• October 21, 2010

Anyone reading the newspapers is aware of the recent confusion and on-again-off-again paralysis in residential mortgage foreclosures nationwide.  Often, in Minnesota Litigator’s experience, the problem in particular cases (if any problem at all aside from the difficult challenge of foreclosure itself) is simply the logistics of the document-intensive foreclosure process, in which corners have been cut at times because of the sheer number and volume of foreclosures.  Rarely, though, does one hear or read about a borrower who actually denies having taken out the loan on which he is being foreclosed, or denies having been in default when foreclosed upon.  Rarely does one read about lenders actually forging loan documents or engaging in bad faith/malicious wrong-doing.

Ex-Minnesota lawyer Trent C. Jonas, however, as CEO for two title companies, has admitted failing to record mortgages on 3,000 mortgage transactions, admitted failing to make $1.321 million in mortgage payoffs to prior lenders in mortgage refinance transactions, and admitted failing to remit nearly $200,000 in insurance premiums to title insurers.  He’s confessed to judgment against him for more than $ 6.3 million in connection with his wrong-doing.  For that, Jonas has been disbarred, which is often the relatively innocuous prologue to more challenging later chapters in the lives of lawyers gone bad

Jonas’ primary victims, it would seem, were title insurance companies.  Query whether borrowers in Jonas-related transactions might think they have lucked out and are now foreclosure-proof (and insult to the lenders’ injury)?   At a minimum, lenders might have their work cut out for them if/when these transactions need to be revisited and reconstructed from the point of view of documentation.

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