Posted on 10/20/2010 8:27:12 PM PDT by An Old Man
Foreclosure-gate is heating up and the mad scramble for what's left of $45 trillion in real estate is guaranteed to leave homeowners homeless, pension funds unable to pay their pensions and even some of the biggest banks insolvent. A great housing goat rodeo was created when some of the 65 million mortgages on U.S. homes didn't follow proper legal procedures;
Fraud by homeowners who lied on their loan applications Fraud by banks who didn't follow proper legal procedures around the notarization and processing of mortgage documents Fraud by investment banks who packaged this junk and resold it to unsuspecting pension funds Pension funds promised returns to their pensioners they could never achieve
Lies, lies, lies and more lies. In this jockeying for position, the only thing guaranteed is Leona Helmsley's Law i.e. "Laws and taxes are for the little people". But the little people are starting to fight back in the U.S. and we'll get to that after we do a quick review of the situation at hand and how we got there.
“The homeowner still owes the unpaid balance on the note but they owe it to the last person to whom the note was endorsed”
“I can’t think of a reason the endorsed holder of the note could not sue the homeowner for failure to pay the note.”
I can. If the “last endorsed” bundled it and sold it, then the “last endorsed” has no right to it. They sold their interest & were paid for it. AND, if the “last endorsed” sold it 3, 4, or 5 times, (read the KABOOM article), They are guilty of felony fraud on top of not having any right to it.
“The homeowner still owes the unpaid balance on the note but they owe it to the last person to whom the note was endorsed.”
So what is the last person to endorse the note was say Countrywide who no longer exsist who had previous to being brought by BOA had already sold the note in wrapped in a mortgage back security?
“Who wins? Lawyers.”
Duh. Of course.
I paid off or sold all my real estate back in 2005.
yep
The last person to whom the note was endorsed was very early on in the chain of events - they were PAID. So they owe nothing to that person. In many cases, the next lender/investor to whom the note was assigned (typically, the bank creating the security) was also paid.
The borrower owes money to investors now, and a servicer is supposed to collect these funds and transfer them to the investor(s) who bought the (supposedly) mortgage-backed security. However, because the chain of title has been broken, the investor cannot call for foreclosure. Since the initial lender has been paid off, they can’t call for foreclosure.
The simplest solution under current law is for the investors to force the initial lenders (who do have the authority to foreclose) to buy back the note (ie, a put-back) and let the initial lender foreclose and perfect the title.
This, of course, is going to mean that some banks fail.
Oh well.
The investors who hold the RMBS force Countrywide (now BofA) to buy back the note. By doing this, the note and the mortgage are re-convered in the same party, and the lender who holds the title chain has a deficiency that allows them to foreclose. It seems very simple to me. Just force the banker who is last listed on the deed to buy back the mortgage.
I can see how that would work, but if the bank fails before the Investor can force it to do the buy back? If the Bank has sold the same mortgage to more than one investor? or as in some cases the bank has ‘pooled’ the mortgage and bank no longer knows exactly which secureity has claim on which mortgages?
But you way seems the most legal, but how may years and how many law suits before it would all get settled?
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