Home Foreclosures seem to be dominating the news these days in a way that many of the foreclosing lenders (major banks) rather not be happening. Foreclosure usually involves a procedure in which a lender or mortgagee (holder/owner of the mortgage note), having determined that the homeowner or entity to whom mortgage money was provided (the mortgagor) under specific repayment agreement(s), failed to adhere to the agreement by refusal to or inability make the agreed-upon payments until the mortgage is repaid in full; notifies the homeowner of an intent to foreclose unless payments are resumed and proceeds to obtain court approval to foreclose the property through summons and complaint and eventual referee sale in the absence of payment resumption.
That's a general idea of how the process worked for years; But this year the foreclosure process is undergoing a different kind of process whereas many homeowners, through their legal representatives, have questioned the methods under which present-day lenders have initiated the process, demanded to see certain documents that would entitle the lender to the right to foreclose and insisted that the procedure being employed to take away their homes be in conformity with real estate laws set forth by their local governments as well as federal regulations to the extent that they apply.
In other words, if the lender (a bank in the current scenario) is the owner of the mortgage note, for example then it has every right to foreclose as long as it can prove ownership of that note. Another problem which seems to be creating problems for lenders these days is the method in which certain foreclosure documents were notarized. As you may be aware, documents requiring notarized signatures must be signed in the presence of a duly licensed Notary Public and then certified (stamped or seal) as genuine. There are questions as to whether this process was adhered to when notarizing the foreclosure documents.
So the atmosphere is very murky which may be the reason four major lenders suspended foreclosures to some degree; Attorneys General nationwide have opened investigations into the banks' foreclosure procedures; And many federal lawmakers are calling for a moratorium on foreclosures until banks are able to demonstrate that the process of foreclosing on homes and evicting the residents are forthright and free of errors as well as the appearance of fraud. There are strong feelings and arguments on both sides of this foreclosure issue and it may not be easily resolved to everyone's satisfaction any time soon.
But one fact is indisputable, and that is the laws which govern our real estate industry and the lending practices of the institutions that provide the financing thereto did not change in such a way as to ignore lending practices and all the instruments available to a lender to protect its interest, nor did the law change in such a way as to ignore what that lender's responsibility is towards a property in which it has interest and therefore the obligation to protect the owner's rights. In both instances there is an expectation that actions will be governed by those laws presently on the books.
For more on the current foreclosure dilemma, please see the article titled "So Exactly Who Owns Your Mortgage" on Our Foreclosure? page