FORECLOSURE? Can the lender produce the loan Doc?

[David]

Just heard this and found it very interesting. There was apparently a CNN report, which I have not yet located, that found that many writers of mortgages can not produce the original loans documents, often due to sloppy record keeping.

The bottom line is that if you're one of the victims of this predatory subprime mortgage scandal and you are facing foreclosure, call the lender and demand that they produce the original loan document with your signature. If they can't, apparently they can NOT foreclose on you since there is no evidence to take to court.

I'm not clear on what that means in regards to what you actually owe them if anything. But, the person I was listening to suggested it is an excellent bargain chip to negotiate a new mortgage with reasonable terms.

Bottom line, if you're facing foreclosure, don't be intimidated and just walk away. Make some phone calls and/or call a lawyer.

Here is one thread I found that has some interesting info and a Bloomberg News article that substantiates the claim that many of these companies can not produce the loan document.

Walking away from foreclosure a good thing? - QRZ Forums

 

[David]

Here's the Bloomberg article:

Bloomberg.com: Exclusive

Banks Lose to Deadbeat Homeowners as Loans Sold in Bonds Vanish, Feb 22, 2008

Bloomberg is a much trusted financial news source.

 

[madMAX]

Now that is very interesting and if this catches on, I can only imagine what will happen to the lending industry. It will probably become nearly impossible to obtain a loan without putting up your first born as collateral.

 

[vraiblonde]

I am against theft and dishonesty, and that's exactly what this is. "Deadbeat Homeowners" - I'm pleased that Bloomberg called them what they are instead of "victims". They need to close that loophole and fast. If I have to pay my mortgage, these losers should have to pay theirs as well or get the hell out.

 

[vraiblonde]

Joe Lents hasn't made a payment on his $1.5 million mortgage since 2002.

Must be nice to just friggin' STEAL a $1.5 million home.

 

[RoseRed]

There is a reason to keep copies of ALL your home ownership paperwork.

Speaking of which, I need to put my deed & papers in my safety deposit box.

 

[vraiblonde]

Lents is former CEO of Investco Inc., a Boca Raton, Florida-based developer of voice recognition software. In 2002, the U.S. Securities and Exchange Commission sanctioned Lents and others for stock manipulation, according to the SEC Web site. He lost his job, was fined and his assets were frozen. That's the reason he couldn't pay his mortgage, he said.

So this guy is just a dirtbag all the way around.

This is the stuff that pisses me off about the way the news presents these foreclosures. Here we've got a guy who can't pay his big fat mortgage because he broke the law and lost his job.

Nice.

 

[Christy]

I am against theft and dishonesty, and that's exactly what this is. "Deadbeat Homeowners" - I'm pleased that Bloomberg called them what they are instead of "victims". They need to close that loophole and fast. If I have to pay my mortgage, these losers should have to pay theirs as well or get the hell out.

ALL of this mortgage bailout business just infuriates me. I can't for the life of me fathom why we, the taxpayers get to foot the bill for all these dip####s.

 

[vraiblonde]

ALL of this mortgage bailout business just infuriates me. I can't for the life of me fathom why we, the taxpayers get to foot the bill for all these dip####s.

There's a segment of our society that thinks it's cool to get one over on people. Little do they realize that ALL of us are paying for it, not just the faceless "government". Wanna know why your taxes are so high? Because of crap like this.

It's like they're stupid and don't realize where that money comes from.

 

[Christy]

It's like they're stupid and don't realize where that money comes from.

I think the vast majority fully realize who is paying for it, and they simply could give a crap. And I'm sorry, the sob stories don't phase me one bit because I know how tough it is to be financially strapped. I've got a mortgage and credit card bills out the wazoo, but guess what, I knew exactly what I was signing up for and I pay them. You do what you gotta do, you pay your freakin bills. I'm sick of paying my bills AND bailing out every dingleberry on the planet who cannot seem to grasp that concept. :

I am 100% opposed to the government bailing out these mortgage companies who knew better and gave out these loans anyway.

 

[Pandora]

Must be nice to just friggin' STEAL a $1.5 million home.

He may have stolen it, but it is the rest of us who borrow responsibly that pay for it. I can accept the prices going down for market adjustment but a majority of the decreases in home values now have been solely due to foreclosures and that is unfair to those who bought around about the same time, in a fixed mortgage and have lost a considerable amount of value due to the irresponsibility of individuals and lenders. It could take YEARS for them to revert their investment and I cannot help but feel sorry for them when they own homes worth $40k-$50k less than their purchase price. :shrug:

But no way in HELL should the gooberment bail them out, because again, it is on OUR backs and we've taken on enough, as is, because of all of this.

