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Foreclosure Ruling by Massachusetts Supreme Court may have Huge Impact

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By : Dywon Erick Dylon    99 or more times read
On Friday 14 January 2011, the Supreme Court of Massachusetts ruled against two big banks in two foreclosure cases. US Bancorp and Wells Fargo lost the case, as they did not have evidence to prove to the court that they owned or had clear title to the mortgages. The court ruled against them for shoddy paperwork and processing foreclosure when they did not have a clear title.

This decision by the Supreme Court has raised many eyebrows. There are several speculations in the market about what impact the decision will have on the overall foreclosure and housing market. Wall Street has denied that the ruling has had any effect on them.

Wall Street saw the broad based KBW Bank Index dip by 2.2 percent along with Wells Fargo stock prices plummeting by 3.4 percent. Also according to a broker dealer, Braver Stern Securities, there are “class action lawyers trying to ‘unwind’ foreclosure cases and there are some ‘emergency amendments’ being made at state level on similar lines of ‘Massachusetts constitution’.”

This is clear indication that everyone is worried about the consequence of the Massachusetts court’s ruling. The concept of “unwinding,” where lawyers are helping the delinquent borrowers re-look at cases where borrowers have left their property, but now believe that their foreclosure was an invalid one, could have terrible end result.

According to the Massachusetts Supreme Court foreclosure decision, “the legal impact that this decision sets in motion is going to be huge.” Moreover, “Anybody who was foreclosed on in Massachusetts should now be phoning up their lawyer and trying to find out if the foreclosure was illegal. If it was — if there was a break in the chain of title somewhere which meant that the bank didn’t own the mortgage in question — then the borrower should be able to get their deed, and their home, back from the bank. This decision is retroactive, and no one has a clue how many thousands of foreclosures it might cover.”

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