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NEW JERSEY COURTS JUMP INTO THE FORECLOSURE MESS

Posted by Admin Posted on Jan 13 2011

Bank of America acquired Washington Mutual Savings Bank when WAMU collapsed under the weight of bad mortgage lending.  Now Bank of America is foreclosing on some of the properties securing those loans.

When BoA tried to foreclose against Alvarado, he discovered that WAMU (not BoA) had lost the mortgage note, which we have learned is not an uncommon set of facts.  Chancery Court in Bergen County held that BoA could enforce the note it didn't have to prevent the "unjust enrichment" of the borrower.

Meanwhile, probably the only group with worse press than mortgage lenders are the Wall Street firms who bought the mortgage securities and lost their shirt.  So far, they haven't had much success suing to recover losses.  Looking for another avenue of attack, The Washington Post reports that the Association of Mortgage Investors has released a white paper with its idea of an acceptable settlement to the investigations underway into the mortgage mess by the 50 state attorney's general. The Association wants improvements in procedures and transparancy by the servicing companies.(http://www.washingtonpost.com/wp-dyn/content/article/2011/01/12/AR2011011205564.html)

Investor lawsuits are considered to bigger threat to the banks, with claims against the banks estimated to be as much as $120 billion.

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