Just how pervasive was illegality in the real estate boom? On the surface, it seems that mortgage companies and banks did whatever it took to ram through deals.

The concepts of rules and regulations were tossed. This has been shown pretty clearly in the past year, via court cases and various inquiries. But a new study commissioned by the officials in San Francisco County offers an interesting take on this issue.

It studied about 400 recent foreclosures and found that nearly 100 percent of them had some sort of legal issue, from basic legal responsibilities to MERS-related issues. While some issues fell in a grey area, about 85 percent of the cases had clear violations of law. Some might be tempted to call the study moot in light of the just-signed $26 billion settlement, a large portion of which will be earmarked for California residents (We can only hope the state does not use the proceeds for deficit reduction, which is going on elsewhere).

But the New York Times notes that the issues identified in the report are not necessarily resolved by the settlement, and there are plenty of areas where the banks could face additional prosecution, given the settlement’s limited immunity. We’d like to think however that banks and regulators can address these issues as the remediation process continues. The findings of the study will be forwarded to the California AG.

For more:
- here’s the article

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