Thursday, April 7, 2011

Illinois court halts 1,700 Cook County foreclosures

Well, this is a new one.  We've seen robo-signing, we've seen lost documents and notes, we've even seen foreclosures on the wrong houses.  But to my knowledge, this is the first time we've seen a mortgage servicer's counsel adding new pages to affidavits and then re-attaching the signature page.

From the Chicago Tribune comes the story of how 1,700 foreclosure proceedings were halted, due the practices of mortgage servicers' attorneys:

The admission to the court by Fisher and Shapiro does not involve rubber-stamping of documents but rather removing the signature page, altering the affidavit's content and reattaching the signature page, the court said.

The changed contents included the addition of attorneys' fees, insurance costs, preservation costs, inspection costs and taxes on the property, costs that may have been incurred before or after the servicer signed the original affidavit, [Judge] Jacobius said in his order dated March 2.

The firm's admission signals a note of caution to purchasers of distressed homes, which represent about 50 percent of local home sales, because of potential lingering legal issues if the title transfer process was faulty.

I believe that last sentence is what we call a 'buried lede.'  Or at least one heck of an understatement.

Big hat tip to the blogging savants at Credit Slips for linking to the article first.  It's impossible to keep up with those people.

Mark A. Edwards

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