Foreclosuregate is About to Explode

Black Listed News ^ | 10/11/2010 | Michael Snyder

[JTHomes]

I’m not talking about walking out on 2 years of car payments. I know people living in modest homes with 20 years left on the mortgage who’s property value has declined by 70%, putting them 100K under water. The market is not coming back to fix that type of problem. Better to walk away, the bank gets the house back, and start over. The bank puts the recourse in the mortgage contract specifically for that scenario. They entered the contract as willingly as the buyer, and share the risk. I don’t know why some people come down so hard on folks who make a rational decision to walk away. I’m current on my mortgage right now, and I like my house, but with my neighborhood in decline, and being far underwater, my only way out is to walk away. It may tip that way before long.

[SeattleBruce]

“The point is that he owes you money and is using legal means to screw you. Sadly this happens every day in America. If it was happening to YOU PERSONALLY, you would be pissed.”

In a very real sense this is happening to ALL of us PERSONALLY, as these private debts have become public obligations (through TARP and otherwise), and the slide in house values, the debacle in the housing market, et al. That is why those who bought too much house, the politicians that greased the skids at Fannie, Freddie, Countrywide, WAMU, et al, and those that approved those risky loans, are NOT innocent.

I don’t know how this all needs to unwind, but it sure aint with *most* people who are worthy of foreclosing getting out of foreclosing just because.

The legalities of all this are certainly also important and those legal institutions that have been cutting corners may just end up holding the bag on some portion of these foreclosures, but leave it up to lawyers who smell ‘blood in the water’ to remove any semblence of accountablity even more from the situation, than has already occured with the mortgage derivatives.

There certainly are few heroes in this situation that has saddled our children with irresponsible people’s debt.

[ex-Texan]

Members of Congress are traitorous elitist bastards. They are also greedy and lazy. HR 3808 passed both houses of Congress without hardly any dissent. These traitors just nod their lazy heads like those little toy dogs we all see in the back of Mexican low riding cars. IMPO — all of them should be voted out of office.

[bolobaby]

That’s the most sensible response I’ve received thus far.

[JTHomes]

Well, unfortunately nationalization may be the response if these banks who failed to properly keep track of their title are once again bailed out. I say the proper response is for them to FAIL. Title holders who can prove they own the property can and should have the title or recourse specified in the agreements. Businesses who were are badly run as Citi, Countrywide, BoA, Wachovia, etc, should go out of business for their failures and fraud. If socialists like Obama use that as an excuse to march toward marxism, that is the consequence of electing tyrants.

[NVDave]

When lawyers submit false affidavits to a court of law, that’s called “fraud upon the court.” Lawyers are officers of the court.

A non-lawyer lying to a court is mere perjury.

In a judicial decision that relied upon facts in evidence by way of a fraudulent affidavit (as happens in judicial foreclosures), the case law shows that a judicial decision based upon a fraud upon the court may be vacated. ie, the lender’s foreclosure action against the borrower in court can be vacated. It doesn’t have to be appealed when the bankers seize the house. The appeal could come after someone else has bought the foreclosed house.

Future buyers of the property are buying a legal land mine, in effect.

Now, since judges are notorious for getting pissed off when people LIE to them, some judges have taken to:

1. Dismissing the foreclosure complaint with prejudice (meaning that it cannot be brought again) and
2. Awarding legal fees to the defendant, even if they were represented pro bono.

Moral of the story: Don’t lie to a judge. I’ve always found this to be sound policy when in court. The bankers don’t seem to have learned this policy in their experience. They think that just because someone owes them money gives them a free pass to get rubber-stamp approval from judges.

Want to prevail in court? Tell the truth. Don’t file fraudulent affidavits.

That’s all the bankers have to do. Very simple stuff, that.

Telling the truth, however, is deadly to their business model.

[Blood of Tyrants]

Then it is definitely time to stock up on food (6 months worth per person of non-perishables) and ammo (minimum 1000 rounds per firearm).

[longtermmemmory]

you can’t be a squatter in a house that you own.

people forget, the borrower owns the house. It just has a lien as collateral.

[Joe Miner]

Under normal circumstances you are correct. If you didn't read the link in my previous reply, here is how they can generate profits :

different-direction-foreclosure-mess

[A Navy Vet]

"Because that’s what going to happen if people realize nobody can foreclose, which will then lead to the nationalizing of all banks, and all capital."

Yup, that is probably what will happen under our new obambi socialist Fedgov. However, if I had a mortgage today I couldn't afford (even with a responsible down payment) and the holder of my title decided to foreclose, I would also ask for the appropriate paperwork (not computer files) to know who actually owns my loan.

The property payees have a right to know who owns their mortgage, whether they qualified for the loan or not, according to traditional standards.

This is going to go on for years! I knew I should have been a lawyer. Forget the day time ads for Mesothelioma. I can foresee the ads for millions of foreclosure "victims". Then again, maybe I should have gotten into advertising just for the coming flood for the ambulance chasers.

TV ad: "Hello, my name is Hairy Porker. Are you in foreclosure on your home? Have you been told to leave your home due to unforeseen financial difficulties? Is so, we understand and are here to help. We will fight for you. Your property rights are our concern. Call 555-bsbs now!

[Freak Flag]

In a couple months inflation will kick in HARD, the banks have stopped selling forclosures, they will then own all of those homes . Those foreclosed properties are hard assets that will retain value .

