The Foreclosure Documents Mess

I wonder why people are surprised, yes surprised, that the banks and other mortgage holders can't come up with reasonable facsimiles of actual mortgage documents in order to foreclose on hapless homeowners. So they have to make them up. And they don't even do a good job. This kind of thing has been happening to tenants in foreclosed properties for years. Tenants have been evicted with no notice at all--that's why the Cook County Sheriff stopped evicting tenants there--with notice addressed to a resident owner, with notices designed to confuse and obfuscate, of course leaving aside the illegal lockouts, threats and other bad behaviors of realtors and other bank representatives. State Legislatures could have done something about it, but they didn't think tenants were worthy of legally sufficient documents and civilized behavior. Judges who hear unlawful detainer (eviction) actions could have done something about it, but they mostly ignored the problem, as the documents presented to them were, sort of, okay. State Bars could have done something about the lawyers participating in the illegal eviction of tenants but, since the lawyers weren't taking money from the rich, they didn't think it was worth the trouble.

My favorite response to the documents' problem, though, is that of Wells Fargo. When they sell a property out of foreclosure, they require that the new owners sign a document that makes the new owner responsible for any title problems that later turn up. This means that Wells Fargo can foreclose on a property, sell it, and not have the repercussions of any suspect documents come back to haunt them. This means that they have to sell to buyers who don't read, or can't understand, what's put before them. Hmmm, didn't they do this a few years ago?

Update 11/4/10: And now the press has finally noted that tenants have faced eviction without proper notice or service for a long time. See this. Unfortunately the article doesn't note that attorneys working for the Foreclosures-R-Us services have an obligation to ensure that tenants have received proper notice, and that California courts have largely allowed banks to get away with unlawful evictions by not requiring that lenders show that they have properly identified the residents of foreclosed properties.