Massachusetts Foreclosure Ruling May Set Precedent for Large Banks

By Kyle Chezum Updated on 1/10/2011

1/10/11

On Friday, the Supreme Court in Massachusetts ruled that banks cannot foreclose on homes unless proof of ownership is clearly established.  This is part of the issue at the core of the foreclosure crisis.  Many banks packaged and sold mortgages as mortgage backed securities, technically transferring ownership of the mortgages to investors and in many cases destroying the paper trail needed to prove any ownership at all.

If the ruling in Massachusetts sets a precedent for the rest of the nation, the major financial practices of big banks may have to change or further litigation will result.

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