Servicing

Foreclosure documentation issues trap investors

Investors in mortgage bonds are finding themselves on the losing end once again with foreclosure documentation issues at servicing shops leading to additional losses, Reuters reports.

Reuters says a study of loan documents and property records show mortgage servicers in some cases reporting homes as still in foreclosure long after they were sold off or paid.

If you’re an investor in one of the pools carrying these ghost home loans, you may be paying monthly fees that are no longer warranted or buying into bonds that still have billions in undiscovered losses, Reuters writes.

The end result of this chaos could be another round of litigation, with investors targeting banks for newly discovered losses, the publication reports.  

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