Court to inspect Countrywide loans

An article in The New York Times today said the agency charged with monitoring the US Bankruptcy Court is looking into two Florida foreclosures.

The agency issued subpoenas to Countrywide for the borrowers' mortgage records. The move comes amid a growing realization that mortgages were sliced and diced and sold to Wall Street investors in so many packages that it may be difficult to determine who is the true holder of an individual mortgage.

In Ohio, a judge, lacking sufficient proof of ownership, has thrown out dozens of foreclosures, according to Times reporter Gretchen Morgenson.

That can't happen in Massachusetts. That's because under state law, most foreclosures are never reviewed by a judge. The Bay State is among a handful nationwide that do not require the courts to monitor the process. So if a lender decides a borrower is behind on his or her mortgage, that lender can seize the property.

Only borrowers who take the extra step of filing bankruptcy have their foreclosures reviewed by a judge.

Massachusetts Secretary of State William Galvin proposed legislation early this year to require all foreclosures be heard by a judge -- even those outside the bankruptcy court. It was a non-starter.