Judges and Foreclosure

The headlines proclaim that the country's judges are showing hostility to home foreclosures.  In the body of the story are details of judges demanding technical correctness in proof of mortgagee rights to foreclose.  Since many of the banks and the other securitization players were sloppy in gathering and holding paperwork through several transfers of the mortgage paper, the requirement can  stymie banks and trustees attempting to foreclose on homes.  The lesson for homeowners?  Fight foreclosure in court.  You can extract serious concessions from lenders and you may win (want a free house?).  This is not new news.  Even a quick look at foreclosure law in any state will reveal a process that is encumbered with multiple levels of procedural requirements from years, decades of legislative hostility to foreclosure.  Consider the effect on banks if the judiciary successfully attacks the attempts of banks to execute on collateral behind loan defaults -- balance sheet write-downs on loan defaults, whatever they have been, will be too optimistic.  So Congress gives tax incentives to borrow money to buy homes and courts attack lenders in foreclosure proceedings.  The market dips and dives trying to figure out the mess.