Imagine not being able to collect on a mortgage just because you can't prove that you actually own it. That's the situation that PHH Mortgage found itself in last week when a judge refused to enforce its claim because it could not establish clear ownership. For years courts have been very lax in allowing banks to play fast and loose when it came to establishing ownership rights to pooled mortgages. Such leniency would almost never be extended to borrowers. It now appears as though some judges are prepared to insist that the banks will actually have to follow the law if they want to collect their money. Good article by Gretchen Morgenson calling attention to this case.
--Dean Baker
