Tweet
Banksters have been cheating people on foreclosures for months, maybe years. David Axelrod says he’s just sure the Banksters will correct this aberration, and the White House is working closely with them on this important project. Axelrod expects them to “reconstruct their paperwork” quickly, and get back to the important business of evicting people from their homes.
No doubt he speaks for the boys on the White House economics team, Geithner, Summers and Bernanke, when he says the administration doesn’t support a national moratorium on foreclosures.
I get a sinking feeling hearing that the White House is encouraging a bunch of liars and cheats to “reconstruct” paperwork. I thought that was the big problem: banksters and their hired guns are making up documents and lying in affidavits and directly to courts, not to mention stonewalling customers while extracting their last few dollars in the vain hope of a mortgage modification.
Perhaps this will fire up Obama’s Wall Street buddies for this election, but they don’t have enough votes to overcome those of newly homeless people.
136 Comments
Sounds like somebody’d better make Axelrod walk back those comments, especially now that their scapegoat firewall Rahm is gone.
If this is a trial balloon, it’s a really stinky one.
These guys sure have a knack for firing up the base, don’t they?
tweeted, recommended, and facebooked.
For further firing up, see this:
You’re killin’ me!
Gotta take a deep breath here.
I knew this was coming. No matter what, he was gonna move further to the right. All we hear 24/7 is how Americans are so fed up about spending,(other than the corporate tool Teabaggers I believe it’s total BS), they’re setting people up for major austerity moves and more corporate friendly bail outs.
Obama is a really bad person. It’s just incredible.
I am now certain he’s gonna dismantle SS, and take cover by pointing to The Republican majority that he’s making sure will happen.
Their frantic response to claw some cash their way after Citizen’s United.
Who was that Right wing group that brought the original case to SCOTUS? Freedom Works? How did political party money that funded a movie trashing Hillary beget fascism?
Oh, that’s right. The court decided to expand the decision on their own, something nearly unprecedented.
I smell a den of goosestepping rats.
Here is the trailer for latest movie from Citizens United. Horrid.
Ugh, the images were a discusting, racist, load of garbage.
But the script was typical hate your neighbor who can’t feed his kids theme they’ve used for decades.
Considering the Dems are on the same side they are now, they gotta hype up the divide and conquer distraction with some race baiting.
If you look at the image on the homepage that is behind the trailer try to find a figure of a woman anywhere. I think I saw a few in the distance. These people are pigs in many ways.(apology to actual pigs)
Hate filled monsters who would step over their dying grandmother if they had something to gain.
Aww, crap. The right phrase would be “submit the PROPER paperwork” not “reconstruct.”
All that means is to create a new MERS filter of some sort, and get moving.
The only counter to this if for Title Insurers to go “Nope – nada. Not going along with this, it’s our ass on the line.”
Unfortunately not really a surprise.
This might be an effort to get out in front on this story.
Perhaps this Reuters story suggests the reason for the sudden denial of a problem.
“Pressure intensifies on mortgage lenders”
Link to full story at Reuters
A bipartisan effort by at least 2/3 of State Attorney Generals- to find out what is going on…with foreclosure documentation and fraud.. can’t have that. To be subject of an announcement on Tuesday..
Too Big To Fail = Too Big To Prosecute?
Too Big To Fail = Too Big To Investigate?- Stay tuned: to be answered perhaps as early as this week.
Change we can believe in? Oh yea.
IN REPLY to Kelly Canfield @ 11
Functionally, the taxpayer is probably already the insurer of last resort.
As previous financial fixes show, there is no need for this to be discussed prior to the transfer of the government funds to the commercial enterprise that needs to be propped up.
At this point the argument is about who the designated beneficiary of the policy is. Homeowners?, taxpayers?; thousands of lobbyists with hundreds of millions of dollars to spend are at the front of the line waving the money.
yes ! oldnslow is all over the subject of Title Insurance
‘extend and pretend’ seems to be the go-to m.o. for this WH – sounds to me like they’re attempting it again here
good effing luck ‘reconstructing’ that gaping hole in your hull, Captain
This broken chain of title thing is poised to kill off the banksters. The government will have to intervene. They can again rescue the banks or nationalize the banks. But I’m guessing they will find a way to legalize the fraud.
How? Without fraudulent actions?
There’s 2 very interesting areas of Title search and insurance that can provide clues as to how this all might work out.
-Louisiana, with the Napoleonic aspects (it’s bizarre compared to the rest of the country, as you must have an agent perform a search back to the Louisiana Purchase)
- New Mexico/So. Colorado, the Baca Land Grant
It is also poised to kill the Title Insurance companies, and destroy the foundation of property rights.
The people buying foreclosed homes now appear to have defective title. The people who suffered foreclosure have competing rights, and both parties are innocent of title manipulation, yet both have rights.
Going to pass a bill that changes property rights in the past, with almost unique processes in ever state? Without screwing a completely new class of people? How?
These MOTUs who caused this will now fix it – right! They’re stumbling from one disaster to the next hoping for a miracle.
As for a foreclosure moratorium, its not possible. The moratorium will not be lifted for many years, and given 10 years of uncertainty, the number of strategic defaults (aka: Fuck off and die from consumers to lenders) will probably be astronomic.
The past homeowners will sue, the new homeowners will sue, the bond holders will sue, and the Banks will what? Demand sovereign immunity under the state secrets privilege?
Hang on here. There’s only a “moratorium” because they aren’t producing THE CORRECT PAPERWORK, you know, who owns the deed and who owns the note.
Until all the notes are “un-tranched” from their specific CDO, this problem will continue to exist, and THAT is the reason TARP was a bad deal.
The fuckers gotta prove which investor owns what and split the losses accordingly.
The. End.
thanks for the links, will take a peek
Even if the banks are nationalized (my preference) the title problem will remain. New law will be needed to mend titles that are now broken. A new agency perhaps, to do arbitration and whose decisions have force of law? I dunno. But I’m thinking the home owners and tax payers will pay the bill.
I totally agree.
F*ck… What a shitty-ass comb-over by Axelrod, and, I’m not referring to his poor-ass hairdo…! *gah*
Go Back and reconstruct Cheney Admin War crimes? No Way. Look Forward. Not back.
Go Back and desconstruct Predatory Lending Practices and Credit Default Swaps? Collateralized Debt Obligations? Nope. Go Forward. Move Ahead.
Quantitative Easing For Banksters? You betcha. Try To Detect it.
Now Go Back and Reconstruct the paperwork and get these Jobless No Pays out on their asses. Its not to late.
This is gonna play real well on Main Street. So whip it. Whip It Good.
That bill that obama recently left unsigned apparently would have not been a cure-all for the banksters’ foreclosure “issues”. The oval office is on record that they had “concerns” about the bill and that’s the reason obama didn’t sign off on it.
Prediction:
After the mid-terms, of course, they’ll revisit those “concerns” and work with the banksters and their cohorts in congress to craft a bill that will retroctively take care of all the banksters’ worries.
You really can’t be too cynical in regards to these scumbags.
Z
That’s right. And the Bush Tax Cuts? That’s also a lock.
Not sure that it matters what Ax and the rest of the current crop of White House Straussians want. Foreclosures, I believe are a matter for individual States. 40 AGs in a bipartisan fashion are out to screw their hopes and dreams.
Fuckers!
Right alongside all the Catfood Commission’s recommendations…! We’re sooo screwed…! 8-(
Hello? Hello? Hello?
Anyone still think Obama is a Democrat?
