As soon as the election is over, legislation "fixing" Foreclosuregate will be passed

[Junkdrawer]

Bank on it (pun intended).

Because, while the body politic can absorb the idea of trillions going to make banks that made questionable, sometimes fraudulent, loans whole, it cannot stand to see anyone in the lower or middle classes getting a "free home".

[dkf]

1. Irony is anyone truly poor didn't have a mortgage.

Anyone who did is better off.

Will this be a lottery deal? Those who had crappy servicers get their homes free and clear while those who had responsible loaners have to pay in full. That sure would be ironic.

[Junkdrawer]

2. That's why no one will get "free homes"....

I haven't run the numbers recently, but back in 2009, it looked like there were "only" $92 billion of loans in default, but almost a trillion of securities in trouble.

But wiping the books of $92 billion of loans was never an option - too many people would have been given free homes.

link:

http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=389&topic_id=4044397

[customerserviceguy]

4. Nobody's getting a house free and clear

It's just a matter of how long the defaulting borrower will be allowed to live there before the lender finally gets it's shit together and forecloses properly.

Nothing is going to make the original mortgage disappear, other than either a foreclosure or a satisfaction of mortgage, and the lenders aren't going to issue the latter as long as they have been unpaid for the amount of the mortgage.

[Junkdrawer]

5. But what do you call a house that you cannot sell, but no one can force you to leave....

:shrug:

Many would call that a "free house". Not the same as home ownership, but it is shelter you don't have to pay for.

You say: "It's just a matter of how long the defaulting borrower will be allowed to live there before the lender finally gets it's shit together and forecloses properly."

What if they can't? What if the necessary paper just doesn't exist anymore? That's why I'm betting that new laws relaxing existing lending laws will be passed.

[dkf]

7. What if you are a squatter? Don't you get the property after a certain period?

[customerserviceguy]

9. Squatters rights

don't apply here. A recorded mortgage will be a lien on the title for decades.

Sorry, that's just the way it works. Wishing it away won't make it go away.

[customerserviceguy]

8. It's all a matter of when they can force you to leave

If they try to do so after slipshod processes (probably the same level of care and concern shown when making the loan in the first place), then no. If they go back and dot every "i" and cross every "t", then they can foreclose. The mortgage is still in place, even if the original document has been shredded (just like the checks that clear your bank account) there is still a copy in place, and because it's been recorded in the same place that deeds get recorded, it's still there.

This is just a crisis in the ability to get title insurers to insure deeds to third parties, based on faulty foreclosure practices, it's not about the rights of the lenders to foreclose on the borrowers that are in default on the loans. Those rights existed on the day the mortgage was signed, and those rights are still vested in some entity, whether or not it's the entity attempting to do the foreclosure.

If MERS is the problem, then the original lender does a re-recording of the assignment into an entity which will have the power to foreclose. There is nothing subsequent to the original lending process that will make the mortgage 'go away' other than either a foreclosure or a satisfaction of mortgage that is executed by a party with the power to do so.

[dkf]

10. So you think this is no big deal and just needs a little more attention and detail to process?

[customerserviceguy]

13. It's a big deal

in that it slows down the foreclosure process, and that means that it delays the time when we find the true bottom of the real estate market, which needs to be achieved to have a genuine recovery. We've only got about two years to bring about that recovery, or we hear "Hail to the Chief" played to President Palin.

The original mortgage, as it existed on the day the loan was made, gives the right to the lender to foreclose. If that lender assigned that right correctly, the assignee has the right to foreclose, if there's a dispute about who that assignee is, then 'more attention and detail to process' is the thing that cures it. You just have to go back and do the damned thing right, if it truly was done wrong.

Nothing else will make the mortgage go away. A sloppy process of either assignment or foreclosure will simply slow the whole thing down, while a properly redone process will get it back on track.

[dkf]

15. Sounds like a significant job creator.

[customerserviceguy]

17. Yep, for lawyers and title company people

But the rest of us don't get back to work until the economy recovers. Even the lawyers and the title people get back to work when that happens.

