Posted on 11/17/2007 8:23:04 AM PST by AndyJackson
Securitized mortgage debt means you end up owing money to nobody.
WTF?
It might to those who thought they could rely on the income in their retirement. I am not saying we can or should do anything except to pursue the perpetrators to the ends of the earth and make sure that their yachts and houses are recovered too. That won't pay anyone back, but it might be some justice.
Don’t ask me. I didn’t invent this mess.
you said “Costs are always passed on to the consumer. Businesses will make their profit.”
You must live in an alternative universe and/or never have had you own business.
It happens ALL THE TIME and they even have a name for it INSOLVENCY.
Lurking’
Greenspan? Interesting idea and he sure deserves it, but it would be a first, I think.
I imagine that the higher courts will throw the judge’s ruling out on appeal.
It is only a matter of “mortgage” -
(which is, in fact, nothing other than a an instrument of debt and as such it is fully assignable and divisible, like any other debt) -
terminology, not what a mortgage is and how it can be handled,
and securities terminology
having not progressed in sync.
No one among the lender or the bank that assumed or bought the debt worked any legal error or fraud or malice against people who simply did not pay their mortgage.
Securitizing the debt (mortgage) did not change the terms that applied to the debtor and the technicalities and intricacies of securitizing such debt will not stand as a technical loophole that errant debtors can escape through.
Mortgage ins generally only pays if you die and the death is not self-inflicted.
Actually it’s only about .5% and about half of those are second homes and investment properties. The banks and borrowers who made these transactions don’t want to pony up when it all comes due, they want taxpayers to take the hit, so they whine. Squeaky wheel gets the grease.
In the short run, the mortgage holders will suffer losses. In the long run, consumers will bear the costs as the entire industry reacts.
The judges opinion states that they did not demonstrate standing by filing lawful evidence that they were assigned the mortgage. No evidence is no evidence and is not grounds for appeal.
Furthermore, the banks can do one of two things. Find the right entity who has standing in this case - if one actually exists - or pursue an appeal. The latter course may fail because they lack grounds on which to appeal and in the mean time 27 mortgagees get to live "rent free." for a long time while this one wends it way through the courts.
Please put me on your list.
Texas: Bought house 2 years ago on stated income, not one piece of documentation. 30 year fixed at 5.75, 20% down. Original company kept trying to get me into a house that costs more than twice as much. Loan sold 3 times-now with Countrywide. Keep getting calls from them-”they can ‘restructure’ my loan to give me lots of cash and percentage would probably only be 6.25” Also recd form letter from their CEO saying they were good company, etc. Apparently they are trying to counteract all bad publicity. Not sure what would happen to my loan if they go under. Son and daughter-in-law bought great house 3 years ago for $170,000-not uncommon in Houston suburbs-their loan co said they qualified for $800,000 with zero down. They said no, many of their friends said yes - two have lost their homes to foreclosures. Buyer beware!
Without all of these bad loans, I would peg the “real” home loan interest rate at about 2.5%.
My curiosity is focused on why this was in the Federal Court in the first place. Foreclosure on real property is a state law action (like garnishment, levy, repossession, etc.) Why did this attorney lodge this in Federal Court in the first place and have to face the diversity jurisdiction question at all?
We're realtors and loan borkers, and I sadly say, in the years we've been in business we have run across a lot of crooks, with licenses.
[Greenspan?]
May I suggest an appetizer before incarcerating the main course?
http://www.freerepublic.com/focus/f-news/1891779/posts?page=34#34
http://www.freerepublic.com/focus/f-news/1891779/posts?page=36#36
So, those billions and billions of dollars ended up in someones hands, right? Who’s got the money now?
This thread is excellent. Some of the posts have added quite a bit to my understanding of the sub-prime mortgage situation. I am going to venture a couple of additional comments from a rural landowner— remember land ownership law and foreclosure law are meat and drink to anyone involved in modern agriculture.
Remember that the banks and investors in this crisis do not really use the individual mortgage as a significant unit of value or analysis. They write, buy and service loans in bulk. Anything that forces a foreclosure claimant to produce error-free paperwork is going to pose an additional source of risk to the value of their mortgages in foreclosure.
Remember that the banks who wrote the loans have local operations, but the eventual owners of the loan probably do not. This means that such loans will have to be foreclosed on by yet another party in the transaction chain. In effect you or I might set ourselves up in the mortgage foreclsure business. Ordinarily judges vary quite a bit in their diligence in nailing down the legitimacy of every mortage assignment document, every overdue fee, every mortgage collection fee, every foreclusure fee, etc. If this decision leads to more careful examination of the entire document chain, then the value of the mortgage will drop.
For a large mortgage package, the value of foreclosed mortgages is determined by the value that a third party would pay for the opportunity to collect on the entire package of foreclosed mortgages. That value is lessened by the length of the litigation chain that will be required for collection or sale of property. If I can’t sue the homeowner because there is a mortgage assignment problem, I will have to sue the mortgage writer, who will then have to sue the homeowner. If there are several assignments (routine in this crisis) the cost and time of the litigation will overrun the value of the recovered property. In this circumstance, the property will sit, the homeowner will suffer, values will decline, lenders will include these costs in their future loan calculations and the whole thing will be a mess for a long time.
For regional home and land owners— if you are about to have somebody foreclose on you, and you are a solid risk otherwise, and you have friends with resources (usually a local bank)— you can do yourself a lot of good here by negotiating with your mortgage service company, replacing a sub-prime loan with a large principle amount with a sensible mortgage on the discounted principle. Bankruptcy lawyers around here have been helping extended farm families and their banks play this game for years, sometimes with great profit.
Shrewd players are going to profit here. Bank of America used to be North Carolina National Bank until they started buying and operating other banks and thrifts in temporary difficulty.
Don’t forget and/or. A company can do both: take and sell assets/jack up prices to help them recover costs, all the while reducing dividends.
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