People spouting your line - ie, “don’t know of any such cases” - it is because you’ve all been wandering around, deliberately ignorant. You haven’t seen the cases because you don’t want to pay attention.
So pay attention.
I’ll give you just two cases of foreclosure on paid-off properties.
In the first case, we have a man who bought a house that had previously been foreclosed. He paid CASH. Got that? There was NO mortgage on the property. He paid CASH.
Yet, guess what he gets? Foreclosed and the property sold.
http://www.sun-sentinel.com/business/fl-wrongful-foreclosure-0922-20100921,0,36776.story
Second case of foreclosure on a paid-off house, out of Arizona:
http://www.kvoa.com/news/bank-admits-mistake-on-willcox-home-foreclosure/
Here’s their legal complaint:
http://www.scribd.com/doc/37804326/Newman-v-Bank-of-America-N-A-Complaint
As you can see, BofA can’t find their ass with either or both hands. They have no clue what their doing with that property. Part of BofA wants to foreclose, the other part wants to assist. Neither can seem to get the clue that BofA has no interest in the property, nor any claim.
Next case: Another Florida case, this time a house going into foreclosure. The deadbeat is fighting it in court, as is their right. During this contest in court, the judge discovers that there is a second foreclosure claim being put forward in another court in Florida. Same bank, different law firm, same amount, different court.
Foreclosure claim #1:
http://www.scribd.com/doc/30586881/Note-One-See-4closurefraud-org-for-Details
Foreclosure claim #2:
http://www.scribd.com/doc/30586720/Note-Two-See-4closurefraud-org-for-Details
Both of these are for the same lender, but they’re being brought by different law firms for said lender (JP Morgan).
If the timeframes were slightly different, and one foreclosure succeeded and the property was sold while the other foreclosure action hung fire, you’d get a repeat of the case where a guy paid cash and then gets a foreclosure notice.
So-called “conservatives” who keep harping on the deadbeat, here’s a bit of advice:
Try and think just a little further than the possibility of someone getting a free house. Y’all have your veins standing up on your necks, thinking about the possibility of some deadbeat getting away with a free house by legal connivance. Get over yourselves. That’s the LEAST of our problems right now.
Think about the consequences of hundreds of thousands of compromised titles, or buyers buying property without title insurance as the title insurers back away from this mess. Old Republic has already refused to write new policies on foreclosures by GMAC/Ally as of two weeks ago.
THAT is the biggest issue I see going forward. That’s an example of what happens when the paperwork has been so completely bungled that the banks cannot issue a quiet title on a property. If there is a real possibility of non-quiet title, investors back the hell away from foreclosed properties in a hurry. All it takes is a legal dispute over the claims to the property, or some lender comes forward with a claim of an unpaid debt attached to the property, and an investor can go into the tank hiring lawyers to get this crap straightened out.
The reason why the banks are doing this is because they’re trying to save their own skins. They know they didn’t property assign the paperwork on properties. They know (quietly, amongst themselves) that they’ve in effect turned a whole bunch of asset-backed securities into unsecured debt... and as soon as the lawyers representing the buyers of said now-unsecured debt get traction, the banks are going to have to take back truckloads of that compromised debt. This will sink their books. They can’t afford to take back that paper. And there’s some very powerful forces out there on the other end of this now-unsecured paper: Fannie/Freddie (ie, Uncle Sam) and the Federal Reserve.
If the Fed decides that there’s losses in the $1.2 Trillion of residential mortgage backed securities that are now on the Fed’s balance sheet that are the result of shoddy paperwork, do we think that the Fed is going to put up with it?
Heh. Heh.
No.
If the Fed wants, they can bring forces to bear on an offending bank that Uncle Sugar can only dream of. The Fed will get their way.
Hence the pell-mell rush to ram these foreclosures through.
Well, too bad, so sad, the jig is now up. The turds are hitting the turbine blades, and the result isn’t pretty.
My point is that while anecdotal examples of a few instances where the “paper work questions” have wrongfully, in financial terms, attempted to foreclose on properties, I continue to see no evidence, in their numbers, that they DO constitute the exception, not the VAST majority; that I do expect will - the majority, at the end of the day, prove to be fully justified, on financial terms and their paperwork issues cleared up.
Due diligence by the regulators and the industry WILL clear up the paperwork issues, and when all is said and done the VAST MAJORITY of these houses that are now in question due to the paperwork issues, will either still, or again, been in foreclosure.
Clearing up the paperwork is not, to me, the bigger problem (BECAUSE IT IS SOLVABLE), which is instead, the time, the delays in settling all these foreclosures, to get to the bottom of the fall-out of the burst housing-bubble sooner rather than later.