TOXIC ASSETS AND FORECLOSURE PROBLEMS. I have posted several times about how the toxic assets seem to be the distinctive feature of this financial crisis, about how “a lot of the paperwork on mortgages hadn’t been done” (here) and on the view that “You won’t have a recovery until you cleanse the system [of toxic assets]” (here). Now a number of banks are halting foreclosure activity because of paperwork problems (many of which arose in the processing of the foreclosures). Andrew Martin and David Streitfield wrote this article in the New York Times focusing in part on the problems for prospective purchasers that result from paperwork problems. There are title problems—who owns the house—and the property winds up in a legal limbo. And these problems are occurring on a huge scale.

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