Democrats how does it feel to be Con By Obama?
Obama is not seeking to run with Hillary in 2012, Obama wants to run with Sarah Palin in 2012.
Obama Palin 2012 tea party ticket
Deep throated bipartisanship, a nation united in perpetual debt peonage.
David Axelrod says the administration “hopes” X, Y and Z will happen and things will improve. Yeah, that seems consistent with their method of operation to a T.
They didn’t have a relationship with business already?
You could have fooled me: it’s looked, for the last 18 months, like they were in bed with business, or at least Wall Street and the insurance companies.
They sure aren’t paying attention to actual voters.
Which Republican AGs are on your list? Please provide a link.
And yes, property contract matters are a province of the individual State; but, the wrinkle is the individual State is going to have a little problem compelling via subpoena the CDO tranch that the mortgage note/deed is subject to; because that AG cannot know who to compel!
More to the point, that AG would have to be wont to do so, on behalf of the foreclosed persons. How is that situation going to arise?
This stinks of more of this President trying to distance himself from the left and in some insane way appeal to the middle. These people are clueless. Even the middle thinks forclosures need to be halted until this crap can be figured out. Who the hell is advising this White House and why the hell haven’t they been fired yet. If its Axelrod, he just showed the left he should be the next person to go, and tomorrow won’t be soon enough.
you have FB mail :D
They’d probably be urging their grandmother to die a little faster.
For those crazy judicial states, this thing is a state law issue. The Federal stuff is just taking heads.
The banks simply created “processes” that they carried out to summarily circumvent state laws. If states don’t care (I think the AG’s are supposed to be attending to this), then so be it. We then have a new hidden amendment to the constitution… ‘Banks can make up whatever unwritten laws they think are best for them under the proviso that what is best for them is best for the whole economy.’
When in the world will the state judicial systems realize how they’ve been gamed. Good grief judges, wake up!!
Heh – SEE!?! I’m a bit nuts, but I ain’t stupid.
The most politically unsavy and tone deaf WH in decades. These “smart guys” are UNBELIEVABLY STUPID!
They cannot put the genie back in the bottle. It has jumped the fence and is now spreading into hundreds of courtrooms. Most importantly it is now the owners of the mortgage backed securities who are going after their creators, the US banking giants. The foreclosure dust up over some dodgy sworn documents is a sideshow.
Axelrod may or may not know it but this is now out of the hands of a few people winking and nodding and having their way, extending and pretending.
Private label mortgage backed securities were born of fraud, of mortgages written in fraud, the MBS sold in fraud and they are not going to live on without their promoters going down. The courts will find against them in thousands of cases or by the time the do the big banks are going down.
Dinner beckons. out.
I think it has been said here. The banksters have to fix the freaking thing or they will never get paid or foreclose or be able to sell anything. Who in heaven’s name is going to buy a piece of property without clear title? And how in hell are the banks going to prove that? This mess could keep the housing market in the shits for a long time to come, no help from the government. Now where in hell is that CDO I had laying around here?
Fuck Obaxelrod. It is in the hands of the class action lawyers now, and they don’t need no steenking white house. Fraudulent paper – or missing paper – will speak for itself. No West Wing/Fed spin can change that.
Win!
Chow, Caio…! ;-)
They did have a relationship – now they’re going to let business come in their mouths.
I’m making an instinctive guess. It’s the cover up that will start the ball rolling. A lot of very wealthy and connected people did and continue going bankrupt. This ship will leak into, I hope an eye popping eureka moment for the wage earners. I hope.
Shit this could require another TARP to bail out the banksters a second time, ya think?
they’re supposed to be the big swingin’ dicks of messaging
and less than a month before a mid term, a major white house figure takes the side of the Banksters (the guys polling lower than open running sores) on national tv
the smart kids say it aint necessary because FinReg allowed a backdoor straight to the Fed – no more pesky and demeaning requests to Congress …
but as you can see from the some of the comments in this thread – even that isn’t going to stop this runaway train
That they are, eh…? ;-)
Maybe they are hoping to go back to the days when only the landed gentry had the vote.
Hi masaccio!
I’m going to guess that the Banksters are going to retreat and retrench around an ‘un-winding fee’ settlement fund – patterned after the French Bank fine to the hapless trader last week – which was something like $6.8B, almost all of it an ‘un-wind fee.’
They’re going to say that *all* the paperwork really is there – that they can reverse-engineer the shredder they used to slice-up the mortgages in the first place – even though it’s a really expensive process to do – hence the Big Settlement Fund – and according to them, that’ll square the system back up, in oh maybe 90 days, so that the foreclosures can then go on!
…while they try to avoid further scrutiny.
Obama’s opening up a lot of room to his left, and things are going to get plenty worse over the next six to nine months. These are strange times, and if I were an ambitious state AG, I might start having some late-night conversations with close friends.
With this appalling lack of leadership from the White House on this, here’s something. How does this impact current mortages/house sales? If the foreclosure business is in such disarray, this will probably spill over into existing home sales as well. With no standards, this is a recipe for chaos.
Glad I sold back in 2006, and I still have the paperwork saying my condo has been paid off. Just in case…..
some guy I’ve been reading has a whole ‘nother take on that
Maybe or not. this thing could become a runaway freight train. I don’t know how they unwind any of this shit, even the good mortgages. We may be looking at just the tip of another monster. So much may depend on how good their record keeping is and from what we hear so far, it is not.
What I am suggesting is it is just possible (hope not) the banksters have lost all control over this and then that scenario you spelled out becomes possible.
And the guy is who?
There’s quite a bit of this ‘nother take around here as well.
anecdotally, folks who have been following this story since 07 and possibly longer are saying the Banksters have lost control, it has it’s own unstoppable momentum
I don’t necessarily agree with the outcome expressed at 55 above, frankly I don’t know where it’s headed, but I am convinced the Banksters are no longer driving the bus. they and their WH pets may attempt various modes of bus jacking, but the story is out there and gathering steam beyond their reach
I can see what you’re saying – it could easily turn into a runaway.
I think we’ll see a firebreak built that has the purpose of issuing clear titles and adjusted fair-rate mortgages in hopes of breaking the fall.
We need something drastic, clean and simple that keeps people in their homes, with a real jobs program to pay those mortgages – a New Deal that makes home owners feel like their home is once again their piggy bank for the future.
No half measures will do, I agree with you – they need to go for broke and restore the dream.
Teddy Partridge is upstairs!
Sunday Late Night: It Gets Better, but it Better Get Better Soon.
Perhaps I’m dense, but could you point out the “race baiting” in the Citizens United trailer?
Kelly
It’s not that simple. The Note is served from the collateral (the property). A huge majority of mortgage debt is unsecured. People will realize there is no penalty, foreclosure, to stopping paying their mortgage. Aka: Massive strategic default.
To avoid this, Two sets of people have to agree:
The Borrowers and
The Bond holders.
How do they have a dialog? Who’s going to arbitrate, mediate and pass judgment? If it is judged that there is no collateral for many mortgages (the property cannot be foreclosed), who will pay the losses?
his name is Karl Denninger, was introduced to him via Dylan Ratigan. he’s been on the foreclosure fraud story since at least late 06.
he is presently advising Congressman Alan Grayson.
as I told Kelly, it it tough for me to get my hands around all of this story, so I’m not completely sure he’s right all the time. But it’s clear in the Ratigan appearance that Ratigan concurs and he didn’t invite him on for the sake of ‘balance’
that said, here is the link for that quote above
and one more time, has Elizabeth Warren chewed through the restraints yet ?
