A Moratorium On Due Process, Cont'd

Via Atrios, Cleveland Plain Dealer:

Michael Rendes of Berea had his mortgage sold last year to Bank of America. The bank foreclosed on him in November, after insisting for months that it didn't hold his loan and wouldn't accept his payments.

Via D-Day, see also this.

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    Read the DailyCaller article this morning (none / 0) (#1)
    by BTAL on Sun Oct 17, 2010 at 10:24:54 AM EST
    The new player is DOCX, that supposedly can create entire document packages (mortgage, note, assignments, etc.) out of thin air.

    Their web site doesn't resolve www.docx.com  A quick check shows that the domain is owned by LPS, formally Fidelity National - the largest servicer and provider of mortgage software in the country.

    The thick plottens.

    DOCX existence and what they have been doing (none / 0) (#3)
    by Militarytracy on Sun Oct 17, 2010 at 11:59:11 AM EST
    has been known for about two weeks now for those who wanted to know.  IMO, the next fraud we are all going to be slapped upside the head with in this mess is that they created more mortgage backed securities than we have mortgages for.

    Not only have they created more (none / 0) (#5)
    by scribe on Sun Oct 17, 2010 at 01:09:11 PM EST
    mortgage-backed securities than they have mortgages for, but also they failed to properly create the trusts holding the mortgages (or, rather, the thought-to-be-mortgages) resulting in the trusts being non-existent, or they failed to properly administer the trusts, resulting in the IRS having huge unpaid bills owed by the trusts (per Daily Caller, the money sent to such an improperly administered trust is taxed at a rate of ... 100%).

    The one good thing that will come from this is that it's likely to kill the banks.


    I personally would have wished (none / 0) (#8)
    by Militarytracy on Sun Oct 17, 2010 at 01:55:06 PM EST
    for them to be taken over back when we knew all this stuff was horrific.  If they had been nationalized, we could have probably gotten lending back on track again and saved a lot of economic contraction that occured when lending dried up because they had so much crap on the books.  We could have given money to the pensions they destroyed instead of giving it them and watching them all walk off with millions and millions in pensions and bonuses and called it the troubled assets relief program.  We could have done a lot of things, but we didn't.

    Your last link discusses (none / 0) (#2)
    by Militarytracy on Sun Oct 17, 2010 at 11:57:22 AM EST
    that we have more mortgage backed securities than we have mortgages for.  Someone is going to jail or there is no justice in this country.

    The D-day link is interesting (none / 0) (#4)
    by robotalk on Sun Oct 17, 2010 at 12:57:40 PM EST
    but you see, there are two issues:

    1.  How will homeowners be effected?  A: likely the Act spoken of therein, but much more problematically

    2.  How will entities with interests--not the foreclosing entity itself--in the mortgage backed securities be dealt with?  How does the foreclosing entity assure people with ownership interests are paid off?  Who really owns these loans?  Will this be left to be worked out in the shadows?

    The answers to these questions are pretty simple (none / 0) (#6)
    by scribe on Sun Oct 17, 2010 at 01:16:13 PM EST
    1.  Homeowners should make sure the local/county/state property and school taxes on their property are promptly paid in full.  Since those records are usually maintained in the homeowner's locality, a quick visit to the friendly tax collector can keep that straight.  In the meantime, changing your particular mortgage from "including the taxes with the payment" to "property owner pays taxes directly" would be a good idea.  Mortgage companies, when dealing with "including taxes with your payment"  type mortgages will cut only one check to each locality, lumping all the taxes due for the properties they are dealing with in that municipality into that one check.  They can't keep the mortgages straight;  you can be sure they're going to start screwing up the taxes.

    2.  It will be worked out in the shadows.  No one knows, so any answer they make up will, be definition, be correct.

    Will title insurers (5.00 / 1) (#7)
    by robotalk on Sun Oct 17, 2010 at 01:22:18 PM EST
    insure foreclosed properties since they don't know if the loan was actually owned by the foreclosing party--potential for actual owner to ultimately say to purchaser you own nothing?  

    Can escrow close on the purchases of foreclosed properties without title insurance?

    Who will buy foreclosed properties with these potential liabilities and at what price?  


    Ah, I just thanked my spouse (5.00 / 1) (#9)
    by Cream City on Sun Oct 17, 2010 at 02:12:08 PM EST
    for being firm about not having the banks be responsible for paying our property taxes, having us put them in escrow.  I did so as a homeowner on my own.

    Instead, he has been willing for years to do the standing in line (he won't even do it online now) to pay the property taxes, in person, and straight from our own account.  

    His reasoning for doing so was different, but how nice to know that the results works in our favor as well amid this horrific mortgage mess.

    And now, he has just thanked me for deciding, when last I handled our refinancing not long ago, to stop seeing our mortgage sold and resold to whoknowswhere.  That really chapped me and caused occasional muddles amid transitions.  So we paid a wee bit more to have a mortgage with our longtime local bank (it's very strong, per the FDIC ratings, and it gives great service), one that it would hold, one that would not be resold.

    Of course, with all that is coming down and coming apart now, who knows what we will find out tomorrow about how this mess may spread even to the best banks . . . and thus to us.


    I got our loan through (none / 0) (#10)
    by Militarytracy on Sun Oct 17, 2010 at 02:18:22 PM EST
    an army aviation federal credit union.  I did not read any fine print though.  I was promptly sold like the slave I am :)

    We are a good risk though (none / 0) (#11)
    by Militarytracy on Sun Oct 17, 2010 at 02:20:16 PM EST
    a very stable boring fixed loan, I wonder how many times we were sliced and diced and poured on the crap to make the crap look better though?  As far as I'm concerned....I'm in MERs and they can't tell me who owns me right now, I'm phucked.

