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Missing documents


Have you ever wondered why it’s been so hard and slow to sort out the mortgage foreclosure mess in the U.S.?

Part of the reason can be summed up in two words: missing documents.

Two European banks have sued Bank of America over their mortgage investments, claiming they at least want back some of the mortgages that they allegedly invested in during the final years of the housing boom.

The probelm is no one can account for many of the mortgages in question. There’s alleged evidence some mortgages may have been sold twice. Some are now under the FDIC’s control due to bankruptcy filings by loan originators.

One mortgage portfolio — worth a half-billion dollars — reportedly has no paperwork at all.

The questions abound: Who did the borrowers pay each month? Who accepted the payments? Where did the money go? What happens if a borrower discovers his or her mortgage has no paperwork? Should they stop making payments and hope no one notices?

File under: Ghost mortgages

2 Responses to Missing documents

  • I have personally suffered loss due to misplacement of my papers. These huge corporations get away with all this scam and people like us get blamed.

  • The state of IT in the banking sector for all but a few small investment firms is despicable.

    It’s a new story waiting to happen.

    There’s documentation, scanning, and filing software out there that could make this a thing of the past; but that’s expensive (up front capital investment) and not conductive to the bottom line, managers who seek not to rock the boat, and dividend/quarterly oriented fundamentalist version of capitalism were currently in.

    Most people imagine that finance is full of war rooms with all sorts of tech goodies to keep, manage, and make them money on their investments like they see in the movies or on TV.

    The truth is most of the back office work is system re-management on accounts that can’t be preformed otherwise because of old IT systems that can’t do certain things, or just plain suck.

    I’m willing to bet 70%+ of your finances are handed on legacy MS Dos / Lynix mainframe programs that are 30 years old.

    You should see some of the shortcuts needed to deal with newer types of securities that weren’t even dreamed of when the systems were developed.