The Shock Of Due Process

The Massachusetts Supreme Judicial Court issued an opinion in a much followed foreclosure case. The opinion is fairly straight forward and, frankly, if there is rule of law in this country, should have been completely predictable. But apparently it has sent shock waves. Consider the simplicity and fairness of the result, as described by Felix Salmon:

[H]omeowner[s] being foreclosed upon will as a matter of course challenge the banks to prove that they own the mortgage in question. If the bank can’t do that, then the foreclosure proceeding will be tossed out of court. This is likely to slow down foreclosures enormously, as banks ensure that all their legal ducks are in a row before they try to foreclose.

(Emphasis supplied.) Salmon muses about the SCOTUS maybe getting involved, which would be ironic, in light of the Twombly and Iqbal decisions, which make it very difficult to even get in the courthouse at all. More . . .

Unlike many federal court plaintiffs, the banks will get a second chance to get their "legal ducks in a row." Or, in the words of mortgage industry analysts, "clean up their records and re-foreclose on the properties."

Personally, I have serious doubts that the banks can do this. The main reason is if they could, they would have done it already. We are not here by accident. As the same mortgage analysts note:

"What is surprising about these cases is not the statement of principles articulated by the court … but rather the utter carelessness with which the plaintiff banks documented the title to their assets."

What these same analysts do not get is that the robo-signing scandal that they compare the Massachusetts case to is a direct result of this carelessness -- an attempt to cover up the mess by fraud. Fixing this for the banks is going to be very difficult. As John Carney writes:

One final positive note on the ruling—the court did not say that the lenders could not go back and re-foreclose on these properties. And based on what the lenders have re-documented since the initial actions, the lender should be able to restart and complete the action now, subject to the normal legal delays. But this might be far more difficult than Goodman thinks.

Let’s take the example of the Ibanez mortgage. The case involved a $103,5000 loan on a house in Springfield, Massachusetts made on December 1, 2005. The initial lender, Rose Mortgage, Inc., recorded the mortgage in the county registry of deeds the following day.

[. . . ] What [. . .] give[s] the court pause is what happened next, when the mortgage entered the Wall Street securitization assembly-line. [. . .] US Trust couldn’t show any evidence of [. . .] assignments [of the mortgage.] As soon as Ibanez mortgage entered the securitization assembly line, the assignments stop being duly noted on the mortgage, much less recorded in any property registry offices.

The solution to this seems easy enough. From now on, banks seeking to foreclose should just make sure that whoever is the last recorded assignee grants a new assignment to the foreclosing entity before the bank takes any action. No doubt this is what Goodman has in mind when she says banks will go back and re-document the assignments. It might not be so easy.

[. . .] You didn’t buy the mortgage from [the last record owner of the mortgage. . . .] They aren’t under any contractual obligation to you to execute any documents. [. . .] A great many of the companies involved [in the mortage industry] have entered bankruptcy or changed ownership. When these companies appear in the ownership chain, “re-documenting” the assignments may be all but impossible.

Yep. In other words, if you are buying a foreclosed home, make sure your title insurance company is in good financial shape. You may need it.

Speaking for me only

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    Shockwaves... (5.00 / 2) (#2)
    by kdog on Tue Jan 11, 2011 at 08:44:33 AM EST
    Thank goodness for shoddy work, eh...those binding their fellow humans in a modern form of indentured servitudem, and their co-conspirators in government, forgot to strip away a few rights from us proles.  

    Let us hope it bites them in their greedy arses...

    No $hit :) (none / 0) (#3)
    by Militarytracy on Tue Jan 11, 2011 at 08:46:31 AM EST
    If there is any shock, it is probably (5.00 / 2) (#11)
    by Anne on Tue Jan 11, 2011 at 03:03:15 PM EST
    being felt by the lenders, who thought they had locked up total control over borrowers and believed they had the courts on a very short leash.

    And it pains me to say this, but I think there is some shock being felt by us common folk, who didn't think we stood a snowball's chance in hell of prevailing over the wealthy and powerful.  How sad is it that we should be shocked by courts making corporations play by the rules?

    I hope it's a trend.  I hope courts across the country (Florida, are you listening?) are empowered to hold the lenders and servicers accountable for the sloppiness that was a by-product of unrestrained greed.

