By: Richard F. Kessler

Richard F. Kessler — Sun, 07 Mar 2010 20:46:18 +0000

Dear Mr. Lyons:
Kudos for a cogent, incisive column about the widespread problem of the use of defective, deficient and spurious documentation in foreclosure proceedings. Now that you have so well summarized the problem, I suggest you share with your readers the likely consequences.
The use of defective documentation, especially documents which are recorded in the land records such as bogus assignments, are ticking times bombs. Such documents break the chain of title of the mortgage from the originating lender to the present alleged holder. This creates a cloud on title. Such a cloud will prevent the property from being resold with merchantable title. This means it will neither qualify for title insurance of financing. The banks, using unscrupulous foreclosure mills, have created have created a caldera of blighted title properties which will plague the nation for decades.
These documents also provide evidence of mortgage fraud. Such evidence will serve as the fuel that fires future lawsuits subsequent to foreclosure for wrongful foreclosure seeking a reconveyance to the borrower as well as damages. These false documents will be used in massive class actions suits for damages for wrongful foreclosure, fraud and deceit, racketeering and violation of fair debt collection practices authorities.
I suggest you speak with counsel for such major title companies as First American and Fidelity to confirm what I am saying. Both companies recently stopped offering rider coverage to insure against claims from parties with an interest in a foreclosed property that had not been made a party to the foreclosure. Because so many claims were being filed because of incomplete judgments of foreclosure, the title companies discontinued the coverage.
I also suggest you interview Chief Judge Hays who has been acutely aware of the future title problems being created by foreclosure mills and has desperately sought to sweep this problem under a judicial rug by ignoring its resolution. More than a year ago, my colleagues and I petitioned Chief Judge Hays to use the Court Clerk to verify documentation including the chain of mortgage title and to require each plaintiff to submit a title report to make sure all parties with an interest in a property were properly served, notified and therefore dealt with in a foreclosure judgment. He declined the recommendation and went on to make sure the judicial, practice of rendering incomplete or defective foreclosure judgments continued. Please ask Chief Judge Hays who is going to wind up paying for the mess that he and other jurists like him have created.
Richard F. Kessler
Documentary Clearing House and Associates, LLC.

Comments on: Lyons: Documents Insufficient in Foreclosure Case

By: Richard F. Kessler