|Published:||Oct 14, 2010 4:37 AM EDT|
|Updated:||Oct 14, 2010 1:37 AM EDT|
LEE COUNTY, Fla. - Attorney General Bill McCollum wants Florida to take the lead in investigating flawed foreclosures across the country. Local lawyers say the paperwork problems have been going on for awhile.
"It's been about two years that this issue has been raised in the courts," said attorney Carmen Dellutri.
Attorneys say poor paperwork is a common defense when foreclosures hit the courts. They say the problem lies with who holds the mortgage.
"When the mortgage is being foreclosed by Bank X, they have to prove they own that mortgage, and often they can't do it," said attorney Robert Adamski.
Mortgages are often transferred numerous times, electronically without a signature, which Dellutri says is not good enough under the law.
"You need to have ink. Wet ink on paper," Dellutri said.
Every state is now investigating how many misplaced mortgages led to flawed foreclosures, but attorneys say the full affect on homeowners still isn't clear.
"As much as everybody would like to think their loan contains fraudulent documents, there's no way of knowing it just yet," Dellutri said.
"Whoever owns that note and mortgage has every right to foreclose, but at the same time, the integrity of the system, due process is very important," Adamski said.
While it may be a win for the legal process, attorneys say it's also a blow to economic recovery.
"What does it do to the real estate market, though?" Dellutri asked. "The real estate market has come to a grinding halt again."
"This will definitely stall the recovery in Florida because the properties will be vacant for that much longer," Adamski said. "It's a crisis to begin with, now this throws another layer of crisis over us."
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