It looks like we're heading towards lawsuit city, and some of the nation's largest banks are in the crosshairs of the SEC. Many of the mortgage-backed-securities that were traded during the bubble apparently don't have the right paper work, creating havoc in terms of figuring out who actually owns all the homes that were packaged up and resold.
According to New York securities law, there are particular requirements needed to validate ownership of mortgages, and when the banks went on a selling spree, they just happened to forget a few minor details. Here's Christopher Whalen on bloomberg with some of the recent news. [HT Rithholtz]
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