 

[dawn]

Stupid question.... Will he ever be able to sell his house? Is there a way he would ever be able to get a clear deed?

 

[RadioPatrol]

Banks Lose to Deadbeat Homeowners as Loans Sold in Bonds Vanish, Feb 22, 2008

Bloomberg is a much trusted financial news source.

Nice, so banks or lenders screw up and you come out ahead ...

how is this stealing ....

are you going to keep sending money to someone who cannot prove that they hold the note ...

Yes you should be paying somebody .... :shrug:

but you could end up paying $10's of 1000's to the wrong entity if the Note got "Sold" to some other financial institution

More than $2.1 trillion, or 19 percent, of outstanding mortgages have been bundled into securities by private banks, according to Inside Mortgage Finance, a Bethesda, Maryland-based industry newsletter. Those loans may be sold several times before they land in a security. Mortgage servicers, who collect monthly payments and distribute them to securities investors, can buy and sell the home loans many times.

Housing Boom

Each time the mortgages change hands, the sellers are required to sign over the mortgage notes to the buyers. In the rush to originate more loans during the U.S. mortgage boom, from 2003 to 2006, that assignment of ownership wasn't always properly completed, said Alan White, assistant professor at Valparaiso University School of Law in Valparaiso, Indiana.

``Loans were mass produced and short cuts were taken,'' White said. ``A lot of the paperwork is done in the name of the original lender and a lot of the original lenders aren't around anymore.''

This is like Monopoly " Bank Makes a Error in Your Favor"

When the mortgage servicers and securitizing banks that act as trustees of the securities fail to present proof that they own a mortgage, they sometimes file what's called a lost-note affidavit, said April Charney, a lawyer at Jacksonville Area Legal Aid in Florida.

Nobody knows how widespread the use of lost-note affidavits are, Charney said. She's had foreclosure proceedings for 300 clients dismissed or postponed in the past year, with about 80 percent of them involving lost-note affidavits, she said.

``They raise the issue of whether the trusts own the loans at all,'' Charney said. ``Lost-note affidavits are pattern and practice in the industry. They are not exceptions. They are the rule.''

State laws generally make it difficult to foreclose because they favor the homeowner, said Stuart Saft, a real estate lawyer and partner at the New York firm Dewey & LeBoeuf LLP.

`Waste of Time'

Requiring banks to produce the paperwork at a foreclosure hearing is a nuisance, said Jeffrey Naimon, a partner in the Washington office of Buckley Kolar LLP.

``It's a gigantic waste of time,'' Naimon said. ``The mortgage may have transferred five, six, eight times. It's possible that you don't have all the pieces of paper, but it was enough to convince the next guy in the chain. There's no true controversy over whether the owner owns the loan.''

Judges are becoming increasingly impatient with plaintiffs who produce no more proof of ownership than a lost-note affidavit or a copy of the note, said Michael Doan, an attorney at Doan Law Firm LLP in Carlsbad, California.

Aww Poor baby, it sucks having to follow the LAW, you would use to evict someone ...



yeah trust me, the check is in the mail, I am from the Gobberment and I am here to help you, and no baby I won't in your mouth ....

U.S. District Judge David D. Dowd Jr. in Ohio's northern district chastised Deutsche Bank National Trust Co. and Argent Mortgage Securities Inc. in October for what he called their ``cavalier approach'' and ``take my word for it'' attitude toward proving ownership of the mortgage note in a foreclosure case.

U.S. Bankruptcy Judge Samuel L. Bufford in Los Angeles issued a notice last month warning plaintiffs in foreclosure cases to bring the mortgage notes to court and not submit copies.

``This requirement will apply because developments in the secondary market for mortgages and other security interests cause the court to lack confidence that presenting a copy of a promissory note is sufficient to show that movant has a right to enforce the note or that it qualifies as a real party in interest,'' the notice said.

Quick foreclosures benefit communities because properties in default lose value and homeowners in financial distress don't maintain their houses or pay real estate taxes, said Saft of Dewey & Leboeuf.

``When banks originally made the loans they used people's money from pension funds and savings accounts and they should be allowed to foreclose the loan as quickly as possible before the property depreciates in value any more,'' Saft said. ``The mortgage industry has been painted as the enemy when all they did was make loans to enable people to buy homes. Now there's less money available for new borrowers to buy homes and that's what's causing the value of homes to go down.''

American Home Mortgage Investment Corp., the Melville, New York-based lender that filed for bankruptcy last August, said it was paying $45,000 a month to store loan paperwork and petitioned U.S. Bankruptcy Judge Christopher Sontchi in Wilmington, Delaware, for the right to toss it all. Sontchi ruled last week that American Home Mortgage could charge banks from $3 to $13 a file to retrieve documents.

of course there is'nt :

No Tracking Mechanism

Snip

For about half of U.S. mortgages, there is no tracking mechanism.

