Can someone tell the author that when you default on your mortgage, you should expect your home to be foreclosed on. You should not be rewarded with a blackmailed extortion from the lender who seeks to recover the property that you were able to buy with the lender’s money.
As long as there is high unemployment, a recession/depression, a weak dollar, global uncertainty and a marxist dicator in the White House, the real estate market will remain where it is and perhaps sink lower.
95% of all bank house loans during the bubble years were sold to Wall Street. Wall Street bundled the loans and sold them to investors, leaving the original loaning bank only being able to service the loan i.e. collect the mortgage payment, taking a small fee for doing so and then sending the remaining balance to Wall Street for investor’s share.
Banks never told the homeowner/mortgage payer or filed with the local County Recorder’s Office that the deed had changed hands. Then Wall Street never bothered with listing all the investor’s name on the note since they all (the investors) now owned part of the property.
In the meantime, banks, real estate agents and appraisers are all happily selling homes right and left to whoever shows up to sign the paperwork with ‘stated income documents’ (the paperwork where nothing is verified and taken at face value) all this with the approval or even behest of Congress as no one is left behind when applying for a loan.
The housing bubble pops the crash starts and foreclosures begin, except there is no note to foreclose on, it is no where to be found.
Enter MERS...from Wikepedia
“Mortgage Electronic Registration Systems, Inc. (MERS) is an American privately held company that operates an electronic registry designed to track servicing rights and ownership of mortgage loans in the United States.[1] MERS is owned by holding company MERSCORP, Inc.
The real estate law and real estate transactions in the US are subject to state regulations and county level recordation requirements, since the time of the establishment of the US as an independent country.[citation needed] That made it quite cumbersome for financial companies to develop a smooth operation of a market based on US mortgages in the early 1980s.[says who?] This is because every time a financial instrument containing mortgages is sold, various state laws may require that the sale of each such mortgage (or deed of trust) be recorded in the local county courts in order to preserve certain rights (e.g., the right to foreclose non-judicially), which triggers an obligation to pay corresponding recording fees.[citation needed] So, the financial industry, eager to trade in mortgage-back securities, needed to find a way around these recordation requirements, and this is how MERS was born to replace public recordation with a private one.[citation needed]. By 2007, MERS registered some two-thirds of all the home loans in the US.[2]
The company asserts to be the owner (or the owner’s nominee) of the security interest indicated by the mortgages transferred by lenders, investors and their loan servicers in the county land records. MERS maintains that its process eliminates the need to file assignments in the county land records which lowers costs for lenders and consumers by reducing county recording fee expenses resulting from real estate transfers[3] and provides a central source of information and tracking for mortgage loans.[4] The company’s role in facilitating mortgage trading was relatively uncontroversial in its early days a decade ago but continued fallout from the subprime mortgage crisis has put MERS at the center of several legal challenges disputing the company’s right to initiate foreclosures. Should these challenges succeed, the US banking industry could face a renewed need for capitalization...”
So now investors out their investment, counties are out the transfer fees, cities are out the property taxes, neighborhoods suffer the blight of abandoned houses and falling values, taxpayer’s paid full price for these mortgages via the GSEs (frannie, freddie, FHA, etc.) that bought all the banks bad paper at par as part of TARP and other bailouts, MERS is now outlawed, courts are ignoring simple contract law and banks settled with States and throw a bone to underwater homeowners that the bank’s and Congress’s actions caused.
But you are worried about some loser that might stay in a house for free for a year or asks to see the proper paperwork when it comes to a foreclosure.