Judge's Foreclosure Ruling May Impact Title Insurers

I was reading Banker & Tradesman yesterday and there was a story about a court case that I found important.

Judge Keith Long ruled on March 26, 2009 in Massachusetts Land Court on 2 foreclosures in Springfield were invalid because the foreclosing institutions did not have proper title at the time of the foreclosure auction. The court will hear a motion to reconsider on April 20th.

The article also says that the ruling may have "wide-sweeping changes" for how foreclosures are handled and that industry insiders talking about how the ruling would likely cause title insurance companies to pull back on their coverage.

Recently (within the last 6 months or so) the Boston Globe wrote a story about a major national auction company that evidently didn't have clear title to auction some of the properties they auctioned in a large & well publicised event. Buyers only found out after the auction sometimes days later that all the paperwork was not complete or properly filed & recorded to auction the properties.

I've also read stories online about people in foreclosure that are finding out that the company contacting them do not actually hold their loan or represent the company that actually does due to mergers, company's failing, incomplete or lost filings etc.

I'm glad to see the courts taking the lenders/attorney's/companies to task for pursuing legal action without following the procedures & requirements of such actions. I don't begrudge the company's from foreclosing, just when they don't complete the required work to do so.

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