Very hard to feel bad for the banks in this, since it's only the epic scale of foreclosures that allowed anything like this to happen, and the scale of foreclosures is a direct result of non-existent underwriting.<p>However, the problem is, it's not the banks footing the bill, it's the taxpayers. As usual, the less you pay, the more you get, and now apparently that includes the wholesale American Dream of home ownership.<p>What I don't understand from a legal perspective, is how statue of limitation can possibly apply. The time limit would have to be filing of the case, not conclusion right? I know there were issues with robo-signing and all that, but did the loan servicers really drop the ball so badly? (Edit: The answer is in the actual case PDF I found and linked to below -- the original foreclosure was dimissed without prejudice because the bank couldn't produce the necessary documents, namely an original copy of the mortgage.)<p>Mortgage servicing is outsourced by the government in fairly lucrative contracts. The bank you get the loan from is almost never (credit unions are the obvious exception) the company that collects your payments each month. I would have guessed it's up to the loan servicer to handle the foreclosure... the article simply doesn't have enough details behind the catchy headline.<p>Also so good to know they won't even have to pay tax on the income... </s> <a href="http://www.irs.gov/Individuals/The-Mortgage-Forgiveness-Debt-Relief-Act-and-Debt-Cancellation-" rel="nofollow">http://www.irs.gov/Individuals/The-Mortgage-Forgiveness-Debt...</a><p>And here's the actual case... so much for "NOT FOR PUBLICATION": <a href="http://noonanandlieberman.com/media/pdfs/washington-11-6-2104.pdf" rel="nofollow">http://noonanandlieberman.com/media/pdfs/washington-11-6-210...</a><p>Secion I. Introduction:<p><pre><code> “No one gets a free house.” This Court and others have uttered
that admonition since the early days of the mortgage crisis, where
homeowners have sought relief under a myriad of state and federal
consumer protection statutes and the Bankruptcy Code. Yet, with a
proper measure of disquiet and chagrin, the Court now must retreat
from this position, as Gordon A. Washington (“the Debtor”) has
presented a convincing argument for entitlement to such
relief. So, with figurative hand holding the nose, the Court,
for the reasons set forth below, will grant Debtor’s motion for
summary judgment.
</code></pre>
Edit 2: The lawyers for the bank seem like complete neanderthals?! The statue of limitations is 6 years from the date of maturity, which was accelerated, so debtor claims it's been 6 years since the accelerated date. But the statue specifically says the bank can <i>extend</i> the date of maturity by written instrument. So... write a note de-accelerating the acceleration by 1 year, and re-file the foreclosure.<p>It's also not even clear the statue in question was effective in this case. The judge assumes that based on a prior statue which did say it was to be effective for all foreclosures filed after that date, but the law in question says no such thing.<p>And a final closing remark, as I just got to the last sentence in the PDF:<p><pre><code> "The Court will proceed to gargle in an effort to remove the
lingering bad taste."</code></pre>