… of foreclosure fraud:
More than two-thirds of state attorneys general plan this week to launch a joint probe into charges some banks used fraudulent paperwork to kick struggling borrowers out of their homes, a source familiar with the effort told Reuters on Sunday.
This is going to make Enron look like a kid shoplifting jelly beans at a candy store.
It has been revealed lately, BY A BLOGGER incidentally, that most of these “securitized” mortgages have zero paper trail. They exist only in a computer at Fannie Mae, because otherwise the cost of doing it would have been too high.
This is the biggest scam maybe -ever-.
This is highly amusing. With all the mortgages going into default in such a short time, it comes as no surprise that lenders paper punched a lot of paperwork as they found themselves handling more foreclosures than they normally have before. So now the lenders are portrayed as bad buys for not spending a great deal of time processing a foreclosure. Notice that all those who are making their mortgage payments on time are not involved in this social exercise.
banks bad, defaulting homeowners good.
Foreclosure fraud parody
http://www.youtube.com/watch?v=9kPCYcBm-C8&feature=player_embedded#!
Pretty brutal, seems like funding wasn’t the only thing the government transferred to banks, they also gave them their shoddy work ethic and tendency for piss poor quality.
I’ve never trusted banks and probably never will.
“So now the lenders are portrayed as bad buys for not spending a great deal of time processing a foreclosure.”
I don’t think this is a simple case of ‘cutting corners’…and even if it was, it would be inexcusable to cut corners that take homes from people illegally. Spending time processing foreclosures is what these guys get paid for, not doing your job is inexcusable.
“banks bad, defaulting homeowners good.”
You can’t form a moral conclusion such as this. No where does this suggest that homeowners who don’t pay their mortgages are in the right.
BTJ: Exactly.
Exactly why would the banks be eager to kick “struggling” borrowers out of their homes? So that they will have a valuable asset that they can sell on a fast-rising real estate market?
It’s the borrowers who have given up struggling, or who never “struggled” at all, that should be given the boot.
Texas Canuck, two things happened.
First, banks made loans to people they KNEW were never going to repay. These loans were combined together into “mortgage backed securities and sold on a securities market. Which is pretty evil on its own. That’s what made this recession happen in the first place.
Second, there’s no paper trail. They didn’t fill out the paperwork every time the mortgage changed hands. Which it did, quite a few times. Its all in a database. Which we all hope there’s no bit-rot in, right?
Of late these same banks have been foreclosing on houses that they can’t prove they hold the mortgage on. Because there’s no PAPER WORK. Which apart from being just amazingly stupid is very illegal.
So maybe they’re foreclosing on deadbeats, or you know, maybe NOT. Nobody knows, because the friggin mortgage note does not exist. Records are scattered on computers all over the world, not just in the USA, because those securities got sold as AAA investment grade paper world wide.
It is entirely possible they won’t be -able- to foreclose, it could be unconstitutional.
Enron, jellybeans.
Following the fraudulent housing bubble after the peak of the fraudulent public banker bail out and with the soon to arrive currency contraction melt down and looming derivatives implosion – I can’t get that old Mojo Nixon tune out of my head ;
I Hate Banks
by Mojo Nixon and Skid Roper
I hate banks…
I just can’t stand ’em.
Gimme a shovel & man I’ll plant ’em.
Six feet under thats where they belong.
I hate banks is the name of this song.
I think I’ll rob myself one or two,
Yeah I hate banks, yeah, how ’bout you?
Well lend me a nickel & lend me a dime,
repossess my house any old time.
Financial institutions think they’re so high faluting –
Just a bunch of fruits in three piece suits,
trying to steal all my loot.
Things are smelling pretty rank,
We must be near a stinky bank.
Smells worse than Rockefellar’s feet,
Wall Street can eat my meat.
Yeah throw the moneylenders out of the temple;
I hate banks its just that simple.
Royal Crown pomade Tin, is a the best thing to keep your money in.
Mason jar is okay too,
if you see a bank well you know what to do.
Well,when I walk in they treat me like a dog;
want to hit them in the head with a doo-doo log.
Dempublicans, one and all…
Their talleywhackers are mighty small.
Stealing from the poor to give to the rich…
Wanna make the bank president twitch in a ditch.
Yeah, see that teller with the blue hair,
giving me the evil-eye stare.
Won’t cash my check don’t like my ID…
got the security guard after me.
If I was E. F. Sloane,
I’d say the Dow Jones can suck my bone.
Yeah.
Everybody say the three magic words!
I want you to repeat after me!
I HATE BANKS!
Can’t stand ’em!
I HATE BANKS!
Don’t Like ’em!
I HATE BANKS!
Bunch of Foo-Foo’s!
I HATE BANKS!
Contrary like a big zit!
I hate banks…
I just can’t stand ’em.
Gimme a shovel & man I’ll plant ’em.
Six feet under thats where they belong,
I hate banks is the name of this song.
I think I’ll rob myself one or two,
Yeah I hate banks, yeah, how ’bout you?
