foreclosure mess

[dmarc117]

http://www.zerohedge.com/article/janet-tav...capital-markets

[dmarc117]

http://news.yahoo.com/s/ap/20101008/ap_on_...oreclosure_mess

[redrumjuice]

What does this mean?

[dmarc117]

what does it mean.........

 

for people getting foreclosed--they can stay in the place now, free of charge until the mess is cleared up

 

for the banks--they have no idea what they own or dont own. these notes have been sold, resold, and resold. they have no idea what their securitization is worth. another possible bailout if it gets real bad. investors will sue. titles will be invalid.

 

housing market--it does not move now cause all of this inventory is frozen.

[redrumjuice]

So you're telling me to quit paying my mortgage?

[bpwallace49]

So you're telling me to quit paying my mortgage?

 

If you took out a mortgage through a numbnuts bank that cant complete basic paperwork correctly to secure their assets . . go ahead!

[westvirginia]

If you took out a mortgage through a numbnuts bank that cant complete basic paperwork correctly to secure their assets . . go ahead!

 

Translation: You can quit paying a GOVERNMENT mortgage.

[bpwallace49]

Translation: You can quit paying a GOVERNMENT mortgage.

 

Not so much?

 

From dmacs link

 

EK: It sounds almost like you’re saying we still need to go through the end of our financial crisis.

 

JT: Yes, but I wouldn’t say crisis. This can be done with a resolution trust corporation, the way we cleaned up the S&Ls. The system got back on its feet faster because we grappled with the problems. The shareholders would be wiped out and the debt holders would have to take a discount on their debt and they’d get a debt-for-equity swap. Instead we poured TARP money into a pit and meanwhile the banks are paying huge bonuses to some people who should be made accountable for fraud. The financial crisis was a product of our irrational reaction, which protected crony capitalism rather than capitalism. In capitalism, the shareholders who took the risk would be wiped out and the debt holders would take a discount but banking would go on.

 

How is this only related to evil gubmnet problem? isnt that a failure of those bastions of free market economic . . the banks?

[dmarc117]

http://www.huffingtonpost.com/dylan-ratiga...n_b_754586.html

 

good explanation

[bpwallace49]

http://www.huffingtonpost.com/dylan-ratiga...n_b_754586.html

 

good explanation

 

Good read . . .

[dmarc117]

http://www.zerohedge.com/article/meet-dani...me-over-weekend

[Big Country]

I think it also means, don't buy a foreclosure cuz you might have title headaches later on.

 

 

Or, if you do, be sure to get property title insurance so that if there is a claim made on your title and you lose out, you are not responsible for the mortgage on the property, insurance pays it.

[Perchoutofwater]

http://www.zerohedge.com/article/meet-dani...me-over-weekend

 

I hate lawyers. Most are the scum of the earth. They are part of the reason we end up with 2,000 page bills passing congress that nobody has read. They are part of the reason or tax code is so f'd up. Sometimes I wish we could just go back and start over with a constitutional amendment that says all laws that over 20 pages long are nullified and all future laws mush be less than 20 pages and written in plain English.

[redrumjuice]

Hey, it's change you can believe in!

 

Everyone stop paying your mortgage, hussein's gonna take care of it!

[dmarc117]

I hate lawyers. Most are the scum of the earth. They are part of the reason we end up with 2,000 page bills passing congress that nobody has read. They are part of the reason or tax code is so f'd up. Sometimes I wish we could just go back and start over with a constitutional amendment that says all laws that over 20 pages long are nullified and all future laws mush be less than 20 pages and written in plain English.

 

 

http://news.yahoo.com/s/yblog_upshot/20101...oreclosure-mess

[Azazello1313]

A Few More Thoughts on the Foreclosure Scandal

Arnold Kling

I am not a lawyer, so treat the following as an amateur's view.

 

When you obtain a mortgage on a home, two documents get recorded. One is a mortgage, which as I understand it is just a piece of paper that says (if I am the homeowner), "Arnold Kling cannot sell this house until he pays off his loan!" Another document, which we will call the mortgage note, gives the terms and conditions of the loan. The lender, who we will call the noteholder, has the right to foreclose if I do not meet the terms and conditions of the loan.

 

The "foreclosure scandal," as I understand it, is that with securitization, the actual noteholder has changed in ways that may not have been recorded properly at the county records office. However, the identity of the noteholder is well defined in the trading systems used by mortgage securities traders.

 

Morally (as opposed to legally), the borrower is not really a party to this controversy. That is, the borrower did not abide by the terms of the note. The borrower has no moral claim to anything at this point.

