The property that sums up
America's mortgage nightmareBy Daniel Bates
Last updated at 6:51 AM on 24th January 2011
Two banks lay claim to Staten Island house
Homeowner caught in middle of foreclosure row
It is the one house owned by two banks that sums up the unintelligible mess that America's mortgage system is in.
This detached suburban home on Staten Island in New York is at the centre of a bitter legal row between lenders Home123 Corporation and U.S. Bank.
Both have launched separate legal bids to take over the property and foreclose it, leaving the homeowner caught in the middle of a row which sums up the mess the mortgage system is in.
Paperwork nightmare: Two banks are laying claim this house in Staten Island, according to a foreclosure filing
Whilst Home123 claims it has its name on the county tax rolls, U.S. Bank has said in court papers that it is responsible for the property.
But in a farcical twist, the bank was forced to admit that the original mortgage documents have been lost by its staff and are nowhere to be seen.
The case highlights the problems that banks face identifying who owns which properties after the global financial meltdown in which dozens of financial institutions closed down, taking their paperwork and records with them.
In some cases banks have foreclosed homes when they had no right to do so and left families to come home and find all their personal possessions have been illegally taken from the property.
On top of all that, in New York there was the scandal of ‘robo-signers’ - workers for financial companies who processed large volumes of foreclosure documents but did not verify them, making errors even more likely.
The Staten Island home was to be put up for foreclosure by U.S. Banks servicing company Ocwen Loan Servicing after the unnamed owner fell behind on the mortgage payments.
All was clear enough until Home123, the original lender, pitched in and said it owned the property.
U.S. Bank has fought back but did admit in court documents that ‘due to unforeseen circumstances, the original Assignment of Mortgage and Endorsement Note were lost before they could be recorded’.
Joseph Sant, the lawyer representing the homeowner said that U.S. Bank wanted to foreclose on a home ‘without proof that it owns the mortgage’.
‘That should not surprise anyone after the revelations of widespread robo-signing and document falsification in foreclosures,’ he said.
‘What does surprise me is that the bank admits that it lacks key evidence needed to foreclose, yet is trying to bulldoze through the legal process anyways’.
Across the U.S. there have been countless cases of banks wrongly targeting homeowners for foreclosure.
In one of the most shocking instances, Bank of America was accused of unlawfully seizing the ashes of a dead husband from his grieving widow’s home.
Bailiffs working for the company are said to have broken into the Mimi Ash’s house during a foreclosure before ransacking the place.
According to a lawsuit they cleaned out the entire property in Truckee, California - including a wooden box, its top inscribed with the words ‘Together Forever,’ that contained the ashes of the 45-year-old’s late husband Robert.
U.S. Bank spokesman said it did not bring the action but was named as a plaintiff to send paperwork to.
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