Californians that are facing a potential lawful home foreclosure can sometimes avoid losing their property with help from an experienced bankruptcy lawyer. But, in recent years, investigations have found errors in how many financial organizations conduct this process, such as the longstanding robosigning controversy that was recently put to rest in a federal settlement. Similarly, residents of San Francisco county that were confronted with foreclosure in recent years may have been the victim of illegal procedures.
Commissioned by San Francisco Assessor-Recorder Phil Ting, mortagage consulting firm Aequitas Compliance Solutions conducted an audit of 382 recent San Francisco county residential mortgage loan transactions that resulted in foreclosure sales from January 2009 to November 2011. These homes accounted for 16 percent of the total sales in that time frame.
Researchers found one or more irregularities in 99 percent of the loans, and noticed that 84 percent of the documents had what the auditors identified as one or more clear violations of the law.
Some of the problems the researchers found were absent original homeowner signatures on loans and missing affidavits that were required to be filed to prove that lenders discussed options with their borrowers within 30 days of issuing a mortgage default notice.
"What is at stake here is more than merely fairness and minimal due process," Aequitas stated in the conclusion of its report. "Foreclosures impact not only homeowners but also entire communities and housing markets. The integrity of California's record title system is also at stake because the validity of title for subsequent purchasers is dependent on those that precede it."
Ting told The New York Times that there needs to be a better process for supervising lenders to make sure that they are obeying the laws and not taking any shortcuts.
In response to the report's results, California Attorney General Kamala Harris said that she would be looking into the report, according to The Associated Press.
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