Yves here. Huh? “Replace flawed and fraudulent documents” and press forward? This is nuts. Why do you think servicers and foreclosure mills provided bogus documents in the first place? Because they had made such a botch of things that that was the least bad approach, from their perspective. You don’t make up documents if you have the real ones, and if you don’t have the real ones, you are really stuck. So the idea that the banks can somehow magically find documentation they clearly DON’T have and get back to life as usual is a complete non-starter.
And the regulators appear also to assume that the courts will tolerate banks showing up with different documentation. If the bank discovers it has filed a case in the name of the wrong party, it will probably have to refile the case. And some judges will not accept new affidavits, since it’s an admission the earlier submissions were improper, which is a sanctionable offense.
And notice now that courts are starting to push back. Again form the WaPo:
Some consumer advocates and lawmakers said the policy was soft on banks and industry insiders and may have little effect, because many lenders are already taking such steps. In addition, the handling of individual court cases is the province not of federal officials but of judges at the state level.
Judges handling foreclosure cases in the Maryland suburbs said Wednesday that they have begun to take concrete steps to cope with alarming problems now apparent in legal documents.
In Prince George’s County, which has the Washington area’s highest foreclosure rate, the circuit court has ordered a special review of cases in which lawyers have acknowledged they did not sign the documents as they had earlier claimed. The circuit court is scheduled later this fall to slowly begin reviewing some of the 14,500 foreclosure cases pending in the county. A judge in Montgomery County said the court is putting about 400 foreclosure sales on hold while waiting for lawyers to explain why they had not actually signed the legal paperwork in those cases as they had initially said.
The officialdom needs to come to grips with this mess, rather than hope it will somehow go away if the banks clean up their act a tad. Now it may be that Team Obama hopes to diffuse the situation until the elections, then go full bore into what will no doubt be bank favorable remedies. But we don’t see any quick fixes here, and the Administration’s efforts to minimize problems this deep seated are likely to blow up on it in short order.
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