Sunday, January 9, 2011

U.S. foreclosure processing update

Since this past October, I have shared updates on the home foreclosure processing problems related to the issues of “robo-signing” and no-documentation mortgages. On Friday, the Massachusetts Supreme Judicial Court upheld a lower court ruling that Wells Fargo & Co. (US: WFC) and US Bancorp (US: USB) could not foreclose on homes because they lacked the supporting mortgage documentation.

MY TAKE: With foreclosure practices under investigation in all 50 states, this case will likely set the tone on how homeowners, mortgage holders and regulators will proceed in resolving the mess. There will continue to be strong tension between the desire for economic expediency and “rule of law” processes in clearing out the foreclosure backlog. The most significant factors that drive US economic growth relate to industrial manufacturing and housing. While manufacturing seems to be improving, a recovery in housing continues to remain less certain.

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