Another great (and heartening) report from our friends over at Naked Capitalism, this one on the U.S. Trustee’s decision to start asking hard questions about the documents that seem to appear out of thin air to serve as “evidence” in foreclosure proceedings.
We’re all familiar with the underlying problem:
The big problem for servicers and trustees (the parties that are responsible for the trust that holds the assets of the securitization) is that the pooling and servicing agreement which governs the securitization required that the note (the borrower’s IOU) be transferred though a specific set of parties by a specified time not all that long after the deal closed. Increasingly savvy anti-foreclosure lawyers recognize that the party attempting to foreclose may not have the legal standing to do so.
Here’s the possible game-changing difference in this case, though:
A new development is that the US Bankruptcy Trustee, which is part of the Department of Justice, has started poking around the nether world of slipshod and possible made-up documents, and is asking banks to explain what they are up to. These inquiries may be paving the ground for broader-based action.
Read the full analysis along with the U.S. Trustee’s Motion for 2004 Examination in US Bankruptcy Trustee Takes Interest in “Ta Dah” Documents Mysteriously Appearing in Foreclosures (aka Probable Fabrications)