How Can California’s Non-Judicial Foreclosure Process Not Violate Due Process?

The New York Times reports that study of thousands of San Francisco foreclosures found errors in 84% of them.

The improprieties range from the basic — a failure to warn borrowers that they were in default on their loans as required by law — to the arcane. For example, transfers of many loans in the foreclosure files were made by entities that had no right to assign them and institutions took back properties in auctions even though they had not proved ownership.

The press release for the report itself adds:

“By focusing on six subject areas within the foreclosure process we can see broad patterns and consistent issues. On the whole, over 75% of cases had problems related to three or more of the six general subject areas,” explains Pizante.
The report found 75% of sampled foreclosures had at least one issue relating to an assignment of the Deed of Trust. When a lender sells a loan it signs an assignment of the Deed of Trust in favor of the new lender. Common problems uncovered include conflicts between federal filings and recorded documents (23%), new lenders signing over debt to themselves (11%), and assignments being filed after the Notice of Default (59%).
The report also found that in many cases, there were instances of suspicious activity indicative of potential fraud. Examples include “strangers” to the Deed of Trust purporting to be Beneficiaries (45%) and the back-dating of documents (59%). Overall, 82% of cases had at least one occurrence of suspicious activity.

How can that system not violate due process?  Turner v. Rogers requires that procedures in cases involving taking of constitutionally protected interests provide sufficient accuracy and fairness for the significance of the matter at stake.

Sixteen percent compliance fails that test.


About richardzorza

I am deeply involved in access to justice and the patient voice movement.
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