10,000 foreclosoures just stopped dead!

The funny thing is this only delays the inevitable foreclosures and drives down prices on foreclosures since buyers will demand lower prices to compensate them for the higher risk of purchasing a foreclosure - so these consumer protection advocates are just driving down the value of other homes in Maryland - way to win one for the little guy you idiots.

I'm one who believes that the rule of law argument trumps efficiency. Democracy is about rule of law first and foremost. If you want efficiency, move to a Fascist state.

If the economy keeps picking up steam then those properties mag be worth more in six months or a year and you could see greater demand from investors fir those places

RS: I also believe in rule of law but the govt has already made it clear they are going to clean this up with any efficient means at hand -- remember TARP? As we and others endlessly blogged about the s**tstorm of the securitization disaster and the put backs, the bankers and brokers went about their business like it was a flea on an elephants ass. Many repercussions here but seems like Bill Daley might be in the "sweep it under the rug" camp and pretend everything is alright so the dollar doesn't collapse. RE Bill Daleys possible thoughts:

http://news.firedoglake.com/2011/01/12/bill-daleys-third-way-promotes-limiting-lawsuits-for-foreclosure-fraud-victims/

Easy for someone to say who knowingly took advantage of the bubble and is now talking down the market in hopes of re-buying in at a lower price in order to do again.

Basically what's at stake is whether the a buyer of a property has the right to expect an unclouded title, and whether the owner of a property can wake up one morning to find their belongings on the street without due process. Property law goes back hundreds if not thousands of years, it would be a mistake to disregard it.

RS: it seemed clear from the PBS blog that there was either going to be an end run around a lot of laws or the markets would be inundated with law suits --banks, owners, securitization trusts, pensions -- all of it.

In this Maryland case, since banks are required to mediate before re filing the foreclosure, I wonder if they won't just settle with owners for x on the dollar to keep their stock prices up and get it off their books. But what would that mean to the securitization trusts and the enormous moral hazard blowback. If banks lower the principal in any meaningful way, law abiding homeowners might take to the streets, the Tea Party would gain strength in 2012. The current administration couldn't let that happen. Maybe they just kick the can down the road and the banks do the costly work of mediation and foreclosure on case by case basis. That would mean their stock takes a hit and the economy is slower to recover. What a mess. Most scenarios would signal another leg down for home prices.

I have always contended that to get this all cleaned up the states will somehow settle the MERS issue by tweaking due process law. How else will the securitization market ever recover if you can't transfer electronic documents without wet ink. But right now, there is no legal process at all. A great decade to be a lawyer. This will take forever.

"tweaking due process law"

Sounds like a great idea.

Habeas Corpus next?

apt 23.

Perhaps you should have read that out loud before hitting reply. How do you "tweak" due process? Respect some rights?

Due process is the principle that the government must respect all of the legal rights that are owed to a person according to the law

Easy, apt23 is moralistic about housing prices, but only because moralistic after selling.

+appropriate grammar corrections.

and you are hfscomm1

Yes RS and many states say that part of that due process is that there must be a wet ink signature on the paper. But MERS trashed that process by transferring loans electronically. How will they settle that issue on hundreds of thousands of mortgages if they don't come to some terms with the states. An electronic process will have to be established. I am willing to bet the due process of many, many individual owners will be compromised.

Your position is that is good or bad?

my position is that you are hfscomm1.

cc: no doubt about it. same MO as hsf1 --- exactly. same stilted reasoning, same obsessive stalking, same copying and pasting , same nonsense.

??

we're already in a fascist state. duh. or as Mussolini called it "corporatocracy". the Federal reserve this week is moving to remove legislation on"ressiscion". long story short: even if the bank is shown to have acted fraudulently the homeowner would have to pay the entire balance of the mortgage before being allowed to sue.
"change we can believe in". but only in the interest of the banks.
Have u noticed who's the new chief of staff of BO?

Riversider?

too naive

Apt23. This is not purely a MERS issue. The judge in Mass opined as such when he offered his suggestion on how the foreclosure could go forward. That said, I read the following this morning...
[Bottom line if you don't pay you will get foreclosed on, but only if the bank can prove they have the mortgage and the note]

A Utah court case in which the owner of a Draper townhouse got clear title to the property, even though he still owed $132,000 on it, raises new legal and financial questions about a property-records database created by mortgage bankers.

