from Black Quill & Ink
The foreclosure processing problems that have come to light the last few weeks at Bank of America, Goldman Sachs, J.P. Morgan, and others is very bad news to be sure. The effect on homeowners, the housing market and the broader economy will depend on how quickly the banks, bond holders and the legal system can sort the problem out.
The problems with banks and foreclosure companies signing fraudulent title documents is certainly going to cause a drag on the already slow housing market. Plus, it raises the distinct possibility the improperly handled title documents will eventually cause problems for homeowners who are not behind on their mortgages when they decide to pay off their mortgages or sell their homes. But the fraud associated with the title paperwork not being processed properly is almost quaint compared to larger fraud being perpetrated in the mortgage-bond world.
To understand the fraud, we must first review how Bill and Sally Johnson’s home mortgage becomes part of a mutual fund in Aunt Betty’s retirement account.
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