In the news today it was reported that the stock market fell below 12,000 today partly on news that China's economy isn't growing, and partly due to news that initial unemployment claims increased by 26,000 to 397,000 in the week ended March 5. Bankruptcy filings nationwide reached 1.53 million last year making it the largest number of cases filed nationally in a year since 2005.
The good news is there were only 225,101 new foreclosure cases filed in February this year (still a lot, but the lowest in one month in a long time).
One would think that was a great thing - foreclosures are dropping. But given all the news about foreclosure fraud over the last few months, and MERS instructing their members that their name could no longer be used on a foreclosure pleading, it would appear that the dip is due in part to the mortgage companies fear of filing, and not a sign that things are improving.
Oh, don't get me wrong. I'll be glad to see that the number of foreclosures nationwide is dropping if the trend continues for several months. But I don't expect it. I believe what is happening is that the lenders are taking time to cover their collective butts.
You see there has been much to-do about fraudulent documents, robo-signing, and lack of a valid paper trail. I believe during this time of slowdown in filings that the lenders are taking the time to create that missing paper trail, and create documents that were not robo-signed. Sadly, while this will probably work for them in the long run, I believe it's just wrong. I think if there is currently no paper trail, they should not be allowed to go and create the evidence to support their allegations. Just my opinion, but then I'm probably in the minority on this, even though my profession (law) requires those that practice in my state have at least one hour of continuing legal education in ethics every year.
I know that someone is owed the debts that people incurred when they signed their note and mortgage, but I'm looking at it from an ethics perspective. If you claim to hold a note and or mortgage, but have no paper trail to prove ownership of it, I believe you should not be allowed to go out and create that trail. It's like creating evidence for a court case - if it doesn't exist, creating it is fraudulent.
In some cases my belief would lead to a bad result: homeowners getting a free home when they legitimately owe money. But I see no way to get around the problem without someone losing out, and I for one would rather have the lender have to prove there is a good chain of ownership of the paper involved in these debts than to allow them to make one up.
I do have an open mind, and am willing to be re-educated, so if your opinion differs, feel free to give me a well reasoned argument as to why the homeowners should take the hit rather than the lenders.
