Magazine article American Banker

Do Outcomes Trump Procedures?

Magazine article American Banker

Do Outcomes Trump Procedures?

Article excerpt

Byline: Marc Hochstein

Is it "just" a technicality if a mortgage servicer, foreclosing on a borrower who in all likelihood has defaulted, creates documents to prove the servicer's client acquired the loan years ago?

Is it just a technicality if a criminal wasn't read his rights before being arrested? If we know a person is guilty, is it fair to say he was not harmed by a procedural misstep? Is it worse to violate his constitutional rights, or let him back out on the street?

That age-old friction between due process and the messy results of honoring it echo in reader reactions to American Banker's story about servicers backdating paperwork to support foreclosures ("Mortgage Servicers Rewriting History," Aug. 1).

One reader took umbrage with a Bank of America spokeswoman's comment that retroactive mortgage assignments are simply "procedural steps" to prove to a court that a trust has the right to foreclose.

This commenter noted that in at least one highly publicized instance, B of A has tried to foreclose on a home that had no mortgage at all, let alone one with B of A.

"Why should we assume that they are correct when they allege that New Century wanted to assign a particular mortgage to Deutsche Bank as part of complex securitization deal executed 5 years ago?" this reader asked. "This is the danger of skipping those pesky 'procedural steps' long ago. ... Unfortunately, it is not only the banks who are now paying for this. Homeowners with clouded titles are paying too. Procedures matter."

Other commenters cited our country's foundational principles of rule of law and equal protection: "Nobody is above the law and banks can't be an exception to this constitutional principle. You can't go to court with forged and fabricated evidence to support your claim," wrote one reader. Another said: "Private property and the right to it are core to our economic system. …

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