Legal Technicality Prevent Banks from Right to Foreclose (bankruptcy, insurance, complaint)
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IMO THIS is hilarious! It seems that the banks may have outfoxed themselves big time!!!
" A judge recently held that banks' electronic shortcut for recording mortgage information makes it impossible for banks to establish their rights to ownership.
Over 62 million mortgages are now held in the name of MERS, an electronic recording system devised by and for the convenience of the mortgage industry. A California bankruptcy court, following landmark cases in other jurisdictions, recently held that this electronic shortcut makes it impossible for banks to establish their ownership of property titles--and therefore to foreclose on mortgaged properties. The logical result could be 62 million homes that are foreclosure-proof.
That means hordes of victims of predatory lending could end up owning their homes free and clear -- while the financial industry could end up skewered on its own sword."
It's unfortunate that so many foreclosure cases never even bother to challenge the foreclosure in court. Something as simple as a demand for proper title can send the process into a tailspin. More people ought to take a shot. It's cheap and easy; plenty of websites explain the challenge and filing processes for various states. Just download a "model complaint" for your state, change the relevant information (location, names, dates, etc.), print it out, and file it with the court.
As long as you are getting foreclosed upon, you might as well make the bank work for it.
Sad to say the burden of proof is on the banks..where is the note and assignment of mortgage to them ?
I challenged a bank years and years ago (early 90's) on a mortgage. They didn't have the note/mortgage but I did have a copy. Sent them a copy with the paragraph they said I couldn't do (assumable section) which I could legally. They admitted they didn't have any copies so this electronic stuff is not new but probably more widespread. They dropped the issue.
Sad to say the burden of proof is on the banks..where is the note and assignment of mortgage to them ?
I challenged a bank years and years ago (early 90's) on a mortgage. They didn't have the note/mortgage but I did have a copy. Sent them a copy with the paragraph they said I couldn't do (assumable section) which I could legally. They admitted they didn't have any copies so this electronic stuff is not new but probably more widespread. They dropped the issue.
I think the banks depend on the people not wanting to challenge them due to the illusion they have stables of lawyers to bleed the customers dry in any legal actions.
Look, I have bought foreclosures at auction. The lenders really do outsource all of this to specialized law firms. While it is true that almost no borrowers show up in court to challenge a foreclosure, those that do generally do so by themselves or with an attorney that is working for free as they are a family friend or something.
The judges thaf have half a brain will not entertain any such foolishness. Should some whack job jurist start claiming that electronic record keeping by itself invalidates titles there ineveitably would be some whack job criminal defense attorney that would claim electronic files of fhe court itself are invalid. He'll some nut case will probably go along just because their computer crwshed on them earlier that week. Are they gong to subpoena the inventors of data bases to testify as to how the integrity of records is ensured? It would be a huge waste of time and there is no way that such a case would ever be heard by any appeals court without a MASSIVE number of actions from other parties. You think the information technology industry would risk being put out of business? That is just stupid.
Are ther a handful of cases where an egregious lack of notification MIGHT result in a cranky and overworked judge tossing the underprepared and entitled looking foreclosing lender's legal counsel for a loop? Probably, but anybody counting on this as their magic escape clause is better off investing in lotto tickets...
If you are into the "Gresham novel" view of corporate law firms having lackeys change records in the middle of the night this could make for a great story. More likely any defects in MERS will be unwound with some friendly legal opinions and changes in the boilerplate that one signs upon receiving a mortgage. For the former hippy types that now have a mind to run car companies, insurance / finance firms and what ever else they can get senile congress critter to go along with their fantasies of having a Swedish or Aussie style "peoples bank" just won' t fly in a White House where the Chief of Staff is soaked in Wasseralla millions...
Last edited by chet everett; 08-20-2010 at 01:22 PM..
I think the banks depend on the people not wanting to challenge them due to the illusion they have stables of lawyers to bleed the customers dry in any legal actions.
I will say I did feel a little intimidated by them. It was Barnett Bank in Florida who took over my mortgage. But I had the copy of the mortgage right in front of me and told their folks they could take me to court if they wanted but I had black and white proof that my mortgage was assumable.
It was a recorded copy too so I had the book and page from the county records.
I also had some dealings with JPM as they took over a mortgage I had but they are rotten to the core and arrogant and don't give a hoot about customer service. I refi'd with my CU and got away from them.
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