Posted on 10/13/2010 4:57:31 PM PDT by SmithL
Just two days ago, I blogged about how title insurance may play a big role if foreclosed homeowners should come back to haunt the banks by trying to reclaim ownership. This issue particularly strikes a cord with me, as I became a homeowner recently - purchasing a property a bank had foreclosed on.
Well, what I imagined could happen had already happened last Saturday. Down in Simi Valley, a suburb of LA, a family broke back into the house that the bank had taken away from them. With the local ABC news film crew invited to the move/ break-in, the family of 11 reclaimed the house they say they were illegally evicted from. The scary part is that the vacant home had already been sold to new owners.
A family claims they were illegally evicted, and Saturday, they broke the locks and started moving back in even though the home has already been sold.
Jim and Danielle Earl, along with their nine children ranging in age from 3 to 23, returned to their house of nine years on Mustang Drive.
(Excerpt) Read more at sfgate.com ...
That is why I was opposed to the bailout of banks. I say let them all fail. Sure, the recession would be steeper, but we would be out sooner.
“It seems to me that if the banks don’t have clear title to these houses, then the alleged homeowners don’t either...”
Well, let’s take this to it’s conclusion...”possession is 9/10’s of the law” and “finders keepers”...I have my eye on a really nice place near here.
What chaos. just making a WAG here, this uncertainty will add a few percentage points to loans made in the future.
I’m not certain of who is the wronged party in these situations. But if this goes in front of a jury, guess who is going to win.
The problem is the owners of the notes did not have the transfers recorded with the county in an effort to avoid recording fees and the banks created MERS in an effort to track transactions amongst themselves. As has become readily apparent, the packaging and spliting of loans that were resold made tracking all the transactions virtually impossible.
Just try asking your mortgage servicer for a copy of the documentation proving who owns the note on your own home. You think you don't have a problem with you mortgage just because you have made every payment?
What's going to happen when you try to sell your house and the new buy wants a clear title; especially now that title companies are gun shy concerning clouded titles? Good Luck.
Why is this surprising? We all sign things we don't read....If I read all the documents when I bought my house, I'd have to make 3 payments by the time i was done.
“Just try asking your mortgage servicer for a copy of the documentation”
Can’t do that since I haven’t had mortgage since my home was paid off 20 years ago and every other property was bought for cash.
You ALWAYS have the ability to read the documents.
These were machines and people who literally were EXPECTED to sign WITHOUT READING. It was designed to be a fraud. Remember they were documenting under penalty of perjury.
"Last week we get certified letters that Chase is foreclosing on our house for non-payment. Chase is now claiming that loan modification payments do not count towards being a “current payment.” And since we are “nine months behind” they are foreclosing."
"Now they will not accept any payment from us because of the foreclosure proceeding."
You've been damaged by Chace. That is par for the course with HAMP. Gather all your communications and hire a lawyer.
“Only if there’s a pit bull found in the house.”
LOL!
I’m sure there are a lot of people who aren’t aware that documents are notarized days or weeks after the signer has left. Happens all the time. And that is fraud.
I have to say the bank is at some fault for granting a “no interest” loan. There were also “interest only” loans that buyers were fools for taking out. Lots of greed and “wants” involved in all this.
If the bank is in the wrong here what about the people who bought the house? Sounds to me like the bank screwed them big time. Wonder if they’ll ever get their down payment and closing costs back. I’ll bet the bank will fight it tooth and nail.
(My guess is that discovery is the real goal here and that the bank will give them the house rather than open their books).
How can the bank give them the house when they say the bank doesn’t own it?
There are many things the banks could have done illegally that would be fraud, but that would not mean these people deserved to keep their house.
The pertinent question is whether these people deserved to be foreclosed, not whether the bank violated the law in some cases.
In THIS case, the only indication we have of a conflict is the family’s unsubstantiated (yet) claim that there was a $25,000 discrepancy in the amount they thought they owed and the amount the bank said they owed.
They don’t even assert that they are actually RIGHT and the bank wrong, just that the records didn’t match up.
What is NOT in dispute is that they were behind on their payments, that they had NOT caught up on their payments, that they owed a significant amount of money still, and that when they decided the records didn’t match, they responded by stopping all payments, rather than taking a legal action to correct the errors.
There action would make sense if their claim was that they had finished paying the debt but the bank insisted they owed more. But that’s not the case here — the question was simply how many more years they would have to pay, not whether they would have to keep paying.
There is no indication that this foreclosure had any fraudulent paperwork.
