| Failure to produce the mortgage note for defense | | | | mortgage note or title establishes possession rights |
| now has bigger ramifications as witnessed by a | | | | depending on which state you live in. |
| recent Massachusetts court ruling by Judge Richard | | | | Without proof of ownership, as is seen in this |
| Long where he called into question whether banks | | | | Massachusetts ruling, foreclosures cannot proceed. |
| wrongfully foreclosed on thousands of local homes | | | | While challenging a lender to produce the mortgage |
| and can now be brought to court to try and | | | | note does not absolve the mortgage holder from |
| invalidate the foreclosures. The lawsuit was originally | | | | being absolved of the original debt, it may provide |
| filed by three separate banks in order to obtain a | | | | negotiating power and a way to resolve the impasse |
| clear property title. The banks were the only bidders | | | | amicably. More and more of these types of cases |
| at the foreclosure auction and had bought the titles | | | | are now surfacing within the court system and it |
| after the homes were sold on the courthouse steps. | | | | may provide a valid option for those homeowners |
| The judge overturned the 2007 foreclosure of two | | | | facing foreclosure. |
| out of three homes mentioned in the lawsuit because | | | | In the Massachusetts case, the plight of the |
| of a lack of paperwork establishing ownership of the | | | | mortgage holder was highlighted. Judge Long was |
| note. | | | | quoted as writing in his decision, "None of this is the |
| The only foreclosure that stood was where the | | | | fault of the mortgagor (homeowner), yet the |
| foreclosing bank could provide the unrecorded | | | | mortgagor suffers due to fewer (or no) bids in |
| assignment. Massachusetts lawyer Gary Klein has also | | | | competition with the foreclosing institution. Only the |
| filed a federal class action lawsuit to try and revoke | | | | foreclosing party is advantaged by the clouded title |
| 2,000 more foreclosures due to the same issue of | | | | at the time of auction. It can bid a lower price, hold |
| ownership not being properly established. | | | | the property in inventory, and put together the |
| This lack of ownership is what is allowing mortgage | | | | proper documents at any time it chooses." These |
| holders to challenge the banks. Mortgages often | | | | types of court cases are forcing banks to now |
| change hands several times over the course of a | | | | become more accountable for their paperwork and |
| loan and the paperwork trail is often mishandled or | | | | actions against homeowners. |
| lost in the process calling into question ownership. The | | | | |