SAN FRANCISCO (AP) -- More than 80 percent of residential mortgage loans that have gone into foreclosure in San Francisco have missing documents or signatures or otherwise violate the law, according to a review ordered by the city assessor.
The results hint at potentially broader problems with how foreclosures have been handled since the collapse of the housing market.
While many of the errors were technical and related to paperwork, the problem shows the state needs to change its antiquated real estate regulations, Assessor-Recorder Phil Ting said on Wednesday.
"The whole process ... is absolutely, 100 percent broken and not working for any of us at this time," Ting said. "These rules were made for people who walked or rode their horse to the bank."
The review found that signatures of some original owners of loans were missing and that affidavits were not filed showing lenders had contacted borrowers to discuss their options 30 days before a mortgage default notice.
The review was conducted by Newport Beach-based Aequitas Compliance Solutions. The company looked at 382 of the city's 2,405 foreclosure sales between January 2009 and October 2011.
The report said it was possible that homeowners were accused of defaulting on loans that they had never agreed to in the first place, and were being foreclosed by lenders that didn't own the loans.
"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 said in a statement.
The report was not aimed at individual lenders, but the system in general. It suggests similar problems could be found elsewhere in the state, Ting said.
He said it would be up to the District Attorney's Office and state Attorney General's Office to determine whether the violations were prosecutable.
Richard Green, director of the University of Southern California's Lusk Center for Real Estate, said he would like to see similar audits done in other California cities to confirm San Francisco is not an isolated case.
But considering the high rate of errors with foreclosures in the city, which suffered a comparatively mild downturn when the housing bubble burst, Green said he would not be surprised if the audit's findings foretold a broader problem.
"Mistakes happen. But it's the robustness of this happening. It's that it's happening over and over again," he said.