Whatever problem we think exists, it apparently has not reached the equity markets yet. I wonder what would happen if Obama proposed a moratorium?
If there really is a problem then those mortgage securities are becoming increasingly worthless and there may be no way to turn it around, to recover any residual value at all. Maybe the banks will start to take principal reductions to limit their losses.
There will be a public demand for her instant involvement.
There are quite a few folks out there predicting conditions that will make the depression seem like good times.
Um, the Tea Party doesn’t like Obama very well…
Much appreciated. Whether he wants it or not, Grayson may be the go-to guy in the emerging crisis, so it’s critical that he gets solid advice.
Grayson is the reason Bush opposed stem cell research: Pre-emptive strike against Democratic spinal cloning technology.
The US is slowly going down. Oilbummer and the Harvard elites are incompetent fools.
You suck, Oilbummer. Why can’t you do the right thing and help the suffering American people? Have you no shame, neoliberal fool?
Maybe that’s the idea…
Can homeless people vote if they don’t have a legal/valid address?
Axelrod sounded like he didn’t have a clue as to the real issues, which is pretty damn scary. Uniformed, disingenuous, or just flat out lying? They want banks to “expedite” their bad paperwork? He’s definitely behind the curve.
Damn those bloggers! Telling everyone about the title issues, and how the bonds were incorrectly securitized and how the forclosure mills are fraud factories and about the document forgeries and about the lack of standing to foreclose, and about the . . . and on and on and on. There are about 50 scandals running simultaneously here. And right smack dab in the center of a bunch of them is the SEC, the DOJ, the IRS, and every state enforcement agency.
Axelrod struck a very dumb, disconnected note, if you ask me.
If Obama ran tomorrow for Preznit again, he’d lose in a fucking landslide. To Barney the Dinosaur or Ross Perot, take your pick.
just one note about the chain of title issues:
No matter how messed up they are, most states have a legal action that can be brought in court to fix clouds on title. In Texas its called a Trespass to Try Title. Highly formulaic and very strict in the pleadings. But Title Companies will get into the muck and mire and fix one title at a time. For a cost. Just expect higher closing costs in the future.
Foreclosed homeowners now with defective title if prior loan was ever securitized because the securitization process lost track of the owner (deliberately lost track of the owner so all trances would take any foreclosure hit seems unlikely – more likely is just bad paperwork.
The non-securitized loan “bad paper work” – like no review or fake notary – can be fixed over the next two years. But the SEC will need to allow after issue modification of those securitized loan investments – and the “best tranch” will sue all others just for the hell of it hoping to get a better deal than what is on offer – no matter what is on offer – leading to nothing being foreclosed – for at least a long long while.
That is – unless Congress passes a pro-bank law that deems an owner of those securitized loan investments – and we know Obama will propose and the newly GOP Congress will agree to such a fix – I’d say that by Feb 1st the crisis is over except for the delay to redo the docs. Heck if Dems retain control, the Congress will still agree. Which of course is the problem that Rahm made clear to us.
:-(
The whole shitty capitalist system seems to be going down, too. Just like the communists.
Scary times, people.
The homes that were bought by bona fide 3rd party purchasers will have clean title. The aggrieved original homeowner may still be able to recover damages against the lender, but they will not be able to recover property from a bona fide third party after a period of redemption expires. Most laws protect the 3rd parties. So, title is clean there.
Where the banks credit bid or keep possession for themselves after foreclosure, there will be a dispute among the “note holders.” But that can be litigated/settled and the bank will make strategic choices as to which ones to fight for and which ones to give to which “note holder.”
For the situations where Fraud was proven to have occurred, the homeowner will have to seek redress from the lender. I don’t think courts will award specific performance damages in those cases. They would unravel all the post-foreclosure bona fide transactions. Not going to happen without causing massive implosion of property values even worse than now. There’s more chance of ending the Federal Reserve than unraveling third party bids on foreclosures.
Where the banks still hold the inventory and Fraud was proven, then specific performance is very possible – but it will still depend on the solvency of the borrower, etc. The banks can’t be forced by couts to re-approve another sub-prime loan! They will have to use standard and reasonable underwriting practices – and if the aggrieved homeowner doesn’t meet the requirements, then they can’t get the property. Which is why, if I was the homeowners’ attorney, I would be asking for MONETARY DAMAGES and say screw the specific performance award. Why demand the right to be a borrower again?!?
Instead, get monetary damages, and with that cash, BUY A NEW HOME CASH DOWN and cut the damn lenders out of it.
Man, a couple of observations:
1) You got voters watching the show, Axelrod. This probably doesn’t fire up the base.
2) You want to reassure your Wall St buds, Axelrod? Pick up the phone and have all the oral sex you want after the fraking’ show – they are not many votes and they understand that you can lie to the cameras for the voters.
And please, let’s take all further considerations of TARP II or bailouts OF THE TABLE:
From a simple optics point of view, Obama and the Dems might as well hand the keys of government over to the Republicans and do your own “strategic default” if you think you have a snowball’s chance in hell of surviving ANOTHER bailout.
And from a governance point of view, this is where you need to decide to “man up” (I believe that the phrase currently being bandied about) and RUN THE GD COUNTRY. And if you think you didn’t deserve to end dealing with all these problems, well, too bad, you need to GET OVER IT.
Bush kicked this can down the road, then Obama kicked this can down the road. We realize it’s mighty tricky to restructure the banks to get all the fraud, corruption and bad debt under control, but it’s been down before. FDR did it. Heck, Reagan did it (according to Bill Black he was complaining the whole time as his buddies went to jail) for the S&L crisis.
I just don’t understand what Obama thinks the end game is here. He cannot be stupid enough to believe that he can just continue to kick the can down the road. This problem only grows larger every time they ignore it, or bail it out or change the accounting rules to extend and pretend. What’s his end game? Ignoring fraud and corruption in the banks, and due process in the courts? Sure, I know he’s worried that freezing the home market will drop the bottom out of the market (despite the Treasury and Fed’s best efforts to pump it up), but it was a pretty stupid decision when they made it the first time. They have to do the hard work – they have to provide a functional banking system while the clean up the TBTF banks.
o. campaigned as a progressive Democrat, but once he was sworn in as President he surrounded himself with wealthy wall street zionist banking criminals and then came out of the closet (so to speak) and revealed himself to be corporatist, imperialist and a royalist-tyrant.
From what I have read here about these mortgages and their being sliced and diced and resold who knows how many times over, I really doubt that very many of these foreclosures were completely legal. These sleazy mortgage lenders and bankers may be on the hook for the whole enchalada (sic) as they say… Another massive bailout of the wall street banking criminals after their foreclosure fraud has been revealed to the world?
Umm, no. There is not clean title. Not in CA. Maybe in TX, but this I doubt.
If the Banks erred (defrauded) in some manner in their foreclosure, the title is clouded. As you write, a quite title action can clear clouded title, but not when it was conveyed fraudulently. In addition, if there is a previous owner stating the property was foreclosed on by fraud, there is no “quiet” in the action.
The previous (foreclosed upon) owner can claim that there was no valid lien on the house, and they want it back, unencumbered. Voila, house free and clear.
This does not include damages paid because of the hit (slander?) on the foreclose owner’s credit, potential loss of employment because of bad credit, costs of credit because of the foreclosure and so on.
Denninger is correct about things with amazing regularity. Check out his comments about your 401k. A perfect storm seems to be gathering.
