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January 10, 2011

Wells Fargo & U.S. Bancorp Lose Landmark Foreclosure Court Case 
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Wells Fargo and U.S. Bancorp have lost a major court case in
Massachusetts that could have profound effects on how foreclosure cases
proceed nationwide. The Supreme Judicial Court of Massachusetts voided
the seizure of two homes by the banks because the banks had "failed to
make the required showing that they were the holders of the mortgages at
the time of foreclosure." Associate Justice Robert Cordy declared that
the banks demonstrated "utter carelessness" in documenting their rights
to the properties. The short-term effects of the decision are that Mark
and Tammy La Race will be able to stay in their home, despite the fact
that it was foreclosed upon in 2007, and Antonio Ibanez will have the
title of his home returned to him. If the bank will not allow him to
retake possession of the home, then it will have to pay him for his
deed. The decision was applied retroactively, meaning thousands of
homeowners could seek recovery for homes that were wrongfully foreclosed
upon. Analysts worry, however, about the economic costs of the decision,
suggesting that it could make selling homes more difficult.



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