In an interesting article regarding home foreclosure, the LA Times reports that the banks and regulators have reached an agreement as to the appropriate remedy for the errors in the banks’ foreclosure process.
I understand that there isl unfairness regarding the foreclosure process that needed to be addressed, however, I doubt that these agreements will resolve the major problems with most foreclosures on people’s homes. This article seems to be sidestepping the most pressing question on home foreclosures: Where is the promissory note?
This issue has been confounding me to a high degree. One of the most fundamental aspects of real estate law is to prove your ownership and mortgage rights with original documents. This is to prevent the bank (by virtue of being a bank, they are inherently untrustworthy . . .), or some other untrustworthy person, from claiming a right to a property with copies of documents. It also used to be required to produce the original note prior to foreclosing on someone’s home. This apparently is no longer the case.
I have had clients whose signatures were forged on loan documents by the bank. I have had clients whose documents at the recorder’s office show that someone else own’s the property other than the foreclosing bank. I have had clients who have had their house wrongfully foreclosed on because the bank was foreclosing on the wrong house. All of these instances were to be prevented by requiring the original documents, rather than copies, to foreclose on a property.
I find it hard to believe, and yet it is true, that there does not appear to be a remedy for this situation other than allowing the foreclosure to go forward. You would think some Judge here in Arizona would take a stand against the banks and force them to prove their ownership interest in the property with the original note, but it appears that is not the case. Instead, the mere possibility of causing a bank hardship for failure to follow the law has more validity than protecting Arizonan’s homes.
I do not believe that these people should get their homes for free for the bank’s failure to prove the note, but I do believe that the banks should be required to follow the same laws as everyone else.
Thank you for taking the time to read this article. This article is solely the opinion and beliefs of Tempe based Bankruptcy and Foreclosure lawyer Glenn W. Roethler. This is not the opinion of all members of Greeves Price and Roethler, PLC.