OK - your post 12 makes me regret my post 14 (which was being written before I saw 12).
Post #12 is reasonable to a point. The problem is that when there is a problem with the lien due to derivative sales AND the resident isn’t paying, what do you do?
You obviously shouldn’t base foreclosure on forged documents, but there has to be some way to handle non-payers.
This reminds me of a situation in NYC where I had a car stolen. I had put the car up for sale and found a prospective buyer. He gave me a forged bank check to obtain the car. The check looked so damn real (and he seemed like such a nice guy) that I let him take the car. Little did I know that my girlfriend had accidentally left the title in the car. When the perp found that, he *forged* the transfer of the title to his name, too.
Now here’s the best part: not only did I know where this guy lived, he *admitted* to the police that he had taken the car without paying for it. Do you think that means the police stepped in and retrieved my car? Nope - because there was a “title problem.” Of course I explained that he had forged the title (another crime) and this could be proved by matching signatures, but they didn’t care. The said it was a matter for small claims court.
The way I see it there were three crimes committed:
a) Forging the check
b) Forging the title signature
c) Stealing the car - larceny by deception
I was told that this deadbeat would keep the car despite admitting having obtained it from me AND not paid for it. All because of a “title problem.”
Unfortunately, I never took him to small claims court despite my burning desire for justice to be served. The max recoverable damages in small claims in NYC was $3000. The car was “sold” for $3800. More importantly, as a consultant earning $220/hr on an out-of-state gig, the *opportunity cost* to pursue the small claim was MORE than the max recoverable damages. (Assuming a potential midweek court date with round trip flight to get back, plus court fees.)
I assuaged myself with the knowledge that I did get him arrested one night for driving an unregistered limo, with no insurance, and a suspended license. The limo was impounded and, since it was his bread and butter, he lost a ton of money in the process.
Anyway, deadbeats piss me off. I hate the idea of a deadbeat getting away with property because of a legal loophole. I’ve been on the receiving end of that, so you can imagine how I feel about someone getting a house.
Sue all the "lender" agents (appraiser, underwriter, title insurer, etc) for gross negligence.
Use the proceeds to pay whoever lost money - that would be the taxpayer.
All I am saying is that preserving the rule of law comes first over worrying about a ‘dead beat’ getting a free house or not. The ‘dead beat’ wouldn’t be getting the chance at a free house IF THE BANK HAD JUST FOLLOWED THE LAW! The ‘dead beat’ didn’t set the bank up to defraud them the bank set itself up to be defrauded.
I look at it this way when these people fall for the con “I found this bag of money and I will share it with you if you put up some good faith money” and of course the person loses their money. Yes someone comitted fraud against them but its hard to feel sorry for the fool.