Posted on 04/04/2011 1:40:39 PM PDT by Libloather
Mortgage mess: Who really owns your mortgage?
Scott Pelley explains a bizarre aftershock of the U.S. financial collapse: An epidemic of forged and missing mortgage documents
April 3, 2011 6:01 PM
Do you know who really owns your mortgage? As Scott Pelley reports on "60 Minutes" this week, that question has become a nightmare for many homeowners since the invention of mortgage-backed securities. Yes, those were the exotic investments that sparked the financial collapse in this country. And the're still causing problems.
As it turns out, Wall Street cut corners when it bundled homeowners' mortgages into securities that were traded from investor to investor. Now that banks are foreclosing on people, they're finding that the legal documents behind many mortgages are missing. So, what do the banks do? As Pelley explains in this video, some companies appear to be resorting to forgery and phony paperwork in what looks like a nationwide epidemic.
Even if you're not at risk of foreclosure, there could be legal ramifications for a homeowner if the chain of title has been lost. Watch the "60 Minutes" report and listen to Pelley's discussion with "60 Minutes Overtime" editor Ann Silvio about the findings of his reporting team.
Watch Scott Pelley's report.
Have you contacted your mortgage servicing company to find out whether your mortgage has been bundled and sold? Did you get a clear answer and a copy of your mortgage paperwork to back it up?
(Excerpt) Read more at cbsnews.com ...
"O.K., I can't make all more mortgage payments, but my bank used shoddy document handlers so they should have to take a haircut on the principal amount of my mortgage, to the point my payments are down to a level I can afford"
Cleaning up the paperwork should not require ignoring the facts of actual defaults and getting the foreclosure rate down sooner by foreclosing sooner; not stalling.
You are right in the case of mortgage modifications. But the impression I got from watching 60 minutes, particularly with the woman lawyer that was being foreclosed on, is that albeit she did not make her mortgage payments, she should have a defense to any foreclosure action because of the bank’s paperwork misdeeds after the fact. The reality in that case is that the real harm is not to her but to the institution or investor that may have purchased the mortgage and whose interest was compromised by the foreclosing bank’s paperwork misdeeds.The mortgagor in that case cannot be held liable for the foreclosing bank’s misdeed and the real fight is between the the foreclosing bank and the investor.
“Got mine from a credit union that does not sell their mortgages and thank God I did.”
Chances are very that you have a 5 year or shorter ARM, or they did sell your mortgage and retain the servicing.
Mortgage backed securities were created so lenders could offer longer term loans in the first place.
There were banks and S&L's that went under in the 80’s because they didn't use the secondary mortgage market (MBS’s).
They made a 30 year mortgage to a customer and funded it with deposits.
Say they made the mortgage for 7% and funded it with 3% CD’s.
What do you think happened when the CD’s matured and they had to pay 9% to renew the CD?
Correct, they were out of business.
MBS’s made it possible for the bank next door to make the same loan, keep the servicing (customer still made payments to the bank that made the loan) but have the rate risk offloaded.
It was a good system.
Long term fixed rate financing just won't be available without a secondary mortgage market.
And it would put the banks in a much riskier position the next time interest rates shoot up which we are overdue for.
I haven't watched the 60 minutes episode and probably won't because it is 60 Minutes.
What you’re missing is the fact that the lenders have already been paid.
When the debt was packaged and RESOLD.
China is holding the bag. And Japan. Mostly.
Moreover....
The local banks (American) have ALREADY Been paid for the MBS when RESOLD.
**AND** They took BAILOUT MONEY to pay off Chinese and Japanese holders of the notes.
So again, only the little people are getting screwed.
I didn't see the 60 Minutes show, but there are two possible issues: (1) In any lawsuit, the plaintiff must prove that it has standing-- i.e., that it is the party who has the right to sue. If the original lender sold the loan, but didn't do the paperwork properly, it may be impossible for any bank to prove today that it is the party which owns the mortgage and has the right to foreclose.
