Any banker who sells property to which they do not actually own title to the deed, should lose the value of the entire house in a court settlement.
That seems fair to me.
The banker never held the title. And the banker didn’t sell the “property.”
The home purchaser holds title — usually a warranty deed. The bank paid for the house, by lending money to the home purchaser. The bank usually holds a note and a trust deed. But the trust deed is not “title,” it is a lien that can be recorded.
In order to spread the risk of all the crappy loans that bankers have been forced to write under the Community Reinvestment Act, they began bundling the loans — some bad, some good — and selling and reselling them en masse. So the original hard copies of the paperwork have not always followed the ownership of the loan.
The purpose of the foreclosure proceeding is to obtain title, which resides in the home purchaser who has not made a payment for many, many months. The foreclosure also clears away any subordinate liens, like the second and third mortgages that some people took out, which are now, in all likehood, worthless.
By the time it gets to foreclosure, the only person who clearly has no right to the house is the person sitting in it, not paying back the bank that advanced the money for the purchase. The business over who holds the loan paper doesn’t really affect the home purchaser. It might mean (but probably not) that two banks will end up fighting each other, but that’s all. But, some lawyers have exploited this to allow deadbeats to remain in homes they are not paying for.
There has been no attempt to “defraud” the homeowners.
“Any banker who sells property to which they do not actually own title to the deed, should lose the value of the entire house in a court settlement.”
But, then, under your logic, the title should revert to the person who originally held the valid title, NOT the mortgagee.
So the bank gets screwed, the buyer gets screwed, and the “seller” walks away with the money?
I’ve got a neat idea. Why don’t we work this out WITHOUT all the effing lawyers, old west style.
Sheriff: Martin, did you intend to sell this house to Gordo?
Martin: Ayep.
Sheriff: Gordo, did you intend to buy this house from Martin?
Gordo: Sure did, Sheriff.
Sheriff: And did you borrow the money from Nialls the banker to do so?
Gordo: Sure did, Sheriff.
Sheriff: Nialls, did you lend Gordo the money and he agreed to repay?
Nialls: Yes sir, Sheriff.
Sheriff: Fine. Gordo, pay Nialls the money or I’ll throw you in the blasted jail.