Today’s New York Times offers a wrist-slashingly depressing look at what people do when improper foreclosure documentation impacts their home purchases.
Twenty-eight-year-old Florida catering assistant Amanda Ducksworth is now couch-surfing at her boss’s house, her 7-year-old son in tow., She can’t move into the house she wants because it went off the market amid investigations into the shoddy paperwork behind sales of foreclosed homes.
Delivery-truck driver Richard Clark failed to restructure his loan from CitiMortgage. As a precautionary measure against losing his house, he put together the scratch to bid on another foreclosed house, only to have his latest purchase suspended by Fannie Mae amid the mortgage crapstorm. He’s now left with the perverse hope that the foreclosure on the first home will be caught up in legal technicalities, even though he’d prefer not to live there anymore.
Tremendously gummed-up foreclosure documentation has prompted Bank of America (BAC), JPMorgan Chase (JPM) and GMAC to suspend their foreclosure activity in 23 states. Reports have emerged that lenders have used “robosigning” — the process of signing thousands of documents without going over them as is required by law — to get through ever-growing mountains of foreclosure paperwork.
After President Obama pocket-vetoed a bill yesterday that would have loosened legal requirements on foreclosure documents (by making courts recognize papers with electronic signatures and documentation that was authenticated by notaries with out-of-state licenses), the legal mishmash promises to continue to compromise the dignity of American homeowners.