Denninger:
a link http://market-ticker.org/
Yup. One has to face reality and do the clean-up job how ugly it might turn into. If Cop keeps a blind eye there will be more and more reckless driving and more accidents. If he enforces the traffic rules the first day it will be ugly but soon rule of law will prevail.
Yeah it’s the courts that started (or rather stopped) this. So if it’s not in PBO’s hands anyway, why does Axelrod give the banks another big wet one?
He used some progressive words and phrases, but the substance of what he ran on was not progressive at all.
Real estate will continue to fall, as it should. We’re not done with this by a long shot. The smart money will stay out for a while.
That is the trap of TBTF, they do not have a choice.
I truly do not think Obama sees the problem. He simply believes that the laws do not need to be followed anymore. Allow the banks to come up with some voodoo solution and force the judges to accept it.
Of course with all the “government cut-backs,” there probably aren’t enough prosecutors to bring the necessary cases. [Assuming, of course (a fact not in evidence) that the Administration wanted to prosecute these crooks.
And then, of course, there’s the insufficiency of judges, since Obama hasn’t put forth the nominees.
Moratorium on Poison Ivy Graduates entering Governmental positions, and perp-walks for Bankers.
http://publicbanking.wordpress.com/2010/10/08/nations-must-print-their-own-money-and-establish-their-own-banks/
amounts of gold .This accordigly cheapens their debt load while simultaneously giving mortgages inflated paper value so they can mark to market vand defy the critics who said this toxic crap should be dumped for a dime on a dollar.
4closureFraud Exclusive – President Obama Falls Victim to Chase Robo-Signer:
“The Obama administration opposes a moratorium on home foreclosures, but wants problems involving improper paperwork resolved as quickly as possible, senior adviser David Axelrod said Sunday.”I’m not sure about a national moratorium,”
Like my dear friend at the Hamlet puts it
It’s not the foreclosure affidavits only. Hello? It’s the whole kit-n-caboodle. it’s the fabricated assignments of mortgage, fake allonges, robo-stamped endorsements in blank, and satisfactions of mortgage, ignoring SEC and IRS regulations, disregard for the steps required by the REMIC rules. It’s all the top national banks and their servicing arms. The whole of it is a sham. Don’t believe the propaganda that insists otherwise.
Got it?
Now for the fireworks…
First we will start with a screen shot of one of Obama’s Release of Mortgage…
check it out here, a-fucking-mazing, really – this will be a feast for the MSM.
http://www.zerohedge.com/article/4closurefraud-exclusive-%E2%80%93-president-obama-falls-victim-chase-robo-signer
Why isn’t anybody asking for these people to be drug-tested?
</s>
Anyone else see the parallels to the ungodly transfer of Russian state properties to the dirty money funded mobsters during Yeltsin’s presidency in the 1990s? The mobsters even managed to elevate themselves to oligarchs in the process. Sent ordinary Russians into desperate economic straits. Obama is narcissistic, no wonder he thinks Reagan was a great president. Ronnie “everybody I know is doing fine.” I will never forget Reagan saying that in answer to a question about the economy when unemployment was at 10 percent. Hang on, folks, we’ve got another one. With a SC very inclined to certify the results.
“Perhaps this will fire up Obama’s Wall Street buddies for this election, but they don’t have enough votes to overcome those of newly homeless people.”
Not a problem; they have vote cagers working on that. The newly homeless will find that they are not allowed to vote, since they no longer live at the addresses where they were previously registered. The Wall Street buddies probably WILL be able to out-vote the disenfranchised evictees.
Axelrod:
To quote a little Shakespeare for David:
Claiming to be hopeful for a rapid resolution to the problem seems extremely insincere given that a serious governmental response is required but not forthcoming.
Allowing the current situation to work itself out within the existing legal framework is just asking for disaster. It will place millions in a lengthy legal lottery were some win homes and others lose everything. And in the mean time it will continue to destroy our economy and our publics faith in government.
The Obama admin needs to think big on this issue. Nationalize all the institutions involved to get all these contracts under one roof. Freeze the forclosure process and replace it with right to rent and cramdown programs based on current market rates. Property titles… government will need to work with the states to reconstitute many of them via fiat.
Is it wishful thinking on my part to think that the Obama admin would even consider doing this? Yes absolutely, but it’s gonna be a disaster if they don’t do it.
Is Obama our elected President or merely an “errand boy, sent by grocery clerks , to collect a bill”? (AN)
Wow…the disappointment cannot get worse, but I had a feeling. Obama cannot let this cat out of the bag because he colluded with criminals with TARP. So in order to get re-elected he likely feels that this needs to go away. He is certainly worried that if it gets out that this fraud was as large scale and dirty as it really was, that he millions of folks lost homes to illegal behavior of these banks…and then he rewarded them so they could do it some more…he is at a risk of losing the vote of everyone. But hello stupid people. Those of us who would vote for you Mr. Obama either are losing their homes, have lost their homes or has a loved one who has lost their home. My relatives have seen the shoddy paperwork. They know what happened. We all wondered why you would reward them.
He’s stuck between a rock and a hard place. If the truth of this comes out, the entire economy could crash and he is left having enabled them. So…he will try to continue rewarding corporate america…in hopes that at least “they” help him get re-elected.
This is all so sick.
If you gotta ask, let’s just move on shall we?
Cannibalism, corporate style………..
Call the White House today. 1-202 456 1111. Use the words “systemic fraud” as many times as Axelrod used the words ” institutions” Nothing about homeowners whatsoever. Man they do not get it or their agenda is to help the Banks ah sorry the ” institutions” only.
Denninger is good to a point. Used to read him every day.
I can’t read him when he starts spewing his libertarian, selfish, free market fanaticism. He’s a Beck fan, and that says alot.
During the entire BP catastrophe, he was freaking out that Obama might stop deepwater drilling. Wasn’t too disturbed about the oil slicks bellowing into the ocean, other than the PR damage to the industry.
I strayed away from him after that.
This administration won’t do squat on this issue. The rot has set in, or was always there, depending on how you look at it. They don’t have the drive, the vision or the will to risk a lot to gain a lot. They’re weak, really weak, with no principles or fundamental concepts of right and wrong. It will be nothing more than CYA, I guarantee it. The most important thing to our esteemed President is his “legacy”, his standing with the “people who matter”. It will be a wonderful irony if that legacy turns to dust because of his desperate attempts to preserve the buoyancy of our sinking ship.
“Reconstruct their paperwork”?
What the fu{k is this idiot War Criminal talking about?
“Reconstruct their paperwork” is what has brought us to this point. This doofus and ZerObama want the Banks to go back and do the same thing…to make things legal.
Any doubts that we are now living in a Banana Republic?
yeah, was somewhat concerned about the various Galt fans in his forums – but have been passing some of his pieces on ARMageddon around to some of the smart kids in my orbit and they concur (on what he says should happen anyway) Ian Welsh advocated the exact same scenario in a post yesterday
thanks for the heads up
p.s. love your name, from real life or the film ? – clemenza is one of my all time, all time favorite characters in film
this needs to be posted. It’s busy right now. This needs a diary of it’s own. We need to swamp the white house with calls to at least let Obama know that we are not going to “lay down” for this.
