CLEVELAND, Nov. 15 A U.S. judge in Ohio created a possible obstacle for lenders trying to reclaim foreclosed property from troubled borrowers.
U.S. District Judge Christopher Boyko of Cleveland ruled against a long-standing practice by dismissing 14 foreclosure cases brought on behalf of mortgage investors because those trying to seize the property failed to prove they owned the property.
The pooling of home loans into securities has been practiced for decades and helped maximize real estate prices in recent years, The New York Times said. Some $6.5 trillion of securitized mortgage debt was reported outstanding at the end of 2006.
But it has become more difficult at times to determine who holds the mortgage notes, consumer advocates said, because of the complex structure and disparate ownership of mortgage securities.
In the Boyko case, handed down Oct. 31, the judge sought proof of ownership in 14 cases represented by Deutsche Bank National Trust Company. But lawyers could supply only documents showing an intent to convey the rights in the mortgages rather than proof of ownership.
Copyright 2007 by UPI
