http://aequitasaudit.com/images/aequitas_sf_report.pdf If the link did not work you can find a discussion of the audit commissioned by Phil Ting at “Credit Slips” or “Naked Capitalism. The SF chronicle covered this story and according to their reporter there were some paperwork problems with foreclosures done over the last few years in SF, no big deal, move along. I read it and disagree. This was a random sampling of 382 foreclosures and 84% had serious flaws, in 46% of the cases possession of the property was taken by someone who was a stranger to the title. Think about that for a minute. The study describes those 46% as void foreclosures meaning they had no legal effect. And those houses were resold. There were more than 3,000 foreclosures completed during the time period this study covers….For simplicities sake call the void foreclosures 50% of the total, the number of foreclosures 3,000 exactly and assume every sale was $500k. $750 Million down a black hole. People who “Bought” these homes did not get valid title because they bought from someone who did not own or have a right to sell them. Can they sue the banks and lenders who “Sold” them these homes? It depends on the language of the contract the buyer signed, if there was a “Hold Harmless” agreement in there tough luck. How about the title insurance company ? The language in title policies changed a couple of years ago and as I understand it you are not covered (I am not a Lawyer, have a competent attorney review the policy). How about suing your agent? that probably won’t fly either, the language was in a contract you voluntarily signed and claiming you did not understand it…..good luck. Would I personally buy an REO? Yes, if it was from a portfolio lender, maybe even one that had been taken back by a major bank if it did not have a “Hold Harmless” agreement. What about those roughly 1500 people in SF who bought homes from someone who had no right to sell them?? No clue, it’s a mess. They might try filing an action to quiet title, spend $10-$15k and 6 months. It’s worth a shot if you put $100k down and borrowed $400k to buy a home you don’t have clean title to. Think about the nightmare if someone comes along who DOES have a legal right to the home and tries to enforce it. Oh, this is the FIRST audit of an assessor’s files to be done in California. For some reason none of the county DA’s have had the resources to look into this little problem and neither has the State Attorney General Kamala Harris. It may be a coincidence that Kamala Harris became comfortable signing the Mortgage Fraud Settlement without doing any investigation shortly before she became a frontrunner to be appointed to the Supreme Court.