Posted on 12/25/2009 3:17:36 PM PST by reaganaut1
A group of state and federal judges presiding over foreclosures are wiping away borrowers' mortgage debt, invalidating foreclosure sales and even barring some foreclosures outright.
The decisions in recent months by a handful of judges in states including Massachusetts, New York and Texas mark a new phase in the judiciary's battle to stem the rising tide of foreclosures by punishing mortgage companies for paperwork mistakes and alleged mistreatment of borrowers.
The number of judges taking such action remains small, and most foreclosures go through without a challenge.
But the growing number of rulings against lenders' claims is raising questions among some legal experts about judges' impartiality.
"The question is whether judges are changing the rules in the middle of the game...just because there is a financial crisis," says Todd Zywicki, a law professor at George Mason University and a critic of policy initiatives aimed at curtailing lenders' ability to foreclose.
As early as 18 months ago, several judges in California, New York, Ohio and elsewhere would dismiss foreclosure cases if they could find reason to do so. But those judges often allowed the mortgage companies to refile their foreclosure claims after attesting to their ownership of the mortgage in the county in which the homeowner lives.
Now, after the country has been mired in a housing crisis for more than two years, more judges are calling these companies on their paperwork glitches, and in some cases going much further in their efforts to help homeowners.
It makes sense for judges to demand that mortgage companies follow the rules to the letter if they want to win foreclosure cases in court, says Raymond Brescia, an assistant professor at Albany Law School who has written about the role of the courts in the financial crisis.
(Excerpt) Read more at online.wsj.com ...
How sloppy do you want them to get?
This is not error on the part of the courts.
BTW, not that there aren't criminals in the mortgage business but there are! You should be more wary.
I guess Banks and Lenders will really only loan to people that can only just about pay cash for a house.
The legal concept is known as "due diligence". If these mortgage companies didn't exercise it, they're out of luck. And there is absolutely nothing illegal or immoral about it.
I'm expected to exercise it daily in my job and if I don't the company I work for is legally liable for any errors I make. That's the way the world works.
Too bad for the mortgage companies. I don't feel a lick of sympathy for them.
If they didn't follow the rules to the letter, they deserve to lose.
L
I guess Banks and Lenders will really only loan to people that can only just about pay cash for a house.
That is exactly the end result, and is a microcosm of the litigious distrust that tears apart, and is tearing apart, a prosperous society.
I believe the US has three times more lawyers per capita than any other nation (UK).
If I wish to sell a car, I must produce a title, and then transfer that title to the buyer. Banks need to do the same with mortages. That’s a reasonable standard. However, the Court has an obligation to determine who the owner is - and protect the mortage owner’s rights. If courts become Feel Good Societies, our entire monetary and credit system will be destroyed.
How wonderful. They fix a wrong by doing another wrong. Who pays? The people who do pay their debts and let’s not forget the people who would have been good credit risks. They will have a hard time getting the chance to prove they are responsible. Not a good fix.
We had this problem with half a dozen homes in our community. Washington Mutual "went under". Ownership of many mortgages passed to "someone else", and they went under, and that ownership passed on to others.
People in the houses I'm talking about ended up walking away from their now upside down mortgages
This left several vacant houses. Smart guys cut the handles. Put in new locks, et al and rented the homes out. As long as the water, power, gas and taxes were paid, no problemo!
Eventually the owners of the mortgages finally discovered they owned them and recovered the properties.
Agreed - it is unjust enrichment to simply eliminate the debt. These rulings are a novelty, but not a precedent.
The courts are enforcing contract law in an attempt to get the lenders to clean up their act. And they will once they lose the proceeds of a few mortgages. The only mortgage YOU signed was the original and now that’s been stamped “Paid In Full” once the originator was paid for it by one (or more) buyers. When someone shows up in court with no legal documents signed by you, saying you owe them money or they get the house, the courts only have that original document to rule on. If the mortgage is paid, the house is yours. Doesn’t make a damn bit of difference who paid it off. It is the duty of that mortgage buyer to get your signature on a document acknowledging you owe them money - not yours. It may not seem “right” but it is legal and that’s the case the courts are making. You want to buy a mortgage, then do it correctly or you may not get anything in return. Follow the letter of the law, not the intent when you want to prove it in court.
The reason the banks didn't care whether they were lending money to people who could pay it back or not was because they were unloading the loans as soon as they made them.
It wasn't their problem, which is what created the subprime catastrophe to begin with.
Now that it's their problem, maybe they'll be a little more careful about who they lend money to, and what happens to the loan after they make it.
How about just demanding 20% down?
The mentality that home ownership is a right is what got us to the point where houses are valued at two or three times their real value, because people who aren't going to be able to make the payments when the ARM resets are bidding the prices up.
If we have to have it one way or the the other, I will take it where people have to almost pay cash.
Insufficient info from the article to determine if the judgments are unrighteous or not. Meanwhile, I perceive nearly all the corporate industries have become corrupt in various degrees, so I wouldn’t be surprised if a just finding resulted in a party holding paper not having their interests prevail.
No worries. Obama will appropriate all private property in due course.
“I guess Banks and Lenders will really only loan to people that can only just about pay cash for a house.”