    The problem with being in MERS (5.00 / 1) (#14)
    by scribe on Mon Oct 18, 2010 at 01:04:37 PM EST
    is that it matters not whether you are a great credit risk, a crappy one, or should not get credit under any circumstances.  The way MERS is set up (its systemic design) and the way it has operated (it operates as designed and all the atrocities we read about are signs the system is operating as intended) means that any bank could decide to foreclose on you at any time for no reason at all, regardless of whether they had ever touched your mortgage before and regardless of whether you were current in your payments or not.  

    All they would need to do is get DOCX or one of the other document mills to "reconstruct" the "lost" documents in your file and "provide the missing assignments", then send the file off to a foreclosure mill law firm to have you foreclosed.  IF the foreclosure law firm was using its favored process server, your summons and complaint would wind up in the sewer* if you were lucky and get shredded if not, and you would not know about the foreclosure until the sheriff was tacking a notice to your door and the locksmit was changing your locks.

    People should recognize - but are being led away from doing so - that this is a colossal asset-stripping scheme designed and intended to take property from its owners and so cloud title to property that only the rich (and hedge funds) will be able to buy property and clear the clouds off the title.  

    This is of a piece with those "sell your gold" scams on TV - a scheme to get people to part with their valuables at a profit to the buyers.  If someone has enough money to advertise on TV that they're buying something valuable, you can be sure the money for that advertising is coming out of the profit the seller should have made, not the buyer's.  Those same people buying the gold will then gladly resell it to you (as a hedge against inflation, Obama, oil boycotts, or whatever works in their ads) for a substantial premium over the actual market spot price of gold, further profiting and stripping value/assets from the gullible.  They might pay $300 for an ounce of gold with a spot price around $1000, then resell that same ounce to the same set of gulls for $1400.  Subtracting out their costs of advertising and such, they might be making $1000 an ounce on each such flip.

    *  Big digression - where the name "sewer service" came from
       Back before NY state needed to close a budget gap around 1991 and did so by changing the nature of its court system, they required actual service of the summons and complaint and one party or another needing the involvment of a judge to decide something to get the court system involved.  The result of that setup, combined with the law in NY being that actual service of the summone and complaint was required before the running of the statute of limitations, led to many many cases being reported on whether the service of these papers was adequate.  And one of the perennial chestnuts of defective service (and cases addressing it) was the so-called "sewer service", where the process server tossed the papers in the sewer and returned a false affidavit (saying he'd made service) to the plaintiff's attorney.  That attorney could then proceed to take a default judgment and go forward to take property and so on.  Under that old system, it was only when a party needed a judge to decide something - like "please set aside the default judgment because I was never served" - that the party deciding it needed judicial intervention did something called "buying an index number", i.e., paying to the Court the filing fee to open a case.  A lot of times, cases could be litigated all the way up to the point of needing a trial before the judicial system got involved.
    NY state closed a budget gap by changing from that previous system to a "filing" system, in which the case could not be begun until the plaintiff paid the filing fee, f/k/a index number, and the filing (but not necessarily service) had to take place prior to the running of the statute of limitations, in essence collecting a filing fee on all litigation in the state rather than on only the part that at some point needed a judge.


    Huh?? (none / 0) (#12)
    by jimakaPPJ on Sun Oct 17, 2010 at 04:40:18 PM EST
    The bank foreclosed on him in November, after insisting for months that it didn't hold his loan and wouldn't accept his payments.

    And who did he make his payments to? Does he have the cancelled checks??

    I'm have trouble believeing much of what I'm reading.

    Having been caught in one of these Black Holes (none / 0) (#13)
    by Rojas on Mon Oct 18, 2010 at 09:34:03 AM EST
    Back in the Att/Cingular merger, I have no trouble believing it. The incentives are all wrong. The bottom rail is firmly entrenched on top.

    You also have to watch your bank account (none / 0) (#15)
    by scribe on Mon Oct 18, 2010 at 01:06:17 PM EST
    A lot of banks will no longer give you even the images of your cancelled checks.  Getting the actual checks back went out years ago.

    All in the name ofefficiency, of course.


    It talks about that in the article. (none / 0) (#16)
    by Harry Saxon on Mon Oct 18, 2010 at 06:41:41 PM EST
    Would it kill you to click a link once in a while?

    Among those whose foreclosure is in limbo for the moment are Michael and Carol Rendes, both 49, who bought their 1,350-square-foot home in Berea in January 2006. But the couple says the foreclosure isn't even justified.

    Their loan originally was with subprime lender Argent Mortgage, then LaSalle Bank, then Wilkshire Financial. The loan was sold to Bank of America in September 2009, although the couple said they weren't initially notified. They made their September and October payments to Wilkshire.

    "I had no clue. I just made my payment," Michael Rendes said. "I knew I had a mortgage." Wilkshire then told him the loan had been sold. He called Bank of America many times, but bank employees couldn't find the couple in the system. They tried using names, Social Security numbers, the parcel number, dates of birth, everything.

    Their two payments were cashed but apparently not forwarded to Bank of America, or at least not posted to the couple's account. In November, they received a letter that they were in default.

    The couple had the money to get caught up, but they said Bank of America wouldn't take it.

    "It's a nightmare," Rendes said. "I'm paying lawyers. I'm going to the Justice Center all of the time. I'm almost to the point where I want to take that house apart and tell them to shove it."