This is just another impediment on the way to a real recovery. That's the kind we need, if President Obama is going to be re-elected in two years, and we take Congress back from the tea partiers who will have their stupidity on display.

[Junkdrawer]

12. Serious people with a LOT of day-to-day experience say the problem is bigger than that....

http://www.youtube.com/user/weidnerlaw#p/a/u/1/CSDEjjodDIY

[customerserviceguy]

14. Yeah, some guy in a K-Swiss t-shirt talking to his webcam

is a legal expert. Sure, if you have a house in foreclosure, pin your hopes on that...

Within months, the faulty procedures will have been righted, and the foreclosures will go on. The mortgages that provide for the right to foreclose in the event of a default are still out there. No magic 'gotcha' rule is going to make them go away.

[Junkdrawer]

16. Here's a post he did from his office:

http://www.youtube.com/user/mattweidnerlaw

I predict that instead of "the faulty procedures" being righted, we'll get a lame duck law making the faulty procedures legal.

[sabrina 1]

6. They won't be able to foreclose properly in many cases.

Some mortgages were transferred many times from bank to bank. Trying to get the paperwork in order all the way back to the first transfer, it has been predicted, could take years.

In a few cases, judges have ruled against the banks and given the homes to the homeowners. They were so greedy, rushing to transfer mortgages, bundling them with other worthless assets, selling those bundles to investors, the other party in all of this btw, who have yet to be heard from, that they caused a mess that will take years, maybe decades to sort out.

And this is not news. This has been known for several years, but they just kept on foreclosing. Any sales of those properties can be subject to investor lawsuits also, who are entitled to profits from them.

I don't know how they can solve this mess, but as long as two years ago I read articles warning that they needed to stop these foreclosures before the mess got any bigger. No one did, and here we are.

[customerserviceguy]

11. Show me a citation of where a bank declared a validly recorded mortgage to be void

All it takes is a simple title search to find the instruments that are considered invalid or questionable in the chain of title, and a simple re-recording of those documents with a valid entity would be all that is needed to restore the right to foreclose. Yes, it buys time for a person to refinance the original mortgage, but that works only if they have the ability to find a new lender, and the value of the property is enough to support the refinance.

I've worked two and a half decades in the title insurance industry, and I know what I'm talking about here. I suspect that you are simply speaking from the fairy tales that you've read, those are the same ones you have faith in when talking about Social Security.

In short, if a mortgage was validly executed by a borrower, the right to foreclose in the event of a default lies with some entity, even if the chain of the assignments has some sort of current trouble. It will not take 'years' to untangle, unless something falls through the cracks, which is not impossible. The final result is that most defaulted mortgages will be foreclosed on, even though the mistakes will add months to the process.

And I contend that the sooner we get through all the foreclosures, the faster we will find the bottom of the real estate market, and when we do that, we can have a true recovery.

[sabrina 1]

18. Court rulings are fairy tales to you now?

I don't think you have been following this story. 'Validly recorded mortgage'. That is not what is in quesion, it is the possible hundreds of thousands of NOT validly recorded mortgages that are in question.

[customerserviceguy]

20. Which court ruling?

That's what I asked you for in the title of my post, tell me which court ruling you're talking about.

Also, no closing goes through where there is not a validly recorded mortgage. The title company simply won't issue a title insurance policy to the lender without one.

[sabrina 1]

23. You are so wrong. I don't have time to post links right now.

Read my OP among others that explains why title companies HAVE issued insurance on properties that are now known to be without titles. Of course they didn't do it knowingly. But the first major title insurance co. announced this week that they will not be covering foreclosed properties anymore, until legitimate documentation can be produced. The problem with that is, that the corruption that has produced fake mortgage documentation is so widespread, no one knows how long it will take to be able to verify ANY title on any property purchased since at least 2005. And maybe before that.