    What would really shock me, at this point, would be the Obama administration admitting that HAMP has been a colossal failure, and doing what they should have done all along: HOLC.

    Interesting (5.00 / 0) (#17)
    by Molly Bloom on Wed Jan 12, 2011 at 07:42:45 AM EST
    Diogenes stated

    Is anyone disputing that the owners of the "wrongly foreclosed" homes were in fact well behind in their payments.

    In the cases I referred to:

    a) Dr Schroit, Cardoso, Grodensky had no mortgages at all.
    b) Iannelli was not late with her payments.
    c) Bell didn't have a mortgage with the bank in question (and the bank admitted as much later) and obviously wasn't late with any payments to any bank.
    d) Countrywide foreclosed on an active duty mechanic's home (Thitchener) which can be problematic in and of itself, HOWEVER, as it turned out in Thitchener's case Countrywide foreclosed on the wrong condo unit. Thitchener wasn't late in his payments.
    e) Mauck wasn't behind in her payments either. Mauck may not have had her home sold as a result of bungled foreclosure. She just came home to find out the bank took possesion of her unit and all of her personal possessions gone (thrown out with the trash).  

    None of these people appeared to have been "well behind" in their payments. Some had no mortgage at all.

    Again Diogenes asked if anyone was "disputing that the owners of the 'wrongly foreclosed' homes were in fact well behind in their payments."  

    Do you dispute that these 7 people were not "well behind" with payments?

     It is indeed "sad that  certain commentators would rather "stew in their own ignorance" than read the material made available to us before ridiculing a contributor who is making a valid point."

    Maybe you are worried some one is going to get their home for free, and you are not. Let me tell you, so far, I know of maybe two or three cases where that has happened. In those cases, the banks repeatedly defied court orders. In one case, the court issues a sanction forbiddening the bank to present the note to the court. Which is a bit of a problem if you are going to foreclose.  In another case, the bank was sanctioned in an amount equal the arrearage. Given the number of foreclosures out there and factoring in bank sloppyiness, the odds are only slighly better than winning the Florida Lottery.

    I have no knowledge of the cases you refer to (none / 0) (#19)
    by kramartini on Wed Jan 12, 2011 at 09:43:00 AM EST
    but will take your version of events for the sake of argument.

    Even though the examples you cite may not be typical, the fact that they exist is justification for the Mass. court's decision.

    I seriously doubt that more than a handful of these cases involve any more than faulty paperwork. Thus, the effect of the Mass. court's decision will likely be to throw the housing market into further turmoil

    But that is not the fault of the Mass. court but is only a result of the carelessness of the banks.


    strike "these" before cases (none / 0) (#20)
    by kramartini on Wed Jan 12, 2011 at 09:44:18 AM EST
    maybe you should check the links (none / 0) (#33)
    by Molly Bloom on Wed Jan 12, 2011 at 11:25:18 AM EST
    To quote you back to yourself

    It is sad that  certain commentators would rather "stew in their own ignorance" than read the material made available to us before ridiculing a contributor who is making a valid point.

    If no one can show ... (none / 0) (#1)
    by Robot Porter on Tue Jan 11, 2011 at 08:39:32 AM EST
    they own a mortgage, does the person who occupies the home gain full title?

    rewriting the question (none / 0) (#10)
    by Molly Bloom on Tue Jan 11, 2011 at 02:41:21 PM EST
    What I think you really mean is:

    If no one can show they own the note & mortgage, does the homeowner now own the home free and clear of the mortgage?

    The short non lawyer (loosely using the term mortgage as in some states it is not a mortgage, but  deed of trust) answer: in theory, eventually yes.

    Your fact pattern is no one can proove ownership of the note & mortgage and therefore standing to foreclose.

    The mortgage would always be in the public records, but would be subject to a statute of limitations of enforceability. No lawyer would remove it from their title opinion letter until the applicable statue of limitations has run on its enforceabiltity. No title underwriter would insure it without listing it as an exception to the insurance policy until the SOL had run.

    Your fact pattern has interesting implications for a quiet title action as well. If you can't prove who owns the note and mortgage, who do you serve? Can you extinush the rights of someone if you don't know who they are to serve them?