This amounts to stopping foreclosure on a super-technicality. Isn’t a person who was given a house in exchange for a promise to pay morally obligated to re-pay what they agreed to pay?
It’s very likely that “banks bad, defaulting homeowners good.” is exactly how this will be played by the AG’s ( virtually all of whom on the Democrat side were elected by the tort bar – hint, hint, nudge, nudge; and who aspire to, at a minimum, the Presidency) and the drive-by media.
The AG’s premise here seems very questionable: Would any bank initiate foreclosure on an up to date mortgage?
Can we all agree that GIVING a house to someone, without requiring payment is a very, very bad idea, and a cost that taxpayer’s should not have to bear? Who will invest in a bank, if mortgages can be swept away on what amounts to a super-technicality? Aren’t investors entitled to payment for the use of their money?
The best way to stop the certainty of a repeat of all this a decade or so down the road, is to overturn the 1993 changes to Fannie Mae’s lending standards, but that will require an act of Congress.
There is a separate, tangential issue that is clouding the thinking of people on the issue of foreclosures: the US economy has a systemic rot, caused by a misplaced faith in financial chicanery as a source of prosperity for the nation. The banks had an incentive to write these junk mortgages, because Fannie Mae, bought absolutely document with the word ” mortgage ” on it. The prosperity of a nation has always, and will always depend on the production of real goods and services, and the market value they bring, not in the trading of pieces of paper.
But that is an issue separate from the obligation of individuals to honor their promise to pay, or surrender the collateral.
Obligatory .
“This amounts to stopping foreclosure on a super-technicality.”
Um, no. This means neither you nor the bank are able to prove the agreed-on mortgage amount, what payments were made, to whom, who actually holds the mortgage, etc. Because its NOT WRITTEN DOWN.
“…the US economy has a systemic rot, caused by a misplaced faith in financial chicanery as a source of prosperity for the nation.”
Um, no. The US home owner and loan re-payer has been DEFRAUDED by people who said they were going to do something and then didn’t. People supported and given cover by the jackass party for kickback “donations”, with the elephant party standing there looking worried but doing nothing.
If people really understood just how massively they’ve been f-ed over here, they’d be hanging these guys from lamp posts. They may yet.
Phantom:
If the complaint filed by the mortgage holder was the last word, then yes, all foreclosures on securitized mortgages would be unjust: Any legal system where the accused can not provide a defense is unjust.
But presumably the borrower has records, if the the mortgage holder doesn’t. The orignal agreement, and the history of payments made will quickly establish/disprove default.
In the event that neither the borrower nor the creditor have the original agreement, or the record of payment, then the borrower would most likely be legally off the hook, as the creditor would have no basis to sue.
No question the paperwork for assigning/transferring a mortgage has to be auditable for the last holder to have a perfected interest in the real estate.
I guess Harry Reid & Nancy are paying the Real-estate Taxes & Education taxes on these houses in foreclosure….Who gives a flying F** who exactly lost all the Money.. it’s gone.. The Marxist Courts are faking this issue
Nancy hands out Taxpayers money for Food Stamps, Unemployment (welfare), a House, Real-estate Taxes, and Education Taxes…
Brilliant
small c conservative
[…..No question the paperwork for assigning/transferring a mortgage has to be auditable for the last holder to have a perfected interest in the real estate…..]
Exactely! How many times has a financial institution taken a property (Chattel or real estate) and then sold it for the outstanding amount which is lower than market value? Legally this is an improvident sale and the borrower has has a cause of action.
In reality the financial institutions do this all the time and skate. If a guy can’t make his car payments or mortgage he lacks the resources to litigate to recover his loss.
However if the “bank” moves on a first mortgage and does this they risk getting sued by a second mortgagee who does have the resourses and the resolve. It is somewhat pathetic when the “bank’s” excuse/alibi is that they do this every day and no-one sues them….futilly.
You can win against the bank but resources and resolve are neccessary because the “bank” will fight this for years with spurious motions etc.
I have little sympathy for these ninja lenders who did not maintain documentation.
“But presumably the borrower has records, if the the mortgage holder doesn’t. The orignal agreement, and the history of payments made will quickly establish/disprove default.”
Borrower doesn’t have to provide evidence against himself in an action brought by the lender. Borrower just needs to say “prove it”. And they -can’t- prove it.
Additionally, adding to sasquatch’s point about improvident sale, the mortgages are in securities. Which are presently trading for pennies on the dollar.
Here’s a little story from NPR [yeach, ptoo!] which actually explains the whole thing rather well (oddly, for NPR). http://www.npr.org/blogs/money/2010/09/23/130079590/toxie-s-dead
Toxic mortgage asset holders have zero recourse now, because there is no record other than a database entry of their part-ownership of the house. Its like a perfect storm of perfect fraud. Everybody loses, nobody wins. Even the idiots who perpetrated the scam didn’t win. They just DESTROYED 12 trillion dollars is all.
“Borrower doesn’t have to provide evidence against himself in an action brought by the lender. ”
Well said.
One guy in Florida got foreclosed on by Bank of America, and he didn’t have a mortgage. He had paid cash for his home.