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Virtually everyone has had the experience of being forced to pay a late fee or a bank penalty because of some fine print provision that we overlooked. Sometimes begging by good customers can win forbearance, but usually we are held to the written terms of the contract no matter how buried or convoluted the clause in question may be.
That is the way it works for the rest of us, but apparently this is not the way the banks do business, at least when those at the other end of the contract are ordinary homeowners. As a number of news reports have shown in recent weeks, banks have been carrying through foreclosures at a breakneck pace and freely ignoring the legal niceties required under the law, such as demonstrating clear ownership to the property being foreclosed. The problem is that when mortgages got sliced and diced into various mortgage-backed securities it became difficult to follow who actually held the title to the home. Often the bank that was servicing the mortgage did not actually have the title and may not even know where the title is. As a result, if a homeowner stopped paying their mortgage, the servicer may not be able to prove that they actually have a claim to the property.
If the servicer followed the law on carrying through foreclosures then it would have to go through a costly and time-consuming process of getting its paperwork in order and ensuring that it actually did have possession of the title before going to a judge and getting a judgment that would allow them to take possession of the property. Instead banks got in the habit of skirting the proper procedures and filling in forms inaccurately and improperly in order to take possession of properties.
GMAC, the former financing arm of GM, has become the poster child for these sorts of practices. Jeffrey Stephan, a leader of one of its foreclosure units, acknowledged that he had signed thousands of affidavits claiming that he had reviewed documents that he had never seen.
http://www.counterpunch.org/baker09292010.html
our creaking housing market is being capsized by a foreclosure pandemic riddled by corruption.
Afraid it would look like it was blithely executing foreclosures on a callous conveyor belt -- which is precisely the case -- GMAC quickly put the brakes on any further evictions in 23 states until it could find a way to massage the problem.
"Do not proceed with evictions, cash for keys transactions, or lockouts,” GMAC's official memo explained. “All files should be placed on hold, regardless of occupant type. Do not proceed with REO sale closings.”
prospective home buyers could be inheriting damaged goods. Because of their dense securitization, each mortgage is divided between so many parties that banks are foreclosing and selling homes that may not even belong to them.
"Wells [Fargo] is sufficiently concerned about the risks of selling properties out of foreclosure that it is springing an addendum on buyers, shortly before closing, which effectively shifts all risk for any title deficiency onto the buyer," Yves Smith explained on Naked Capitalism. [But] if a bank like Wells does not have the right to foreclose, it cannot have clean title to the property. So the bank could conceivably be selling something it does not own."
Worse, titles to REO properties are being compromised and confused by these crafty banks and their lawyers. In one particularly ridiculous case, Bank of America foreclosed on a Countrywide-brokered Florida home and transferred its title to Fannie Mae, even though it had already been paid off in cash for it and no mortgage existed.
This securitized madness is exactly how owners were saddled with predatory adjustable-rate mortgages to begin with. The plan was never to keep them in their hastily constructed properties, built during a post-9/11 housing boom that more or less functioned as a casino for hedge funds and other deregulated power players. The plan was to saddle homeowners with artificially inflated loans that would exist long after their assets' true value was reached, in the best case. Or, in the worst case, long after they were kicked out of their homes, or could have their homes illegally repossessed thanks to obscure legalese and naked grift.
http://www.alternet.org/story/148340...et?page=entire
Afraid it would look like it was blithely executing foreclosures on a callous conveyor belt -- which is precisely the case -- GMAC quickly put the brakes on any further evictions in 23 states until it could find a way to massage the problem.
"Do not proceed with evictions, cash for keys transactions, or lockouts,” GMAC's official memo explained. “All files should be placed on hold, regardless of occupant type. Do not proceed with REO sale closings.”
prospective home buyers could be inheriting damaged goods. Because of their dense securitization, each mortgage is divided between so many parties that banks are foreclosing and selling homes that may not even belong to them.
