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Foreclosure in California, A Crisis of Compliance

Assessor-recorderThe City and County of San Francisco’s Office of the Assessor?Recorder retained Aequitas Compliance Solutions, Inc. to review 382 residential mortgage loan transactions (the “subject loans”) that resulted in foreclosure sales that occurred from January 2009 through October 2011.1 Over this period, there were 2,405 foreclosure sales. The subject loans thus represent approximately 16% of the total. (See Appendix B – Methodology.) We analyzed the subject loans to determine the mortgage industry’s compliance with applicable laws. Specifically, we focused our analysis on important topics relating to six Subject Areas: • Assignments • Notice of Default • Substitution of Trustee • Notice of Trustee Sale • Suspicious Activities Indicative of Potential Fraud • Conflicts Relating to MERS Our Subject Areas and the topics we explore therein may not be exhaustive. Nonetheless, we believe our analysis presents an accurate picture of the nature and frequency of the mortgage industry’s performance respecting compliance with important aspects of California’s nonjudicial foreclosure laws. Overall, we identified one or more irregularities in 99% of the subject loans. In 84% of the loans, we identified what appear to be one or more clear violations of law.