Washington Post Staff Writer
Friday, January 7, 2011; 10:26 PM
In a ruling that could escalate the mortgage problems facing banks, the Massachusetts Supreme Court on Friday voided two foreclosures because the banks failed to show the proper paperwork to prove they owned the loans.
The decision challenges the way mortgages were bundled and sold around the world and could lead to the invalidation of thousands of foreclosures across the state. The ruling comes in the wake of accusations last fall that lenders improperly handled thousands of foreclosures and possibly engaged in fraud, spurring federal and state investigations.
The Massachusetts court is the highest to rule on the issue, providing ammunition to borrowers in other states who will almost certainly use the decision as a precedent to seek similar rulings and perhaps bring a similar case before the Supreme Court. Read More
