Just the other day they announced that they were halting their actions just in the 23 states where they must go to court in order to complete a foreclosure. These states are referred to as judicial foreclosure states. The other states, referred to as non judicial foreclosure states do not require that the lenders or banks go to court to foreclose. They simply place a notice of sale on the door of the home indicating that the home will be sold at auction on a certain date.
What makes this new action by BofA so significant is that it lets everyone know that even in non judicial states the homeowner has a legal right to defend their foreclosure the same as if it were a judicial foreclosure state. I say again, THIS IS BIG!
Regardless of which state you are in, the ownership of the mortgage note is still a prime factor in determining who can legally take the action to foreclose. Having a properly signed and recorded Assignment of the mortgage note is also a major factor in proving ownership regardless of what state you are in. Unfortunately, too many people believe that in a non judicial foreclosure state they have no recourse or defense because the lender does not file a court case.
This fact is untrue. The only difference is that in these 27 non judicial foreclsoure states, the homeowner has to initiate the legal action and file the case and defense in court. They must pay any and all filing fees associated with it as well.
Even more important here is that by taking this action they are seemingly affraid of the legal repurcussions of their illegal actions. While I believe they are betting on the government giving them favored legal status by renewing their "Get Out of Jail Free" cards, there does exist the realities that maybe their cards will be permanently revoked.
As this story develops in the days and months to come, we will find massive cases of fraud that will lead all the way up the ladder to the most major companies on Wall Street - Goldman Sachs, JPMorgan, Citibank, Merrill Lynch, Bear Stearns, Morgan Stanley and of course Lehman Bros. - already under investigation for allegations of fraud in their bankruptcy case.
The range of fraud will be from defrauding investors to defrauding the U.S. Government - which they are doing today by selling trillions of dollars worth of mortgages to the Federal Reserve, Fannie Mae and Freddie Mac - all of whom, I believe, are implicated in the entire housing bubble and the crisis that resulted.
What Are The Banks Saying?
Of course the banks are offering up excuses and justifications. Both GMAC and Bank of America spokespersons have said that even thought there are issues with the documentation there is justification for these foreclosures and that they have been made for good and just reason.
By making comments like this they are actually making several statements.
1. They are saying that the payments on these homes are delinquent and that in many cases they don't even begin the foreclosure process until the payments are 4 to 6 months in arrears. The conclusion being that they have the right to foreclose based on the delinquency.
2. They are saying that because of the delinquencies and the homeowners default in honoring their contractual commitments that proper paperwork on the part of their banks is irrelevant.
What they are saying here is that they are above the law and that the laws do not apply to them.However, two things are working against them right now. The first is President Obama's veto of the bill - passed without discussion or issue in both the House and Senate - that would have made it possible for the banks to foreclose using shoddy paperwork. The second is Hosue Speaker Nancy Pelosi calling for a full Congressional investigation into these exposed issues of fraud.They - the banks - have no where to go and no where to hide. Their strength and control of our Government is disappearing as the people are becoming more aware and more angry.
As I said in my previous post, "this is the tip of the iceberg". The truth will begin to come out, the frauds exposed and the punishments will be doled out. What do I think will happen. Stay tuned as I will expand on that in my next post.
In the meantime, if you are a homeowner and are in foreclosure or about to go into foreclosure prepare yourselves to fight back. While many of us were intimidated by the Too Big To Fail status given them, remember the old saying,
"the bigger they are - the harder they fall".
This now marks the beginning of the battle this blog along with all the others have been looking for.