Not since the mortgage industry got shaken up with the Home Valuation Code of Conduct (HVCC) that changed the way appraisals were conducted has there been such a spectacle. The headline act of the latest Barnum and Bailey sideshow is the flawed foreclosure paperwork now plaguing the real estate world.
If 20% of Florida foreclosures paperwork has issues, we need to be prepared for some future reckoning regarding potential law suits and who may have to end up paying down the road. Will it be the Title Insurance companies? The lenders? Dare I say it? The taxpayers?
A recent New York Times article posted on the CNBC website outlines some of the allegations. And this is not just a Tampa Bay mortgages problem; this could have the earmarks of an epidemic:
- Documents that were signed despite the verification of critical information like the amount due the lender
- Potentially invalid notarizations: The date of the document’s creation is later than the date the document was signed thereby putting into question whether or not the signature was witnessed
- There are even some documents that show multiple appearances of an official’s signature with markedly different writing styles
- This is all added to a mix of borrowers who may have been evicted as the result of improper filing and some blurry ownership status stuff!
So lenders are reviewing their processes and assessing the potential damage and trying to get their act together.
At the end of the day, hopefully these issues do not result in a huge finger-pointing circus; we’ve got enough clowns running around with buckets of confetti trying to freak everyone out.