Mortgage brokers have helped millions of Americans to shop for the best mortgage and purchase homes for their families. Once we complete a loan package and the closing is completed, others take over the servicing of the loans and collection of payments.
In the boom years of real estate, there was a great deal of speculation in mortgages, with large numbers of them packaged into loan groups and sold to investors and larger banks. Then, these could be re-sold yet again. If a bank or lender became insolvent, these same loan packages could be purchased by other lenders or the government.
During all of this passing-around of mortgages as assets, paperwork has been lost, and other irregularities are now being reported. GMAC, and now JP Morgan Chase have both acknowledged irregularities in their foreclosure processes, and have stopped foreclosures in 23 states where foreclosures require court approval.
It seems that a common practice is to produce loan company attorney affidavits that state the attorney has personally examined the loan documents to verify the terms and the amount still owed and the amount past due. It now seems that thousands of these affidavits were signed, but the attorneys never saw the documents.
These foreclosures have been postponed while GMAC and Chase attempt to examine all documents and meet the requirements of the courts in these states to proceed to foreclose. Some attorneys for the home owners are trying to claim fraud. One could rejoice in the troubles of these huge companies because they didn't follow the rules ... except the taxpayer is now the majority owner of GMAC.