DITTO. People think because the bank does not have the note they cannot foreclose. Wrong!! States have procedures for dealing with lost notes/titles. Banks have to hire lawyers and auditors to back track and find the last known location of note/title. If it was lost due to a service company or old holder going out of business, the rep for that company (usually a lawyer) will fill out a statement under oath to attest that the note/title was lost. These procedures always existed to account for natural disasters or businesses going out of business and documents being lost due to the chaos. The whole process will take more time, and additional funds spent by bank to document the process and events. The homeowner can still challenge the documentation but if done properly it will be much harder then original issues of robo signing. This process will gunk up the legal system because each foreclosure will be reviewed by a judge. The borrower may have just brought himself an additional 12 to 18 months from eviction.
However the legal issues for mortgage backed securities are different. These investments are sold with a prospectus which must be accurate in its declarations. If Bank of America publishes a prospectus for investors to read before they buy the securities, the info must be accurate and not false. There are SEC procedures and checkpoints that a bank must go thru before publishing such a document. Failure to do so or intentionally not doing that and releasing the prospectus to unsuspecting investors is FRAUD!!! Investment bankers can handle the homeowners, but lawsuits from the pension funds, Freddie Mac/Fannie Mae, foreign governments and other investor funds that brought the mortgage backed securities are another story. Maybe that is why the Feds took a chunk of the TARP and paid off foreign banks who brought a sizable chunk of MBS. Maybe both sides figure it was better to settle with US taxpayer money then drag it out in court with its costs and consequential bad PR.
But many of them weren't lost. They were intentionally shredded and banks have admitted this in open court. That means when they filed affidavits of lost notes they committed thousands of counts of perjury.
When do the frog marches start?