This article from USA Today breaks down the situation as it currently stands in regards to foreclosures. Apparently, mortgage lenders have been filing faulty court papers to foreclose on homes. The lenders were using “robo signers” to prepare legal documents required to get court approval to foreclose, and they signed thousands of papers without reviewing supporting documentation in the case or signing the affidavit in front of a notary, making their paperwork invalid in states where judicial approval is required to move ahead on foreclosures. Furthermore, there have been some allegations that the supporting documentation in some of the cases was falsified and some signatures were fraudulent. As a result, many banks have either suspended foreclosures, or are continuing with the foreclosures while investigating their practices. 

There are a handful of investigations into the foreclosure mess being launched by various bodies including The Justice Department, The Office of the Comptroller of the Currency (which regulates the nation's largest banks), the Federal Housing Administration and The Senate Banking Committee. Those charged with fraudulent foreclosure practices face civil penalties and criminal prosecution.

Courts could now see a wave of challenges to both current and past foreclosures cases. And there could be legal battles between former owners who will claim they were foreclosed on illegally and those that currently own the foreclosed property. For this reason it is recommended that those looking to buy a foreclosed property, hire a lawyer to review the court case file to look for missing documents and incorrect dates.

For the full article click here

for more on current programs meant to help homeowners avoid foreclosures, watch this course by Ducchi Quan: An Attorney's Guide to Loan Modifications under the Home Affordable Modification Program