Posted on 10/12/2010 3:45:12 PM PDT by TigerLikesRooster
Foreclosure Fraud: It's Worse Than You Think
Posted By: Diana Olick | CNBC Real Estate Reporter CNBC.com
| 12 Oct 2010 | 01:14 PM ET
There has been plenty of pontificating over the ramifications of foreclosure freezes on troubled borrowers, foreclosure buyers and the larger housing market, not to mention lawsuits, investor losses and bank write downs. There has been precious little talk of what the real legal issues are behind the robosigning scandal. Yes, you can't/shouldn't sign documents you never read, but that's just the tip of the iceberg. The real issue is ownership of these loans and who has the right to foreclose. By the way, despite various comments from the Obama administration, foreclosures are governed by state law. There is no real federal jurisdiction.
A source of mine pointed me to a recent conference call Citigroup had with investors/clients. It featured Adam Levitin, a Georgetown University Law professor who specializes in, among many other financial regulatory issues, mortgage finance. Levitin says the documentation problems involved in the mortgage mess have the potential "to cloud title on not just foreclosed mortgages but on performing mortgages."
The issues are securitization, modernization and a whole lot of cut corners. Real estate law requires real paper transfer of documents and titles, and a lot of the system went electronic without much regard to that persnickety rule. Mortgages and property titles are transferred several times in the process of a home purchase from originators to securitization sponsors to depositors to trusts. Trustees hold the note (which is the IOU on the mortgage), the mortgage (the security that says the house is collateral) and the assignment of the note and security instrument.
(Excerpt) Read more at cnbc.com ...
Gosh. Like 70% of all mortgages are held by Fannie & Freddie. That would be what,at least a trillion in losses for we,the people,to eat? I’d prefer a solution that wouldn’t involve me and mine owing another 30k apiece.
“Gosh. Like 70% of all mortgages are held by Fannie & Freddie.”
Yes, Wiggen, and it’s going to get worse. Example...I made a cash offer on a Fannie repoed condo the other day. They took a lower offer, because the applicant was a minority with no references. And they financed it. They’re digging us back into the same hole and will keep doing it as long as we keep handing out the money to bail them out. Fannie gives MILLIONS every year to groups like Maldef, LaRaza, Rainbow Push coalition and finances a BUNCH of politicians..on the left and right. All with OUR money.
You can also bond around a lien. Not big liens but small ones such as a lien filed by an unpaid plumber.
99% of the rancor is over technicalities.
I have yet to read where any substantial number of these foreclosures came about when the buyers were not in fact in serious default on their mortgage, over extended periods of time.
So, lets all jump up and down with populist angst against the evil banks, and allow some technicalities to force them to NOT foreclosure on people grossly in default and even though “saving them” now, forestalling the foreclosure now, will not improve their ability to prevent the foreclosure in the end.
Forestalling the inevitable over technicalities, when, in general we need the true bottom of the housing market to be arrived at sooner, not later. The longer the inevitable is forestalled, the longer before a healthy housing market can contribute to recovery.
You get a foreclosure notice.You know that you've made the payments,as set out in the original loan documents,as required...to the address you've been given.You have the original loan documents...you have all the various notices and statements you've been sent...and you have the canceled checks.
You take these documents to the courtroom...the judge examines them...and the foreclosure petition is denied.And rightfully so.
But if you *haven't* been keeping up with the payments or have violated some other important part of the agreement then you're out! Period.And if the entity that's foreclosing might not have the authority,or "standing",to do so then let the entity that does take *them* to court.
You don't pay your mortgage....you're out.OUT!
Even if the Document Fairy comes by in the night, waves her magic wand, and cures all the document problems, the housing market is not going to recover until the oversupply of houses built in the last five years works its way back to equilibrium and enough decent-paying jobs are created for people to have the income necessary to support a house.
That’s years away, at best.
Thank you!!!
I think that is the point. “They” want us to pay for the banks mistakes.
My mortgage is “supposed” to be with Fannie, but the chain of title that they claim my mortgage with is bogus. BofA, which I never had a loan with, “assigned” it to Fannie! So, you and everybody else can pay for my mortgage, if we ever default. Lucky for you, my hubby is employed. We are doing OK. BUT, how many other loans has this happened too JUST TO SAVE THE BANKS!!!