Dislaimer: I am not giving legal advice to anybody who reads this. Having said that…
A trespass to try title action is the proper method of determining title to lands, tenements or other real property. Tex. Prop. Code Ann. § 22.001; Tex. Jur. 3d, Quieting Title & Determining Adverse Claims § § 37 to 40. Trespass to try title actions are governed by Texas Property Code § § 22.001 to 22004, Texas Property Code § § 22.001 to 22.004, 22.021 to 22.024, 22.041 to 22.045 and Texas Rules of Civil Procedure 783 to 809. It is a legal remedy, not an equitable remedy. Billups v. Gallant, 37 S.W.2d 770, 771 (Tex. Civ. App.–Austin 1931, writ ref’d n.r.e.). A trespass to try title action is a suit by which rival claims to title or right of possession may be adjudicated. Yoast v. Yoast, 649 S.W.2d 289, 292 (Tex. 1983); Goebel v. Brandley, 76 S.W.3d 652, 656 (Tex. App.–Houston [14th Dist.] 2002, no pet.). It is a procedure to recover the possession of land unlawfully withheld from an owner who has a right of immediate possession. Knupp v. Miller, 858 S.W.2d 945, 951 (Tex. App.–Beaumont 1993, no writ). It is a method of determining title to lands, tenements or other real property. Tex. Prop. Code Ann. § 22.001(a). The action of ejectment is not available in Texas. Tex. Prop. Code Ann. § 22.001(b).
A trespass to try title action must be brought against a party in possession of the disputed premises if the premises are occupied. Tex. R. Civ. P. 784; Kenneshaw Life & Acc. Ins. Co. v. Goss, 694 S.W.2d 115, 118 (Tex. App.– Houston [14th Dist.] 1985, writ ref’d n.r.e.). If the premises are unoccupied, the action must be brought against some party claiming title to the premises.
So, in other words, there is no worry about such things as “being quiet” and the action to “quiet” title has NOTHING to do with how “loud” one party is being.
I hate to tell you this, but just because you get defrauded by the Bank and they foreclose the home and sell it to a BONAD FIDE THIRD PARTY BIDDER does NOT mean you will “Voila” get your house back.
The Statutes is pretty clear that once a BONA FIDE THIRD PARTY has purchased the home, that part is protected, and the only way to recover is during the Redemption Period.
In Madison v. Gordon, 39 S.W.3d 604; 2001 Tex. LEXIS 5; 44 Tex. Sup. J. 410, (Tex. 2001), The Texas Supreme Court held that “Status as a bona fide purchaser is an affirmative defense to a title dispute. A bona fide purchaser is not subject to certain claims or defenses. To receive this special protection, one must acquire property in good faith, for value, and without notice of any third-party claim or interest. Notice may be constructive or actual. Actual notice rests on personal information or knowledge. Constructive notice is notice the law imputes to a person not having personal information or knowledge.”
If a homeowner wants to prevent their home from being sold at foreclosure in a fraudulent manner, then that homeowner has to bring an action to STOP the foreclosure before it happens. IF they don’t, then at best, they have maybe 6 months to bring it. Once the right of redemption expires, that 3rd party bidder at the foreclosure sale is PROTECTED from losing the property back to the original homeowner. The NonJudicial Foreclosure Process is designed to protect Bona Fide third Party purchasers.
LIke I said earlier – the homeowner STILL HAS A REMEDY! They can SUE the Lender for FRAUD and GET MONETARY DAMAGES.
But they will NOT get the home back.
And my last point – if you thought they could get the home back once its been foreclosed upon and sold to a third party bidder for value, do you think they would get it back unencumbered? No. They would still be subject to the debt that is owed the bank.
Remember that a lot of these fraud cases are not about whether the homeowner OWES the underlying debt or not. They are about whether the Bank used the right formulaic process in executing their remedy against that debt. If the homeowner still owes the underlying debt ,they STILL won’t get the home back until that debt is paid off.
So, the Court and the State have no public policy reason to strip away a home from a Bona Fide 3rd Party Purchaser for Value only to give the first homeowner a “chance” to reclaim the propert, only to then find out that the homeowner still can’t pay the underlying debt, or is not qualified for the loan on the property. Who gets the house then? The Bank? Or the third party purchaser for value?
I’ve been doing this for about a decade, and I’m telling you that the Foreclosure Sale Deed is not Void on its face, but only Voidable, and as such, the Bona fide Purchaser is safe. They won’t lose the home. The lender may owe a lot of money to the aggrieved original homeonwer. But the plaintiff will not recover the specific performance remedy of getting the actual house back.
Also, lets not confuse the “Fraudulent Conveyance” concept with this. In most jurisdiction, fraudulent conveyance actions are remedies brought by creditors against other creditors or against the borrower, usually in the bankruptcy context, but sometimes in the marital estate context, when one party liquidates or conveys an asset to put it beyond reach of other creditors or to defraud an estate. One homeowner claiming that the creditor perpetrated fraud on them and then trying to recover the property from a second homeowner will usually not happen in a fraudulent conveyance claim. For a foreclosure to be unwound like that, there has to be some showing that the purchase price was far below market value, that the transaction was not arm’s length, or that an intent to defraud occurred. The 5th Circuit dealt with this issue in United States v. Shepherd, 834 F.Supp. 175 (N.D. Tex 1993), when the US government sought to unwind a foreclosure on the basis that a creditor has sold it at foreclosure to extinguish junior liens of the US Government before the property could be part of a bankruptcy estate. The court based its ruling on whether the property was sold for less than fair market value, whether there was collusion or less than arms’ length transactions. The Court found this to be the case, and therefore unwound the transaction. But that was not allowed in other cases where the prior homeowner wanted the property back. The courts ruled that in those other cases, the prior homeowner was not a creditor asserting that they had been defrauded of a valid debt. Rather, they were claiming that some payments had been misapplied. In those cases, the homeowner should have challenged the foreclosure prior to its completion in a Stay of Foreclosure proceeding.
At the end of the day, I’m not an attorney for these lenders. I don’t condone their actions, and I don’t support their sloppy mishandling of these documents. I am just making sure that people don’t get the wrong idea about how the law works. The law works to facilitate the conveyance of proprety in most cases. If fraud occurs, people can still be made whole by suing for monetary damages. But most lenders will have most paperwork to prove that a valid debt exists. If the lender can’t produce the promissory note, then you CAN stop the foreclosure in Texas (And most other places). BUT, you have to bring that action BEFORE the foreclosure. Once it occurs and the right of redemption expires, you can’t demand the lender produce the promissory note at that time. You can’t just unravel the foreclosure. Its a limitation and if you want the property itself back, you’ll have to file a Trespass to Try Title against the new homeowner. Good luck with that. It will never work. That new homeowner will demonstrate that they were a third party purchaser for value, they will argue that the first homeowner raised none of these objections prior to the sale, and that as the record shows, the lender foreclosed under the prior owners’ deed of trust, the trustee took it, and the trustee conveyed it to the new homeowner. THAT is a clean title. And the Trespass to Try Title Action will likely fail. Unless you an attack one of those steps as having been improperly recorded, etc. If you can prove that the Trustee didn’t actually show up to the Foreclosure sale, or that the Bidding process was itself done improperly, etc. But unless you can do that, the issues between the original homeowner and the bank are not going to be decided in a TITLE ACTION. That is what most people don’t seem to understand. The TITLE ACTION is a separate matter from the FRAUD ALLEGATIONS. You want to prove fraud? You sue the bank. It has nothing to do, at that point, with the title of the property. Not once the right of redemption has expired.
