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 Abagnale—the 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 them—including Bank of America, J.P. Morgan Chase and Ally Financial's GMAC Home Mortgage—have 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 ...
WOW!!!
I have tried to keep up with all of this, but I’m no “insider”.
So, alot of people might just have had their notes paid off with TARP,
BUT,
we keep paying because nobody told us what was really going on. That we are really only paying on a bond, with no title attached to it.
Do you have a link? Is this at Market Ticker?? Thanks!!
Certainly worth repeating.
No.
You pay back what you owe and keep in living there or you stop paying and give the house back.
Part of the deal is that after the borrower pays-off the loan, they get clear title to the property.
If the lender can no longer provide a clear title to the property, the borrower should return the property to the lender, the lender should return all payments made to that point, and make no adverse notations on the borrower's credit record.
The lender can then resell the house once they can straighten out the title.
If they can't straighten out the title, "sucks to be them".
This is old news but it’s only now beginning to be accepted by the public at large .. it is undeniably true ... my only question is how it will be resolved..
You might want to start reading at the various websites that fight foreclosure..
www.livinglies.wordpress.com
www.mattweidnerlaw.com/blog
http://4closurefraud.wordpress.com/
and many others ...
What if the loan has already been repaid ,, I don’t care if it’s your Aunt Clara or an insurance policy that paid the loan.. Do you still give up the house because you personally didn’t write the check?
Sorry, not how it works...
People agree to pay...When they stop paying, they can just give the house back.
The simple answer is: Who do you send your mortgage payments to? When I bought my home I got a mortgage from "Company A". At that point, "Company A" held the paper. A few years later, they sold my mortgage to "Company B". Now "Company B" holds the paper. After "Company B" feels that they've made enough interest off my loan, they'll no doubt sell it to "Company C".
I haven't said anything about securitization, because to me it's meaningless (except in a macroeconomic sense). I don't care if Companies A, B, or C sold mortgage backed securities with my mortgage as part of the package because my mortgage stayed put. I don't owe money to the Singapore Housing Authority, or to the Sovereign Bank of Bahrain, or to anyone else who bought that stuff, and never will. That's not how it works. The mortgage backed security is based on the income stream from the mortgage, not the mortgage itself. Purchasers of MBS have no claim on me, only on the issuers of the MBS.
Ding!
I ran into something similar over a car loan.
I missed one payment, was late on the next, made a double payment including late fees that were never properly credited...and entered a nightmare.
The bank “sold” my (actual)loan balance to a collection agency, but apparantly did not include the title in the transaction.
My credit rating was shot, but even if I paid the collection agency, I still would not acquire the “title” to my car (according to the collection agency).
So why would I pay a collection agency an amount I do not dispute I owed on the loan balance, when I would still never “own” the car?
Are these mortgage buyers in the same catch 22?
That any payments they make now will not be credited to their account?
This situation is bad now.
Christmas is going to be quite a season this year, and next. Well, for the foreseeable future.
The economy is seizing up.
“Who do you send your mortgage payments to? “
Well, that is the interesting part. We had an original loan with one company. A few refinances, not HELOC’s, just rate reductions. No second mortgages. In 2007, we get a letter from company A saying we don’t service your loan and pay company B, who is your new servicer. Almost three years later, Fannie sends us a letter saying that our loan from company C - yes a completely different company that we have NEVER been with - has transferred our loan to Fannie (company D, if you will). Now we need to pay the company we have been paying since 2007, company B. We were already paying that company!!!! For three years even.
Well, it gets even stranger. We call company B, they say Fannie owns our mortgage. Fannie says to ignore the letter they sent, it’s bogus, company C has it wrong. Uh???
So, you see, it does matter because we pay a servicer, NOT the mortgage company. I truly wonder if the title even exists anymore.
“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, “
And now you know why I posted to you. I have no way of knowing who has our actual mortgage. Thus the question.
The simple answer is: Who do you send your mortgage payments to?
Simple, but not necessarily correct.
It's quite common to send your payments to a "servicer", who keeps 1/4% or so for their trouble, and passes the balance of the payment on to the actual owner of the mortgage.
bingo, we have a winner. The real delema has yet to be explained in the media. Chain of custody of these documents was not preserved properly through these transfers such as resale or bundling. You can’t forclose a mortgage you can’t prove you have title to. This is a massive issue.
Still, my explanation of MBS is technically correct. It's "originate to distribute" that is the cause of your confusion.
That really is the kicker - who knows how many homeowners will find themselves without clear title even though they’ve made all the payments!
You did give me a good giggle imagining the lender returning you all your mtg payments “mid-loan” in exchange for the property because they can’t deliver clear title - that was a good one! ;-)
Let me know if it works ... ;-)
Do you realize that things are so screwed up that the banks cannot produce the original papers showing that they have the right to foreclose? Do you also realize that this means that if people pay the full amount of the mortgage they likely will NOT be able to obtain a clear title? Those who lack the proper papers to foreclose lack the proper papers to deliver your title when the mortgage is paid out. I wouldn’t continue to pay in such a situation. I might move out of the house but I would NOT pay.
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,.....
************
I don’t know what an MBS is but I do know that I have a 6.5% mortgage and when we went to re-fi at a lower rate the paperwork read “Deed of Trust” instead of “Mortgage”.
According to the title person, DoT is a mortgage but makes it easier for “the bank to re-po in 90 days if you default”.
We cancelled the re-fi. Not that we plan on defaulting but if something happened, we would lose our home without the benefit of a court hearing. Be aware of this bank scam that bypasses the courts.
There is still a legal out called “bankruptcy.”
Paying off the loan to the servicer is a clear event. Now it isn’t the home owner’s worry about where that money will go — let the financial instruments fight over it with the servicer as much as they want.
What is less clear is walking away from the loan. The structure is so keystone-kopped that it could be months or years before a valid “owner” appears.
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