US Judge Temporarily Delays Loan Document Shredding
* Two defunct lenders seeking to destroy boxes of records
* One judge temporarily blocks document destruction
* In separate hearing, destruction partially allowed
* Rulings come amid wide concerns of missing loan docs
By Scot J. Paltrow
WILMINGTON, Del., Jan 24 (Reuters) – A U.S. bankruptcy judge temporarily blocked bankrupt subprime lender Mortgage Lenders Network USA from destroying 18,000 boxes of original loan files after federal prosecutors said documents in them may be needed as evidence in more than 50 criminal investigations.
In a hearing Monday before U.S. Bankruptcy Judge Peter J. Walsh, a representative from the Delaware U.S. Attorneys’ Office said she did not know details of any of the investigations.
But she said prosecutors and FBI offices around the country had requested time to access to the boxes and assess whether the contents contain needed evidence before the judge permits any destruction.
Walsh granted a 30-day delay, and said he would hold another hearing on Mortgage Lenders’ request.
A series of recent court rulings have increased the importance of original loan documents, holding that they are essential for investors to prove ownership of mortgages and to have the right to foreclose.
Connecticut-based Mortgage Lenders Network closed down and filed for bankruptcy protection in February 2007, and now is being liquidated.
Dozens of subprime lenders went out of business in 2007 with the collapse of the housing market. There is increasing tension as trustees for several of these defunct lenders seek to destroy documents to save storage costs, while law enforcement officials and advocates for homeowners and investors in mortgage-backed securities argue that the documents should be preserved.
Concern about missing mortgage documents emerged beginning in October 2010, with disclosures that large numbers of original loan documents were missing and that falsified ones were being submitted in foreclosure cases.
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We definitely have to support the House Bill coming out of the State of Virginia to which Dena Roudybush has done a fantastic job fighting the big banks and mortgage services to which she used to work for. Now Miss Roudybush, a practicing Attorney in State of Virginia and Maryland is now fighting for the citizens. Check out the site at: themortgagecrisisupdate.com
Virginia House Bill HB1506
Like I said people like Sheila need to have a voice in this matter. Let us know where to send comments of concern. Tks. 🙂
Is there anywhere a concerned citizen can get contact information for the Judge ruling in this case, so that public comments can be sent, that all material is relevant and needs to be kept in tact. This can not happen!
well I have prayed for this day!! My mortgage was with Mortgage Lenders Network USA and another fraud company that do not exit called Mortgage Lenders Accceptance INC. was assigned my mortgage from MERS This was complete fraud on the court and they got away with it. I lost my home in Dec. 2009. My loan was days before they were shut down and filed bankrubsey . Mortgage Lenders Network ‘s owner has fled he knew this would come out some day.