Link I found this interesting. The Massachusetts Supreme Court ruled that bank foreclosures are indeed illegal since the banks never actually owned the homes and can produce no promissory notes. This backs up the assertion and charge that they were illegal months ago but wasn't proven until now. It's not nationwide, but the story is developing in Massachusetts. So essentially the banks have just stolen these people's houses. The banks can turn you over to collections for non-payment or come after you themselves for the actual money, but they can't come and take your house if they don't own it. I'm curious who actually owns all of these homes. I know that people can't just all stop paying, but this should get figured out with the rate of foreclosures remaining high.
That article you are citing is crap. It also has some wild conclusions that have nothing to do with the case they cite and the case does not stand for those positions. If you want to read about that case and what it potentially impacts, you can read a much better analysis here: http://www.boston.com/Boston/businessupdates/2011/10/foreclosure/L4Gl3gBBokZEwJZqLgstuN/index.html
This once again states that the banks didn't own the homes either. If the court is ruling that the people that bought the foreclosed houses don't own them it also means that the banks didn't own them either and sold them illegally. It also goes on to state that the banks didn't have the correct 'paperwork' to prove who owned the home. If they owned the home, they'd have all of the necessary and correct paperwork.
This is not a general verdict against foreclosures. The verdict only says that unless banks do the proper paperwork and transfer the title of the property, they can't re-sell it.