The nation’s largest banks admit submitting “faulty” documentation in foreclosure cases. Home owners behind on mortgage payments get a reprieve. Buyers of foreclosed homes get defrauded.

Company Stops Insuring Titles in Chase Foreclosures – New York Times, 10/2/10

Excerpt:  When foreclosures are done with faulty documentation, that could leave the new owners of the house vulnerable to claims [that someone else actually owns the property they think they’re buying].  Title insurance protects the buyer against defects, errors and omissions in the chain of title . . . . lenders will not issue a new mortgage without title insurance.

On the Foreclosure Front – New York Times, 10/2/10

Excerpt:  The improprieties raise the prospect that some families may have lost their homes in a less-than-legal process, and that some buyers of foreclosed homes may not have clear title to their properties. . . . The robo-signing scandal is yet another reminder that it is folly to rely on banks that got us into this mess to get us out.

Bank of America to Freeze Foreclosure Cases – New York Times, 10/1/10

Excerpt:  Bank of America, in an emailed statement, said it would “amend all affidavits in foreclosure cases that have not yet gone to judgment.”   That could mean tens of thousands of foreclosure cases would be in limbo for months or, if the consumers in default hire lawyers, years.