patrick.net

Well, on the one hand you feel some glee that the greedy banksters are being forced to produce the paperwork and get their acts in order,

but on the other hand I am pissed that the guy bought a $1.5 million house and is welching on the deal he made when he borrowed the money

- it's not like it's a little old lady in a $100,000 property or a family of four near the proverty line that is trying to hold onto their property.

At some point in time, could he claim the property free and clear as in "homesteading"?

At some point in time, could he claim the property free and clear as in “homesteading”?

I would be in favor of a 100% tax on any gains from acquiring a house free and clear because you stopped paying on a loan. Tax due as 100% of the unpaid balance of the welched loan. Use the proceeeds to help fund the inevitable bailout.

@Claire,

I've got no love for obvious system-gaming sleazeballs like Joe Lents. However, the idea that it's A-ok to be so f**in irresponsible and cavalier to lose the deed to a house, then expect to be able to foreclose & evict the occupants at will is ludicrous.

Banksters have been playing fast and loose with the rules for years because it was so (short-term) profitable for them. Now, the "efficiency above all else" chickens have come home to roost and it's creating real headaches for them.

Tanta over at CalculatedRisk has been beating this drum for some time now, but to see it play out in real time is just priceless.

I had a friend a couple years back who got a NOD on his house, despite having dutifully paid up his mortgage by the 1st of each month. Took him a little investigating, but it turns out the originating lender had sold it downstream and it changed hands several times among various MBS servicers.

The note-holder is required by law to notify the mortgagor of the change and provide a new mailing address to send the checks to, but --surprise, surprise-- they played fast and loose, cuz' due diligence would cost them money 'n cut into profits 'n stuff.

Funny thing is, his checks were still being cashed by the old servicer, not returned uncashed as they should have been. So, all the while he thought he was current, the new servicer was marking him delinquent. Even better, it dinged his credit rating and he had to hire a lawyer in order to fix things and recover his wrongly-cashed mortgage payments.

Joe Lents and these corporate sleazebags deserve each other.

@HARM

Don't get me wrong - I'm definitely not on the side of the banks, like you say, they deserve each other.

I just wonder if, again, those of us on the sidelines will somehow be made to pay for this.

I'm thinking that banks will want to be changing the wording and terms on all their mortages that they orginate in the future - to our detriment.

Off topic but I couldn't resist. I've read this blog for 3 years and have learned more than I did in 4 years of college. I would like to thank everyone sharing your opinions. I haven't posted in quite a while but yesterday I came across a situation I had to share. I have been renting for almost 3 years now and couldn't be happier. Quick history; bought a triplex in 2001 and sold in 2005 for a large profit. Currently renting a 1.5 million dollar house on Lake Sammamish for $2850/month with a 3 year lease. I regularly browse craigslist for similar rentals on the lake. Yesterday I came across a rental down the road from mine. 4200sf remodeled 4br 3.5ba. A beautiful home on a great piece of property. The listing said something very odd; no use of the dock at request of owner. I've never seen this and who would rent a waterfront home without use of the dock/lake? I went to Zillow figuring that someone bought the house thinking they could hold it for a few years and make a killing. Turns out it was bought in December for 2 million. I then called the listing agent and asked about the dock rule. Turns out it was bought by the City of Bellevue and they don't want the liability. I go on to learn that the city is buying up the homes in order to build a park in about 7 years. They now own 2 that I know of. I drove there to take a look and the home next door was obviously bought over a year ago and is vacant and boarded up. My tax dollars are being used to buy multi-million dollar properties at all-time high prices that they will sit on for 7 years and pay to tear them down and develop a park. I would like to have been at the city council meeting where they came up with this use of my money. For all I know this is very common, but even so, it's just another example of the gov't playing with monopoly money.