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This has the potential to be a huge financial problem. The problem is that when many of these mortgages were converted to CDO's they supposedly broke the chain of title. Without getting into a lot of legal speak, the bottom line is when the chain of title is broken the mortgage is no longer owed.
This is why banks were hiring legal firms to forge documents to establish chains of title that did not exist. This potentially means millions of people were illegally evicted, and that millions of homes purchased after foreclosure may not be legally owned by the purchaser.
The title companies are now unwilling to insure titles because they are unsure if the documents were forged. Talk about a mess.
No wonder the market is beginning to tank, and commodities are spiking. 45 States attorney Generals are beginning investigations, and the major banks have suspended all foreclosures.
I think I will short financials tomorrow; at least until the criminals in Washington can come up with a politically acceptable way to give the banks amnesty is this whole fiasco. I would sure hate to have purchased an REO in the past year.
I'm seeing articles on this that agree with SOME of your points but talk more about proof of delinquency and not chain of title. COuld you point me to a good news source that describes some of these alternative comments?
I'm seeing articles on this that agree with SOME of your points but talk more about proof of delinquency and not chain of title. COuld you point me to a good news source that describes some of these alternative comments?
Can you imagine the legal battles between pension funds and mortgage lenders. The lawyers are going to be in heaven. Too bad there is not an ETF in lawyers.
Can you imagine the legal battles between pension funds and mortgage lenders. The lawyers are going to be in heaven. Too bad there is not an ETF in lawyers.
Thankyou!
I found the last sentence of the huffington post article to be the most realistic....
"While courts are not likely to let 62 million homeowners off scot-free, the defect in title created by MERS could give them significant new leverage at the bargaining table."
Seems like these articles are not saying it will destroy the US economy but rather that it's a big legal mess.
I found the last sentence of the huffington post article to be the most realistic....
"While courts are not likely to let 62 million homeowners off scot-free, the defect in title created by MERS could give them significant new leverage at the bargaining table."
Seems like these articles are not saying it will destroy the US economy but rather that it's a big legal mess.
For those of us who invest in real estate, it presents increased risks in purchasing foreclosure properties. It creates the possibility that you are purchasing a property from a lender that does not legally own it.
Not something any of us would like to get in the middle of.
The banks and mortgage lenders have created a credibility problem for themselves.
Uncertainty is never positive in any market.
Try clearing a title from a NY property owned since the 1950's. have fun. I did it once and NEVER will again....Even the estate attorney threw up her hands. And that was a decade ago so now instead of ten banks on the abstract, you may have fifty. Have fun.
the bottom line is when the chain of title is broken the mortgage is no longer owed.
You're extremely weak in real estate law. That is not true.
I would have hoped you would have been smart enough to figure out that the title and the mortgage are two separate things.
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Originally Posted by jimhcom
This is why banks were hiring legal firms to forge documents to establish chains of title that did not exist.
They were not forging documents. They were filing affidavits. This is nothing new. It's been going on for decades. When a credit bank sells defaulted credit cards to a junk debt buyer, or when bank sells defaulted mortgages to a buyer they file an affidavit.
Who on this forum would like to know why?
Quote:
Record copy of lost instrument.
490.500. In all cases where the original of any bond, contract or other instrument, for the recording of which provision has been made by law, shall appear to be lost, or not within control of the party wishing to use the same, the record thereof, or a transcript of such record, certified by the custodian thereof, under the seal of his office, may be read in evidence without further proof, in like manner and with like effect as in the case of the loss of duly recorded instruments affecting real estate. When original shall be produced.
490.490. Where suit shall be brought upon any copy of a bond, or contract in writing, mentioned in sections 490.460 to 490.480 and the defendant shall, in his answer, or on motion to the court, deny the execution of such bond or contract, such answer or motion being verified by affidavit, the court may, if necessary to the attainment of justice, require the production of the original bond or other writing Copies evidence when original lost.
490.390. Copies of the record of such instruments, and of the certificates of acknowledgment or proof thereof, duly certified by the recorder of the county in which the same may have been recorded as aforesaid, when it shall be shown to the court, by oath or affidavit of the party wishing to use the same, or of anyone knowing the fact, that such instrument is lost, or not within the power of the party wishing to use the same, shall be received in evidence with like effect and on the same conditions as the original instrument.
