing finance boom," said Richard Antognini, who represented the plaintiff, California homeowner Tsvetana Yvanova.

The decision tackles a question that became important after the housing market's collapse in 2008: can a defaulted homeowner contest the validity of the chain of assignments involved in the securitization of loans?  Read more here.