A Federal Judge in Ohio has ruled that a long standing practice in Ohio on foreclosures is not allowed because the investors failed to prove they owned the properties in question.
From the New York Times: Saying that Deutsche Bank’s arguments of legal standing fell woefully short, the judge wrote: “The institutions seem to adopt the attitude that since they have been doing this for so long, unchallenged, this practice equates with legal compliance. Finally put to the test, their weak legal arguments compel the court to stop them at the gate.”
Up to 40 percent of foreclosures are done by lenders that cannot provide proof of ownership.
This could affect the homeowners market tremendously. Interestingly, it is similar to the buying and selling of credit card debt where debt collectors cannot always prove they own the debt that they sue on. If you are sued on a debt, you should always ask for proof of ownership of the debt.