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Who Owns Your Mortgage

Piobaire

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Originally Posted by Teger
because life isn't fair? why does affirmative action exist? there's lots of examples of **** not being 'fair.' sure, it sucks that you're paying your mortgage and some people are getting away owning a house they can't afford, but is the solution to vindictively pursue their eviction even in circumstances that might not warrant it?
The "circumstances" for foreclosure are fairly cut and dry, no? I mean, you either pay the entire bill at the end of the month or you don't. If you don't for a long enough period of time you have the house taken from you. Now, if life isn't fair, which I agree it isn't, time for the non-payers to move on. Since we both agree it's unfair, I'm puzzled as to why you would feel an attempt to make it so in this fashion is advisable.
 

dfagdfsh

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Originally Posted by Piobaire
The "circumstances" for foreclosure are fairly cut and dry, no? I mean, you either pay the entire bill at the end of the month or you don't. If you don't for a long enough period of time you have the house taken from you.

Now, if life isn't fair, which I agree it isn't, time for the non-payers to move on.


how about if one of the pre-conditions of accepting the settlement from rnoldh's hypothetical fund be that the payment is applied against the person's mortgage balance?
 

Piobaire

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Originally Posted by Teger
how about if one of the pre-conditions of accepting the settlement from rnoldh's hypothetical fund be that the payment is applied against the person's mortgage balance?

I'm not sure what to make of this. I mean, what else would it get applied to?

People talk about how we need help these people or risk putting the economy back into the crapper. Well, if you want to get things rolling through some mechanism like this, give those that can actually make payments a financial goose.
 

Dakota rube

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Originally Posted by rnoldh
It might have been procedural but in some states it is necessary to implement the foreclosure. And as they showed on the segment, much of the paperwork was out and out fraud and forgery committed by the banks!

What should the penalty to the banks be ( if any )? Should these people that could not or would not pay their mortgages ( could not and would not are quite different ) end up with free homes, because fraud was committed? Why should a deadbeat have a better result than someone who really struggled to keep current on their mortgage?

Those people that were responsible and did not fall behind in their mortgages. They are being screwed by losing equity. Are they due anything?

I see some huge fund being announced that will address this issue. And while it will be said that the banks are contributing to the fund I have an idea that it will come out of the taxpayers pocket.

Finally, there are different categories of a Little Guy! If it is someone that bought a home for their family and was laid off and is struggling to save their dream home and have a place for their family, then I am all for a loan modification.

But that is nothing like those that have 2nd homes or investment properties and have decided to let them go back. Or those that have chosen a strategic foreclosure ( there are many articles about this )and are walking on a property because they are so much upside down they would rather walk on the property rather than even attempt negotiating with the loan holder.

I really did not realize how far we are from a healthy RE market.


I think the banks' "fraudulent" paperwork is more along the line of robo-signing and improper notarizing. Re-filing papers is the way to fix the problems, and all it does is stretch out the process even longer. Most of the people who are "losing" their houses are doing so because, as Pio pointed out, they ain't making the payments. This paperwork **** is just obfuscation.

I am not trying to be a bank-apologist here; they short-circuited the paperwork chain, but they haven't taken thousands of houses away from people who were making their payments. They had some drones in an office in Milwaukee signing papers when they should've had people in Minneapolis or Memphis doing it.

The banks are going to take a massive ass-******* in this mess: they're going to end up getting pennies on the dollar of their initial loans, and it will run downhill to **** up the residential real estate market even more than it is now. We have a new "normal" in my industry now; it isn't pretty, but it is reality and there's still money to be made.

The other shoe to drop in residential RE is the Fannie/Freddie thing and who is going to buy mortgages on the secondary market. If that isn't straightened out pretty quickly getting a mortgage is going to continue to be a pretty tough undertaking for all but the absolute prime buyer.
 

rnoldh

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Originally Posted by Piobaire
Why can't those of us that have been paying our mortgages get some free **** too?

And I thought guys like you and Mark were smart!

