Mortgage paperwork mess: Next housing shock?

[AgeOfEnlightenmentSCP]

It'll hopefully push lenders to settle more quickly. Real estate prices are struggling to fully correct right now, and I think it's high time we get these properties liquidated at their market price and get on with things. Existing homeowners are going to take the biggest hit (because their home value will collapse further) but that's just the brakes for responsible people. In the long run, a correction is what's needed. Real estate is still way over-valued.

[souldoubt]

I've heard about this being a problem for a while and know another area where it's a problem. I know someone who has "owned" her townhome for almost 20 years. She took out at least a second mortgage on it and had no problem spending the money she received. She hasn't paid a mortgage payment in 3 years and still lives in "her" place. She's been fighting the fact that the 2nd mortgage documents like too many documents during the era were falsified. So despite the fact that she spent the money she received she thinks she should not only get to stay in "her" place but also that she shouldn't have to pay any of it back. She still believes that the housing market will bounce back and even though she owes over double what she originally paid for it that she'll turn a profit by selling in about 3-5 years. All the while living in California in a county where home prices more than doubled from 2000-2005. Unfreakingbelivable.