Sabatini and Associates, LLC Attorneys at Law :: Newington :: Hartford :: Connecticut

Massachusetts’ highest court voided foreclosures on two homes because the banks that tried to take title failed to show they held the mortgages at the time of foreclosure. The ruling by the Supreme Judicial Court on Friday upheld a lower court ruling against U.S. Bancorp and Wells Fargo & Co.  The ruling should have an effect on other foreclosure cases where the banks paperwork specifically with regards to establishing the owner of the mortgage is not legally adequate.

There are some so-called experts out there that have announced that the real estate market will bottom later this year or in early 2009.  This theory is premised largely on the belief that once the worst of the subprime crisis ends, the market will bottom and slowly tick upwards.  This theory may be failing to consider the following.  In August 6, 2008 edition of the Wall Street Journal, the paper reported a story of FirstFed Financial a LA based bank that just posted a 70 million first quarter loss.  The loss was not due to subprime mortgages which the bank largely and smartly steered away from.  Instead, these loses are tied to payment option mortgages made to people with good credit.  Certain bank analysts are prediciting that up to 48% of these option ARMS could wind up in default.  Firstfed has taken the extraordinary effort of contacting borrowers with these loans that are current in payments and offering modifications so that the loans remain in good standing.  I am afraid that the mortgage crisis will continue, simply moving to another group of mortgages turned toxic.

A Califoronai appraiser has filed a lawsuit against Washington Mutual alleging that she was blacklisted after reporting that home prices were falling.  Last May, she became convinced that home prices were falling in her region so she marked a box in one of her reports indicating that prices were declining.  A WaMu sales manager contacted the appraiser following the report and instructed her to check the box indicating that prices were stable.  She refused.  WaMu then took her off the bank’s preferred appraiser list and has not received more work from the bank.  The lawsuit is pending in California state court.