U.S. Trustees Taking on Banks in Foreclosure Mess

The U.S. Trustee Program is stepping up its scrutiny of the veracity of banks' foreclosure claims against borrowers, the New York Times reported yesterday. After examining their foreclosure practices for flaws in mortgage documentation and other procedures, many of the nation’s largest banks have resumed - or will soon resume - trying to evict defaulted borrowers. JPMorgan Chase, for example, told investors this month that it had extensively reviewed its foreclosure controls, trained personnel in the unit and started new procedures to ensure that all legal requirements would be met when it moves to seize a property in default. While banks may have booted a few robo-signers and tightened up some lax procedures, one question at the heart of the foreclosure mess refuses to go away: whether institutions trying to take back a property can prove they even have the right to foreclose at all. Trustees in other parts of the country have intervened in borrower cases, but many of these actions have been related to questionable foreclosure fees or to dubious legal or documentation practices. The shift to a broader focus on the issue of standing suggests that the courts may no longer accept at face value the banks? arguments that they have the right to foreclose or represent the institution that does.

http://www.nytimes.com/2010/11/28/business/28gret.html