Yea - that’s the end effect. If contract law doesn’t stand, then we become a cash-only society. No one in their right mind will lend money if some Obama-type judge can say: “you were mean, they lost their jobs, can barely pay for their face-lifts, and cannot pay the mortgage, so you don’t get their (now worthless) house back”.
For example, why would ANYONE ever buy a corporate bond, considering the way bond-holders of GM and Chrysler get screwed by Obama? Likewise, how do you lend money, if you don’t have a means of securing the loan? Maybe you lend at credit card rates, and then only up to typical credit card limits.
As to the hot-shot bankers that think they should get away without filing paperwork...tough. They should be held personally liable by the banks, rather than the deadbeats.
I agree but I think the banks should be held to the same standards
Walk Away News: Morgan Stanley Gives Properties Back to the Lender
So we’ve discussed the ethics of individual borrowers walking away from their mortgages. (Some say we’ve over-discussed it.) If it’s immoral, as some would say, for a borrower to walk away their mortgage, is it any different for a bank?
Morgan Stanley is doing just that. News reports on Thursday said the bank plans to give back five San Francisco office buildings to its lender–just two years after buying them at the top of the market.
“This isn’t a default or foreclosure situation,” spokeswoman Alyson Barnes told Bloomberg News. “We are going to give them the properties to get out of the loan obligation.”
Actually they don't. The Courts obligation is to determine if the entity which filed for Foreclosure has the legal right to do so. It's called "standing" and it's existed since the inception of our legal system.
How would you like it if some company that had no proof you actually owed them money tried to kick you out of your home?
I actually agree with you. Property owners have rights. Step one is to determine who owns the property and who owns the mortage.
Normally a home loan contract has lingo in it that says it can be reassigned to anybody else, but by Federal law the borrower has to be notified when that happens (and there is a grace period for such a transition during which an installment payment to either lender counts as valid).
I’ve been hearing of cases where the “owner” of the mortgage isn’t the same as who gets the payment. I can’t blame the courts for going “ptui” at this situation, saying that the proper entity is not making the claim. If the two entities do not square this properly when making the deal, then it’s their fault not the borrower’s.
“...the litigious distrust that tears apart, and is tearing apart, a prosperous society.
“I believe the US has three times more lawyers per capita than any other nation (UK).”
Brings up an interesting point about how corrupt & how unwieldy our legal system has become. Reading excerpts from the proposed healthcare bills is difficult because there is no subject but only references to other legislation. Only someone familiar with the previous edicts can read them with alacrity. The fact that most of our legislators are lawyers and most have large financial interests, it is clear that it’s easy to fool the public about what they are doing.
Bruno Leoni in Freedom and the Law concludes that the mistake the Founders made in the Constition was to let the elected representatives write the laws.
or you could eliminate ARMs.
A lotta people who paid less than 20% down pay their mortgage. The issue is loss of jobs and over inflated prices which are still dropping.
When I sold my house the mortgage company admitted they couldn’t find the original paperwork.
As originally conceived, the House of Representatives was to be directly elected but the Senate not. Assent of both bodies was a necessity to enact any law. Today we have the same system electing both bodies, and so we should not be surprised to see Congress become a den of prostitutes to those whose votes can be bought.
And a lot more don't.
If it were your money, money that you actually earned, who would lend it to?
People you felt sorry for, or people who were most likely to pay it back?
When banks make bad loans, it's not free to you, thanks to Freddi/Fannie and the FDIC. It comes right out of your pocket.
As a matter of fact, it is almost a certainty at this point that the subprime mortgage crisis (it isn't over yet, not by a long shot) will precipitate a collapse the US currency.
When that happens there will be a total meltdown of civilization, and over the next few years millions of Americans will starve, as will hundreds of millions world-wide.
When that happens, I hope you have three years of food for your family stored up in the basement like I do.
You do, don't you?
“If it were your money, money that you actually earned, who would lend it to? “
I don’t lend money. Banks do it to make money, to the point of taking advantage of people.
” People you felt sorry for, or people who were most likely to pay it back? “
Work history has more to do with whether someone can/will pay a mortgage than their down payment. Especially when house values drop by 50%.
“I hope you have three years of food for your family stored up in the basement like I do. “
I don’t have a basement because I live in Florida. The water table is about 3 feet down.
And where does the bank get its money, Einstein?
Boy you really are an offensive person, dufus.
Where banks get their money depends on the bank. But then I’m sure you are an expert in the financial markets as well as everything else.
You evidently believe that you are, wanker:
"I don’t lend money. Banks do it to make money, to the point of taking advantage of people."
I get so weary of empty-headed wankers who never created a job for another human being in their entire lives who think that the only reason the world is not heaven on earth is because there are evil rich people who hog everything up and don't share.
You'll find out about the real world, maybe in 2011.
The fairy tale world you have been living in is about to end, and you don't have clue.
Figures.
Deadbeats and bums, being a primary Democrat constituency, are going to get more and more free stuff courtesy of scumbag judges. It wouldn’t surprise me if many of these mortgage holders (usually everyday American investors who have a stake in IRAs, pensions, personal portfolios, etc. that include mortgage-backed securities) decide to move their holdings into gold because they are nervous about how much “other peoples money” these scumbag judges are willing to give away.
Well since I do a lot of work with banks, yeah I think I understand them fairly well.
But you are a waste of good Christmas spirit. Sounds like the post apocalypse zombies have already gotten to you.
Merry Christmas
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