We always knew that both the irresponsible lenders and their irresponsible borrowers were responsible for this mess (choose your own personal weighting).
Now we see further confirmation of how incestuous this relationship is. Irresponsible servicers (the largest owned by irresponsible banks) cut corners to foreclose on irresponsible borrowers and now the latter are suing the former. It’s actually pretty hysterical in a way. I mean, the borrowers are supposed to get foreclosed on – they’re not paying and they certainly don’t deserve to stay in the property. But because the servicers haven’t gone about foreclosing on them in a completely technically legal manner (robo-signing and god knows what else), the borrowers have some flimsy, and ultimately unenforceable, claim on the property.
Anyhow, this just delays the inevitable. All of these deadbeats will ultimately be removed from their residences (or get modifications). But the servicers are going to take it in the arse in terms of additional expense and hassle. And inventory will continue to be kept off the market, with the predictable impact on prices.
