Florida Supreme Court asked to halt foreclosures amid probe

[trumad]

This is really starting to gain traction--- and of course the great Alan Grayson is the leading the charge.

A Florida congressman has asked the state Supreme Court to stop all foreclosures being handled by three major law firms under investigation by the Florida Attorney General over questions about slipshod paperwork practices involving thousands of cases.

U.S. Rep. Alan Grayson, D- Orlando, pressed the court to halt foreclosures being handled by the law offices of David J. Stern, Marshall C. Watson, and Shapiro & Fishman. The three South Florida-based firms represent about 80 percent of foreclosure proceedings in the state, according to Grayson's letter.

A fourth firm under state scrutiny, the Florida Default Law Group of Tampa, was not named in Grayson's request to Chief Justice Charles T. Canady.

Supreme Court spokesman Craig Waters said Friday that the court was preparing a response, but did not elaborate.

http://www.sun-sentinel.com/business/fl-gmac-fallout-0925-20100924,0,7852721.story

[Warpy]

1. This is a direct result of snipping the loans up

and selling them in traunches as structured investment vehicles. Nobody knows who owns the outstanding loan on the house any more. In effect, the companies servicing the loans and trying to foreclose are being accused of taking property they don't own because even they don't know whose behalf they're acting on.

Most paper issued after 2001 was treated this way and quite a bit of the paper issued before 2001 was treated this way. Instead of a mortgage being owned by Fannie or Freddie, that mortgage could be owned by a dozen pension funds and sovereign countries.

My guess is that the court will eventually find a way to give the mortgage servicer the legal authority to foreclose, but that will buy people under the threat of foreclosure a little more time to get their lives in order and plan what they're going to do next.

[trumad]

2. Well---with the State Attoruney investigating this mess

It may take a long time before it is sorted out.