Home owners that pay a mortgage on time, My God
devil.gif


Guys, just stop paying. You will probably get a year or so before there is even a problem. That is a lot of moolah. And make sure to vote as liberal as you can and there is a good chance there will be some super government agency like the RTC of the 1990s to clean up the crap. Measure the downside ( a hickey on your credit ) versus the upside ( 2 to 3 years of missed payments ). Sort of, but not exactly like the yuppies that are doing strategic foreclosures in Ca.

Of course, you two might be honest or have morals ( as well as real life experience ). That is a problem.

NB:As to myself, it is both good and bad. I sold in the beginning of 2008, so no crash had occurred. But now I rent ( a house from a friend ) and I cant just say F/U each month when the rent is due.
 

dfagdfsh

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Originally Posted by Piobaire
I'm not sure what to make of this. I mean, what else would it get applied to?

People talk about how we need help these people or risk putting the economy back into the crapper. Well, if you want to get things rolling through some mechanism like this, give those that can actually make payments a financial goose.


what do you mean what else would it be applied to? there is going to be some sort of settlement by the banks/fine levied against the banks, and the people whose mortgages are in foreclosure are going to be the recipient of some sort of money. id rather that money go back to the banks in the form of a mortgage credit than just being a free payout.

an interesting comparison is lawsuits against debt collectors. theres rigid federal guidelines about how/in what shape a debt collector can operate. if they violate these laws you can sue em and make bank.
 

Piobaire

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Rube, thanks for that input. It's for this reason that I see home prices continuing to fall for the next several years. People that are prime credit risks and cash buyers are going to be getting some great deals.
 

rnoldh

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Originally Posted by Dakota rube
I think the banks' "fraudulent" paperwork is more along the line of robo-signing and improper notarizing. Re-filing papers is the way to fix the problems, and all it does is stretch out the process even longer. Most of the people who are "losing" their houses are doing so because, as Pio pointed out, they ain't making the payments. This paperwork **** is just obfuscation.

I am not trying to be a bank-apologist here; they short-circuited the paperwork chain, but they haven't taken thousands of houses away from people who were making their payments. They had some drones in an office in Milwaukee signing papers when they should've had people in Minneapolis or Memphis doing it.

The banks are going to take a massive ass-******* in this mess: they're going to end up getting pennies on the dollar of their initial loans, and it will run downhill to **** up the residential real estate market even more than it is now. We have a new "normal" in my industry now; it isn't pretty, but it is reality and there's still money to be made.

The other shoe to drop in residential RE is the Fannie/Freddie thing and who is going to buy mortgages on the secondary market. If that isn't straightened out pretty quickly getting a mortgage is going to continue to be a pretty tough undertaking for all but the absolute prime buyer.


I really respect your opinions and this is 99% true.

But I bet you did not see the 60 Minute segment.

It was not just robo signing. There was out and out willful fraud. People were being paid strictly to sign a false name in Signing Mills! And there were known willful false notarizations.

I am certainly not for deadbeats getting free homes, and that would be a horrendous precedent. Eventually this will all get played out but it will be lengthy and painful.

I remember that when O'Quinn died I said he was a pioneer and first on the scene of the Mega semi extortion huge PI cases. I am far away from that but I bet there are literally 100s of big time PI Attorneys that are salivating on the prospects of this case, which will come. You dont get much deeper pockets than Banks.
 

Dakota rube

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Originally Posted by rnoldh
I really respect your opinions and this is 99% true.

But I bet you did not see the 60 Minute segment.

It was not just robo signing. There was out and out willful fraud. People were being paid strictly to sign a false name in Signing Mills! And there were known willful false notarizations.


No, I didn't watch the program.
If there was out and out fraud, the banks should obviously be punished. But the result of that punishment shouldn't be some asshat who quit making payments getting a "free" house. (Which I don't think you are advocating.)

Your insight about people who stop making their mortgage payments and continue to live in the house for 12+ months "free" is accurate in some markets, especially those where the foreclosure rates are sky-high. Around here you can probably expect to coast for six months maximum. The banks hire servicing companies to come in and change the locks, turn off the utilities and secure the properties.

