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News Link • Housing

BofA on Foreclosure-Gate: Liabilities Are For The "Little People"

This part of the settlement discussion is sneaky and troubling: “alleged failure to properly securitize home loans in accordance with state laws.” The big violation with “proper securitization” is chain of title, and more and more homeowners are waking up to the mess banks have made here and are not happy with it. Yet even as offensive as this waiver is, the AGs can only waive their rights to prosecute. They can’t waive private parties’ rights to action, which means borrowers can and will continue to use chain of title issues to fight foreclosures, and investors, if they finally take enough losses to rouse themselves, would also be able to sue on this basis. The importance of having state AGs act is that they conduct investigations that private parties can leverage, and also legitimate certain types of litigation (investors in particular tend to be conservative, and would rather ride in the slipstream of other efforts). And the part at the end of the discussion of who might be eligible for mortgage mods is nausea-making:

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