Uncovering deficiencies in the foreclosure process could potentially have serious implications for the market, said Stuart Saft, a partner at New York law firm Dewey & LeBoeuf, because it raises questions about the ownership of properties that have been resold.
Mortgage servicers, who asked for anonymity, say they anticipate more legal action contesting foreclosures.
Miami attorney Richard J. Burton, who specializes in foreclosure litigation, says he expects that class-action lawsuits will be filed against GMAC and other servicers, furthering slowing the foreclosure process.
The turmoil in the market also could encourage more voluntary defaults, said Cameron Findlay, chief economist at LendingTree.com, because overwhelmed lenders may simply ignore newly delinquent homeowners.
Source: Bloomberg, Bob Ivry, Prashant Gopal and Jody Shenn (09/27/2010)