IVN News

Despite settlement, no end in sight to Foreclosuregate

[/caption]

An audit of hundreds of foreclosures in San Francisco by the city’s assessor-recorder reveals that 99 percent of loans contain at least one irregularity. Auditors uncovered “what appear to be one or more clear violations of law” in a vast majority (84 percent) of cases.

The audit was commissioned by the office of Phil Ting last Fall after homeowners involved in foreclosure suits complained to Ting that their property records contained inconsistencies or were missing documents. Nearly 400 of the 2,400 foreclosure sales that took place citywide between January 2009 and October 2011 were included in the audit. Ting’s office calls the report the “first public study to provide a rigorous, quantifiable analysis of foreclosure practices” in California.

The audit found that corporations who lacked the proper legal standing to foreclose were allowed to do so anyway in 85 percent of cases. It also revealed that 82 percent of the loans contained “suspicious activity,” including “backdating” and “fabrication of documents.” The mortgage servicers involved in the foreclosures were not identified in the report.

“State law dictates how the mortgage industry must file those records,” reads a statement from Ting’s office.”How can we expect homeowners to have a fighting chance of saving their homes when they can’t even find who currently owns their debt?”

The auditors say in their report that the results paint an “accurate picture” of the mortgage industry’s failure to comply with state foreclosure laws.

Ting announced the results on Wednesday, almost one week after a coalition of state attorney generals settled with the nation’s five largest banks on a multi-billion dollar package. A portion of the $18 billion secured for California by State AG Kamala Harris will go to reducing principals on loans and a much smaller part toward damages to homeowners who lost their homes as a result of mortgage fraud. In exchange, the banks are to be released from civil liability for fraudulent lending practices.

The analysts said in their report that the settlement “does not resolve most of the issues” that were uncovered. Ting has turned over the report to the city attorney, San Francisco district attorney and Harris’s office.