An audit of hundreds of foreclosures in San Francisco uncovered "one or more irregularities" in 99 percent of the loans, according to a study released Wednesday by the city's assessor-recorder, Phil Ting.
In 85 percent of the loans, homes were lost to people or corporations who lacked the authority to foreclose on properties, the auditors found.
In 84 percent of the loans, the analysts identified "what appear to be one or more clear violations of law."
And 82 percent of the loans contained "suspicious activity," including "fabricating documents" and "backdating of documents," according to the study.
The auditors say their report paints an "accurate picture" of the mortgage industry's failure to comply with California's foreclosure laws.
"We have corporations pretending to be other corporations," Ting said in an interview. "You have someone foreclosing on a property that has no right to do that."
"What it tells me is that things are not working," he said.
The report did not identify any of the mortgage firms involved in the foreclsoures.
The report was prepared for Ting's office by Aequitas Compliance Solutions, a private consulting firm in Newport Beach, Calif. Ting commissioned the audit last fall after homeowners facing foreclosure requested their property records and found that documents were missing or contained inconsistencies.
"State law dictates how the mortgage industry must file those records," a statement from Ting's office explained. "How can we expect homeowners to have a fighting chance of saving their homes when they can’t even find who currently owns their debt?” Ting asked in the statement.
Most of the foreclosures occurred in the southeastern section of the city and the Tenderloin district, according to Joshua Abeyta, a spokesman for Ting.
Ting believes the report shows that California needs to change its laws to provide more protection for homeowners. The complex nature of the mortage industry requires greater oversight, Ting said.
"These laws were written at a time when we didn't drive to a bank; we rode up on a horse," he said.
The analysts agreed.
"If there is one lesson to take away from this report it is that, with so many homes being foreclosed and with so little oversight, California’s foreclosure process appears utterly broken," they concluded.
The report was released less than a week after California's attorney general, Kamala Harris, signed on to a settlement agreement with the nation's five largest mortgage servicers that will give the state and its homeowners $18 billion in compensation for fraudulent foreclosure activities.
The analysts said that the settlement "does not resolve most of the issues" in their report, which they described as the "first public study to provide a rigorous, quantifiable analysis of foreclosure practices" in the state.
Ting's office has turned over the report to Harris' office as well as the offices of the San Francisco district attorney and the city attorney.