Hello? Bueller? Bueller?
Quote:
Originally Posted by jimhcom
This potentially means millions of people were illegally evicted, and that millions of homes purchased after foreclosure may not be legally owned by the purchaser.
Did they have legal standing to be there? No. So they were rightfully evicted.
You're really weak in probate law.
Quote:
Originally Posted by jimhcom
The title companies are now unwilling to insure titles because they are unsure if the documents were forged.
Well, of course they're crying "forgery." They want to avoid as much loss as they can.
Quote:
Originally Posted by jimhcom
45 States attorney Generals are beginning investigations, and the major banks have suspended all foreclosures.
Of course they're "investigating." It's an election year. Nobody wants to be seen as weak against banks and big business.
I guess these real estate lawyers are weak in real estate law also.
Quote:
They were not forging documents. They were filing affidavits. This is nothing new. It's been going on for decades. When a credit bank sells defaulted credit cards to a junk debt buyer, or when bank sells defaulted mortgages to a buyer they file an affidavit.
Utah University law professor Christopher L. Peterson described the process in a law review article published on September 29:
To avoid paying county recording fees, mortgage bankers formed a plan to create one shell company that would pretend to own all the mortgages in the country -- that way, the mortgage bankers would never have to record assignments since the same company would always “own” all the mortgages. They incorporated the shell company in Delaware and called it Mortgage Electronic Registration Systems, Inc. mortgages.
Even though not a single state legislature or appellate court had authorized this change in the real property recording, investors interested in subprime and exotic mortgage backed securities were still willing to buy mortgages recorded through this new proxy system. Christopher L. Peterson
Calculated Risk quoted a JP Morgan spokesman saying,
"We've identified issues relating to the mortgage foreclosure affidavits and those include signers not having personally reviewed the underlying loan files but instead having relied upon the work of others. … And there are circumstances where affidavits have not been properly notarized" Oct. 13.
Failing to "personally review" loan documents means that asserting that the review took place was perjury. This happened for countless mortgages. Failing to properly notarize mortgage signatures violates state property law. It could also be seen as negligence by investors in the mortgages.
Quote:
Did they have legal standing to be there? No. So they were rightfully evicted.
By whom? If you have no note, you have no claim to the property. If they could produce the notes they would not have to be forging documents.
Well, of course they're crying "forgery." They want to avoid as much loss as they can.
Hello.... avoid loss? If they have loss it is because there is a problem with the title!
Quote:
Of course they're "investigating." It's an election year. Nobody wants to be seen as weak against banks and big business.
And the banks have stopped their foreclosures why?
I will tell you why...
The Mortgage Electronic Registration System (MERS) is ground zero for the current crisis. The very entity that was to bypass state and county laws and regulations and assume universal ownership apparently has a very limited or nonexistent basis in law.
If that's the case, then the MBS investors have no recourse to recover their investment in the mortgage investments. In addition, all mortgages written using these procedures are at risk if homeowners decide to walk away from upside down, under water notes by challenging the legality of their mortgages.
Shortly after the September 22, Washington Post article on robo-signers, Senator Richard Casey, (D-PA) introduced a bill to the United States Senate that had been passed by the House of Representatives in April. The bill created a federal law invalidating the property laws of all 50 states. It made legal all of those robo-signed mortgages notarized outside the state in which the property was sold. President Obama exercised a pocket-veto and the bill died.
Who knows the motives of Senator Casey's, the Chairman of the Judiciary Committee, Senator Patrick Leahy (D-VT) who released the bill for a vote, and all the Senators present? A reasonable person interested in the facts could assume that this was a Hail Mary pass to preserve the value and legality of trillions of dollars of mortgages for the benefit of the Wall Street, the big banks, and their MBS clients.
Absent that protection, we may soon see a pincer move against the to-big-to-fail financial giants by state attorneys general and homeowners on one flank and MBS purchasers on the other.
Here is another article saying if you have purchaced a Repo you may have problems.
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