Judges Beginning to Challenge Foreclosure Procedures

Local and federal judges have started to side with homeowners during foreclosure proceedings. Recent decisions have included, completely wiping out the balance due on a mortgage, invalidating foreclosures due to improper paperwork, and even canceling some foreclosures totally.

States like Massachusetts, New York, and Texas have become ground zero for the judicial battle that is beginning to make its way through this country's courts systems. Questions are beginning to be raised about the role, and possible biased rulings that judge's are handing out in what is traditionally a straight forward proceeding.

We have already seen the efforts of two of the three branches of government try to stabilize the housing market. There are questions about what role the judicial branch should play in this march towards recovery. In a review of the past 18 months, judges have begun to hold mortgage lenders to the letter of the law on issues previously allowed. It is decisions like these that have mortgage lenders screaming foul play.

One reoccurring complaint within the courtroom by these judges in question is the listing of the actual owner of the property. Lenders are being required to re-file their foreclosure complaints after they obtain an affidavit of ownership from the county where the foreclosed property is located. Many judges prior to the housing market crash did not require proof of ownership due to the amount of times a mortgage changes hands. It is this type of "nit picking" that has some mortgage holders suggesting that judges are showing empathy towards down and out borrowers.

In Florida a state appeals court judge admonished a lower court judge for routinely delaying foreclosure proceedings by as much as 7 months. A high profile case in New York found that the judge canceled a $292,000 in mortgage debt because he believed that the borrower's mortgage company Indy Mac Bank mistreated them.

These cases have judicial watchdogs' wondering if some judges are beginning to take sides. The legal issues that some of these so call "activist judges" are using to stall some foreclosures appear to be valid. The real question of these legal maneuvers has to be the true intent of the judge. If the sudden rush to cross every legal "T", and dot every legal "I" is due to the recent spotlight on foreclosures and the immense nature of the ruling, then judges should stick to the letter of the law. If however, these rulings are an emotional attempt by certain judges to prevent some borrowers from falling under the foreclosure knife, then they should be admonished for stepping beyond their judicial boundaries.