[customerserviceguy]

24. "I don't have time to post links right now"

Sorry, I know you're an honorable person, but that looks so much like people who just don't have an answer to my question.

As far as your contention about ANY title, well, there are far more sets of court procedings that have been handled properly than improperly. I'll admit, it will take some time to sort that out. In any case, there is a statute of limitations on being able to challenge a court proceeding, and I don't think it's five years, even in the case of a minor fraud.

Also, there are states where non-judicial foreclosures happen all the time, and they don't have the same rules as the places where technicalities of robo-signers are being raised. Those foreclosures are fully valid and insurable.

How do I know? I used to be a title officer in one of those states. Your experience?

[sabrina 1]

25. I already wrote an OP on this subject with links. Check my

journal, it's the last entry there. I am at work right now and cannot take the time to do what I already did.

As far as challenging the legitimacy of mortgage notes, there is no statute on that. People did not know about the corruption that produced fraudulent titles and they now have to be straightened out no matter how far back they go.

I am aware of non-judicial foreclosures. It doesn't matter, individuals can still sue to demand the proper docomentation from the banks on their properties. Read my OP, there is a lot of information there.

As for your experience, I respect that, but experienced title corps are now admitting that they have been fooled and are refusing to insure foreclosed on properties. In the comments in my OP, I posted a link to some info on that also.

[customerserviceguy]

3. Whether it does or doesn't

Expect the mortgage lenders to go back and do the job a bit more carefully the next time around. Foreclosures will still happen, it just won't be at the breakneck pace that it was going before the monkey wrench got thrown into the process. It will simply prolong the recession, as we cannot get out of the economic hole we're in until real estate prices bottom out, and as long as there are foreclosure properties to unload, we won't see that point.

[sabrina 1]

19. If it prolongs the recession, the blame goes to the corrupt

Banks who were so greedy they didn't care about properly recording mortgage transfers. That leaves untold numbers of mortgages without anyone able to legally claim ownership of the notes.

You can rail against the homeowners all you want, but they are not the problem. Corrupt mortgage lenders, banks Wall St. gamblers, the same people responsible for the collapse of the economy, KNEW what they were doing and hoped to get away with it. They didn't count on the people and now, many judges, demanding to see proper documentation.

And that doesn't even include the investors who have yet to be heard from. Any foreclosed on home that was securitized, is not only owned by some bank, investors are entitled to a share of any profits made. Not to mention the buyers of those illegally foreclosed on homes. Soon, they may find that they are not the owners of the properties because they do not have proper documentation. And this is why many people are leery about buying those homes.

This is directly the fault of greedy, corrupt mortgage lenders, no one else. It may take years to sort it all it out, and anyone involved who knew about this, needs to be held accountable, and they will eventually as finally, this is being exposed. Several court cases across the country have already resulted in the halting of foreclosures with demands from the judges for proper documentation. When they could not produce it, they could not proceed with foreclosure, as it should be.

[customerserviceguy]

21. Regardless of who the blame goes to

We all know who suffers the consequences. Investors who bought bundles of sloppily assigned mortgages have already taken most of their hit, but the folks who cannot get jobs until the recession is over are still signing up for unemployment every week. And many of them are running out of benefits.

Maybe the investors will make sure that the muckey-mucks in charge get dinged for it, or are never allowed to work in the financial services industry any more, but that's beside the point. We need the real estate market to stop its freefall, and for prices to stabilize again before we go forward.

This is the same debate you and I have been having over Social Security, you seem to think that when there's some identifiable powerful party to blame, be it Congress or mortgage bankers, that somehow, suddenly, those entities will just accept their blame, and make everything all right again. I know that the guilty almost always go unpunished.

[ljm2002]

22. I agree that is what will happen...

...because these idiots still think the system is worth propping up.

They'll change the rules and then just tell us we have to accept it.

Just like they change the rules with workers' pensions, and abrogate union agreements, all the while screaming about the sanctity of contracts when it applies to banksters' bonuses.

This system is ROTTEN TO THE CORE.