Barely 24 hours old — the Massachusetts Supreme Judicial Court’s U.S. Bank v. Ibanez decision is already a huge national story. CNN-Money calls it a “beat down” of the big banks. Reuters says its a “catastrophe risk” for banks. The Huffington Post claims there’s some Obama Administration-Bank of America conspiracy in play. The ruling has spooked investors, as bank stocks were down in reaction to the ruling.
The case certainly has national implications as the SJC is the first state supreme court to weigh in on this particular issue, and the majority of states have laws similar to Massachusetts’ regarding the assignment of mortgages, such as California and Georgia. Other courts across the country will likely be influenced by the ruling, and the SJC is widely regarded as one of the most respected state supreme courts in the country.
But is the Ibanez ruling really the next Foreclosure Apocalypse?
That remains to be seen. But the answer to the question will likely rest with what has transpired under complex mortgage securitization pooling and servicing agreements, known as PSA’s. These complex agreements may unlock the key to who, if anyone, owns these non-performing mortgage loans and has the legal right to foreclose.
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