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Miami Foreclosure Dilemma Shows Need for Land Title System Overhaul

A recent article in the Columbia Law Review calls for a revamping of the land title system in America after seeing the many errors in the mortgage foreclosure process.

Miami Foreclosure Defense Lawyers have witnessed many of these problems firsthand — “robo-signed” documents, paperwork testified to in court that is supposed to be accurate but isn’t and pieces of paper designed to show how much a person owes on their loan that aren’t accurate — and that’s just a few. It is perhaps the best time ever to begin fighting foreclosure in Miami because of all these problems. The banks’ screw-ups could be the homeowners’ best chance of saving their house.

The article contends that when the real estate bubble hit its peak in the last five years, lenders created a private limited-access system to record and track residential mortgage assignments because the public system wasn’t keeping up with the feverish pace of purchases and sales. And the failure of that system is playing a role in millions of foreclosure cases where lenders have had difficulty proving actually ownership of the mortgage.

In 1993, frustrated by the time and cost involved in complying with state laws regarding the recording of mortgage assignments, the residential mortgage industry created MERS — Mortgage Electronic Recording System. But its flaws have been a focus of many foreclosure cases nationwide.

With the improvement of technology in recent years, the land title system should be improved, the article argues. It’s most significant problem is that the country uses grantor/grantee and tract indexes that are difficult to use and prone to problems. Even the misspelling of a person’s name can make the instrument impossible to locate, such as a woman buying property under her maiden name and selling under married name.

The article argues that local recorders, such as clerks of court offices, are immune from penalties and that if one name is misspelled, not spaced properly or otherwise entered incorrectly, it can put the property outside the chain of title. When a mortgage is sold, information is registered with MERS, but no assignment is recorded. So, if a homeowner faces a foreclosure, county records may not reflect whether the company, a trust of investors or another lender actually owns the house where homeowners are sending payment checks.

If the system were to be revamped, the article contends, it should start with digital records rather than paper records being digitalized. Indexes shouldn’t be limited to the names of parties, the land type and description and recording date. Additional data should be available for cross-referencing. The system should go nationwide because local systems are no longer relevant — property is sold not only nationwide but worldwide. The author believes a federally run system, cutting out local clerks, would be most beneficial.

Miami Foreclosure Defense Lawyers have seen many of these problems with the recording of land titles in foreclosure cases and it shows that the banks have an uphill battle when aggressive defense lawyers are put on the case. These problems can be exposed and put to the homeowners’ advantage in a foreclosure case.

If you are fighting foreclosure in Miami or the surrounding areas, contact Jacobs Legal for a confidential appointment to discuss your rights. Call (305) 358-7991.

Previous Blog Entries:

States’ Attorneys General Continue Assault on Miami Foreclosure Process: May 31, 2011

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