The latest turmoil in the mortgage lending industry shows that American homeowners are losing their homes without due process and without just cause due to questionable title documents and lack of oversight by the largest lending institutions in the country.
At the heart of the dispute is again the process used to push as many foreclosures as possible in a minimum amount of time with a disregard for due diligence and proper document verification which leaves the American homeowner in the most vulnerable position.
The 23 judicial foreclosure states have shown in several court cases that mortgage lenders requested a court to grant them the right to proceed with the foreclosures. Several courts found the requests to be in violation of the Home Affordable Modification Program (HAMP) and the documentation presented to be questionable.
The 27 states where a judicial process to proceed with a foreclosure is not mandated by law may soon be forced to follow suit until a full investigation can ascertain the American homeowner that a foreclosure proceeding is warranted and a restructuring or modification of an existing loan is not applicable.
Congressman Alan Grayson (FL) publicly announced in a revealing video that at least four cases were discovered where homeowners had been wrongfully evicted from their homes in a foreclosure case. One man was informed of a foreclosure on his home while he did not have a mortgage and paid cash at the time of purchase. On family received two foreclosure notices in the mail because both loan services claimed ownership of the title of the property in question and one couple was forced into foreclosure because of a disputed $75 late fee.
Senator Harry Reid, Majority Leader, has called upon all mortgage lenders to halt any foreclosure proceedings including those that have been scheduled for official closing.
As a result, all Government Agencies, FNMA, FHLMC, FHA and VA have agreed to start an internal investigation to ensure due process was followed according to HAMP and the foreclosure documents adhere to the regulations of the Consumer Financial Protection Bureau (CFPB).
Bank of America’s announcement this past Friday to cancel all foreclosure proceedings in all 50 states came after GMAC and JPM-Chase announced similar plans earlier in the week and it is expected that other mortgage lenders will follow suit voluntarily rather then being forced.
The American homeowner became a victim to predatory lending practices and “fine print” in loan documents pertaining to ARM loans during the real estate boom.
This investigation may very well prove that some practices may still be prevalent and not only endanger the American Dream but also prohibit those that realized it from keeping it.
Written by Nick Doms © 2010, all rights reserved.