I’m hoping that people don’t get suckered into foolish schemes where snake oil salesmen try to take someones last dollars in an empty promise to “sue the bank for fraud and get your title back.” Those are two separate legal concepts, and they involve different actions, different issues, and different rules. You were defrauded? Sue for fraud, and get monetary damages. Then take the money and buy a house. Trying to piggyback the fraud argument into a “clean title” argument is not as easy as some people are making it sound.
Buck up Farack!
What about the title insurance company (Old Republic) that is refusing title insurance on foreclosed properties from Chase and GMAC? Doesn’t this mean they feel title isn’t clean?
OOPS–this should have been a reply to Marsdragon.
They have their reasons for doing it, so I don’t know why.
But, having said that, lets remember that the current fiasco has many variations on what is going wrong:
(1) Originators of Loans sold the notes to lenders who sold the notes, etc and someone in the process didn’t record or transfer paperwork properly. That results in the lender holding the bag not having sufficient paperwork to foreclose. That lender may just sit on it, or may try to fabricate paperwork to prove they have a valid note.
(2) Lenders may have all the paperwork but failed to document income, assets, debts, etc of the borrower. So, they can legally foreclose, but they were poor underwriters of the debt. Many foreclosures fall under this.
(3) Lenders are using MERS to foreclose and MERS is messing up the paperwork and verification process.
(4) Lenders or Mers are not properly performing the foreclosure itself. They are failing to send notices as required by law, or failing to file notices properly. They may be engaging in fraudulent activity to backdate paperwork implying that they DID use the proper procedures.
(5) Lenders are using Judicial Foreclosures and sending in representatives to court filing affidavits asserting that the file is complete, when the file isn ‘t complet and those reps didn’t really look at the files (to save money and time). Those Lenders are getting caught and being told to go back and get the paperwork that is required and then refile the suit for Judicial Foreclosure.
Not every single one of these results in unclean title. In fact, none necessarily do, except maybe 4 if its a Non Judicial Foreclosure. If the formalities of Foreclosure are done improperly, then YES, there could be a title issue. If the underlying economics are improper, then a finding of fraud is possible.
Think about this example: A husband and wife own a home. They have a loan. They get divorced. The wife gets the house, and the husband “Quitclaims” the property to her. The wife doesn’t pay the mortgage, thinking that the court order was clear that the husband should pay it. The husband doesn’t pay it because he “quitclaimed” the property and felt he no longer owed on it. The Bank could care less what a Family Law Judge decided to do when the Bank was never called as a party to the suit and doesn’t really care what that judge decided with respect to its rights on that collateral in the suit. And for good reason. The Family Law Judge has no absolutely no authority to rewrite a Promissory Note without even having the Lender on the Note present at the proceedings or made aware of it.
So, the Lender forecloses. Against BOTH husband and Wife. But Husband doesn’t ever know of it because husband doesn’t get mail at that address. And Wife never opens the mail because its addressed to her in her married name (she changed it back in divorce court). The house is foreclosed upon and the family gets an eviction notice to vacate. A third party bought the house at the foreclosure sale for the amount of the debt due.
Does the wife now get to sue the bank? Yes, but only if the bank failed to properly follow the steps involved in foreclosing. If the bank followed those steps, then the wife will have to figure out if the bank committed perjury or filed fraudulent or false documents with the the court or in the property records.
If so, the wife can sue the bank for fraud, and if she does this within the statutory “Right of Redemption” period (which is 6 months in TExas but may be longer in other states), then she MIGHT be able to unwind the foreclosure. And the bidder who purchased it was aware that he had to wait 6 months before title would vest.
Now, if the 6 months expire, and nothing is done to unwind the sale, then the new third party bidder will try to sell the home. The seller will get a Title Insurance Policy for the new Buyer. And that Title Company will warrant that it will defend the Title for the Buyer. (Some states may require the Buyer to purchase title insurance).
So, is Old Republic now wanting to cover its butt and tell the bona fide third party purchaser at a foreclosure sale that it will not issue a title policy after the Right of REdemption? I don’t think so.
In my scenario above, there is always a possibilty that nobody bids at the Foreclosure Sale. I’ve often seen that most homes are not bought by third party bidders. They are “credit bid” by the lender. That means the Lender just keeps the property on its books.
I think that Old Republic is telling the LENDERS that it won’t offer title insurance to them or their subsequent transactions as long as THEY are holding the inventory. Why?
Because there was NO THIRD PARTY BONA FIDE PURCHASER! and that means that the Aggrieved Homeowner CAN POTENTIALLY recover the actual property in a fraud suit.
Why? Because the property is still available. It is not occupied by a bona fide third party. And if Old Republic REFUSES to insure the title on the banks’ attempt to unload that inventoryafter the redemption period expires, then the bank will stuck hlding the property until such time as a fraud action can be brought and a homeowner can win the fraud action.
First, they homeowner winsthe fraud action. Then, if the case merits it, the homeowner can tryto recover the actual property FROM THE BANK if the Bank still holds possession of the property and no third party has purchased it for fair market value in an arms length transactions.
Now, if Old Republic refuses to issue Title insurance, then Fidelity Title might just step in and offere the policy, making the whole Old Republic strategy moot.
But if ALL TITLE COMPANIES refuse to insure title on inventory credit bid by banks and still on their books, then THAT may be a relief to the homeowner.
But Old Republic is not doing this to Third Party Bona Fide Purchasers for Fair Market Value.
And… in my scenario above… the Wife will not win on Fraud if the Bank sent the letter to her at the address on record to the name on the Deed of Trust. Why? Just because she got divorced, changed her name, and got a court order saying the husband owes the money, means diddly squat to the Lender or the Law. She first should have FILED HER NAME CHANGE in the property records and had the Deed of Trust updated to reflect that name change. Second, she had to get the LENDER to remove her name from the Deed of Trust and Promissory Note. Third, the Lender is not required to honor that Court Order. The Lender loaned the money to the two parties jointly. If her credit is not good enough, the Lender is not required to redo its underwriting because two co-borrowers stopped enjoying the sex together (or whatever reason they divorced). Lenders don’t remove parents from their kids’ loans juts because the kids and parents have a falling out. Nor do they for couples. And lenders are only required to send notices and correspondence to the parties as the information is provided ni the PROPERTY RECORDS of the County in which the property resides. All other changes that are “off record” are of no consequence to the lender.
So, the wife has to prove fraud, and she likely won’t. And if the Bank still has possession of the property, and she can prove fraud, then she can maybe recover the home. But if the bank already transferred the propery, legally, to a3rd party, and if the Title company issued title insurance in that transaction, the wife will, at best, get monetary damages for the fraud. But she has to prove fraud first. And not every foreclosure is fraudulent. Even the unethical ones may still be legal and non-fraudulent.
But no matter what, the innocent 3rd party that pays fair market value and waits until expiration of redemption period to then convey the property for value is protected. Except in cases where the property was sold as a fraudulent transfer to hide assets in an estate to defraud creditors. Then, the creditors can yank back that transaction with a court order. And then, the innocent third parties are screwed.
Unless some form of legislative action is taken to make this remedy available to homeowners who can prove fraud, there is no standard remedy for recovery of the house.
And finally, even assuming ALL of that were possible to the homeowner, they then have to still prove they can make good on the underlying debt. If they still cannot pay the debt, then courts are not going to clawback those transactions needlessly. The homeowner’s damages may not equal the full value of the underlying debt. What then? Screw the innocent 3rd party who had no part in the fraud and relied upon the law to wait the statutory amount of time? Foreclosures are a necessary part of our real property economic system. When people can’t pay, then neighbors and communities don’t want the place just sitting empty for 2 years. They want the banks to have a means to sell the property to someone who will occupyit and take care of it. Cities and school districts want someone in that property who will pay taxes on it. Foreclosures are a necessary way to accomplish that.
