If this case flies, any care to venture a guess as to just how far the flood gates could potentially open up?
Lawyer to lenders: Prove you own mortgages
By Thomas Grillo
A class action lawsuit has been filed that could stop hundreds of foreclosures and reverse thousands of others.
“The rush to foreclose has turned the process into a circus,” said Gary Klein, an attorney representing two Boston homeowners facing foreclosure. “We’re asking these lenders to prove they hold the mortgage.”
The suit filed in Suffolk Superior Court alleges that since 2004 GMAC Mortgage, Deutsche Bank National Trust, Harmon Law Offices and Ablitt Law Offices foreclosed on properties despite the fact that they do not own or were not assigned the mortgages.
Klein estimates that as many as 1,000 homes in Massachusetts could be affected and thousands more going forward. If the lawsuit is successful, foreclosures in the pipeline would be placed on hold until lenders can prove they own the mortgage. If a foreclosure sale has taken place without the proper authority, it could be set aside.
Toni Simonetti, a GMAC spokeswoman, said she could not comment because she has not seen the lawsuit. Thomas Walsh, an attorney at Newton-based Harmon Law Offices, declined to comment. Officials from Deutsche Bank could not be reached for comment. James Rogal from the Ablitt Law Office in Woburn did not return a call seeking comment.
Last year, a federal judge in Ohio ruled against Deutsche Bank, dismissing 14 foreclosures after the lender failed to prove ownership. But a Florida federal judge dismissed a class-action lawsuit that claimed that Mortgage Electronic Registration System did not have the right to initiate foreclosures.
The lawsuit comes as the number of property deeds seized through foreclosure increased in the Bay State 34 percent last month to 993, up from 739 in October 2007, according to the Warren Group, publisher of Banker & Tradesman.
But in a positive sign, foreclosure petitions, the start of the process, plunged 51 percent last month to 1,507 compared with 3,065 in October 2007.Article URL: http://www.bostonherald.com/business/general/view.bg?articleid=1133901