More Bank of America Shoddy Mortgage Documents Revealed in Miami Foreclosure Cases

A Fortune Magazine investigation revealed that Countrywide’s mortgage securitizations may be invalid after testimony from a company official, who said many loans weren’t properly handled.

It’s amazing how many of the country’s largest banks have struggled to properly maintain records in foreclosure cases in Miami and elsewhere, this can actually be beneficial to homeowners. Miami Foreclosure DefenseLawyers believe that using the banks’ errors against them can be one of the most advantageous ways to save your home. If you want to fight back against the banks and their errors, consult with a law firm that believes negotiating from a position of strength can provide you with the best options.
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Court testimony last fall from a Countrywide employee revealed that many loans weren’t being properly handled. So, Fortune examined dozens of court records that corroborated the woman’s testimony. The magazine reports that if the company’s mortgage securitizations failed, Bank of America, which bought out Countrywide for $4 billion in 2008, has potential liability that would dwarf its shareholder equity.

During testimony last fall in a New Jersey bankruptcy case, a Bank of America official testified that Countrywide didn’t deliver the notes to the securitization trustee and that the company’s notes weren’t endorsed except on a case-by-case basis, generally long after securitization occurred. Under all securitization contracts, both steps are required.

Securitization is the practice of pooling various types of debts, including residential mortgages or other types of loans and selling them as bonds to investors. The principal and interest on the debt is paid back to investors.

The testimony led to one investor filing a lawsuit and New York Attorney General Eric Schneiderman is investigating mortgage securitizations by three banks, including Bank of America. Bank of America has denied the woman’s testimony.

The Fortune investigation looked at 130 foreclosure cases in Westchester County and the Bronx from 2006 to 2010 filed by Bank of America on a Countrywide mortgage-backed security. In 104 of those cases, the loan was originally made by Countrywide, with the other 26 made by other banks and sold to Countrywide for securitization.

None of the 104 Countrywide loans were endorsed by Countrywide, only including the original borrower’s signature. Two-thirds of the loans made by other banks also didn’t have bank endorsements. Fortune concluded that the lack of Countrywide endorsements plus the bank’s representation to the court that the documents are accurate calls into question the securitization of the loans as well as the bank’s right to foreclose.

A problem in many courts, including in Florida, is the issue of “magically appearing” endorsements, where defense attorneys point out the problem and bank officials produce documents they say are accurate and original.

Miami Foreclosure Lawyers have seen these tactics and will aggressively fight to defend our clients from the shady practices our country’s banks have endorsed. Sometimes, fighting a foreclosure in Miami allows the homeowner to stay in the house while it is being defended in court, work out a meaningful loan modification, avoid a deficiency judgment and force the bank to settle under better terms.

Don’t try to fight your foreclosure by yourself. Trust a firm of lawyers who have fought tooth and nail with the banks and financial institutions who have played these games with homeowners and the courts for years. We have seen the games and we will stop them.

If you’re battling foreclosure in Miami or the surrounding areas, contact Jacobs Keeley for a confidential appointment to discuss your rights. Call (305) 358-7991.