I just think thta we need to be careful how we characterize the entire situation going down. Most of the remedies will need to be done in the first days of a foreclosure action.
Its like a restraining order. Or a Temporary Injunction. What good is it if you wait too long to file for it? You get one BEFORE the action occurs. Not 2 years later. You can’t unwind bodily harm. You can’t unwind crimes. You can’t unwind theft so easiyl. What happens when the gold jewerly is stolen and the gold melted and resold? You going to recover the gold? OR just the monetary value of that gold?
So, title is a strict concept. If title is cleanly conveyed, but later one we learn that crimes were committed in the conveyance of that title, do we unwind all the years of title history?
IF WE DID, don’t you think the Native Americans would have been able to recover the TITLE to most of the land that was FRAUDULENTLY and VIOLENTLY stolen from them back in the 1800s?
TITLE vests and once it does, it is very hard to unwind it. Monetary damages are far more practical. That’s my whole point.
This foreclosure thing is just a technicality. Sure, the deadbeats of this country want Santa to come down and give them their house for free but that’s not going to happen.
Too many people bought too much house and now they want to be bailed out. Again it ain’t going to happen.
Pay your mortgage payment or head on down the road.
Very informative.
Thank you.
Sadly you are right. Idiots signed on the dotted line for mortgages they dreamed they could afford but couldn’t. Besides, as long as you can still get a place to live, why does everyone think they need a 4 bedroom brand new house, and two new vehicles in the driveway? We were much happier as a society before we got so damn greedy.
The problem I keep having with this is I don’t see why Congress can’t set up a relief program for people who are in danger of losing their homes due to unemployment or other hardship. It looks like the money (what little there is) is being spread all around, rather than to come up with programs that can save people who are willing to be saved.
A certain number of these foreclosures are just gone. No one is going to pay a $200,000 mortgage on a $60,000 condo. But a number of the foreclosure situations are ones where granting a 3.5% mortgage would do a lot to solve the problem.
What’s disappointing is that no one in the Administration seems to be “on it”, you know?
Ian Welsh posited today that Obama and his advisors want a Republican majority so that Obama can further squeeze middle class “entitlements.” Why else would they come out and say they don’t want a moratorium on foreclosures this close to the election?
I think that another oft missed problem associated with the housing bubble is the fact that with the repeal of Glass Steagal and the comingling of comsumer deposits with insurance premiums and wall street casino investing, we saw these banks loan money they didn’t have to people who couldn’t afford to pay it bank using consumer deposits and insurance premiums that were then squandered. The securitization of all of it only passed the buck down the road and extended the problem and pretended there wasn’t one.
Now, AIG, the insurer of last resort, is belly up and on tax paye life support because all the other insurance policies that squandered their premiums went to AIG to bail them out. And now, the taxpayer has to bail AIG out (in perpetuity, it seems, since the liabilities are in the TRILLIONS). The liabilities are bigger than the amount of dollars that are printed.
So, the fact that mainstreet homeowners are being foreclosed upon is a travesty, but it is one compounded by the fact that taxpayers are footing the bill for the insruance companies and banks to be “made whole” due to their own stupidity in blowing all their cash in the first place.
THATS the real villainy of all this. The American dollar and economy is on life support right now and we’re nowhere near the end of this. And the financial institutions and industry that CAUSED its own mess is now draggin us with it. And this administration is RUN BY THAT INDUSTRY!
If you have no example, let’s just ignore your claim, shall we?
Of course the flip side to your contention and that of comment #114 is why did the banks and ultimately Wallstreet so readily approve loans to individuals they knew up front would not be able to keep their homes?
So exactly whose hands are squeaky clean in this two way farce?
Thank you for the additional information on this guy.
Please post the stuff contained in your numerous and extensive comments in a Seminal diary. It just clogs up the thread here.
I do that as well, but when I see a need to add what I know to a strained topic, its worth the effort to other readers to provide it. “Clogs” is a bit of a harsh verb, don’t you think? Was the word, “Stuff” a bit of self-editing I wonder? :) IF the thread was meant to be about the repercussions of the white house’s statements and position on the foreclosure crisis, then I think a little bit of reality mixed in is good. If it “Clogs” then it must have been a good read. Thanks for the compliments!
To further “Clog” the thread, I am curious why you say that most mortgage debt is “unsecured.” How is that possible? Mortgages are Puchase Money Security Interests. PMSIs. They are written exclusively for the purpose of purchasing property – the collateral – which is a home. And I’ve never seen a promissory note, deed, or other instrument that involves a loan that wasn’t so buttoned up to secure that property that it could be called “unsecured.” Unsecured is what a Credit Card is. REal Property – that is bought with loans that are more “Secured” than anything on the planet. I say that because even vehicles are purchased with “Secured” Financing, but people can abscond with the vehicle (which is Personal Property) and vehicles tend to depreciate as a matter of course.
Real Property is the one thing you really can’t “abscond” with. So, its pretty secured. These lenders may have messed up a lot of things. But they didn’t forget to secure the property as collateral. They just forget to make sure the borrower could repay, and they forgot to make sure they had the funds to extend the loans in the first place. They resolved BOTH of those problems with TARP. They got the taxpayer to pay for those issues. So, the property IS Secured. By someone. The question is just WHO has a security interest on it.
I do not recall exactly which of the many posts that have been done here at FDL on Foreclosure fraud where that was explained but as I recall, by bundling the various mortgage notes together, slicing and dicing them up, then failing to do the proper paperwork trail, the banksters and mortgage servicers apparently took care of breaking the links between the note and the property, leaving themselves holders of unsecured debt since they have no true record of who actually owns what property.
It’s pretty much a large part of the mortgage fraud in operation.
Well, I will see what I can find in those posts where that is definitively explained. But I wonder if that is a LEGALLY Binding understanding or just a theory that has yet to be established as a matter of precedent.
The Securitization Process does not, in and of itself, revoke the Secured natue of the loan. It merely spreads the risk and reward across multiple bondholders. The servicer of the loan still has a right to exercise the terms of the loan against the borrower.
In most cases, the borrower still owes the money to the servicer of the loan. If the servicer can establish that, there WILL BE a foreclosure. That is sufficient. Now, who the servicer has to pay with the proceeds from a foreclosure sale, or who gets the loss on the foreclosure sale, is a different matter, and it involves Contract issues between the Servicer and the Bondholders.
I know of cases where the homeowners were able to prevent foreclosure when they demanded to see the Promissory Note that showed what they owed and how much. In the cases where the Servicer cannot produce that, the foreclosure stops. Many times, however, that is not the end of the story. The Servicer may very well come up with that Promissory Note if it digs through its warehouse of files. But yes, if the Promissory Note is lost for good and no public record was filed of the transfer of the note from one lender (the Originator of the loan) to the current lender (usually the Servicer), then the foreclosure process is stopped. But, its still a SECURED debt. You just have an evidentiary problem of establishing that. It is not suddenly “unsecured” because that implies a KNOWN CREDITOR.
If the CREDITOR can prove its relationship to the Borrower, then they are using the PROMISSORY NOTE to do it. Which means, its Secured. But if the posts in that link point me to something verifable that says otherwise, I would love to read that. In my world, that would have made headline news. I have not seen any caselaw updates or legislative updates or industry updates for practitioners that says that mortgages are now deemed to be “Unsecured” by virtue of having been collateralized to bondholders.