The award of a title free of liens means that whoever owns the promissory note on the Draper property — likely a group of faraway investors — no longer has the right to foreclose to collect on a delinquent loan. Indeed, the townhouse owner has sold the property and kept the money. Those who own the promissory note probably don’t even know what occurred.

Decisions such as the one 3rd District Judge Glen Iwasaki handed down in the Draper case could have a big impact as the state wends its way through hundreds of lawsuits involving foreclosures, loans on properties for more than they’re worth and predatory lending practices that led Utahns to lose their homes as the real-estate bubble burst.

http://www.sltrib.com/sltrib/news/51006287-78/mers-property-mortgage-loan.html.csp?page=1

What bothers me is the subjective enforcement of contract law.

On one hand we are told we have to honor bankers salary contracts even though they were essentially paid by the US taxpayer in 2008-today... on the other hand, it is being suggested that mortgage contracts and property law itself should be modified so the very banks that were saved with taxpayer $$$ can avoid any responsibility.

These banks seem to want it both ways - enforce their remunerative contracts while taking them off the hook for completely screwing up their mortgage and related securities agreements from which they heavily profited.

What is most distrubing is the impression that the State and judiciary system seem to be looking for a way to turn a blind eye to all of this fraud.

Memito, they want it both ways on many levels.

Consider this....
Banks fought to end mark to market for real estate assets on their books, yet insist on an appraisal(current market value on a home) when one seeks to borrow funds.

RS: The Utah example you give is shocking on many levels. First of all, Utah is a Title state so presumably this would not have happened in a Lien State like NY. At least, you would hope so.

First issue is moral hazard. Though the article was sketchy on details,lets assume that because the lender could not prove clear title, the owner got the property back free and clear and does not have to pay any more of his mortgage because no one can prove that they have the paper. If this stands in hundreds of thousands of cases where banks can't prove title (mostly due to MERS electronic transfers which did not have wet ink) then millions of homeowners who played by the rules are going to go berserk. And it will play out at the polls. Forget Tea Party. Pissed off homeowners might even go for the Nazi party if they promised an equal playing field. People might be pissed off that bankers make millions but that is removed from their purview for the most part. But they will become rabid if the guy next door gets to walk away from a half million dollar mortgage and still keep his house.

Secondly, the put backs. This is judicial proof that whoever the banker is in this case, did not have the right to put this loan is a securitization trust which is what presumably happened since no one can find the title. There are a dozen processes you must go thru before you place that loan in a trust. If you don't have clear title at the end of the process, it can only mean FRAUD. By-passing the law. Reckless endangerment of fiduciary responsibility. The trust that claimed to own this one mortgage now has a slam dunk case against the bank for fraud. Meaning that not only does the bank have to take back the loss on this one loan, it has to take back every loan in the trust that held it. The put back issue is obviously not a manageable problem that the banks (and investors) are claiming.

The banks escaped collapse due to the govt and TARP. But here is the can they kicked, right here in the middle of the f'kin road. This is the same problem that threatened the banks in 08. It has not gone away. Now what are they going to do?

I'm buying some 9mm ammo. this does not end well. except for me, cause I got a big gun. -me kissing my right and left biceps-

I will only add that my problem is with people who don't take responsibility/have accountability for their own problems. I know not everyone PUT themselves into this situation - but dismissing thousands of cases where people legitimately OWE their mortgage payments just because their specific case wasn't personally reviewed is also wrong.

If you owe - you owe. That's regardless of the paperwork to get you to pay. If you borrowed money - you signed a contract to pay it back. I don't mean to imply it's a black and white issue. But again - just throwing cases out based on a bureaucratic glitch is ridiculous

But samcraig, that's not how the law works. There's a judge out on Long Island who's thrown out several mortgages since 2008, and put lots of lenders through their paces. Complaining about those borrowers getting off scot-free is like whining about somebody else winning the lottery.

When a lender is so sloppy as to lose the evidence of the debt, tough shit for them.

If you owe - you owe
-------
Everyone agrees you owe. The question is who is the party that owns the mortgage and note. It is this party who has the right to foreclose. If that were not true , then Wells Fargo could foreclose on a J.P. Morgan dead beat. But feel free to repeat your memes.

Without proof of the debt, there is no debt. Cut and dried. Morality doesn't enter into it.

