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Under piles of paperwork, a foreclosure system in chaos

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Green also submitted to courts documents that listed "Bogus Assignee" as the owner of a mortgage instead of the real name. In another case, she signed as the vice president of "Bad Bene," a made-up company.

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Michelle Kersch, a senior vice president for Lender Processing Services, said in an e-mailed statement Wednesday that the names were just "placeholders."

"Unfortunately, on occasion, incomplete documents were inadvertently recorded before the missing information was obtained," she said. "LPS regrets these errors and the use of this particular placeholder phrasing."

The company declined to comment further, citing the pending criminal investigation.

A large chunk of the nation's foreclosures are being initiated by three companies owned by the federal government: Ally, Fannie Mae and Freddie Mac. Fannie and Freddie have said they are looking at the matter but refuse to reveal the numbers of affected homeowners.

The Obama administration has repeatedly said it would try to help homeowners facing foreclosure. But its principal mortgage-relief effort is faltering. More than half of those who enrolled in the program are have now fallen out of it, the Treasury Department said Wednesday.

This week, Treasury Secretary Timothy F. Geithner and the Obama administration's newly appointed consumer protection adviser, Elizabeth Warren, also vowed to simplify the process for getting a mortgage.

But when asked to respond to problems plaguing foreclosures at the companies controlled by the Treasury, a spokesman repeatedly declined to respond to questions, saying only that the agency does not involve itself in the companies' day-to-day affairs.

Judges' oversight

Some of the problems in foreclosure paperwork are being created because mortgage loans were repackaged and resold to investors so often that the physical documents become lost. It's the job of a document processor to present and vouch for the authenticity and accuracy of these papers, but attorneys for homeowners have unearthed examples where critical records are forged.

In theory, a judge should review the files one more time. But after the crisis produced massive numbers of delinquent homeowners, judges in many cases became overwhelmed.

Some simply took at face value the documents handed over to them by the lenders - who in many cases were not checking the files, either, according to interviews with judges, attorneys and consumer groups.

In some Florida courts, for instance, many judges automatically approve a foreclosure unless a borrower can point to a specific problem. Homeowners are given five minutes for a presentation. Often, they do not bother to show up.


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