Posted on Wednesday, January 12, 2011
The Friday ruling by the Massachusetts Supreme Court that invalidated two foreclosures by Wells Fargo and U.S. Bank has prompted an outpouring of responses from the industry, and many are wondering if the ruling will have far reaching effects on other foreclosure sales.
U.S. Bank and Wells Fargo foreclosed on two Massachusetts properties and then bought the homes themselves at the foreclosure auction.
But the Supreme Court ruled that the companies did not have the legal right to foreclose on two homes in the state,
because they did not have proper documentation to prove they owned the mortgages at the time of foreclosure.
A statement released Monday by U.S. Bancorp, the parent company of U.S. Bank, said the bank “is not the originator, owner or servicer of the loan in question, nor the sponsor or depositor for the securitization trust and the mentioned foreclosure was conducted by the servicer on behalf of and in the name of the securitization trust.”
As trustee, the bank claims it is not responsible for the foreclosure procedure, the mortgage’s transfer process, or the sufficiency of the mortgage documentation.
According to a statement from American Home Mortgage Servicing, the ruling is of limited applicability because it is based on a law that is unique and specific to Massachusetts.
But Congresswoman Maxine Waters (D- California) says she believes the ruling is a victory for homeowners everywhere.
“The ruling today by the highest court in Massachusetts establishes important precedent to protect homeowners from wrongful foreclosures and requires banks to follow the law,” she said. “I hope the influence of this ruling extends to other states.”
DS News. By: Joy Leopold