February 2008 A few weeks ago, Judge Christopher S. Boyko, of the U.S. District Court in Cleveland, Ohio opened a can of worms that won’t soon be closed. He threw out 14 foreclosure suits that mortgage investor, Deutche Bank, had filed. He ruled that a security backed by a mortgage is not a mortgage itself; thus, because Deutche Bank could not produce a chain of assignments of the debt to itself to prove that it was the holder of the defaulted mortgages; it had no legal standing before the court. Unless overturned by the Supreme Court, or remedied by Congress, this far reaching ruling has the potential to shake up the trillion $ plus secondary home mortgage market, and ultimately, change the ways houses will be bought and sold.
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