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.
They were cheated out of their homes not to mention, most likely, the foreclosure mill that did the foreclosure fabricated documents to expedite the foreclosure. That would be fraud on the Court, which judges don’t appreciate to much.
Michael, do you give them any slack in lieu of the fact that many of these upside-down homeowners were forced with no option to overpay for their homes originally, due to Barney Frank’s meddling and bubble-building Fannie Mae and Freddie Mac government intervention into our otherwise perfectly fine free markets?
Their house being overpriced has nothing to do with it.
No matter how you slice it they do not own the home and whoever does has the property rights not them.
If they can’t afford the payments they should default and go bankrupt just like the bank will have to when they are eventually forced to mark their junk mortgage paper to what it is actually worth.
Until both of these happen the housing mess will not recover.
I agree with everything you’ve said in that last post, but not your prior post. Your prior post implies that the borrow is the only party at fault in a default. That is only true in a stable free market, void of government bubble-forming entities that go just as “under” as the borrow, but then enjoy being bailed out by that borrower’s tax money, taken by force of gun, only to go out and meddle in the free market again.
The family man with two kids was forced to borrow and buy in a government/banker-created bubble and denied the opportunity to choose a free market. Barney Frank and Fannie Mae interfered in every neighborhood.
When I said “screw the banks” I meant they deserve what they get too and their just desserts a long overdue.
The family man had a choice to not buy he was not forced to buy an overpriced house.
Why should I have anymore sympathy for the guy who bought a house he couldn’t afford or one he used as a cash machine than I should for the bank?
They both are complicit in fraud.
The right thing to do is to clear the system of bad actors and their overhanging debt and that includes the lender and the borrower.
None of this would have happened if reasonable lending standards had been followed.
The banks lent to people knowing a large percentage of the loans would not repaid and the buyers bought in the hope that double digit appreciation would go on forever.
Both sides put short term gain ahead of long term stability.
It’s also a sad fact is that our industry benefited due to all the increased churn in housing and it will never likely be the same again.
Asset bubbles always hurt when they burst and this is far far from over.
The family man was not forced to buy an over priced home. The family man was told, that he could get a better rate, consolidate his debt, and have some money left over to make improvements on his home, due to the equity in his home.
What the family man wasn’t told, was that his home was being used as a penny stock in a “pump and dump” scheme, which included, fattening up the appraisal to make it appear, he could afford the home (pump).
When the truth came out about the fact that the homes being overvalued and the market plummeted, he now found himself upside down in his “investment”. Meanwhile, Wall Street was selling his note for more money each transaction. Now, his home, for all intents and purposes, is worthless. (dump) And, he is what is known as a bag-holder, an empty bag holder.
People may be interested to know that the so-called “rich” are the ones with the most defaults. “Strategic default” is what it is called. They have realized that they will never see a return on their investment, so, they walk. Which is a smart business decision.
A smarter decision is to fight the foreclosure legally. Once you are in Court, rules have to be followed. That is where the fraud gets exposed, if you have an attorney who knows what to look for and it is mostly found in the county records.
Mortgage Electronic Registration Systems has and was designed to cause these problems. When you find out who started MERS, the picture gets clear in a hurry.
Anyone that has used their home as a ATM over the last 6 years deserves everything that they get. Most people I know of who did that bought things that they didn’t really need.
Everything in this world is about choices. Be it good or bad everyone had a choice. Things will never get better in this world until people are held responsible for their choices.
Sounds like a loaded question. If you are implying that people like the ones in the story should get a free home because one of those entities did something wrong, then no I don’t.
You can not take advantage of someone unless they are willing to be taken advantage of.
It isn’t a loaded question. The banks, through their legal counsel, fabricated documents in order to foreclose on people quickly. Unfortunately, that happens to be fraud and the consequences can and should be severe.
A free home may be one of those consequences. It isn’t like the homeowner wanted a free home, the law may dictate that he gets it though.
When in Court, there is something known as “clean hands”, which means, that an entity, in this case the banks, cannot profit from an illegal act, as in, take a home that they legally didn’t have a right to.
This is all due to the improper transfers/recording of title/mortgage. Had all of that been done properly, we wouldn’t be in this mess.
There are millions of loans with “clouds” on their titles as a result. Florida Default Law Groups own title company isn’t issuing title insurance on any of the foreclosures that were done by FDLG. What does that tell you regarding the legality of those foreclosures?
So far our government leadership has done nothing but bail these guys out by allowing them to stay in business and all based on the claim that they are too big to fail.
Barbara Streisand
How about the smaller bankers who played by the rules followed reasonable and sound lending practices?
They sit back and watch the big boys rake it in while they struggle.
If the big banks would be forced to write down their mortgage book to actual value they would all be bankrupt.
That’s a good thing as it flushes the trash out of the system and allows the honest bankers to grow and gain new business.
Our leaders are trying to pretend there is some magical free lunch and so far refuses to face reality.
This is setting us up for a crash with maximum pain for everyone.
Ask yourself this:
Would you rather have a short painful period as things reset and we return to the rule of law or a long drawn out lawless depression where the small fry suffer while the gangsters gloat?
It’s our choice ladies and gentlemen.
This is still a a Republic and the electorate holds the ultimate power if we are willing to use it.
No. it isn’t. It happens to be law.
There are cases on the books here in Florida, and there will be more, that will invalidate all mortgages where MERS was involved.
The bank broke the laws but so did all those borrowers that got stated income loans and had no ability to make the payments they agreed to long term.
They were counting on double digit appreciation to suck the excess capital out of their homes and either roll the profits into the next deal or buy toys and vacations. That is fraud.
I understand what you are saying. There is equal guilt on both sides.
However, do you think someone should lose their home because of those practices by the banks/appraisers/mortgage companies?
Regarding your statement about stated income loans, most of those were done by Countrywide. They were then sold to Fannie Mae. As such, they were required to meet Fannie Mae guidelines. They didn’t.
Fannie Mae is actually reviewing those loans and if there are violations of their guidelines, the will be sold back to Countrywide, now Bank of America, at full price.
I have spoken with a couple of Fannie Mae representatives and they both said the same thing.
Someone on this thread or another one said something to the effect of “people don’t get taken advantage of unless the are willing to be taken advantage of” or something like that.
That is complete nonsense.
90% of the population has no idea how the lending process even works.
Most loans were sold, on average three times before they were even recorded in the county records.
I am not saying that all homeowners got duped, but a majority thought their home would continue to appreciate in value. Not drop by 100%
If you take the moral hazard out of the lending borrowing decision you will only repeat the same mistakes.
That they thought their homes would continue to appreciate is due to the lies we all have been told for the last 30 years. I bought into it too to some extent but now we have learned the truth the hard way.
A home is not an investment, it is a place to hang your hat.
Few want these families to loose their home but let’s be honest, many people should not own homes.
It ties them down to a geographical area and makes it difficult to move cross country should they happen to loose their job or their state they live passes onerous taxes or conditions on them.
In this market, a stronger case can be made for renting than buying.
I wish I had not bought 3 years ago even though I purchased a great home for a great deal.
At the time it was hard to imagine that our leaders would continue the same policies that got us into the mess.
Oh well. It was my risk to take and I’m fine with it.