[RobRoy]

What is interesting is that this is so easy to predict, but my emotional mind just thinks I’m being crazy. Yet most of my (yes, my PERSONAL) predictions from before Obama’s election came true, some even worse than I expected - and I thought I was over the top at the time.

Maybe it is because I don’t have TV and am not constantly inundated with the same irrelevant stuff. I found out about the avian flu epidemic AFTER it “didn’t happen”. I found out about the swine flu just as it was starting to “not happen”.

Meanwhile, I thought and wrote, back in 2008, that this could get as bad or worse than the Great Depression and even reading my own words at the time I had a hard time believing it could really get that bad.

Now I have virtually NO doubt that it will be worse. And it will be international. And it may just be Ezekiel 39, Revelation, and all the rest.

IOW, this really may be “it”.

[Dan Cooper]

The problem here is in the origination of the mortgages. These mortgages were being given out like candy to fill the orders for Mortgage Backed Securities. The demand for MBS was so great that they were being sold money before there were mortgages to bundle. I'm trying to find the reference for this part of the story, but I read it in the last few weeks. Essentially, a pension fund or other buyer would approach Goldman-Sachs or whoever and want to buy $100 million worth of MBS at a certain interest rate or coupon. GS would then say, "Sure, we can sell you that, no problem", then take their money and send it down the line to create the mortgages to fill out the securities bundle (after taking their fee). Mortgage brokers had all this money to lend (adding to their fees) and came up with all sorts of creative ways to do so. All this money was driving a bubble in housing prices, which led people to believe that their house value would only go up. So many people took out ridiculous loans that they couldn't afford or hope to pay off eventually, which mortgage lenders where happy to make since it wasn't their money. The borrowers thought that they could always refinance at some future date after their house gained some paper equity.

The volume of the loans, and their nebulous final status of ownership (who holds the deed in trust? The MBS owner?) meant that there was extreme looseness, nay, even criminal sloppiness in the handling of the origination paperwork. After all, these loans were going to be refinanced long before anyone needed to look at the details.

Boom! The recession hits with a hike in oil prices in 2007. People who are barely making their mortgage payment start defaulting, drying up the MBS interest payments enough to scare off future buyers and, more interestingly, triggering credit default swap payments that insured the aforementioned MBS. Long story short, the bubble bursts.

Now that the banks are trying to recoup (in order to stave off their own bankruptcy) these properties through foreclosure they are finding the things aren't going so smooth. The paperwork is missing and they can't quite establish that they have standing to foreclose. They forge ahead anyway.

Sorry for the pedantic outburst, I really wanted to get it down to establish for myself what I think is going on. I don't think that people who defaulted on their loan should get a free house, they too are culpable. The mega banks that are up to their necks in this mess should taken over and dealt with like any normal bank that goes into receivership. They are bankrupt right now and no public money should be used to help them or special legislation passed to haul them out of the fire. Stupid and greedy should hurt.

[A Navy Vet]

Sorry, but you owe. You signed a contract. There has never been a guarantee that your property would appreciate or depreciate. Real estate is like any other investment - a roll of the dice, according to the macro-economics of a given time.

Still, I'm sorry your having such troubles. I blame it all on the Fedgov and their insistence that banks and other lenders give loans to the unqualified which caused the RE feeding frenzy which crashed the RE market which crashed the stock market which crash many economies around the World. Best of luck to you, sincerely.

BTW, if you can hang in there, property values will eventually increase - they're not making more land and the US population is increasing.

[TruthConquers]

I just saw your post, and I have no idea if anyone has posted this to you:

http://www.zerohedge.com/article/gonzalo-lira-coming-middle-class-anarchy

It about a couple who tried to have their loan modified, then when the didn’t “qualify” were charged late fees!!!

This is a scam. I wish I knew what to tell you what to do.

We got a letter telling us Fannie owns our mortgage from a bank that never had our mortgage!!!! In our state this has to be done with “assignments”. Well, the county recorder has NO assignments, ever!!!

Things are screwed up, and it is NOT “just the deadbeats.”

[Kartographer]

“We got a letter telling us Fannie owns our mortgage from a bank that never had our mortgage!!!! In our state this has to be done with “assignments”. Well, the county recorder has NO assignments, ever!!!”

It’s clear to me you are a ‘dead beat’ so what if the county recorder has no assignment that’s just a technicality that you are hiding behind! The bank is always right and if they have to use forged and back dated documents and perjury that’s OK as long as they get ‘dead beats’ like you out!

[TennesseeProfessor]

Do you have a list of deadbeats in your area? I’d love to foreclose on them and get a nice home I can rent out.

Of course, I can’t prove that I have title to their homes or authority to foreclose, but neither can the banks.

[netmilsmom]

>>I don’t know why some people come down so hard on folks who make a rational decision to walk away. <<

That rational decision is stealing. And because people have done this and flooded the market with foreclosed homes, MY HOUSE is worth less. Nice.

Have you ever taken an economics class?

[mewzilla]

Don’t forget gubernatorial candidate Andy Cuomo. I hope NYS voters demand to know what Cuomo knew and when he knew it....

[Kartographer]

Hey that’s an idea we could forge the securities then the liens/assignments and presto we be in like flint. We might have to ‘hire’ a retired Judge or two and a few arm breakers to clear out the ‘riff-raft’ but that shouldn’t eat into the cost much.