Thursday, February 16, 2012
The City of San Francisco has released a wonderful, empirical study of foreclosure non-compliance and fraud, based on a forensic survey of 400 foreclosures in the recent past. It is so well-written, and explains the foreclosure process and the mortgage-backed securities industry so succintly, that it would be a superb addition to a first year property law course.
The study finds that in 84% of the foreclosures in its sample, there was at least one clear violation of California law, and most often more than one. Many (if not most) of these violations would render the foreclosures invalid.
The only questions now are (1) whether the wrongfully foreclosed upon can find some measure of justice through private claims; (2) whether we can put in place a system of law that prevents this from happening again and (3) how we can trust the validity of title going forward, since in many cases two centuries worth of record-keeping has been broken.
Mark A. Edwards