Some of the issues, which few Americans had thought about until the other day, have to do with real property title implications of mortgage backed securities.
Even if they had done it right, some good, but technical, arguments might be made that securitization itself clouds title, even without lender due diligence negligence seen on a monumental scale.
Securitization itself, arguably, even before the bubble burst, constituted a permanent cloud on titles of all properties so encumbered.
Legal issues, of course, differ, state by state; and there are, of course, 50 of them.
A good argument might be made that all US properties encumbered by securitized mortgages should be entitled to a federally, or affected banks, funded quiet title action against multiple lenders, as there is no way to determine ab initio which lender is the legitimate one, after negligence and banking consolidations, and may never be known with certainty.
It is an impractical, but logical, legal feeding frenzy, brought on by failures of regulation and private self restraints.
My suggestion is that banks should generally be forced by the federal government to write off all these properties as bad corporate decisions, leave the property owners with tainted titles, and go from there.
Some other alternatives, none good either, spring to mind.
Caveat emptor.
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