Posted on 10/15/2009 7:41:30 AM PDT by marshmallow
A real estate judge is refusing to reverse a landmark ruling that opens the door to voiding tens of thousands of Bay State foreclosures dating as far back as 1989.
“The foreclosure sales (in question are) invalid because they failed to meet the requirements of (Massachusetts law),” Land Court Judge Keith Long wrote yesterday in reaffirming a decision he originally reached in March.
Long denied a request from Wells Fargo and U.S. Bank to reinstate two Springfield foreclosures he invalidated in March because of flawed paperwork.
As the Herald first reported in June, the case centers on documents that banks and big investors must file any time they sell mortgages to each other.
However, some paperwork often gets lost, as mortgages typically change hands over and over again in today’s complex market.
Still, Long ruled that banks can’t foreclose on homes unless they have complete paperwork covering every time a specific loan changed hands.
The judge found that fixing documents after the fact, as Wells Fargo and U.S. Bank did in the Springfield cases, isn’t enough. He ruled that flaws not resolved earlier can depress bids at foreclosure auctions, reducing how much consumers who face home losses get for their places.
“The issues in this case are not merely . . . a matter of dotting i’s and crossing t’s. Instead, they lie at the heart of the protections given to homeowners and borrowers,” Long wrote yesterday.
Experts say the ruling paves the way for thousands of people who’ve lost houses to foreclosure to challenge their homes’ seizures.
“The judge has thrown into question every foreclosure performed in the Commonwealth over the last 20 years,” said lawyer Lawrence Scofield, who represents Wells Fargo and U.S. Bank.
Scofield said only foreclosures before 1989 are beyond review, as state law gives people..........
(Excerpt) Read more at bostonherald.com ...
Market watchers add that the judge’s ruling affects far more than just foreclosed homeowners. For instance, any consumer who owns a house foreclosed on in the past two decades must now worry that a former owner will sue to reclaim the property. Such homeowners could also find it impossible to sell or refinance because of “clouded” titles. In fact, some consumers who’ve tried to buy foreclosed homes in recent months haven’t been able to get mortgages or title insurance because of Long’s initial decision. Bank of America and other firms have even pulled some foreclosed homes off of the resale market.
‘However, some paperwork often gets lost, as mortgages typically change hands over and over again in today’s complex market. ‘
The dog ate my homework.
Dam. LOL @ Banks.
If the banks indeed did not have their paperwork in order when they conducted the foreclosures, then they have no one to blame but themselves for this problem.
So what happens if you bought a house that was in foreclosure, and now the original homeowner wants their house back because the foreclosure is deemed invalid?
I don’t know about Massachusetts, but every time a loan is sold in Wisconsin, the reassignment of the mortgage MUST be filed with the county’s register of deeds. At least, that’s the way it was in the 80s, when I worked for a title insurer.
past Two decades? Wow!!
We are desending into the status of a Banana Republic.
This is the type of problem that plagues the third world..no clear titles. It is mainly due to a overworked and corrupt judiciary. Now coming to a home you own..or thought you owned.
It also can be blamed on banks, who have become incompetent in handling any paper work.
The system of MBS has torpedoed them big time.
“Long denied a request from Wells Fargo and U.S. Bank to reinstate two Springfield foreclosures he invalidated in March because of flawed paperwork.”
What about all the “flawed paperwork” that ACORN helped fill out which resulted in bad loans? Why doesn’t the judge throw those out?
Wow! "Fight Club" comes true.
"Show me just what Mohammed brought that was new, and there you will find only things evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelogus
Hope you have very good title insurance and a good real estate lawyer.
.
At the heart of this is the complete absence of any mortgage application, or the presence of an application with potentially fraudulent signatures on it. That’s one good reason why many of these foreclosures have not been processed, and why these banks have so much trouble purging these “toxic assets” from their balance sheets.
JPMorgan Chase inherited a ton of this kind of thing, and the only reason they are showing so much profit is because they have successfully pawned a lot of these mortgages off on the FHA, Fannie, Freddie, and anyone else they can find to guarantee the loans.
If someone challenges their foreclosure and demands “ink on paper” signatures, the bank may well not be able to produce anything of the kind, and therein lies the problem...
so...what is the remedy here, to give back a house you lost in 1989?
“Fight Club” comes true.
How so?
Yep. I remember when I got my mortgage what sticklers they were that all of my paperwork be completely and properly filled out with every 'i' dotted and every 't' crossed.
But in their rush to 'repackage' and 'resell' them on the 'secondary market' it seems they got sloppy with their own paperwork.
No sympathy here. None.
Don’t ever touch a foreclosure unless it’s worth the legal fees and possibly losing the property.
I was thinking of the end of the movie, where the buildings were demolished, taking with them credit card and mortgage records.
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Wow - some homeowners are going to get a free house out of this (with just a ding to their credit).
Of course they will have to live with the day-to-day “fear” that someone may show up at their doorstep with a piece of paper and say “Get out of my house deadbeat.”