Well, you can probably present your understanding to Cynthia Kouril as she is an attorney who has presented most of those articles. If you disagree with her analysis on these things, you can fight it out with her going forward.
But as has been noted, that is a lot of the essence of the Fraud portion where the servicers have been creating fraudulent documentation to try to buttress their own screw ups on things. It is a matter of record that the foreclosure mills have tried to foreclose on properties that had been purchased with cash. It is a matter of record where the same names have shown as representing MERS and the servicing institution and have been “officers” in more than one financial institution.
There are a lot of layers to the fraud. And apparently the case law is being written as we type.
I’m not arguing with what you just posted in your last comment by any means! I completely agree there is a lot of fraud.
But if you hink that some of the comments on this thread are exactly in line with what cynthia wrote, then you are mistaken.
I seriously doubt that Cynthia has ever said that mortgages are “unsecured” just because of securitization of the debt and bundling it into collateralized debt obligations that were sold to bondholders.
I also think a lot of people have taken some very specific points of hers and are now applyting them somewhat sloppily to far more scenarios.
So, I’m not sure why my comments to Synoia or yourself or mauimom are interpreted as being me “fighting with Cynthia Kouril.” I didn’t see her comments here that I responded to, so please refrain from putting words in my mouth or using her diaries to defend other people’s comments. I said I would look at the list of diaries you provided and see what I find. How is that my contention that I “disagree” with someone who has not posted on this thread?
If people are uncomfortable with the items I’ve posted, its a shame. I am just as much upset about what thse lenders are doing as everyone else. And I fully realized that the lenders are committing a LOT of fraud. But, I think its a mistake for people to leverage those mistakes into broad-brushed comments that indicate that ALL foreclosures are going to be fraudulent.
That creates false hope for too many people. I think its important we stay specific and avoid generalizations. When I see commenters making statements about “Strategic Default” as recommendations to readers of this site, I get nervous. “Strategic Default” is a big risk to take. So, I’m adding my thoughts to this discussion.
It may be “clogging” to some, but its also important if people want to discuss how homeowners will be impacted. Having multiple perspective should not be interpreted as someone “attacking” or “disagreeing” with FireDogLake Established Canon regarding all things foreclosure. I would have thought people would appreciate a perspective from a real estate attorney who makes a living representing homeowners, realtors, homeowners associations, and contractors (the latter two often being junior lienholders that deal with foreclosures by lender on a regular basis). My comments should not be construed as hostile or anti-homeowner. Nor are they combatitive with respect to the work David Dayen or Cynthia Kouril are doing.
I guess we ‘re having a disconnect. As I mentioned, I don’t recall the specific post, just that at some point in the series I think there was something presented that showed a path where, because of all the gimmicking with the paper, it could be interpreted that in fact, the link to the secured debt of the mortgage note was/has been broken because of the failure to properly do all the registration of the transfers of the paper, leaving a debt but an unsecured debt. Since IANAL, it is always possible that I misunderstood what I was reading but I don’t think that is the case.
I never said you were attacking anyone. But if you perceive that is what I was saying, you are mistaken.
Okay thank you. I was just suprised that you recommended that I continue to “fight it out with Cynthia Kouril” a person who has not been privy to this discussion and with whom I have not disagreed. I was unsure why her name was brought up. My comments on this thread are limited to the topics having been raised by people on this thread, with the caveat that I am discussing things from the perspective of a TEXAS real estate attorney. That’s all. But thank you for the clarification. I only hope that my input is helpful to people. It isn’t always happy to hear. But I never see the point to tell people what they want to hear. Just tell them the truth, as best I know it, and let the chips fall where they may. Hopefully it will be instructive or useful. Thanks.
That’s really not the people that got screwed. You probably will be the recipient of a 401K or pension fund which was defrauded when it bought securitized sub-prime loans marked as AAA. You’re the one paying for the fraudulent loans when your 401K, stocks or pension fund gets nailed. You’re the one paying when the ripple effect of the bank corruption implodes and you lose your job because financial fraud in the banking sector blows up the whole economy.
Those concentrating on “those guys living for free in a house” are easily distracted by bright shiny objects.
Okay, I’ve been looking through the archive of foreclosure articles that you referenced, and I think I found two that are germaine to your point. And I see where I do agree with her, but where others may think I am disagreeing. Let me first reference the two articles she wrote:
Does MERS registration and mortgage fractionalization extinguish mortgage rights?
and
House in foreclosure? make banks put up or shut up.
As I am reading her diaries, I am seeing the same points I was making. That the original promissory note DOES need to be provided. And that if they can’t do that, they can’t foreclose. The other major point is that by registering these loans through MERS, they may be severing the note from the collateral.
Caveat – not all foreclosures happen on behalf of MERS. I’ve seen many that don’t involve them. So, be aware that she is making this point about severance of notes from collateral in a limited way. Also, she is referencing a Kansas state supreme court ruling.
Having said that, the relevant part of her analysis, which I agree with as she wrote it, is quoted here:
If the other states follow Kansas’ lead, and if MERS cannot keep its paperwork straight, and IF the original promissory note and subsequent transfers cannot be found, THEN it is possible that the othre 49 states might reject MERS argument that is the AGENT for the lender.
And if that happens, then the lender can just sue you for personal liability as if its unsecured. And she makes a good point clarifying that it may or may not be dischargeable in Bankruptcy. Because that is a good but UNRESOLVED question.
So, I do agree with her. She was very clear in how she applied what she was saying. Its only in Kansas, at the time of that diary, that this is the case, and it is only if MERS messes up and is the one trying to foreclose. And that still does not mean the homeowner is off the hook.
Let me add one thing — in some cases, depending on the state, the creditor that wins a judgment may be able to garnish wages, get a writ of execution granted, or be able to attach the debt to the property anyway. I know in Texas that those remedies are much harder, but in places like Minnesota, they are much easier, and in Illinois, wage garnisment is not uncommon. So, “strategic defaulters” must proceed with caution.
The film.
“Sonny’s going wild. He’s talking about going to the mattresses.”
Well fellow liberals, It’s time to go to the mattresses, cause this is war. Class warfare.
Got a chubby squirrel who comes up to my back door for Toastitos.
Hysterical watching him hold the chip in his paws and much away.
Named him Clemenza.
Apropros. At the end of the day, I’ve come to realize that most of the Financial Wizard Bastards who run our government are nothing but organized crime. They carry around so many politicians like nickels and dimes in their back pockets, and they buy political cover to run this financial racket over America. At the end of the day, the small timers represented in the film look like pussy cats compared to what’s in the Federal Reserve, Treasury, the White House, Congress and Wall Street.
I couldn’t agree with you more.
Street mobsters look like choir boys compared to the genocidal,
crooked, corrupt, fradulent, scamming, lying, double crossing, blood thirsty, callous, greedy, narcissistic, meglamaniacs running the US government.
I agree.
That has been my hypothesis for the deliberate trashing of so many
Dem supporters. He wants to hide behind Republicans when
he guts Social Security. Like we never heard of a presidential veto.
He’ll claim he had no choice but to honor the will of Congress.
Can anyone imagine Bush ever running his plays like this? Bush would just send the shit back again and again till he got what he wanted.
Then he’d rub their faces in it just for kicks.
Obama’s a shameless little punk who prefers to look helpless than
“man up” that he’s planning on gutting Social Security.
Best to give him the unsalted variety.