In Minneapolis, I know for a fact, there are a lot of people living in foreclosed houses, but they are mostly unrelated people who just moved into a vacant house. The homeowners vacated and these squatters simply crash there.

I'm not sure of the universality of deficiency judgments but in some states, the lender who loses money on a house they financed for you can come after you, even after taking the house, to collect the spread between what you owed and what they netted when they re-sell the house.
 

rnoldh

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Originally Posted by Dakota rube
No, I didn't watch the program.
If there was out and out fraud, the banks should obviously be punished. But the result of that punishment shouldn't be some asshat who quit making payments getting a "free" house. (Which I don't think you are advocating.)

Your insight about people who stop making their mortgage payments and continue to live in the house for 12+ months "free" is accurate in some markets, especially those where the foreclosure rates are sky-high. Around here you can probably expect to coast for six months maximum. The banks hire servicing companies to come in and change the locks, turn off the utilities and secure the properties.

In Minneapolis, I know for a fact, there are a lot of people living in foreclosed houses, but they are mostly unrelated people who just moved into a vacant house. The homeowners vacated and these squatters simply crash there.

I'm not sure of the universality of deficiency judgments but in some states, the lender who loses money on a house they financed for you can come after you, even after taking the house, to collect the spread between what you owed and what they netted when they re-sell the house.


I think free houses for deadbeats would be a horrible precedent ( see below ). I am even against Strategic Foreclosures, but how do you stop them?

As to living in a home for free ( no mortgage payments ) till you are foreclosed, I think it is very much area impacted. Florida and Southern Cal are particularly bad with people staying 2 years plus without making any payments. If 6 months is the amount of time they get where you are, that is lightning quick.

As to how to punish the banks. And how to make whole those who have never been late on a mortgage payment, I have no idea. I do believe there will be huge amount of litigation and posturing that will gum up the works and prevent a quick solution to this mess.

Originally Posted by rnoldh
.

I am certainly not for deadbeats getting free homes, and that would be a horrendous precedent. Eventually this will all get played out but it will be lengthy and painful.
 

poorsod

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Originally Posted by Dakota rube
I think the banks' "fraudulent" paperwork is more along the line of robo-signing and improper notarizing. Re-filing papers is the way to fix the problems, and all it does is stretch out the process even longer. Most of the people who are "losing" their houses are doing so because, as Pio pointed out, they ain't making the payments. This paperwork **** is just obfuscation.

No the problem with MERS is even worse than that. My understanding is what the banks did with MERS was circumvent property law. Usually, the county clerk documents the owner of the home and mortgage and thus creates a paper trail of the owners of the property and mortgage. It is this paper trail which give legitimacy to the rightful owners. But this process takes time and money. MERS was created so that the banks could trade these mortgages without having to wait or to pay a fee. This makes securitization efficient so you can pool millions of mortgages and buy/sell them repeatedly, quickly and at low cost.

But this creates a number of problems.
1) This process turns out not to be exactly legal in a number of states and the banks are losing many cases.
2) MERS did not keep track of who owned the loans. There is no paper train (to improve efficiency). So you have to trust MERS when they say Bank X really owns the loan. There is no 3rd party to verify as they didn't log these transactions with the county clerk. This is a problem if Bank Y comes and says that they are the real owners of the loan. Or if the property owner says they owe no mortgage.

I think all outcomes are bad. You either have to throw out property law or bail out the banks (again).

This is an old Washington Post article
http://www.washingtonpost.com/wp-dyn...100702742.html

Mortgage Electronic Registration Systems, headquartered in a nondescript office building in Reston Town Center, has flourished quietly over the past decade, saving financial firms hundreds of millions of dollars by helping them avoid the time and expense of filing mortgage documents and paying fees each time a loan changes hands.

Its motto: "Process loans, not paperwork."

The MERS headquarters is tucked amid chain restaurants and retail stores near Dulles International Airport. But the firm's reach extends far beyond this slice of suburbia.

