Foreclosure standing, the sticking point that derailed hundreds of lender lawsuits, tripped up a trial judge, who “throughout the trial … seemed confused” about the role of the loan servicer, according to a state appellate court.
Questions about ownership created a boon for foreclosure defense attorneys in the aftermath of the real estate market collapse, when investors in the secondary debt market transferred loans so quickly and in such large quantities they sometimes left a trail of shoddy paperwork. That paper trail—or often the lack of one—allowed borrowers to challenge plaintiffs’ legal standing to foreclose on the debts.
