Flawed paperwork adds to the woes

Flawed paperwork adds to the woesSome of the largest lenders of the nation have conceded that their foreclosure procedures might have been handled improperly and lawsuits have revealed myriad missteps in crucial documents.

Lawyers and legal experts say that the flawed practices that GMAC Mortgage, JPMorgan Chase, and Bank of America have recently begun investigating are so prevalent that additional lenders and loan servicers are most likely to stop foreclosure proceedings and may have to reconsider past evictions.

From NYTimes.com:

Problems emerging in courts across the nation are varied but all involve documents that must be submitted before foreclosures can proceed legally. Homeowners, lawyers and analysts have been citing such problems for the last few years, but it appears to have reached such intensity recently that banks are beginning to re-examine whether all of the foreclosure papers were prepared properly.

In some cases, documents have been signed by employees who say they have not verified crucial information like amounts owed by borrowers. Other problems involve questionable legal notarization of documents, in which, for example, the notarizations predate the actual preparation of documents — suggesting that signatures were never actually reviewed by a notary.

Other problems occurred when notarizations took place so far from where the documents were signed that it was highly unlikely that the notaries witnessed the signings, as the law requires.

The great increase in foreclosures in recent years has strained the resources of lenders and their legal representatives but the default waves are still not available as an excuse for failures of the lenders to meet legal obligations before making an attempt to remove defaulting borrowers from their homes.

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