The company is an integral part of the system that emerged during the global housing boom, when mortgages were created and sold, sliced and diced, packaged and repackaged so quickly that financial firms had neither the time nor the patience to file paperwork in local courthouses as the loans were traded. By using MERS, lenders were able to reassign loans quickly and cheaply. But often the chain of ownership was not accompanied by an official paper trail.

The MERS registry tracks more than 65 million mortgages throughout the country and continues to facilitate rapid-fire transfers that keep the market for mortgage-backed securities humming.

But if courts increasingly begin to nullify the MERS model - different judges have issued differing rulings - this could call into question the legitimacy of millions of mortgages, wreak havoc on the real estate market, spur costly litigation against Wall Street banks and ultimately harm the broader financial system.

Faster, easier

The land title system that went largely unchallenged in the United States for centuries became an obstacle in the 1990s. That's when financial firms began to ramp up a process called securitization, bundling and selling pools of home loans to sell to investors. Each time the loans were reassigned, the new owner had to record the transfers with local clerks.

Several executives in the mortgage industry came up with a faster, easier approach: MERS. The list of MERS shareholders includes an array of banks, lenders and title companies. Among them: Fannie Mae, Freddie Mac, Bank of America, GMAC, Washington Mutual, Wells Fargo and AIG's United Guaranty Corp.

Here's how MERS works: When a homeowner closes on a house, the paperwork signed at settlement often appoints MERS as a "nominee" for the lender and for whomever the lender might sell the mortgage to down the road. Each time the loan is sold and resold, MERS tracks the reassignment in its computer system, without generating paperwork.

But after the MERS computer system went live in 1997, some county recording offices complained that the company was bypassing the legal process and raking in money charging fees that were lower than those charged by municipalities. They were largely ignored.

"It wasn't like Congress or state legislators did anything," said Christopher L. Peterson, a law professor at the University of Utah who has consulted in cases against MERS. "The mortgage industry just changed how the land title system worked without getting anyone's okay."

MERS has consistently claimed authority to act as a representative, or "nominee," on behalf of banks and lenders.
This is a good thread with the various news reports and such.

http://streeteasy.com/nyc/talk/discu...reclosure-mess
 

rnoldh

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Originally Posted by poorsod

I think all outcomes are bad. You either have to throw out property law or bail out the banks (again).


Yup, this is what I see coming.

What about guys like Mark and Pio ( that paid their mortgages on time )? I guess they are not that Little Guy
plain.gif


And finally, I have a feeling that you agree, but I certainly feel that there will be massive litigation and PI Civil Suits. And I mean mass tort litigation and not Rubinacci!
 

rnoldh

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And here is a link to the 60 Minutes segment on strategic default.

In many ways it makes logical sense.

But it is a ***** when one thinks of things like honesty and morals.

I would not do this. But if the US did a strategic default on its debt to China, it would not bother me.

But it might bother the credit rating agencies and other entities.
 

poorsod

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Originally Posted by rnoldh
And finally, I have a feeling that you agree, but I certainly feel that there will be massive litigation and PI Civil Suits. And I mean mass tort litigation and not Rubinacci!
Yes this will delay foreclosures and drag out the unwinding of the real estate market. But I don't understand these issues enough to figure out how this affects the banks capitalization requirements and if that will force a bank bail out. First, there is a push by companies to force the banks to buy back loans. From Bloomberg:
Demands to buy back loans ‘tip of iceberg’ By Aline van Duyn in New York Published: December 1 2010 03:08 | Last updated: December 1 2010 03:08 ... Assured Guaranty also made losses on mortgage-backed securities but steered clear of insuring the most toxic structured products, such as collateralised debt obligations. The bond insurer was one of the first to pursue aggressively its rights to force banks to take back mortgages if underwriting standards were breached. So far, Assured Guaranty has identified $4.7bn in breaches after reviewing $5.3bn of mortgage loan files, although banks have not agreed to repurchase all of those. ...
Second, how do you mark to model these irregularly traded Tier 4 assets the banks hold? Will it impact capitalization requirements? A finance friend tell me this is not an issue but I don't know.
 

Fraiche

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Why would anyone believe people would get free houses? The most they should get is there money back, which probably wasn't much anyways.
 

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