I have been reading so many articles on this I am no longer sure where I saw this, maybe MarketTicker, or in a thread here at FR, but the main point of the comment was ALL OF THIS IS TO SAVE THE BANKS.
In fact, I was just at ZeroHedge, and there is a thread there that you can “send” a letter to the banks about your mortgage. Guess who is one of the supporters? SEIU!!!!
This will pass you thought the SEIU’s link( action. org) http://www.zerohedge.com/article/here-your-chance-check-if-you-are-victim-mortgage-fraud
But, I saw another site that was much more “real” than SEIU’s bogus site: http://www.consumerwarningnetwork.com/2009/03/05/how-to-use-produce-the-note-in-non-judicial-foreclosure-states
The second link is real help for people.
NOW, SEIU is trying to whip people up. But to what end?
The solution is so simple it is staring you in the face and you don't even see it. Just have the taxpayers bail out the financial system. Then everyone wins! Right?
Thats why bankers get bonuses I guess
RULE OF LAW .... anarchy .... pick one.
That’s the most depressing thing I’ve read in a very long time...*SIGH*
We really are screwed. It seems that we’re just waiting to see how bad it really is!
Come November, I hope our new Congress will be filled with the spirit to bring all of these outrageous scandals and The On-going Rape of the American People to light...
*Crickets Chirping*
*SIGH*
Fascinating. Thanks to all posters. (I’ve been following this story mostly at zerohedge)
BTW, record bonuses for the financial industry this year.
What nerve.
What insanity.
Right now it works for me....... their chickens are coming home to roost......
It appears that MERS is an electronic county courthouse for the entire country, supposedly. Sans filing fee.
Can the county courthouse foreclose on a delinquent borrower? Hardly. It is just a data center.
I read the
TWO FACES: DEMYSTIFYING THE MORTGAGE ELECTRONIC REGISTRATION SYSTEMS LAND TITLE THEORY (pdf) One click download, fascinating. Thanx for the source.
yitbos
I have hard and unpleasant news for those who think that a GOP congress would do something about this:
They won’t.
The GOP leadership is completely in the pockets of the banks. The GOP leadership is either gullible enough, or stupid enough, to believe (at face value) everything the banks say.
Yea, like fraudulent affidavits, notary fraud, failure to produce evidence of right to foreclose.... you know, little technicalities.
BTW... just in case you persist in thinking that these are mere paperwork errors: In most states, filing a fraudulent affidavit is at the very least a gross misdemeanor and for a lawyer it is a felony. In states like Nevada, where I’m most familiar with the law, it is a Class D felony (1 to 3 years) first offense.
A substantial number (as in 10’s of thousands) of these foreclosure proceedings are based upon fraudulent documents. Then there is notary fraud, process service fraud, and we haven’t talked yet about the issues of failures to record conveyance in many states.
A judicial action of foreclosure based upon fraud can be vacated upon appeal. The case law is pretty clear on this one. Get a court to do your bidding based upon fraudulent information... and the courts don’t like looking like your patsies. First they undo what you conned them into doing, then they make you pay for the other guy’s lawyer. Then they start talking about whether or not they bring a case against you for fraud.
The best course the banks have is to stop submitting fraudulent documents, produce REAL documents so they can foreclose and have it stick. Because the fastest, best way to award a house “free and clear” of all future claims is to perpetrate a fraud upon the court by submitting fraudulent affidavits, have the case vacated upon appeal, and then the judge will probably toss in that the bankers have to pay the legal fees of the deadbeats.
Even if the deadbeat(s) don’t appeal, a foreclosure based upon phony docs will likely not have a quiet title. It will cost future buyers of the property a tidy bit in legal fees to clean up the docs and get the title quieted.
The paperwork needs to be cleaned up to make foreclosures successful and the properties ready for sale when it is all done.
TWO FACES: DEMYSTIFYING THE MORTGAGE ELECTRONIC REGISTRATION SYSTEMS LAND TITLE THEORY (pdf)
One click download, fascinating.
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