Congresswoman Waters Applauds Protection of Homeowners by Massachusetts Supreme Court’s Ibanez Decision
Congresswoman Maxine Waters (D-CA) responded to today's ruling of the Massachusetts Supreme Court in the Ibanez case, in which the court ruled that US Bancorp and Wells Fargo did not have standing to foreclose on a borrower because they failed to follow proper legal procedure in the mortgage transfer and securitization process:
"Today's ruling by the Massachusetts Supreme Court in the Ibanez case is a victory not only for homeowners, but also for fairness, due process and the rule of law. In its decision, the court upheld a judge's decision that two foreclosures were invalid because US Bancorp and Wells Fargo failed to prove that they followed the appropriate legal process documenting their ownership of the mortgages. As chairwoman of the Subcommittee on Housing and Community Opportunity over the past four years, I have consistently championed the rights of homeowners and led efforts to protect them from abusive practices by banks, mortgage servicers and other financial institutions. Most recently, during a November 18th subcommittee hearing, I called attention to the legal issues involved in the Ibanez case and cited the potential threat that improper foreclosures pose to our nation's economy as well as their harmful impact on individual homeowners.
"Make no mistake: the failure to properly transfer loans through the appropriate legal "chain of title" is no technicality, but rather part of a long pattern of predatory and negligent behavior by Wall Street. We have long known that borrowers were sold exotic products with tricks and traps, and they were falsely promised that when interest rate spikes hit, they could refinance. The resulting subprime mortgage meltdown precipitated the foreclosure crisis which has devastated America's housing market and indeed our entire economy. Then we learned of the common practice of "robo-signing" foreclosure paperwork, with servicers rubberstamping thousands of foreclosures a week without so much as a cursory examination into the accuracy of the paperwork. Now we are seeing that the banks also neglected to follow the rules of the road when documenting ownership of these borrowers' mortgages and therefore the right to foreclose. This latest failure to follow the law not only creates uncertainty for mortgage investors but also produces some of the horror stories we've seen recently involving wrongful foreclosures.
"The ruling today by the highest court in Massachusetts establishes important precedent to protect homeowners from wrongful foreclosures and requires banks to follow the law. I hope the influence of this ruling extends to other states.
"During the new Congress, I will continue to advocate for servicing reform and in favor of the due process rights of homeowners. I also look forward to hearing the results of the ongoing interagency federal regulator investigation and the probe launched by all 50 state attorneys general, and will continue to demand that regulators hold banks accountable.