Posted on 01/17/2011 10:33:26 AM PST by FromLori
A Utah court case in which the owner of a Draper townhouse got clear title to the property, even though he still owed $132,000 on it, raises new legal and financial questions about a property-records database created by mortgage bankers.
The award of a title free of liens means that whoever owns the promissory note on the Draper property — likely a group of faraway investors — no longer has the right to foreclose to collect on a delinquent loan. Indeed, the townhouse owner has sold the property and kept the money. Those who own the promissory note probably don’t even know what occurred.
Decisions such as the one 3rd District Judge Glen Iwasaki handed down in the Draper case could have a big impact as the state wends its way through hundreds of lawsuits involving foreclosures, loans on properties for more than they’re worth and predatory lending practices that led Utahns to lose their homes as the real-estate bubble burst.
(Excerpt) Read more at sltrib.com ...
A big part of me would like to see that actually housing is taking down our economy but the TBTF Banks who invented these toxic products, i.e., Liars Loans, etc. are being bailed out even today with our tax dollars thanks to obama allowing an open ended arrangement for his backers to dump them on us through Fannie/Freddie. I hope Darryl Issa actually does something to put a stop to that.
Unlimited credit for GSEs seen as backdoor bailout
http://www.reuters.com/article/idUSTRE6044YU20100105
In the meantime, individual Investors or those who have a pension fund/401K have taken big losses already as a result of the Banks greed. I am waiting to see how all the lawsuits brought against the Banks by the Insurance companies (Allstate, MBIA), large investors (Blackrock)even the NY Fed pan out. If those go well I suspect there will be many more.
The Banks can’t hide all these bad loans forever.
What Will Cause the Next Recession?
http://finance.yahoo.com/banking-budgeting/article/111777/what-will-cause-the-next-recession
This time the so called TBTF Bankers who donated so heavily to obama should be allowed to fail like real Capitalists rather then taking down our whole economy like they have done.
Banks repossess 1 million homes in 2010
Fools and their money.
The banker fools got parted with their money first.
The deadbeat borrowers already blew the money they got at closing. Eventually they’ll lose the house they could never afford to someone who can afford it.
If not to the same bank, then to the tax collector (”What? You mean I gotta pay taxes on this house too????” No one told me that!”)
As it is now, for the deadbeat borrowers - it's like taking candy from a STUPID baby.
No, the bank screwed themselves by trying to take short cuts and slicing titles into lettuce.
Or it sounds like the Banks didn’t want to pay the Fee’s involved in recording a title, a time honored well thought out system that has served our country for decades. So they decided to save the fee’s for themselves (MERS) and sell the Liar’s Loans (another faulty product developed by the Banks) to unsuspecting investors who were told they were AAA and it has now backfired.
So I wonder as the lenders have clearly ‘clouded’ the titles on thousands and thousands of homes which will definitely have a extremely adverse affect on those homes value if a Class Action suite seeking monetary compensation for the deliberate ‘clouding’ of titles?
Uhhhh - no.
Many of these mortgages were bundled into Mortgage Backed Securiies (MBS) that were then SOLD to groups of investors.
The Banksters got paid for the MBS, and for the most part are merely "servicers", which means they don't get any on 'em if there's a default.
There are actually two different kinds of mortgages floating around in this mess.
1 - MBS mortgages. The Banksters are EAGER to foreclose on these, because since they don't have any skin in the game, having already been paid, they can milk the "deadbeat" for "fees" relating to his late payment status. Since the "deadbeat" isn't going to pay off anyway, the Bankster gets cuts to the head of the line at the money feeding trough. I talked to someone last week who had to pay $16,000 to Bank of America to get their hooks out of a mortgage issue. This person was putting the mortgage payments aside even though they were told not to by the BOA Bankster.
2. Mortgages owned and serviced by the bank. If these default, the servicing bank takes a hit on the writedown. These are the ones where people are living rent-free for months at a time, because the bank gets hurt worse by foreclosing and kicking them out.
Part II (to quote Mish, when ask by a current mortgage payer. “I have a fear that I will make my payments to Chase over a long period of years, then not be able to clear my title at the end because of all the MBS snafu. Is that an unreasonable fear? “)
“That is exactly the problem this has unleashed. Every title in MERS is potentially clouded. How do you prove you paid the correct party. How do you prove you bought a house from someone that could legally discharge the liens on it? If you didn’t, some genius lawyer, bank, or title company might find “legal” cause to come after you. That in turn may cause Congress to get into the act. This is a theoretical exercise so far, but not without concern.”
Clearly there are two options you get foreclosed on and they get their money that way or you pay it off and you get a worthless deed, which will allow some investor to come back on you and make you pay more.
Black describes what's going on with the Banksters & this foreclosure mess.
The deadbeat borrowers already blew the money they got at closing. Eventually they’ll lose the house they could never afford to someone who can afford it.
The Ponzi was predicated on housing prices and wages ALWAYS increasing. You'd "always" be able to re-finance an ARM.
Whoopsie!
I see people thinking this is some kind of effort to profit from an error. This is NOT true. This is protecting YOURSELF from deliberate actions on the part of the mortgage industry. They thought they could save themselves millions of dollars by skirting the law concerning debt. Let me explain:
First, the ORIGINATOR of the loan, the person or entity that loaned the money wanted to be able to sell that loan to someone else with extreme convenience, without the hassle of a paper trail. So, they signed over the interest (not earned money, the named ownership of the debt) in your home to a third party who did not own the debt. MERS (and other entities as well) is recorded on the deed as the lienholder. Except MERS WAS NEVER THE LIENHOLDER. Then they sold the ACTUAL debt to someone else, debt WITHOUT A LEGAL PROMISSORY NOTE.
