N.Y. Foreclosure Case Alarms Nation's Biggest Lenders

A year ago, Long Island Judge Jeffrey Spinner concluded that a mortgage company's paperwork in a foreclosure case was so flawed and its behavior in negotiations with the borrower so "repugnant" that he erased the family's $292,500 debt and gave the house back for free, the Washington Post reported today. The judgment in favor of the homeowner, Diane Yano-Horoski, which is being appealed, has alarmed the nation's biggest lenders, who say that it could establish a dramatic new legal precedent and roil the nation's foreclosure system. Judge Spinner and some of colleagues in the New York City area estimate they are dismissing 20 to 50 percent of foreclosure cases on the basis of sloppy or fraudulent paperwork filed by lenders.
http://www.washingtonpost.com/wp-dyn/content/article/2010/11/08/AR2010110806583.html