AOL.COM FINANCIAL NEWS: Linda DiMartini, a supervisor and operational team leader for the Litigation Management Department of BAC Home Loans Servicing, testified in the foreclosure case of John T. Kemp that it was “customary for Countrywide to maintain possession of the original note and related documents.” …
Assuming the case follows the normal course going forward, that will mean that neither bank will be able to foreclose on Kemp’s house, and his mortgage debt will become unsecured debt — the banks will have to stand in line with the credit card issuers and get paid only a portion of the principal.
If it’s true the securitization trusts routinely didn’t get notes delivered from Countrywide, then all those properties — millions of properties — could have clouded titles. That hurts many people outside of the bank, because clouded title makes selling those properties much harder, and leaves the current owners in a kind of legal limbo. As the Congressional Oversight Panel warned: Clear and uncontested property rights are the foundation of the housing market. If these rights fall into question, that foundation could collapse. … If such problems were to arise on a large scale, the housing market could experience even greater disruptions than have already occurred, resulting in significant harm to major financial institutions…. (more)
EDITOR’S NOTE: It may take an act of Congress to straighten out this mess for BofA and others.
My loan was sold from Countrywide to Bank of America during that time-frame. How can I find out if my home is one that may have a clouded title? Thanks.