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Domino Effect: MA to VT to NJ “Fraudclosure” Scare

Here’s an article I found about the MA Foreclosure Ruling that my interest you:

“Two States Enact Emergency Amendments to State Foreclosure LawsPosted by Carole VanSickle on Tuesday, January 11th 2011    

The ripples from the Massachusetts foreclosure ruling last week are spreading. While many experts contend that the ruling will have little effect outside of Massachusetts[1] – where, according to one Georgetown professor, the decision to negate two foreclosures based on inadequate proof of ownership of the notes in question “is enough to put a serious cloud on title through the whole system”[2] – other states are hurrying to enact “emergency amendments” that will require similar proofs of ownership in their states before a foreclosure can move forward. Vermont and New Jersey have already enacted such amendments, thereby requiring case plaintiffs (lenders) to “more extensively validate and verify the accuracy of the foreclosure”[3].

While the addition of these requirements may not be a big deal moving forward, if the state courts decide, as Massachusetts’ Supreme Judicial Court did, to retroactively apply these requirements, then it could result in chaos for the entire foreclosure system. In Vermont the emergency amendment applies to all foreclosures moving through the system, but New Jersey the amendment only applies to uncontested foreclosures. New Jersey’s chief justice recently demanded that the state’s six major lenders show evidence why the state should not enact a general suspension on all foreclosures being processed by those six lenders. The lenders go before the judge on January 19, 2011 to plead their case.

Do you think these “emergency amendments” are appropriate or necessary?”

If you have or will buy foreclosures in the near future, how will this effect your business?

Click above to leave your comments and questions.

MA Makes Pivotal Decision In (2) Foreclosure Cases

Good ol’ Massachusetts is once again at the forefront of the nation’s attention.  A MA Supreme Court upheld a lower court’s decision which stated that the (2) foreclosures were invalid because the banks, USbancorp and Wells Fargo, didn’t prove they were the owners of the mortgages, which were transferred into two mortgage-backed trusts without the recipients’ being named.

Wow,  How will this impact the real estate industry as a whole???  When talking to clients in foreclosure, I always mention this as a possibility; slim, but possible.  I actually offer a bonus video at FreezetheForeclosure.com that outlines this strategy.  What type of ripple effect could this have on title insurance policies???

Leave your thoughts, concerns, comments (click above)

Original stories in Washington Post and Bloomberg.com