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OMIGOD WERE ALL GETTING A FREE HOUSE
Nope. We're not ALL getting a free house, only irresponsible people get free houses. Responsible people get f*cked.
"The problem with your reasoning is, if it were as simple as you make it out to be, then we wouldn’t have just had 2 court cases giving foreclosed homes back to the borrowers, now would we?"
From a theoretical standpoint it is that simple. From a practical standpoint it is going to cost a lot of money to trace the title of each mortgage. Just like flying. Sure we all understand the concept now days. But, it takes so much money, specific knowledge, skill and time to build a plane that we individuals rarely do it. That's the difference between understanding and putting things in practice. Now, the banks thought it would be cheaper to try to get the MA courts to simply give them title to the houses in those two cases. They were wrong. Now, they actually have to clean up their messy, half ass practices. Now, they will have to spend the money to look at the title transfers and find out where the break in title was before they were assigned the mortgage. Guess what...homeowners do a Grantor-Grantee search all the time before purchasing a property. Why should a bank be any different?
"But have you read the papers? They screwed up the paperwork so badly that it’s going to be very difficult to sort out who owes what to whom and who has what rights."
So the banks screwed up the paperwork and you want who to fix it? The courts by by simply saying "oh, you really don't have title, but will give you the property anyway." Please. How about I go to court and say, I really don't have title, but I paid so-and-so for a deed on Gameisrigged's house, can you just give it to me, pretty please. Come on….get real. I have to prove chain of title, why should a bank be any different? Or, as I say, do you force the banks to pay the money to find the break in the chain of title and correct the situation. By the way, if they had recorded these transactions with the County Recorders' office like most normal people do when dealing with real estate, it would not be so hard to trace the assignments. But, corner cutting in the name of cost savings, laziness, stupidity leads to you getting what you paid for.
"I don’t see what your analogy has to do with the situation. "
It's the contractual aspect of what the banks did. Just because they do not have a clean transfer of title for foreclosure doesn't mean they do not have any remedies. They can always go after the entity (probably another bank or banks subsidiary) for breach of contract. The failure to properly assign the title per the contract. Of course this has nothing to do with the homeowner.
"Why would the bank want to “negotiate a dealâ€, if it’s as simple as you claim it is for them to sort out who the mortgage is assigned to."
Like I said, theory and practice are two different things. In practice, it cost money to hire someone to do a title search. Add to that the complication that banks probably did not record their transfer with the County Recorder (stupidity). That cost more money because you know have to track contracts assigning rights with your own poorly kept records. Then, tack on the securitization process that probably did not list all the mortgages backing that mortgage-backed security (sloppy). Mo' money to spend. The choices: 1)Spend all that money trying to track everything down so you can properly foreclose, 2) Simply sue the other party to the assignment contract for your damages because they did not properly assign title. 3) Since you have the contractual right to the mortgage, but not the mortgage, negotiate with the homeowner to release their claim on the property.
"If the bank can’t foreclose on me, then I would just stop paying them. Why would I want to negotiate?"
Because the bank can foreclose on you. It would just take the bank that actually has title to do it because the homeowner is still in breach of the mortgage. There's your motivation to negotiate.
"Do you have a problem with people being expected to pay their debts?"
I have more of a problem with banks making loans to people they know will not have the ability to pay it back because it raises prices for those who have to compete with foolishly loaned money, i.e. a housing bubble. If Ryan1781, makes $45K a year and a stupid bank gives him a mortgage of $600,000 with no money down, all housing prices go up because there is an idiot with a lot of money to spend. Now Gameisrigged who makes $145K a year has a choice: 1) Borrow stupidly to compete with Ryan1781. 2) Borrow responsibly and get a crappy lower priced house in the bad part of town. 3) Rent.
In answer to your question...NO, I DON'T expect a person who knows nothing about how financing works to pay back a huge debt that is beyond their means. And, if I had access to their income records when they came to me with a request for a huge debt, I would have told them to hit the road, you're a bad credit risk. A fool and his money are soon parted. Would you make that loan?
"Again, your “stick it to the banks†mentality would be fantastic, in a perfect world."
Agreed.
Sheesh, Ryan. I just don't have the time or inclination to wade through your mess of strained analogies and strawmen. You don't seem to be getting my point at all. You act as though I am defending the banks, when I have written the exact OPPOSITE. You obviously see it as "justice" if hardworking taxpayers who pay all their bills have to cover the debts of irresponsible people who spent beyond their means. I don't think that's fair at all, so I guess we will have to agree to disagree.
Hey Ryan, here's another article about more court cases where houses were awarded back to the borrowers, who now do not have to pay their mortgage off:
http://dailybail.com/home/man-beats-bank-and-creates-mortgage-banking-mers-bomb-lost-p.htm
"Lost Paperwork Means Free Homes For Borrowers"
"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."
"The attorney for the man in Draper, Utah, says he has won two other cases this way, and another attorney in Utah got a default judgment giving title to borrowers who owed $417,000 on a home."
"That could mean in these cases that no one is in a position to try to collect because the actual notes are lost or destroyed, potentially making some promissory notes investors think they hold worthless."
Apparently this author doesn't believe it's going to be easy to collect on these loans - perhaps impossible. Still think it's going to be easy as pie? Because I haven't heard of any lenders getting any of these houses back yet after they've been awarded to the borrower, have you?
Everybody still having a chuckle over the idea of "free houses"? Not so funny anymore, is it?
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http://www.palmbeachpost.com/money/real-estate/court-rules-against-banks-in-pivotal-mortgage-case-1171822.html
With most of the residential mortgage were securitized, most lenders will have difficult time to prove their ownership of the mortgage. If banks cannot prove they own the mortgage, there is no point to pay since one can get the home free. With most of the court rule the case base on precedence, the banks can be in trouble. It is a moral hazard but nowadays, not much moral value are left when confronting with $$, especially in the US.
This really spell a big big future trouble for banks.
#housing