Posted on 10/05/2010 7:14:58 AM PDT by Chunga85
BOSTON (MarketWatch) — Some of the country’s biggest mortgage lenders apparently have been bending the law to speed up foreclosures.
Investigations are under way at Bank of America Corp. /quotes/comstock/13*!bac/quotes/nls/bac (BAC 13.32, +0.17, +1.29%) , J.P. Morgan Chase & Co. /quotes/comstock/13*!jpm/quotes/nls/jpm (JPM 39.35, +0.40, +1.03%) and Ally/GMAC for pushing foreclosures with flawed paperwork. All three have frozen many of their foreclosures pending a review. One suspects that others are doing the same.
What does this mean? Here are seven lessons from the latest scandal:
1. The banks are still stupid — OK, not all of them, but a surprising number. Foreclosures actually hurt them. A foreclosure empties a home and helps blight a neighborhood. It drives down property prices and makes it harder to sell the home and the one next door. Yet here are several of the biggest banks actually bending the rules to speed these foreclosures up and make matters worse. It beggars belief.
Remember that throughout the crisis the banks largely have resisted bending the rules to prevent foreclosures — something that might have helped everyone. They have been dragged kicking and screaming into renegotiating any doomed loans, even when there was absolutely no hope of it ever being repaid on the original terms. They have resisted short sales, and fought bitterly with real-estate agents who actually got them an offer. I’ve seen this firsthand. The banks caused the crisis; they barely have missed an opportunity to make it worse.
2. The banks still think they’re above the rest of us. Two years ago they brought the economy to its knees, and took our money to save themselves.
(Excerpt) Read more at marketwatch.com ...
On Oct. 3, 2010, at about 10:00 PM it was made known that a reporter from CNN named Mary Snow expressed a desire to interview a member of ours who happens to be very learned in what's now being called "Foreclosure Gate".
The following day our member complied and was interviewed by the CNN reporter for thirty minutes and informed our member that the piece would air 10/4/2010 at 5:00 PM.
So I dusted off the TV guide and found the long-forgotten channel for CNN.
Hoping to see the piece, I struggled through watching only to find that it was NOT to be aired. In a subsequent email from the "reporter" it was explained that the issue was just "too confusing" for the viewers to understand.
It IS confusing and it was designed that way. Nothing less than the collapse of our entire economy is at stake and the risk of being confused seems worth taking.
I'm admittedly skeptical, but couldn't help but notice the big friendly Wells Fargo commercial on CNN featuring a couple blissfully frolicking on the beach with graphic depictions of their wonderfully performing retirement portfolio danced across the screen.
For those willing to risk becoming "too confused" read the piece below carefully. Can we handle the truth? Our "free press" can't.
CNBC – Will Foreclosures Get Worse? Foreclosuregate – We don’t know who is entitled to the money
Flame Suit On....
bookmark for later
The author of this piece is myopic. He doesn’t get the REAL lesson to be learned about the fast foreclosures.
*Banks want hard assets.*
The smart financial people realize it is only a matter of time before the dollar-based house of cards falls under the pressure of unsustainable debt levels. OF COURSE banks want to foreclose. When hyperinflation comes, they’ll be left holding the bag on all these mortgages when they are paid off with worthless paper.
So, seeing the storm on the horizon, wouldn’t you ALSO be rushing to obtain as many properties as possible from your delinquent debtors?
The true incompetent people are STILL the government. Their debt crisis is going to crash it all down. The banks are just trying to protect themselves while they can. Can’t say I blame a business for taking that tack.
Landmark Decision: Massive Relief for Homeowners and Trouble for the Banks:
A landmark ruling in a recent Kansas Supreme Court case may have given millions of distressed homeowners the legal wedge they need to avoid foreclosure. In Landmark National Bank v. Kesler, 2009 Kan. LEXIS 834, the Kansas Supreme Court held that a nominee company called MERS has no right or standing to bring an action for foreclosure. MERS is an acronym for Mortgage Electronic Registration Systems, a private company that registers mortgages electronically and tracks changes in ownership. The significance of the holding is that if MERS has no standing to foreclose, then nobody has standing to foreclose – on 60 million mortgages.
>>The true incompetent people are STILL the government.
And their various “housing authority” agencies are often first in line for properties - foreclosed and otherwise - produced via the ponzi scheme.
Welcome to McFeudalism.
I agree with this theory and actually thought of it myself a few weeks ago. Why the sudden rush to finally increase foreclosure rates after 2 years? Obviously to get the tangible asset before the price of a couch in a couple of years can pay off the entire mortgage.
snip>
How to get help?
Fighting foreclosure is an option, of course. (To see what consumer activists are saying, read Foreclosure crisis enters new phase.) For that, most people use lawyers, although some lay people are fighting for their homes. Here are resources to help you get started:
* How to get help?
Fighting foreclosure is an option, of course. (To see what consumer activists are saying, read Foreclosure crisis enters new phase.) For that, most people use lawyers, although some lay people are fighting for their homes. Here are resources to help you get started:
* ForeclosureHamlet.org , where homeowners can chat, learn to do research and share what they've found.
* 4closureFraud.org , which is used by foreclosure defense lawyers.
