Fact is, there have been cases where the bank has tried to foreclose on people not in default. Any case rising to our attention is almost certainly going to be stopped - perhaps expensively. If the foreclosure did happen, perhaps to someone confused, we’d probably have never heard of it. Nonetheless all the stories I’ve read try to emphasize that the vast, vast majority of cases involve people who are in default.
The issue here is really how much are we going to force the banks to actually check in order not to let some small percentage of the innocent get run over, and whether judges can reasonably ask for actual proof of ownership. That these things get blown up is not surprise - some people actually think there are such things as death panels. But it is an inevitable result of the banks own actions. If there hadn’t been cases of attempted foreclosures, the story wouldn’t have had legs.
If you are asking the press to be responsible, there goes pretty much everything except NPR, The Wall Street Journal, and the NY Times.
The came up a week or so ago. Mortgage insurance companies in some cases have stopped writing policies for people buying foreclosed houses for exactly this reason.
Well if the bank says they are not foreclosing improperly, it must be so. Why would they lie? It is always the evil borrower taking advantage of the helpless banks.
You seem to be arguing using the “no true scotsman” defense. You request examples, people give them to you, and you say they don’t count because they are a “one-off” or a “tragic accident”. I don’t think anyone can argue that this isn’t happening. We can argue about how prevalent it is, but that isn’t what you are saying.
It is happening. I would say that in today’s climate, banks and lenders better make damn sure they are doing things correctly, or it’s going to bite them in the ass.
I’ve seen these stories before as well, but in the end has ANYONE received their home free and clear because of this or similar reasons? It seems an awful penalty for bad paperwork, and unjust enrichment for the defaulting homeowner. Obviously, he owes money to SOMEBODY.
IANAL, but I think they do. In most cases a statement from someone who has examined the papers and is willing to testify that there was ownership will do. The problem was that these statements were being signed by people who could have no such knowledge. When that has been demonstrated, the judge should be asking for more evidence.
it is similar in the way to the stuff that got us into this mess. Mortgages without documented income made sense for the fairly rare cases of writers and others whose income stream was irregular. This adds flexibility to the system, but it was taken advantage of by mortgage brokers who used it to get loans for people where the exception made no sense. (And I say brokers because an honest broker wouldn’t allow an unqualified applicant to use this channel.) In the same way, a loophole which allows for the case where good paperwork got lost somehow was used when the paperwork was more or less thrown away.
But we don’t know, in the legal sense, who that is. What if the bank can’t find the paperwork because they really don’t own the mortgage - perhaps it got sold and the paperwork documenting the sale got lost? What if they did sell the loan, and after they take the house the real owner comes after the woman?
You say it is an awful penalty, but if the bank considered the paperwork and loan to be valuable, perhaps they shouldn’t have treated it as scrap paper.
Just curious. I wonder if any homeowner has brought an action for “quiet title” and when/if the bank can’t produce the note, they succeed on those grounds?
So, if the bank handling the mortgage can’t prove ownership, the people who own chunks of that mortgage can say that it was sold to them under false pretenses, and sue to get the bank to buy it back. And these people have a lot deeper pockets than those foreclosed on. Ditto if they wind up owing more taxes than they should because of the poor paperwork. The IRS might not be willing to take the banks’ word for it either. This is real money - far more than what they’d lose not being able to foreclose on a handful of properties.
(Read the linked article - I’d have to quote far more to give the proper context.)
Someone correct me if I am wrong, but I think the people testifying were either lawyers and/or notaries, and thus had special standing. They were not Joe Fileclerk. One of the aspects of the scandal is that people were notarizing documents signed in other offices or other states, and so these notaries had no direct knowledge that the person saying they signed the document actually did. And in many cases, it seemed, they didn’t.
It is an issue of standing. The bank has to be able to prove that they own the loan and that therefore they are entitled to foreclose on the loan. It really isn’t that minor of an issue.
It isn’t an issue of making a typo on something but rather not having proof of their claim. It is important because if it turns out that they don’t own the loan but rather sold it to someone else, it means that the bank that foreclosed collected monies that weren’t owed to them.
Jtgain, you are thinking of Judge Schack in New York. Some of those issues related to MERS. I suspect that those cases have been appealed but I don’t know the result of that.
It does make me somewhat grumpy … our mortgage was sold or however you want to consider it on average of once a year for most of the past 20 years that we have had it. Once for a period of 7 years it ping ponged back and forth between the same 2 companies about every 3 or 4 months.
That misses the point. Mortgages were chopped up and put into CDOs. The process of breaking it us gives either lots of people with the right to foreclose or nobody with the right.
So who determines who gets to collect the cash? Like I said, I was upset because the ownership of my mortgage has pingponged around the mortgage world so often I honestly have no idea who owns it until I check the current payment book. We gave up trying to have it automatically deducted - we kept having to change it and there always seems to be a lag time of several months while the electronic paperwork sorts itself out. Thanks to that whole bunch of financial bullshit I now have 3 months late payments over about 4 years before we gave up on the electronic payment bit.