"Wells [Fargo] is sufficiently concerned about the risks of selling properties out of foreclosure that it is springing an addendum on buyers, shortly before closing, which effectively shifts all risk for any title deficiency onto the buyer," Yves Smith explained on Naked Capitalism. [But] if a bank like Wells does not have the right to foreclose, it cannot have clean title to the property. So the bank could conceivably be selling something it does not own."
Worse, titles to REO properties are being compromised and confused by these crafty banks and their lawyers. In one particularly ridiculous case, Bank of America foreclosed on a Countrywide-brokered Florida home and transferred its title to Fannie Mae, even though it had already been paid off in cash for it and no mortgage existed.
This securitized madness is exactly how owners were saddled with predatory adjustable-rate mortgages to begin with. The plan was never to keep them in their hastily constructed properties, built during a post-9/11 housing boom that more or less functioned as a casino for hedge funds and other deregulated power players. The plan was to saddle homeowners with artificially inflated loans that would exist long after their assets' true value was reached, in the best case. Or, in the worst case, long after they were kicked out of their homes, or could have their homes illegally repossessed thanks to obscure legalese and naked grift.
http://www.alternet.org/story/148340...et?page=entire
With each passing day, the revelations in mortgage-gate, which has for now implicated GMAC and JPMorgan in foreclosing on mortgages without titles, and will likely soon proceed through the entire mortgage origination industry like wildfire as more and more of those foreclosed upon begin to challenge the process (we wonder just what the statute on limitations for retroactive challenges is), are getting increasingly more bizarre.
Today, courtesy of Alan Grayson's office we discover that not only are servicers foreclosing on mortgages to which nobody apparently owns the title, but that servicers, representing such reputable firms as Deutsche Bank National Trust Company, are willing to counterfeit court summons in their pursuit of a clean and efficient foreclosure mill.
As Grayson's office points out: "Apparently what’s happening is that private process servicer companies may not be serving people with summons, and are simply counterfeiting the documents so they can keep the fees without doing the work. That means that you could theoretically be foreclosed on without ever knowing there was even a foreclosure case against you." What it also means, is that banks may have been participants in this outright criminal judicial fraud, which we are confident will be uncovered in many more cases, as this is highly unlikely to be an isolated case. And the ultimate outcome, as the Florida Bar News states, is that soon, the entire foreclosure process will halt, thereby creating a huge bottleneck to cleaning out excess inventory as more and more squatters are allowed to reside in properties that no longer pay their mortgages to anyone, now that it is obvious that nobody (ahem Freddie, but how else can you keep bailing out the banks, pardon, the GSEs, via fraudulent fund flows) owns the actual deed.
“If we had everyone defending their foreclosure, we’d never get through this.”
http://www.zerohedge.com/article/mor...-court-summons
Today, courtesy of Alan Grayson's office we discover that not only are servicers foreclosing on mortgages to which nobody apparently owns the title, but that servicers, representing such reputable firms as Deutsche Bank National Trust Company, are willing to counterfeit court summons in their pursuit of a clean and efficient foreclosure mill.
As Grayson's office points out: "Apparently what’s happening is that private process servicer companies may not be serving people with summons, and are simply counterfeiting the documents so they can keep the fees without doing the work. That means that you could theoretically be foreclosed on without ever knowing there was even a foreclosure case against you." What it also means, is that banks may have been participants in this outright criminal judicial fraud, which we are confident will be uncovered in many more cases, as this is highly unlikely to be an isolated case. And the ultimate outcome, as the Florida Bar News states, is that soon, the entire foreclosure process will halt, thereby creating a huge bottleneck to cleaning out excess inventory as more and more squatters are allowed to reside in properties that no longer pay their mortgages to anyone, now that it is obvious that nobody (ahem Freddie, but how else can you keep bailing out the banks, pardon, the GSEs, via fraudulent fund flows) owns the actual deed.
“If we had everyone defending their foreclosure, we’d never get through this.”
http://www.zerohedge.com/article/mor...-court-summons