Let's say you lend money to your friend. Then you die. If your executor can't find the note, the friend walks unless he's feeling generous to your heirs.

Half the proof doesn't count.

If the lenders willfully violated century year old rules for registering real estate liens and therefore waives its right to foreclose, it doesn't follow that the borrowers are "unaccountable" or get off scot free.

These cases are just about the bank's right to foreclose, not the amounts owed.

The note is still valid and enforceable, with or without the right to foreclose. In most states, the note doesn't have to be in writing and the lender doesn't need a copy of it. It just needs to be able to prove that the loan was made, that the various add-on charges were authorized by the contract, and that the enforcer is the owner of the note.

Here's my crazy-but-not-so solution to this situation:

The gov't ok's the lack of title transfer situation (and the various other fraud) and let the foreclosure process continue BUT everyone that has worked at any of the institutions used TARP money or accepted cheap FED money must pay a 95% tax for every dollar earned over $100,000 between 1997-all of these foreclosures are processed - if you decide you don't want to work in the field anymore, you OWN 100% of your earnings during that period - NO EXCEPTIONS. Until this tax is paid these individuals can't leave the country - sorry, you owe the US taxpayer for the hellish situation you have either put us thru or benefited directly/indirectly from. Thousands defrauded this country and need to help clean it up.

I know some of you might say "you can't do that b/c it is illegal" or "that isn't fair!" - but so is screwing over property holders and ignoring their rights - along with trying to trick and lie to the courts.
If we are going to ignore contract/property law we might as well ignore other laws in order to make certain that this sort of blantnt greed and arrogance doesn't happen again any time soon.

But instead of doing that, I am sure people will be more than happy to deprive homeowners of their rights... break all of the rules you want, there are never any real consequences...

:) Valiant effort Memito but the days of King Solomon are long gone.

fguy: In many states the transaction has to be filed with a wet ink signature. But the banks were playing so fast and loose with the rules that they let MERS transact electronically and thousands of original copies were destroyed. If there is no note and the bank cannot prove that the papers were filed in accordance with the law, then how can the note be valid. Clearly the courts ruling in these 10.000 cases in Maryland, the cases in MA and this one in Utah seem to indicate that the notes are not enforceable.

Even if they are enforceable on a case by case basis that doesn't mitigate the problem of the put backs. The loans could not be legally placed in trusts unless there was clear title -- not to mention the fact that lending guidelines needed to be followed. The put back issue is huge.

financeguy, true, "scot-free" just means the borrower gets to keep living in the property. They can't sell it, but they're not out on the street. A lot of this is unprecedented, at least since the farm-foreclosure riots of the 1930s, so it'll be interesting to see how it all resolves.

> I have always contended that to get this all cleaned up the states will somehow settle the MERS issue by tweaking due process law. How else will the securitization market ever recover if you can't transfer electronic documents without wet ink. But right now, there is no legal process at all. A great decade to be a lawyer. This will take forever.

you mean a real estate lawyer? i hear only complaints and disappointments about being a lawyer lately

The elephant in the room in all this is real estate tax. If people aren't paying their mortgage are they paying their real estate taxes? I'm not so sure. The States will be watching this from the real estate tax angle, for sure.

The only elephant in the room starts with an r and ends with a sider.

apt 23:

If I understand the law correctly, you are confusing the note and the mortgage/deed of trust.

The note -- the debt -- is just an ordinary contract. Under the UCC, I don't see any reason why it should need to be in writing to be enforceable, let alone have a "wet ink" signature. A lender on a note, however, can't foreclose. They need to sue and enforce just like other contracts.

The detailed and specific rules are for the mortgage/deed of trust. Mortgages are real property transfers, which have special rules to make sure that third parties can quickly and accurately tell who owns a property and find all the encumbrances on it (like mortgages, but not notes).

Even if the banks completely screwed up the mortgages, the borrowers will still be liable on the notes. They get to keep their house -- until the bank gets a judgment and enforces it.

yes, sorry. I'm only talking about mortgages. I understand your point but in this Utah case, the home owner, in spite of owing money that was secured by the house, was able to sell the house because he had he clear title. According to your scenario, the banks can sue but since the debt is not secured by any tangible asset, good luck.

And, again, in spite of my confusing language, the banks are still subject to put backs.

So, we're just going to drag out the RE mess a few more years....