Source: CNBC.com
The latest is this: Countrywide Financial, now owned by Bank of America, appears not to have properly transferred necessary mortgage documents when it sold loans to other banks, which then in turn created residential mortgage backed securities (RMBS) from the loans.
The documents Countrywide failed to provide are critical to the owners of the RMBS because without them homeowners can question the legal right of banks to foreclose on their homes.
What's new here? Based upon testimony delivered in a New Jersey bankruptcy court, this may have been a matter of policy at Countrywide—not just a case of a one-off error.
Based on Bank of America's current ownership of Countrywide Financial, it is possible that the largest bank in America, when ranked by deposits, may potentially be held liable for the problem.
Perhaps the biggest challenge in grasping the nature of the problem is that the details can overwhelm our ability to see the forest for the trees, so let's walk through it one step at a time.
To begin at the beginning: Mortgage documentation typically requires two critical documents : The deed of trust and the promissory note. The deed of trust describes facts about the lender, the borrower, the terms of the loan and payment, and assigns a legal title to the property—which is traditionally described as the 'bundle of rights' the owner of the property holds. The second document, the promissory note, obligates the owner to make payments on the loan, for which the deed of trust serves as collateral. In the event of a foreclosure, certain jurisdictions require a bank to 'produce the note' if the homeowner demands that the bank do so.
Read Full Article Here...
Copyright © 2006-2012 BlackListedNews.com
