Skip to comments.The Great Mortgage Mystery
Posted on 10/08/2010 3:28:48 PM PDT by Palter
The big question from the mortgage meltdown isn't why so many distressed homeowners are defaulting on their loans.
It's why any of them are still making payments.
In the worst-hit areas millions have no equity left, and little hope of seeing any anytime soon. The market value of their homes is far below the size of the mortgage.
If they just stop paying, what is going to happen to them? In many cases they may get to live in the home rent-free for months, even years, until the bank gets around to seizing it.
If Frank Abagnalethe con man played by Leonardo DiCaprio in the film "Catch Me If You Can"were operating today, he'd probably be living rent-free in a super-luxury high-rise in Miami.
Consider the latest revelations. The big banks are so backed up with foreclosures that some of them resorted to hustling through repossessions without the proper paperwork. Some of themincluding Bank of America, J.P. Morgan Chase and Ally Financial's GMAC Home Mortgagehave announced a temporary freeze in some states on further foreclosures while they sort through the mess.
In one case, a bank employee said she was approving 8,000 foreclosures a month. By my math, that's roughly one for every minute and a half. No, she wasn't reading all the documents thoroughly. (As one wit observed, the banks paid about as much attention to foreclosing on the loans as they did to making them five years ago.)
In many cases, thanks to the fallout from securitization, it's not even clear who owns the mortgage. The payments may be due to different financial institutions around the world, some of which have gone the way of all flesh.
No wonder a fair number of borrowers have simply gone on strike.
(Excerpt) Read more at online.wsj.com ...
These deals were so bad I would just stay until they Foreclosed and then rent a house. At least with stock you can sell out quick just before the crash.
You borrowed the money, and agreed to pay it.
If the house went up in value, the bank was not entitled to a cut. Now the house has gone down in value instead.
But you still must pay what you borrowed.
Because they’re “homes,” not “houses.”
Amazing that most of these attempted foreclosures pertain to loans for which the foreclosing banks have already been reimbursed at least once, sometimes twice or three times.
How many times do these banksters need to be reimbursed for these loans?
In Houston back in the 80’s several mortgage brokers went to prison for selling the same mortgages to different investors. People would make their payment then get calls from other servicers wanting the payment.
I do have to wonder if a lot of these banks haven’t been paid more than once. I have a feeling the fraud runs very deep.
Finally, let’s say you owed a small, private bank that went under. Who owns the house?
This is interesting. So if my church pays off my loan, the bank can continue to pursue me because I did not pay off the loan. The taxpayers have paid off the loans. Now the banks want the mortgage holder to also pay it off. Make sense?
When your car gets repoed, do you still pay back? Or that rent to own couch or TV? They get the house back. There is some reason for still paying on a presently sunk house. Moving costs, credit wrecked, also coming inflation from the Federal Reserve.
Wouldn’t it be nice if the banks ran up the price of houses, made a boatload. Then got bailed out. Then foreclosed, then had the Fed cause inflation taking that say 150K house and running it up to 250, make money off the sale, and finance it again for the next generation.
Rinse, lather, repeat.
( Who wants to wait around for 20-30 years for 5 percent when you can flip/churn the entire market every 10 years.
Not that that would ever happen.
Credit ratings should place much more emphasis on character. A person with bad character may fail to repay a loan that they are able to repay, simply because it's advantageous for them to default. A person with good character will repay all debts, if they are able to do so. We are seeing that this can be more important than "ability to pay".
Character also doesn't tend to change much with time. Character adjustments to credit ratings should last for a very long time.
Sounds like mortgage holders may have a hard time conveying clear title to your house even if you pay off the mortgage. How can you tell if your mortgage was ‘’securitized?’’
sun tzu: always give the enemy an exit.
these people live in their homes, not a house, so their escape is to say current and avoid the bank mess.
In the end I think the banks will have to “yield” accross the board.
South Florida is becoming a ghetto, more people moving out than in. Middle and upper middle class are leaving. Retirees are finding safer spots enjoy life. Middle/Upper middle class Latins are retiring to the OLD country.
Jamacians and Haitians are moving in.
Ans if you cannot they can foreclose and take the house back and add it to their bloated overvalued portfolio of other homes they took back.
Look, folks are not stopping payments for fun, Obozo and the others who made all the green have destroyed the job market and many have lost their jobs. So what do you suggest they do?
Leave the keys in the mailbox, move on and let the bank collect another relic to their greed and everybody is made whole and life goes on.
Unless of course your stock portfolio is heavily laden with banks....
I think it's worse - or better - than that.
I think their original documents are defective. They bought the loan but not the mortgage - that is, they don't own the property, only the loan.
They can do whatever they can to collect - but they can't foreclose.
at what point does the bank lose its charter and become a holding company?
I wish journalists and others would stop perpetuating this myth. A person or entity that bought a mortgage backed security has no claim on your house if your mortgage was part of the MBS package. None. We must not confuse an MBS with an actual mortgage, any more that we should confuse any object with that object's reflection in a mirror. Not the same.
Would that be because they didn’t bother with paying the fees to the county’s recorders? My understanding is this was one of the ways that corners were cut. In fact, I think that was the attraction with MERS. No fees at the county!!!
The blindness of their greed is breath taking.
And it is crashing our COUNTRY!!!!
Simple answer, many people are honest. They know they borrowed the money to buy the house, and agreed to pay it back, so they will.
Many people have figured out that the servicer they mail their checks to cannot name the lender , if the lender is the true lender or how much of various TARP/BAILOUT/INSURANCE/Credit Default Swap AIG money , etc. has been credited against their balance ... The answer is $0 when the answer should be many tens or hundreds of thousands of dollars... many people are paying on a mortgage to a dishonest bank that has already been paid in full for that mortgage when the “tranche” defaulted and all mortgages in the tranche were paid off by some form of insurance or the taxpayers.
I think their original documents are defective. They bought the loan but not the mortgage - that is, they don’t own the property, only the loan.
They can do whatever they can to collect - but they can’t foreclose.
It looks more like they have the deed and the note/mortgage but they sold the note (it’s paid off) and created a bond in it’s place that the original borrower has no obligation to pay and they have no right to foreclose as it is not linked to the property.
Then who owns the mortgage????
Those MBS’s were made to be streams of income for investors and pension plans. They are interwoven across the entire financial services “world” of the US and the world.
It seemed to me that this rush to foreclose was a rush to keep the “balls” in the air, and keep the system from crashing.
Besides, the banks weren’t planning on keep the liar loans because they KNEW that they were bad, they were hot potatoes, to be gotten rid of quickly.
So, I ask again, Then who owns the mortgage????
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