Thursday, February 16, 2012

CALIFORNIA'S FORECLOSURE PROCESS IS UTTERLY BROKEN

FORECLOSURE IN CALIFORNIA: A CRISIS OF COMPLIANCE; San Francisco February 2012

 San Francisco audit of foreclosures finds irregularities in 99% of the foreclosures.  Shame on the banks.  Shame on the Trustees.  Shame on Lender Processing Services, JPMorgan Chase Bank NA, and the other major banks.

On February 15, 2012 Phil Ting, Assessor-Recorder, Office of the Assessor-Recorder, San Francisco released the above report prepared by Aequitas Compliance Solutions, Inc.  Ting retained this independent audit firm to review 382 residential mortgage loan transactions (the "subject loans") that resulted in foreclosure sales occurring January 2009 through October 2011 during which period there were 2,405 foreclosure sales in San Francisco.  The subject loans represent approximately 16% of the total.  See Press Release.

Aequitas identified one or more irregularities in 99% of the subject loans.  In 84% of the loans they identified what appear to be one or more violations of law.  

The report provides a valuable "California Primer" to help the reader understand the report's findings and to fully appreciate its significance it is helpful first to have some basic knowledge or residential mortgage lending and the foreclosure process in California.  

The report reaches the conclusion that with so many homes being foreclosed and with so little oversight, California's foreclosure process appears to be utterly broken.

"What is at stake here is more than merely fairness and minimal due process.  Foreclosures impact not only homeowner but also entire communities and housing markets.  The integrity of California's record title system is also at stake because the validity of title for subsequent purchasers is dependent on those that preceded it."
 NEW YORK TIMES ARTICLE "IRREGULARITIES IN FORECLOSURES" BY GRETCHEN MORGENSEN

SF Audit Finds Irregularities in 99 Percent of Foreclosures


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