You can, of course, get a lawyer to try to get you off on a technicality. "Lawyers are raising these issues and that's why the banks are backing off. But if you don't have a lawyer, you get a notice that says your property will be auctioned off at such and such a price at such and such a time," says Stuart F. Ebby, a real-estate attorney and principal at the Philadelphia firm of Hangley, Aronchick, Segal & Pudlin.
snip>
“In many cases, the loans are so tangled up in the securitization fiasco that nobody even knows who owns the paper. A hedge fund in Connecticut that has long since shut its doors? A German pension fund? The government of Iceland?”
I think this is the real problem. The lien ownership is a mess because these mortgages were sliced and diced to point they all turned into one great big toxic hash. Hard to renegotiate a lien when a 1000 different people and organizations own a piece of it and they all have to approve the change of terms.
This is not new news. What is new news is that all of a sudden the three biggest banks that received the most TARP money have all of a sudden four weeks before the Rats are about to get tossed out have seen the light and have quit their hardball tactics.
Quite frankly I have no sympathy for the banks and others that made these flawed loans in the first place, and I think it has been detestable that they’ve been bascially filing fradulent foreclosures, but I also resent the fascist arm-twisting under the table by the Obammunists for political gain. Why, I ask you, didn’t the Obammunists take action on this matter, say, 12 months ago instead of now if they were so concerned about the people?
Many angles could be at work here:
Lots of talk on trading desks about this new foreclosure quagmire for banks, where officials at several banks appear to have not read the documents as required by law. More important is the allegation that many are unable to prove they own the note.
Financial traders note that short term this may be a positive by slowing down the foreclosure process: 1) it decreases the amount of supply coming to the market, and 2) it pushes out the potential losses on foreclosure sales allowing the bank to continue to earn through the cycle.
The banks are going to make out one way or the other in this mess. Yet ALL the risk should be on them and those who invested in these mortgage derivatives. They took the risk that if the homeowner defaulted, they would be able to recoup their loss through the foreclosure process. If that's not to be, that loss is (should be) on the risktaker.
the banks and lenders knew this in 2004-05 when they passed bankruptcy reform under the myth of “abuse”. (most consumer bankruptcies were medical based)
The 2005 change in law included significant BANK WRITTEN law which was centered around making it impossible to lower homestead tied debt on the false notion people would never abandon their homes.
Now we have a situation which the banks were not anticipating. Mice that roar.
This is the real nightmare.
I could see someone having bought a foreclosed property with the intent to resell it, being unable to because of the market, then going back to the bank and saying, essentially, you wrongly sold me this property, undo it.
Also since some major title companies (or at least one) have announced they will no longer write title insurance for foreclosures by certain lenders (which will morph into "all lenders"), this is another avenue for attacking completed sales. The buyer could argue that his title insurance, and the underlying title search, was basically flawed or meaningless.
Title insurers are exposed to litigation seeking damages under their “Errors and Ommissions” insurance policies. Gross Negligence.
So, the banks are stupid for attempting to use their contractual means to recoup their investment?
Or for not “bending the rules”?
What part of contractual obligation does the author not understand?
As I understand it, Fannie Mae and Freddie Mac have been two of the biggest advocates for so-called “Rocket Docket” Foreclosures and have been pushing for banks to foreclose as quickly as they could. It makes me very nervous that neither of them have a cap to limit how much money “The Feds” pump into either of them, and how easy it would be for Premier Hussein to announce that Fan/Fred will start buying those nasty mortgages from the banks, and reissue a new mortgage, resized to fit the value of the property and the income of the “homeowner”, with the difference being paid by you and I.
No title for the property?? The Government prints fiat money whenever they need to, so what is to stop Fannie and Freddie from ginning up a brand new “clean” title for that house they just financed??
This is a well lubricated slippery slope we are on here, along with plenty of unintended consequences...
MERS lacked ability to track down the title for the property because the mortgages were registered electronicly and traded on a daily basis like a stock. After a while the manual document system could not keep up and the title literally is lost. There are many homeowners who could not get their current mortgage company involved with MERS to track down the property title. That will become a problem when the homeowner attempts to sell his home and the buyer attempts to get a mortgage to buy the house. It is worst for foreclosed properties or mortgages formerly held by mortgage companies that have closed or involved in fraud. Without clear possession of title, the homeowner and buyer cannot do anything.
So are these people who already have been living in their homes “free” for the past couple of years (after having defaulted) going to end up with “free” houses?
There seems to be no solution here.
“At this point, more homeowners are going to start realizing that a mortgage is simply a contract. It’s a loan secured against a property, not a blood oath. If homeowners stop paying, the banks are free to take the property in fulfillment of the loan. Those are the terms and conditions. The banks knew this from the start; after all, they wrote the terms and conditions.”
Money quote.
all these cases need a “quiet title” action. Once complete, there are no liense and the title is essentially rebooted. The bank does not lose becasue they were paid by the tarp money. WHICH BTW is not being considered in these forclosures.
GASP! Could our government actually be involved?? Say it ain't so!
ABC World News Video – State Official Moonlights as Robo-Signer
Link title should say it all...
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