patrick.net

Suppose that a federal court successfully ruled that all mortgages in the US are invalid. A total loss for the creditors - including pension plans, insurance companies, 401Ks, banks, etc. A total win for all indebted "homeowners", from sympathetic owner occupants, to wealthy doctors' second and third vacation homes. Would this be a good thing? In short, if the US could outlaw slavery it could outlaw mortgages. It could put a final end to all foreclosures (including tax and judgment foreclosures). No one could pledge their house as collateral; no one could lose their house over an unpaid loan. My opinion is that Americans want it both ways: easy mortgage money to purchase houses, easy HELOC to spend home equity; but strong, perhaps absolute, protection against foreclosure. Well, it ain't never gonna happen. Pick one or the other, can't have both. Are Americans willing to go back to paying all cash?

Henry the Investor says

Are Americans willing to go back to paying all cash?

I certainly am if the prices make sense.

Unfortunately if law was followed, the existence of MERS and the MBS market would invalidate most mortgages.

I am not saying that the borrower does not owe the money, rather that MERS created a situation where the note became separated from the property.

Many mortgages should be considered as unsecured debts that any bankruptcy judge can discharge. This is a minor problem in states that have non-judicial foreclosure, but still a problem where these states are owed many billions for non-payment of recording fees.

In other states, "fraud upon the court" via Robosigners should have caused many thousand year felony sentances imposed upon bankers.

In this housing crisis only the little guy goes to jail.

fedwatcher says

In this housing crisis only the little guy goes to jail.

Or almost nobody.