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The Foreclosure Crisis: Washington DC Attorney General Takes a Stand!

The Foreclosure Crisis: Washington DC Attorney General Takes a Stand!

You may recall reading my three part series entitled, "Where's the Note?". Well, DC Attorney General, Peter Nickles, wants to know the same thing. He issued an enforcement statement last month emphasizing that DC law required the recordation of an assignment or transfer of a mortgage instrument within thirty days of the transfer. Remember, the big banks have been using computer based intermediaries such as MERS and LPS to keep track of all of these transfers. Unfortunately, MERS & LPS do not actively record these transfers in the local land records offices where these homes exist.

Some Courts have upheld the procedures instituted by MERS and LPS. Other Courts have held that these tracking entities lack standing or a right to bring a foreclosure action, as local laws governing transfer of mortgages have not been followed strictly. DC's Attorney General explicitly stated that, in the District, the requirement for recording every transfer of mortgage "is not satisfied by private tracking of mortgage interests through the Mortgage Electronic Registration Systems (MERS)."

He went onto say that the, "District's residents should not misled in believing that a threatened foreclosure is supported by the District's public records when in fact they are not."

Nickles went on to say that such violations may provide a "good basis for challenging the foreclosure in court" and encouraged homeowners and advocates to contact the attorney general's office so that it "may consider bringing enforcement actions to stop foreclosure proceedings and seek restitution for consumers".

It looks as if DC is the forerunner in advocating that improperly assigned mortgages that do not comply with local recordation requirements may, in fact, not provide a legal basis by which a bank could foreclose! Look for more jurisdiction across the Country to follow. suit. This tidal wave is just beginning.