06 January 2011

Maybe Massachusetts Will Get It Right

Here’s some good news from the ongoing foreclosure fraud:

Bloomberg is closely following a Massachusetts Supreme court case. At stake is whether several specific foreclosures in Massachusetts should be voided “because securitization-industry practices violate real- estate law governing how mortgages may be transferred.”
There are several issues in the case: The technical one is whether a mortgage can be transferred without naming the recipient, as is commonly done in securitizations. But the more important issue applies to mortgage rights — do they “detach” from the promissory note when that note is sold? Asked more plainly, must someone asserting the right to foreclose actually own that Note?
This is more than a technical issue; at risk is whether we, as a nation, are going to allow corporate entities to violate existing law, or even worse, attempt to create their own, extra-legal, non democratic policies.

The upside of this particular issue is that the banks will have to win every case like this in all fifty states in order to be safe.  Of course, it would be best if this issue were resolved right here in Massachusetts right now instead of, say, three years from now in Idaho.

Still, it’s disheartening that this even has to go to court in the first place.  The law on the matter is crystal clear.  And these laws should have been enforced from the get-go.  There’s really little point in having laws if they aren’t going to be enforced.

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