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Posted on 04/18/2011 3:40:01 AM PDT by Neidermeyer
On March 30, an Alabama judge issued a short, conclusory order that stopped foreclosure on the home of a beleaguered family, and also prevents the same bank in the case from trying to foreclose against that couple, ever again. This may not seem like big news -- but upon review of the underlying documents, the extraordinarily important nature of the decision and the case becomes obvious.
No Securitization, No Foreclosure
The couple involved, the Horaces, took out a predatory mortgage with Encore Credit Corp in November, 2005. Apparently Encore sold their loan to EMC Mortgage Corp, who then tried to securitize it in a Bear Stearns deal. If the securitization had been done properly, in February 2006 the trust created to hold the loans would have acquired the Horace loan. Once the Horaces defaulted, as they did in 2007, the trustee would have been able to foreclose on the Horaces.
And that's why this case is so big: the judge found the securitization of the Horace loan wasn't done properly, so the trustee -- LaSalle National Bank Association, now part of Bank of America (BAC) -- couldn't foreclose. In making that decision, the judge is the first to really address the issue, head-on: If a screwed-up securitization process meant a loan never got securitized, can a bank foreclose under the state versions of the Uniform Commercial Code anyway? This judge says no, finding that since the securitization was busted, the trust didn't have the right to foreclose, period.
If I wanted to ‘sell’ such a clouded entity, I’d just 100 lease it. As in everything else a market would/is develops and they would like any lower rated product be moved at that price. You could also rent it. ( Off the cuff, I’d say half of Latin and South American land is lived, rented, sold without title, and with out courts.
Further, you have to look into the incentives of the courts, lawyers for and against. None have much interest in clearing this. They made money selling, now filing claims, and their brethren defending. Lawyers and judges have to eat too.
The contractual relationship is established by the secondary market, otherwise there is no insurance. All of those that play the buying selling of notes, play by the same rules, how else would the millions of homes that are sold and paid off annually have their paid notes show up and cancelled in a timely manner.
The couple who bought the house, of their own free will took out a mortgage for the purchase of the house. That is a fact not under dispute. They ceased to make timely payments. That is another fact not under dispute.
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SO WHAT , The mortgage does not name the true parties to the agreement , the real lender is not named , the contract is VOID , not VOIDABLE , but VOID AT INCEPTION ... Wait a few weeks or months when journalists actually start to look in the right places and see how corrupt the creators of thse MBS’s were... How it was commonplace to defraud the actual investors by re-using mortgages in multiple MBS’s whenever they were short 50 or 100 million dollars worth of loans..
............easy fix, you just reverse the transaction and let the proper assignor handle the foreclosure, except now the home owner owes all of the attorney legal fees as well.
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What homeowner , knowing that the banks have absolutely no enforcement authority and that they can live unemcumbered in the house FOREVER , will sign new loan docs to cure the banks fraud and encumber themselves?
An MBS issuer who fraudulently listed the name mortgage in more than one securitized pool needs to go to jail.
This does NOT mean that the home buyers who did not pay their mortgage should get the house.
The Horaces are the homeowners and they own the house. They put it up as collateral.
This is why some banks are not just suing on the debt rather than wasting time with the loan.
It is no longer a SECURED debt.
The real issue is in the article. Does the bank get a free house via fraud and lying to the courts OR do the homeowners get a free house by using the same laws the banks have used to bully individuals.
Also remember the banks recieved tarp money for these loans.
If the home values the homes were assessed at were somewhat aligned with the values the homes have and will have for the next twenty years there was no fraud.
I and many others, however have asserted for over a decade now that the assessment system was corrupted - and that eventually the real estate house of cards would collapse.
If, as we have been asserting all this time the real estate values are down and staying down then yes, there absolutely was fraud against the home owners. We aren't prophets and don't have psychic powers - which would be the only way the Banks and appraisors were not defrauding the public against out warnings all these years.
So what is it, Triple?
If home prices don't go back up - or are you going to try to say those of us who were warning America with our little presentations and pictures and charts were psychics?
You don't have a third option.
I do not believe in either party receiving windfall profits.
(1) If the occupants did not pay off the amount of the mortgage they entered into, with the agreed upon interest, then they should not get the house. Period. It should be foreclosed and sold.
(2) If the bank received TARP money to cover the bad loan, then any proceeds from selling the foreclosed house should go to the federal treasury.
You are making a paper work foul up in to something it is not.
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It’s not a “paperwork foulup” It’s organized crime.
It starts with the homeowner tricked by signing a contract that doesn’t name the counterparty ..
The hidden financier/lender thinks they are getting an income stream...
The Wall Street bank that sold the mortgage keeps (on purpose) the note , never actually funds the trust (which they control). They wanted crap loans so they would get a higher rate ... told investors loans were high quality ... In other words they lied to the investors and kept HUGE amounts of their capital ... for example the “trust” may have shown $1B of loans averaging 6.5% but because the investors were unable to see the actual loans they didn’t know they were getting $600M at 8% ... and Lehman or GS or Morgan Stanley sent $400M to their account in the Caymens..
Now with the investment vehicle “broken” they collect on many times the face value in insurance ... THE INVESTORS GET NOTHING ,, SCREWED AGAIN ...
Today we have loans that are documented to have been in a trust but never went there and they are in default .. According to the PSA rules it is IMPOSSIBLE to unscramble the egg as a Trust cannot accept a bad loan ,, especially YEARS after the cutoff date ...
The “banks” (straw man of the wall streeters) are foreclosing through their servicers although they lost NOTHING , have no interest in the loan ...
The real investors that put up money have taken years to maneuver into a position where they can fight back ,, they are there now ... don’t doubt me...
there was no fraud against the homeowner
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Homes aren’t a “want” a place to live is a need ... in my area the monsoon of cash thrown at the market had average 4/2/2 houses that used to sell for $110 going for $300+ , in my area that is approx 7x the average salary ,, WAY OUT OF BOUNDS ... and it was all driven by the fact that a Mexican with no SS or history could walk into a WAMU , claim a 150k salary and buy his cousins house for triple what it was worth and they would split the take and go back to Tijuana. There were no houses to rent back then ,, all the apartments went condo .. and those condo’s have crashed from 250K down to 30k...
We’re not talking about buying the latest tennis shoes or whatever new thing Apple just intro’d ... People really had no choice but to pay up... this went on for 5 years ,, it wasn’t a “blip” you could wait out.
As you live in Virginia I must ask what agency of Obama’s you work for?
How exactly does one teach “real estate” ? Did you teach those seminars for new RE agents? Did you teach RE law? Did you teach what the book says or what actually went on?
Why don’t you ever answer any questions?
Just like being a provacateur?
Do you have anything to add to the discussion or are you limited to simple phraseology and monosylabbic answers?
It’s called a free market, with voluntary buyers and sellers agreeing on a price. The bank does not set the price nor does any appraiser.
When you flood a market with money you bump prices. When you manipulate a market by disregarding all qualifications of the buyer you bump prices ,, if you want a job as an appraiser you give the numbers the bank wants ,, If you need a place to live you pay the price.
This ponzi scheme needed steadily increasing prices ,, and they manufactured them for 6 long years.
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