MERS rules don't allow members to submit lost-note affidavits in place of mortgage notes, Arnold said.

``A lot of companies say the note is lost when it's highly unlikely the note is lost,'' Arnold said. ``Saying a note is lost when it's not really lost is wrong.''

Lents's attorney, Jane Raskin of Raskin & Raskin in Miami, said she has no idea who owns Lents's mortgage note.

``Something is wrong if you start from what I think is the reasonable assumption that these banks are not losing all of these notes,'' Raskin said. ``As an officer of the court, I find it troubling that they've been going in and saying we lost the note, and because nobody is challenging it, the foreclosures are pushed through the system.''

Yeah that is true .... not lost, never filed.

 

[Larry Gude]

I've said this before...

ALL of this mortgage bailout business just infuriates me. I can't for the life of me fathom why we, the taxpayers get to foot the bill for all these dip####s.

...and I'll say it again; all of this is going on because of INVESTORS, ie, people who bought a property with the express interest in making money off of it, not living there.

Guess who this includes? Politicians and people with the money to support them and people who will ##### and complain and write letters.

Consider; If you bought a home to LIVE in a few years ago and you got a 5% ARM that was going to double at some point, typically 5 years, lets do some math;

Call it a $350,000 house, little or nothing down, 5%, 30 years = $2,400 including PMI.

Fast forward to 10% = $3,600

$1,200 a month. Now, how many people are going to stop paying the mortgage over $1,200 a month and lose their home because they can't afford it?

So, you have to get rid of the $800 a month Escalade and get a used Camry. There's $500 a month right there. Go from the $135 a month premo cable package to basic? That's another $100. Two less nights out a month? That's another $200. Go from a $130 a month cell phone to a $30 plan? We're up to $900.

What else? Cancel vacation this year. That's $2,000. Over a year that's over $150 a month saved.

We haven't even gotten to a part time job or overtime or cutting out the $2,000 Christmas present spree or skipping the new big screen or the new furniture.

Point is, even though $1,200 is a quite a chunk, it is NOT prohibitive and certainly not impossible, especially in light of losing the house, losing your credit and moving.

Now, if you bought at $350 hoping to sell in a year or two at $450 and you had an interest only $1,600 a month mortgage that has now shot up to $3,600 and you can't even sell for $350, you're pissed that your bet didn't pay off. So, you write your congressman who is po'd as well because their Vegas condo they bought pre-construction for $150,000 is now worth about $100,000 or less.

So, get enough pols and constituents together who are making the case of how unhappy the Escalade dealer and the cable and phone company and the restaurant people and everybody else who is going to feel the crunch are going to be and, pretty soon, why, we have a crisis! It's a crisis because if you don't find a way to assuage your poor vocal minority of constituents who lost, they'll crisis someone else into office.

So, right and wrong finds it's voice in the form of the collective piggy bank that is the ability to write laws that make money do as you wish. To get away with this you couch in in terms of the poor people who were swindled by predatory lenders. You talk about the greed of CEO's making billions while everyone else gets thrown to the wolves. You talk about blame and assigning it and remedying it through public resources. You do not talk about bad bets, people too stupid to know what they're signing or that you gambled and got unlucky, too.

Crisis!

 

[CalvertNewbie]

I think the vast majority fully realize who is paying for it, and they simply could give a crap. And I'm sorry, the sob stories don't phase me one bit because I know how tough it is to be financially strapped. I've got a mortgage and credit card bills out the wazoo, but guess what, I knew exactly what I was signing up for and I pay them. You do what you gotta do, you pay your freakin bills. I'm sick of paying my bills AND bailing out every dingleberry on the planet who cannot seem to grasp that concept. :

I am 100% opposed to the government bailing out these mortgage companies who knew better and gave out these loans anyway.

I couldn't agree with you more. Hubby and I pay all of our bills on time, no matter what, and unfortunately have quite a bit of debt. But that's the choice WE made so WE pay for our choices/mistakes in life. If we couldn't afford our mortgage, guess what? It would be time to cut back on everything possible to ensure the mortgage got paid. Or we'd get second jobs. Or both. We don't have that sense of entitlement like so many out there. We both feel that everyone should be financially responsible for themselves, with very limited exception. That's the way we were raised.

Like you, I'm tired of paying for everyone else who is a screw-up. If we can pay our bills, so can they. They just chose not to. They got themselves into lifestyles that they "cannot" or will not afford, and that should not be anyone else's problem except theirs. These people need to stop trying to live beyond their means. Buy what you can afford and nothing more.