At the very least, the lawyer should be disbarred for participating in an illegal action. The family should be arrested for trespassing. Then we can take the bank to court and see if there was any fraud.
LOL, if a family of deadbeats broke into a foreclosed house that I had bought they’d be staring down my shotgun!
Hopefully, you kept the original paperwork so you could prove YOU had ownership interest.
I see a real danger if your mortgage gets legally transferred but not with the appropriate paperwork, because you might make payments to the new owner, but that new owner can’t deliver title.
I would refuse to send payments to anybody but the original mortgage company, without a written proof of new deed that has been filed properly.
So long as you always verify the paperwork is done before you change who you send payments to, you should be able to protect yourself. All ownership interest in property is recorded with real paper with the local government — at least where I live.
My mortgage payments are still sent to my original mortgage company, which has expressed no interest in getting rid of the mortgages. I don’t care if they have separately sold paper promising my payments to other people, so long as I send the payments to them and they hold the mortgage lein on the house in our local property roles.
I don’t know how they could destroy the original paperwork, since that paperwork is filed with your local government, not in the mortgage company possession.
I suppose they could have destroyed their copies, but there should still be a mortgage lien indicating the amount owed and the principle/interest payments required, filed with your local government.
It sucks to be drawn into a government-sponsored scam like the “mortgage modification program” where the lender had to adjust your mortgage payments, without knowing if the government was going to actually accept the modifications until months later.
The way to protect yourself from this is to just pay your original mortgage and not try to join a corrupt government program that has been proven to be a failure. It’s a hard lesson to learn though.
There are still people being ripped off by the “Cash for Clunkers” program.
I also blame the lenders who won’t allow a homeowner to make a lump-sum payment to make up the difference if they were paying in good faith; but the homeowner can protect themselves by continuing to pay their original amount until the government clecars the modification. It will cost more in payments, but if the modification takes all those payments will have reduced principle, and if not you won’t lose your house.
How can the bank give them the house when they say the bank doesn’t own it?
********************************************************
Poor choice of words on my part ... The foreclosing entity (servicer , originator , trust) will not allow discovery and would rather drop the foreclosure , rather than allow a look at the accounting from the trust and especially the funds that should have been applied to their account from the creator of the MBS when they got their TARP and AIG bailout ... We all know the entity bringing the suit doesn’t have the right to foreclose based on bifurcation of the note.. which is why non-judicial foreclosure should be immediately abandoned in cases involving securitized loans, there are always questions.
What my original answer meant to state is “rather than allow discovery on the wall street bank and upstream to the actual investor whose money was used to fund the loan ,, the downstream players (below the wall street bank) will take the hit.” This has happened literally hundreds of times in California already but all the cases I’ve seen have strict non-disclosure.
The recorded document is just as valid as the origional paper!
****************************************************
There are at a minimum 3 assignments that must be legally performed and recorded with date certain cutoff dates as proscribed in the PSA to legally transfer a note into a trust in a securitized loan... I don’t care if the original note is recorded ,, if 3/4 of the chain of custody is missing .. and it is acknowledged that you can’t get from A to D without going through A==>B , B==>C , C==>D how can you foreclose?
These assignments are usually what is missing (and forged).. legally the trusts (controlled by the Wall Street banks) cannot show ownership, they got really sloppy transferring the paper from their straw men “lenders”/”originators”.
DALEREED ,
This isn’t 1975 ,, you can forget about thinking of this in simplistic terms where there is your local bank and there is you... That isn’t the case except in approx. 4% of loans originated and held by local credit unions.
You are talking about legal technicalities not fraud.
*******************************************************
Actually when the Wall Street banks laid out their plans and sought legal opinions the answers they got were hedged all over the place with “This could be legal if you followed this and that and did this that way ...” type of statements ... Then they proceeded to forge ahead without following any of those recomendations. IT’S ALL FRAUD.
The big problem for the Wall Street banks is keeping the real investors who put up tens of billions apart from the homeowner side ... The whole plan was for the Wall Street banks to forever stand between the two parties to hide significant facts ... mainly that only 2/3rds of the money taken from the investors was spent actually purchasing loans.. that there were absolutely no underwriting standards making the representations to the ratings agencies false and the ratings false.
You want to see it really hit the fan ... it’s coming soon .. using rules in the PSA that allow for replacement of the servicer under certain conditions some of the actual lenders (real money investors) have found their way into the hidden (from them) side of the equation ... you can bet we will see a lawsuit any day now where the goal is discovery and return of those undisclosed fees.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.