In theory, MERS was “assigned” the right to foreclose, not the holder of the debt. This is legal fiction, because I know of no state that allows someone to foreclose on your property without a legal note on it!
If you contest a debt in court, the debtor cannot collect on that debt unless they provide an ORIGINAL instrument of debt. This is for YOUR protection. That way, I can’t make up a phony invoice for services to you and force a court to collect it for me, since I have no original agreement from you, where you agree to the debt.
This law serves the single most important fraud protection mechanism in law that YOU possess.
Now, follow this carefully. MERS CLAIMS ownership of the debt, but does not legally own ANYTHING. The bank no longer owns that debt, either, since it was sold to someone else.
They SCREWED THEMSELVES. An entity with no legal right to collect any debt is listed as your lienholder. The bank no longer owns the debt. Neither can legally foreclose, since NEITHER OF THEM IS THE DEBT HOLDER! Neither of them legally or morally is owed a freaking dime.
Your debt was purchased by someone, who did not file in your county that THEY own the debt. In fact, that debt may have changed hands 2, 5, 10 or even 65 times, and, the paper trail, that is, legal chain of custody of the original DEBT that you signed, may not exist, or it may belong to some oil Sheik or some pension fund, BUT NOBODY KNOWS in many cases, since NO PAPERS WERE FILED.
The people trying to foreclose? They’re just doing it because they know the payments are past due. They don’t own your debt. They’re just hired to collect your payments and process them, even THEY may not know where the money is going.
Given time, this might be “sortable”, in that eventually, the legal holder of the note may be located, and demonstrate a legal chain of custody. Now you know who is owed. But unless your county records say that THEY hold a lien on your home, they have no legal power to do anything. Again, this IS LAW. It is a consumer protection build to protect you from scams and fraud. If they can prove to MERS, and if MERS will file with your county and change the lienholder to them. And, that, too, might actually be legal fraud.
MERS is a non profit that claims it OWNS NOTHING. Yet, it is listed as the entity that has a right to foreclose on your home. But it cannot legally, since it has no ORIGINAL NOTE.
If you have kept up with this issue, you’ll know that many original notes have been shredded, destroyed, lost, etc. When that note was shredded, your debt was CANCELLED. The one who shredded that knew it.
IF you do not contest an improper repossession, you are enabling fraud, and possibly screwing yourself. Why?
Because if you do not, it is possible that in the future, the original note may be found, and the debt reinstated against YOU. Except, the BANK (or whomever is attempting to foreclose) now owns the property and YOU still owe the money, which the bank got through foreclosure, free and clear, with a clear title, free of any loans. They can hound you, get judgements against you, etc. Legally.
Again, the laws are for YOUR protection. Even if you can’t pay the note, if the paperwork is NOT in order... Fight it. You MUST protect yourself. If you don’t believe me, ask the attorneys who deal in this stuff what can come back to haunt you, if you let a fraudulent mortgage repo occur.
Ah! Yes, that IS the dilemma.
There seems to be a question whether they can or not due to the way MERS works. From the Salt Lake Tribune article:
“While these decisions stripped the owners of the promissory notes of the ability to foreclose on the property to recoup missed payments, it does not preclude them from suing the people who signed the notes to try to recover lost monies.
But that action would open up a new line of questions about the MERS method of property recording, said Christopher Peterson, a University of Utah law professor who has made a national name for himself recently by questioning the legal foundations of MERS’ appearance in property-recording records and its role in foreclosures.
Under laws adopted by all 50 states, the owner of a “negotiable instrument” such as a promissory note must be in physical possession of the document, said Peterson. Otherwise it would be like someone trying to cash a photocopy of a check instead of the actual check.
“One cannot be a holder of a note unless one is in physical possession of that note,” he said.
But Peterson said evidence is coming out in courts that shows the actual promissory notes or mortgages signed by buyers were not transferred as the notes made their way into the mortgage-backed securities investment pools.
That could mean in these cases that no one is in a position to try to collect because the actual notes are lost or destroyed, potentially making some promissory notes investors think they hold worthless.”
How about you file a suite for at least half the value of your home against the lenders for ‘clouding’ the title of your home and then the value of your home for punitive damges as they they knowing broke the law in the process of ‘clouding’ the title?
Charles Ponzi was evil. So was Bernie Madoff. Their investors were fools. Some of them were also evil, since many of them invested with fraudulent intent. Same for borrowers who took a $500K loan on a $150K house, taking out large cash payouts at closing, and stupidly believed that appreciation would go on forever. Fools and their money.
Very nicely laid out.
The people who paid off their mortages aren’t getting foreclosed. It’s the people who didn’t pay them that are having problems.
Now, when someone pays their mortgage and can’t get clear title, they can file a suit (not suite) to quiet title. They will have an actual case, unlike the deadbeats who never paid in the first place. They will either get a default judgment to quiet title, or some stupid lender will challenge it and get their clock cleaned in court.
I actually thought about this and asked Wells Fargo to produce the note on our property. By law I think they have 30 days after it is requested. Anyway, that period of time went by and no response so I faxed them a threatening note that I would quit making payments and consider the home free and clear if they couldn’t come up with it. After about 2 mnths I received a copy from them.
Do the lenders that purposely broke multiple real estate laws get a free ride then?
If you can't pay the note, it's time to move to where you CAN pay the note.
Not sure what's so hard to understand about this.
If you NEVER pay, how will you EVER get clear title (except by committing more fraud yourself)?
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.