 

The potential dispute is over whether the party demanding foreclosure is the rightful noteholder or not. That dispute should morally (again, not necessarily legally) be resolved among the parties that might claim ownership of the note. In theory, those parties could be getting all worked up over the documents, signatures, and so on being used in the foreclosure process. In practice, those parties are not disputing one another. The process that the industry uses for identifying ownership interests in the mortgages seems to be working, as far as the relevant parties are concerned.

 

However, the %&*#^ lawyers for the borrower come in and claim standing to challenge the foreclosure on the grounds that the foreclosure notice was sent by someone who has not properly documented that he is the noteholder. Legally, they may have standing to do this. Morally, they do not.

 

The sensible policy would be for the government to step in and legislate that borrowers have no standing to sue unless they are claiming to have complied with the terms of the note. If necessary, a Federal law could give precedence to the systems that the financial industry has in place for resolving potential conflicts among noteholders, rather than allow local rules to interfere with interstate commerce in lending.

 

What I think of as obviously sensible public policy looks like it's friendly to "the banks," and so the #@#%$^ lawyers naturally made a point of bringing the issue to the media's attention three weeks before the election. That way, instead of responding with sensible policy, the politicians have to show themselves hating on the banks. But if there were any justice, this "scandal" would be regarded as nothing but baloney sandwich.

[Azazello1313]

more arnold kling:

 

What has emerged in recent weeks as "the foreclosure scandal" represents the collision of this 21st-century computerized, global financial system with an 18th-century legal process for obtaining ownership rights to buildings and land. Indeed, the United States has one of the most backward land-title systems in the industrial world.

...

[W]e could go a long way toward bringing title records into the 21st century. Doing so would provide a number of benefits. For instance, we could make property ownership sufficiently secure that we could do away with the wasteful, expensive service known as title insurance. Title insurance indemnifies the owner against past mistakes that might later be used to deny clear title to that owner. If we had a reliable titling system, owners and mortgage lenders would not need such insurance.

 

A modern titling system also would reduce the cost to mortgage lenders of complying with the process of recording a title. A mortgage is a legal document that is entered into the property records in order to prevent a borrower from improperly selling a property on which there is an unpaid mortgage loan. When foreclosing on a property, the lender must, like any other seller, establish clear rights to the property before selling it. It is in that step - where the lender must produce the proper paperwork to comply with legal standards using antiquated recording methods - that many banks apparently took shortcuts, forged signatures or used documents that were only re-creations of the originals.

...

[T]he ultimate losers from this will be you and me. The higher the cost of foreclosure, the more banks have to charge to cover their costs of mortgage lending. In the end, mortgage interest rates for all borrowers will be higher because of the difficulty lenders face in complying with antiquated systems for title transfer.

 

With foreclosures held up by legal challenges, who will be the winners? The delinquent homeowners, who are not exactly heroic figures, may get to stay for free in their houses for a while, until the mess gets straightened out. But in the end, they have not made their payments, and they will have to forfeit their homes.

 

The real winners will be lawyers, whose eyes shine with the dollar signs of class-action lawsuits. In fact, as you read stories about the foreclosure scandal, you should realize that it is in the interest of lawyers to feed reporters the most lurid tales of improper behavior, the better to whip up public support for a settlement in the hundreds of millions of dollars, much of which will go to the litigators.

[yo mama]

more arnold kling:

The title insurance argument is crap. I'm not going to buy property from an unrelated third party unless I know they have good title. Someone has to be responsible for verifying title in a way that makes them financially responsible if they're wrong. And you can't expect idiots who can't understand their own mortgages to be responsible for verifying title to every piece of property they *might* consider buying. Fraud and graft would rampant. (Well, more rampant).

Edited October 14, 2010 by yo mama

[yo mama]

Or, if you do, be sure to get property title insurance so that if there is a claim made on your title and you lose out, you are not responsible for the mortgage on the property, insurance pays it.

Why should you have to pay for property you didn't *actually* buy? Imagine this:

- someone sells you a house they didn't actually own

- you take out a mortgage to pay the guy

- the real owner pops up later, wants the house back, and legally kicks you out

- now you have no house but must continue paying the mortgage? F that.

 

Imagine instead that a 3rd party were to *insure* that the person who sold you the house in the first place, you know, actually OWNED it. That way - if the 3rd party insurer is wrong - THEY pay the mortgage because THEY screwed up. In that case, who is getting away with anything?

Edited October 14, 2010 by yo mama

[yo mama]

How is this only related to evil gubmnet problem? isnt that a failure of those bastions of free market economic . . the banks?

The banks are not at fault at all. Its only the lawyers those bank hired who are to blame.

Edited October 14, 2010 by yo mama