Mortgage Bank Servicer Status Woes
A recent court case that took place in Duval Florida has potentially far reaching implications for the short sale and foreclosure market. A case filed by JP Morgage/WaMu claimed that WaMu submitted an assignment of mortgage in a foreclosure case despite the fact that WaMu never owned the mortgage; it was actually held by Fannie Mae.
If this story sounds family it is probably because a similar situation has taken place thousands and tens of thousands of times across America; however, this time it’s different. Rather than ignore the “clerical errors”, the Court found WaMu “by clear and convincing evidence….committed fraud on this Court” and that these acts constituted a “knowing deception…”. Ouch!
Fraud by Any Other Name
In this situation, WaMu was only a servicer and did not actually own the loans; Fannie Mae did. Because WaMu claimed to be the “owner and holder of the note and mortgage” in order to file for foreclosure on the property, it was then necessary to prove that the course of ownership in the property was properly traced. In recent years it has become almost routine for servicers to take it upon themselves to file foreclosure proceedings when in fact, they have no legal ground to do so.
The implications for foreclosures, REO’s and other real estate transactions is immense; not only may banks be required to fully expose their levels of excess inventory but determining the actual owner of record is becoming more important than ever.
Little Help for Homeowners
Homeowners are likely to find little recourse other than a few months reprieve since it is expected that Fannie or Freddie will begin their own foreclosure proceedings “sooner or later” but it is expected to slow down an already flooded system as lenders and servicers scramble to get records in order.
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Thanks for reading this, Roland Lorans.
Roland is a Real Estate Agent at Better Home and Gardens Real Estate Metro Brokers .
Phone: (770) 866-2561 or 404-843-2500 firstname.lastname@example.org.
View My homes for sale at HelpMeSaveMyHome.
- Dems To Fannie Mae: Why Are You Feeding Foreclosure Mills? (huffingtonpost.com)
- American home sellers walking away with less (washingtonpost.com)
- Free Short Sale Calculator Now Available to Realtors(r) and Homeowners (prweb.com)
- You: Walking away with less (washingtonpost.com)
- If You’re in the Short Sale Business Most of the Banks Are About to Take a Giant Dump on You and Your Clients (agentgenius.com)