It appears that different companies besides legal aid groups and public interest law firms are trying to uncover what they call illegal foreclosures. In more and more instances, they are claiming that the lender cannot prove it has legal standing to execute a foreclosure and is not the legal owner of the note. If the lender doesn’t own the note, it can’t foreclose on it.
Because some companies charge to do title reports, there is debate over whether these companies really want to help defaulted borrowers and foreclosed homeowners or simply profit from today’s growing foreclosure problem.
As a result, lenders have to step up their performance, even if they are 90% comfortable that they own the loan. More than anything, these cases focus most on the procedural aspects of the business and at what point during the process, the lender has to prove ownership of a loan and by what paper trail.
According to industry insiders, it used to be that about 90% of foreclosures were completely unopposed. As a result of that, a lot of foreclosure professionals did business in bulk and fairly quickly. No one really asked anyone to show a detailed chain of title. It was not necessary nor was it required.
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