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Want to get really pissed?

PostPosted by verdilak » Mon Oct 04, 2010 9:13 pm

You should probably go read the original article first, but I'll try to sum up the points briefly.

1. When you get a mortgage there is a note created, and a specific regulated process for transferring ownership of that note to other parties. This sort of transfer happens about half a dozen times with every single mortgage that gets securitized.

2. Around 2004-5, a LOT of banks simply stopped following this procedure, on the grounds that it was both expensive and time consuming. Instead they just stuck all of the notes in warehouses, without ever legally transferring ownership, and certifying to the regulators that they were. That is to say, explicitly lying. This is technically illegal, but what the hey.

3. Now that the banks are foreclosing, they are finding out that 1) They need the note to be able to legally foreclose, and 2) going through the legal steps to transfer ownership after the fact is both problematic, and in many cases ALSO illegal.

4. Without the proper documentation to foreclose, and unable to acquire it legally, many of these banks are now hiring companies to forge legal documents for them to generate the necessary legal papertrail. As you might be able to guess this is super illegal.

5. Despite how illegal this is, Lender Processing Services--one of the largest companies providing forged documents--has made something like a billion dollars off its forgery services in the last two years.
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