(2)In many, but not all, states, mortgages must be recorded in the public registry of land records every time they are transfered. As a result, in some states, even if it is now possible to reconstruct the trail of assignments, the bank who legitimately owns the mortgage, and can now prove it, still cannot legally foreclose because the assignment to it (or one of the prior assignments in the chain) wasn't properly recorded. (If that happens, the result is to void the mortgage, but not the debt; the bank can sue the borrower for a money judgment on the note, but can't foreclose on the property.)
Regardless of whether securitizing mortgages was a good or bad thing for the economy, all of this could have been avoided by the banks being more careful with the paperwork back at the time of the original and subsequent transfers, but it seems that few of them were.
Nope 15 year fixed. They still hold the mortgage.
They service it.
Ask them specifically if the actual loan has been sold (securitized) on the secondary market, a customer wouldn't be made aware if it had.
Most credit unions wouldn't be able to hedge the cost of funds for 15 years to offset the loan they have made to you.
Someone who didn’t pay their mortgage and is now in a sh@tstorm is not a victim.
Exactly! The issues turning up now with the bankrupcies are just the canary in a coal mine. A lot of folks screaming about deadbeats today will be yelling even louder years down the line when they can't sell their house because they can't get clear title. Too many people are insanely short sighted. Little wonder our republic is being flushed down the crapper.
Arguing that the mortgagor should get a pass because of the banks misdeeds after the fact to correct a paperwork issue is analagous to ......
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The banks broke every law in the book ,, and now they cannot show ownership... poor them!
It’s not “paperwork issues” ,, it’s INTENTIONAL FRAUD ,, you can’t fix FRAUD with new FRAUDULENT papers..
Do some reading.. here’s a good one .. http://livinglies.wordpress.com/2011/04/04/get-that-psa-alabama-judge-denies-securitization-trustee-standing-to-foreclose/
As near as I can read, thus far almost all of this comes from Foreclosures bringing the poorly documented transfers to light. I have heard/read stories of multiple banks trying to foreclose on the same property each claiming to be the sole note holder.
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You’ve got it ,, by intentionally not transferring physical notes to the trust AS REQUIRED BY LAW (and common sense) the wall streeters were free to sell the same loan into multiple MBS’s ,, there is a famous case of a single $350,000-ish loan actually accounting for $93,000,000.00 in sales to investors... as long as the loan “failed to perform” the investors would never realize that they were had because they would be getting the expected return from a dead loan , $0 ...
Did they do that intentionally... I don’t know ,, but it happened .. it seems to have happened most often when they were at a “crunch time” and the MBS had to have it’s full complement of loans. Somebody probably just cut/pasted a list of REALLY BAD loans into a MBS whenever they needed a quick $10 or $20 million to finish one up... OR TO ENSURE A REASONABLY GOOD MBS WOULD FAIL SO THEY COULD COLLECT THE “INSURANCE”.
Then we can send a group of louts round your way to beat you up then?
After all, we can break any law we want, as long as you didn’t pay.
Right?
Where a homeowner raises a question as to who is his proper creditor (i.e., who owns the mortgage), the homeowner should be permitted to deposit his mortgage payments with the court until it is determined who holds the mortgage. Courts should have no patience with homeowners who want to use the confusion to just avoid paying the mortgage. They should be tossed into the snow.
title insurance is for the past not the present.
since the big title insurance companies will not insure any transfers there is no protection.
part of the problem is that “all are equal before the law” means nothing to the banks or old judges who would never have survived actually practicing law. If you want evidence of judicially unqualified look no further than then NY judge sotomayor’s ruling on transfer seizures for pass through money.
We have one set of laws for banks and one set of law for serfs. Servicing agents should not be able to be listed in the caption of the case. It must be the name of the trust and bundle owner.
banks had certain blighted areas they would not lend to. They were sued the fed sued and the net result was that banks figured out how to sell what they were forced to finance.
mortgage is just tying the promissory not to the property.
since there is no way to connect the debt to the asset then there is a very serious issue.
This is why some banks have now resorted to suing ONLY on the debt and not doing the forclosure. The banks are treating the debt as unsecured. (and in bankruptcy it is gONE)
Seriously? What homeowner has been beaten up?
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