And, these homeowners will never be able to sell it or refinance it. And how many will want to do improvements or even a new roof if they could lose it next week?
I wonder if a market will spring up for trading these houses?
I wonder if a market will spring up for eventually tracking down the paperwork for a commission?
Apparently the fact that homeowners did not make payments is unimportant. Only the paperwork matters. In that case, no contract signed by anyone who happens to default can be held as legal, right? So go ahead and sign whatever you want and then just don’t bother to pay. Some judge will be HAPPY to bail you out.
‘homeowners’
Obviously they weren't homeowners. If they ‘owned’ the home they wouldn’t have a mortgage. My comments were directed to the bank for failing to be organized and prepared.
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Ruling Could Undo Thousands of Foreclosures
The process bordered on being sadistic on the banks part. I have to admit that I’m chuckling under my breath now as the banks are experiencing what many of us went through. I can’t say I side with the banks on this issue.
Yup, American Jurisprudence at its best: Screw up Everthing!
So what happens if I am a mortgagor... I too am trapped, and my capital erodes further.
I love seeing the banks sweat for their incompetence. As for whether the ruling should stand, I think is should come down to whether the banks actually have sufficient proof that:
a) The borrower actually agreed to and signed the contract for the loan.
b) The bank legally owns the loan.
If they do not have clear and convincing proof of both of these things, the foreclosures should be overturned. If they do, I think the foreclosures should stand, even if some paperwork was incomplete.
Everybody missed the point.
These homes will never be returned to the original owners.
These homes will become the property of the government.
Watch your property rights erode right before your eyes.
Paper does not give you property rights. Screwed-up paper does not revoke your property rights.
i’ll interrupt the conversation you’re having with yourself to agree that this ruling does bring up an issue for MBS. The solution will probably be a payment by the foreclosing institution the the foreclosed party(some formula based on value at time of event) in order to maintain a valid chain of possesion. Anything else would b a disaster.
Good point about the homes becoming property of the government. At that point, they can do what they wish with it. With this crowd running the show, it will be ugly.
What contract? That's the point.
The judge threw out the foreclosures because the banks couldn't produce the original signed contracts.
If the bank can produce the signed paperwork, then they have the right to foreclose.
The banks were trying to 'sign' the contracts after the fact.
Is that legal?
Okay, I am not in MA but Chase handles our home loan. If my house goes into foreclosure, should I demand the bank come up with this paperwork? What can be learned here for those of us going thru this in other states?
“So what happens if you bought a house that was in foreclosure, and now the original homeowner wants their house back because the foreclosure is deemed invalid?”
Ozero will print the money and give it to the bank. The bank will then be able to decide the value of the lose and reimburse the former homeowner. America can not afford to have Ozero’s biggest contributors to suffer from financial lose.
Something to think about is what happens to those who are making payments to someone who does not actually have documented proof of ownership of the mortgage. When you think you have paid off the mortgage, who will have the legal authority to release the recorded lien. If the chain of ownership is not properly recorded, a signed release of lien from the person you have made payments to may be worthless.
The practice of converting mortgages on real property to widely dispersed securities without a properly recorded paper trail poses a much larger problem than just the impact on foreclosures. With real property, it is not as much a question of what is morally right or wrong, as what is legal and provable.
Here’s a question. Might sound dumb but I am curious.
I looked at our property tax info. at the assessor’s home page and for our property, it has a copy of the original deed we signed when we first bought the house.
We refinanced about 13 years after that and signed a new deed.
Shouldn’t the assessor’s office have the more recent deed since this was done by a different company?
Shrug. Dunno, whatever the case, don’t lose it!
Yep, their only hope of not being taken like that again in the future is to leave the MA mortgage market entirely. Let the libs sit on their homes, unsold forever.
I don't see this as a political problem at all. This is just a case of a bank not doing its job. For me personally, I would hate for some bank with which I have no relation succeed in foreclosing on my house just by claiming it "owns" my house with no verifiable proof.
I don’t want to lose it. Talk about stress...........
Basic contract law stipulates that one party to a contract cannot unilaterally change the contract. When a bank sells a loan, the mortgagee MUST be notified.
The judge in this case is absolutely right.
And if we are not notified?
So then, I should ask if they sold the contract at any time?
You can ask your attorney to demand the full chain of assignments with copies of notifications to the mortgagee.
If you write the letter yourself, copy your state attorney general and the FDIC. Send certified.
P.S. I am not a lawyer.
What EVERYONE seems to be missing is that if the bank screwed up the paperwork, the previous owners rights should be AGAINST THE BANK NOT AGAINST THE PROPERTY. Individuals bought the property after it had been through the appropriate channels - they should not be at risk of having their home taken away from them based on a mistake that someone made in selling the property.
Would you cash this photocopy of a check I bought from somebody who sold it to sombody I never met.
that is the mortgage back securities market.
Good.
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