Jan 21 2012
When the Banks Own Everything
Every step of the process of owning a home and going through foreclosure, from applying for the financing to being served with an eviction notice, is tightly regulated at local, state and federal levels. Since all of these laws were ostensibly designed to shieldprotect buyers and tenants from lenders, the huge amount of paperwork these laws create serve mainly to confuse borrowers and encourage fraudulent corporations to prey on them.
The foreclosure lawsuit itself is similar, although it is almost completely dictated by state laws. Debtors find themselves thrown into a complicated legal system just when they are least able to afford adequate legal representation.
There are really too many laws for the mortgage companies to follow to be able to generate and collect on a mortgage in accordance with every regulation out there. While the majority of banks are pretty strict about complying with nearly all laws, the subprime mortgage craze allowed extremely loose lenders to originate one junk mortgage after another and the richest investment firms could never get enough.
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