There’s been a lot of press coverage about the mess in foreclosure land because many of the affidavits filed to support foreclosure actions were signed by people who had no actual knowledge about the mortgage documents. Because of this, many of the banks have stopped proceeding on foreclosure actions until this issue is resolved. The Wall Street Journal has an informative story about this latest embarassment to the mortgage industry at http://online.wsj.com/article/SB10001424052748704049904575554372238256744.html?mod=WSJ_hpp_LEFTTopStories This is not good news for local jurisdictions who have been waiting for distressed properties to be taken back by the bank. I’ve seen properties where the owners have abandoned the property or don’t have the funds for the upkeep. I’ve sometimes advised clients to be patient and wait for the sheriff’s sale so we can send a notice of violation to the lender once it is in possession. With these delays, it means many properties will continue to deteriorate even more.
On NPR last week heard the financial journalist talk about her book she wrote on this very subject. The future down-the-line fallout for people who purchase homes that were incorrectly foreclosed upon is going to be a real bear.