Friday, January 7, 2011
Yesterday the Massachusetts Supreme Judicial Court voided two foreclosures carried out by U.S. Bancorp and Wells Fargo in 2007. Both banks were acting as trustees for securitized pools of mortgage loans that allegedly included the borrowers' mortgage loans. However, neither bank had been assigned the mortgages, and thus had no right to foreclose on the properties.
There are many, many thousands of potential cases out there that are identical on the pertinent facts to these two. Unlawful foreclosures have been so rampant in the past few years that the next stage of this ongoing mortgage crisis may well be a huge wave of restitutions of unlawfully foreclosed properties to borrowers. Despite what many banks have suggested, undoing unlawful foreclosures is not simply a question of retroactively crossing t's and dotting i's; it is a question of undoing the unlawful dispossession of private property rights of huge numbers of people. No amount of going back and filling in the holes in paper trails can cure it. Restitution will be necessary, and it will require overcoming enormous practical problems.
As the lawyer for one of the restituted homeowners said, this case was "merely the first petal off the rose."
Mark A. Edwards
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