Posted on 10/04/2010 3:05:22 PM PDT by the invisib1e hand
Citigroup Inc. and Ally Financial Inc. units were sued by homeowners in Kentucky for allegedly conspiring with Mortgage Electronic Registration Systems Inc. to falsely foreclose on loans.
The lawsuit, filed as a civil-racketeering class action on behalf all Kentucky homeowners facing foreclosure, also names as a defendant Reston, Virginia-based MERS, the company that handles mortgage transfers among member banks. The suit claims that through MERS the banks are foreclosing on homes even when they don’t hold titles to the properties.
(Excerpt) Read more at billionaires.forbes.com ...
I hope sticks.
He who sells what isn't his'n
must buy it back or go to pris'n.
This is going to freeze a lot of homes out of the market while the matter is wrangled out, maybe clear up to the USSC. Result, possible uptick in home prices (for those lucky enough not to be caught in this web of bungled foreclosures)?
Would someone please dumb this whole MERS thing down to my level? Is it basically that the title was bought and sold so many times, no one knows who actually owns it?
Holy crap! If true, the execs need to spend some quality time with Bubba.
Or - will the bottom fall out because people will be afraid to buy ANY house for fear that the title, all titles, are rotten?
That’s a pretty good trick.
They same reason I am getting out of the tax business......
Or - will the bottom fall out because people will be afraid to buy ANY house for fear that the title, all titles, are rotten?
Yes and yes, imho.
Just imagine what life will be like under obama care when everyone's medical records go into that big government (subcontractor) database!
For those that have an absolutely clear title, it might make selling their home easier. This will also constrain the supply of acceptable properties for some time to come.
and/or, prices will rise until....
the government steps in and fixes things, which sort of bolsters my theory (circ the early '90s) that someday the gov't, thanks to mortgage insurance, would be the biggest landlord.
Now, I should point out, that free enterprise could solve this problem if the government wasn't so irrefutably opposed to it. Meaning, turn out the present administration, and there's hope. Push the reset button, in other words.
b4L.
Outstanding! The mortgage industry takes in billions in “fees” and interest but then wants to act illegally, saying they can’t make money unless they do. Just like the airline industry.
Basically, the banks need to have the title to foreclose on a home. MERS only registers the loan electronically, so there is NO NOTE. Presumably, these notes got lost! The securities(MBS) have been sold and passed around, sliced and diced. It could well be that there is no clear title to alot of these homes. Legally, without a note, they can NOT foreclose. They don’t have the right to foreclose on something that they don’t have PROOF they own.
It will hurt the housing market because any home that had been foreclosed on, may not have clear title. I wonder if our home has clear title, and we have been paying all this time. It could well be if you bought a home past 2000, NONE of those homes have clear title.
This is epic fail. Truly.
This is another case of how large investors have it over the small investor: they create financial entities and instruments that can be traded at no cost.
If they can get the government to cover their losses, then it is pure profit for those who are members of the club.
Push the reset button, in other words.
Ok, so when you say note, you mean the actual IOU that was signed at closing? The paperwork the borrowers filed out is lost now, that’s at least part of the problem?
I’ve heard people say that this will be a nightmare for title insuarance? Why, I thought you only needed title insurance if you didn’t put 20 percent down. And aren’t people required to put more down now?
Sorry for all the questions, I just can’t seem to wrap my head around this.
“I wonder if our home has clear title, and we have been paying all this time.”
That was a thought I had watching this fiasco. We refinanced in 2005 and
pulled a little money out for new carpet, paint ect.
Our loan was sold off to the Mozilo syndicate at Coutrywide, which is now B of A.
I was thinking of requesting copies of the title/loan docs.
If they don’t have title and can’t foreclose, how can they demand payment
on a loan they can’t prove they own.
Not that I would stop making my payments, but anyway I could harass B of A would sure be fun.
Ok, so when you say note, you mean the actual IOU that was signed at closing?
-Yes.
The paperwork the borrowers filed out is lost now, that’s at least part of the problem?
-Yes. That is a BIG part of the problem. The banks have no legal right to foreclose WITHOUT that title.
I’ve heard people say that this will be a nightmare for title insurance?
-Yes
Why, I thought you only needed title insurance if you didn’t put 20 percent down. And aren’t people required to put more down now?
-This part I don’t know about. But I do know title insurance companies are already saying they will NOT insure these foreclosed on homes. Meaning, if you are buying a foreclosed home, you may not have full title to the home. The Title Insurance companies don’t want to insure something that there is no clear title on. I don’t think the down payment has anything to do with it.
-And questions are good. I have been trying to understand this implosion since 2008, and there is still alot I don’t know. Glad to help out.
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