In a recent series, Fraud Digest reports that Assignments are often missing critical documents in foreclosure documents.

Foreclosure Document Mills

Despite the hundreds of thousands of foreclosure cases, there are “very few cases where the issue of the authenticity of documents, particularly Assignments, has been raised.” This causes a problem for a lender, because they then can’t prove it owns the mortgage note. Without this proof, the lender has no right to foreclose. Inexperienced homeowners facing foreclosure may have no idea fabricated documents are being used. Ironically, its been judges in many cases who challenge these documents.

With the rush on foreclosures, judges are often in the unique position to see hundreds, if not thousands, of Assignments, and compare the names, job titles, and even notary information on the Assignments.

Lost Assignments

Most homeowners are familiar with this story. The original lender has a note secured by a mortgage and sells to a second lender. The second lender sells to a third and so on. A mortgage can easily change hands five or six times – especially in the recent melt-down marketplace. If just one lender failed to record a sale (assignment), then the chain of possession is broken. During a typical title search, this descrepency may be detected, and the appropriate (sometimes lengthy and expensive) steps are taken to correct this mistake and “reconnect the chain.” Unfortunately, during a foreclosure an unethical person may choose a shortcut.