Detailed Audit of 400% of San Francisco County Foreclosures

Detailed audit report on San Francisco County reveals nearly all the foreclosure files that were checked showed up gross irregularities; some were so serious that these foreclosures should be voided said San Francisco assessor-recorder Phil Ting. The report seems to give a mini picture about the same things happening across America. The county officials of San Francisco has audited 400% of the foreclosures in this region to find nearly all are tainted with illegalities or suspected of it. This report was recently released on 15th January. There has been plenty of anecdotal evidence since the boom burst from 2008 onwards. But this report is detailed and wide-ranging. It points to irregularities that hint about the same thing happening right across the country. The multiple wrongs are wide-ranging – from the very basic of not warning borrowers about the default stage of their loans as expected by the law to the unfathomable. For instance the transfers of innumerable loans in these files were done by dubitable entities that lacked the legal right to do; institutions repossessed units in auctions without proving their ownership. The report was commissioned by the San Francisco assessor-recorder Phil Ting. It combed through files of properties that had undergone foreclosure during 2009 January till 2011 November Nearly 84% of these files showed clear legal violations; two third contained a minimum of four irregularities or violations. Professor Kathleen Engle of Suffolk University Law School at Boston said, “If there were any lingering doubts about whether the problems with loan documents in foreclosures were isolated, this study puts the question to rest”. The report has been released only few days after the announcement of Settlement of $26 billion reached between the five mega banks and 49 attorneys general of the states. The banks have agreed to reduce the principal due in many types of loans and give as reparations $1.5 billion to those who have been wrongly foreclosed upon and evicted. The details of the Settlement have not been disclosed till now. The San Francisco report notes, “The Settlement does not resolve most of the issues this report identifies nor immunizes lenders and servicers from a host of potential liabilities”. It may be pointed out that in California it is felony to intentionally file in court or any public office any false document. Speaking at an interview Ting said he would send his report with relevant files to the office of the attorney general and to other law enforcing officials. The seriousness of the wrongs raises the questions as to whether some of the foreclosure rulings should be voided. He said, “We’re not saying that every consumer should not have been foreclosed or very lender is a bad actor, but there are significant and troubling issues”.