    In Florida, its improper for a junior interest to foreclose out a senior one AND the senior one is not required to respond to the junior interest's law suit (Cone Bros v Moore). A default under these circumstances is worthless. So (in Florida), even if you know who to serve in a quiet title action, does it do you any good? I haven't gotten that far... yet.


    A short course in federal civil procedure (none / 0) (#4)
    by oculus on Tue Jan 11, 2011 at 09:44:26 AM EST
    re pleading.  

    Depends on who you are (none / 0) (#5)
    by Big Tent Democrat on Tue Jan 11, 2011 at 09:48:38 AM EST
    and what the cause of action is.

    That is what is so corrupt about Twombly and Iqbal. Those standards will NEVER be applied to a big player outside of the Court's continuing drive to eliminate private antitrust litigation.


    Iqbal sued under 42 USC section 1983. (none / 0) (#6)
    by oculus on Tue Jan 11, 2011 at 09:52:11 AM EST
    But Twombly applied.  (I'm going to memorize Iqbal's name for future Scrabble games [new rules].)

    Scrabble is already ruined with stupid (none / 0) (#7)
    by observed on Tue Jan 11, 2011 at 09:55:59 AM EST
    two letter q and z "words"---who cares?

    Where's the injustice? (none / 0) (#12)
    by diogenes on Tue Jan 11, 2011 at 10:07:30 PM EST
         Is anyone disputing that the owners of the "wrongly foreclosed" homes were in fact well behind in their payments.  Delaying foreclosure until the t's are all crossed isn't going to enable anyone to suddenly get caught up on their mortgage payments.
         By dragging out foreclosures rather than letting the properties be sold to willing buyers this court is sustaining the zombie real estate market for years longer.  

    yes I dispute it. (5.00 / 1) (#13)
    by Molly Bloom on Tue Jan 11, 2011 at 10:27:32 PM EST
    This one is pretty famous in my circle of friends
    Bank of America forecloses on house that couple had paid cash for

    Charlie and Maria Cardoso paid cash in 2005 for their house in Spring Hill. Five years later, Bank of America foreclosed on it.

    Here are another 6 wrongful foreclosures.

    I have a friend seeking sanctions on a firm because the bank agreed to a short sale, the bank accepted the payoff released their mortgage, AND their counsel, foreclosed anyway. Imagine the new owner's surprise.

    No need to observe due process of law. Just grab it and go, cause the rules don't apply to banks.


    At this stage of the game, there simply (5.00 / 0) (#14)
    by Anne on Tue Jan 11, 2011 at 10:30:57 PM EST
    is no excuse why you are still asking these ridiculous questions, not when there is a ton of information out there that consists of more than talking points that sound like they came right out of the mortgage lenders handbook.

    Do you really imagine you can sell that stuff here?  Still?

    For the life of me, I cannot understand why people would rather stew in their own ignorance and cling to their ill-informed bias than actually take the time to educate themselves.


    With respect to the mortgages in question (2.00 / 1) (#15)
    by kramartini on Wed Jan 12, 2011 at 05:38:04 AM EST
    in the Massachussets case, see page 13 of the opinion:

    "There is no dispute that the mortgagors of the properties in question had defaulted on their obligations..."

    Thus, diogenes is right that the default is undisputed.

    What is disputed is which bank or other party has standing to engage in extra-judicial foreclosure.

    Until that is sorted out, the defaulting debtors will be benefiting from a windfall due to the banks' carelessness.

    Big Tent Democrat was nice enough to do the research for us and provide a link to the opinion. It is sad that certain commentators would rather "stew in their own ignorance" than read the material made available to us before ridiculing a contributor who is making a valid point.


    You could call it simple carelessness... (5.00 / 2) (#16)
    by kdog on Wed Jan 12, 2011 at 07:14:52 AM EST
    on the part of the banks, but nobody says the mortgagors were careless in making payments, they say they're in default.  Different rules different fools.

    The banks and/or other parties defaulted on their obligations...whether it is carelessness or fraud makes little difference, they f*cked up and have no one to blame but themselves and their greed.


    Carelessness is correct (none / 0) (#18)
    by kramartini on Wed Jan 12, 2011 at 09:35:30 AM EST
    Don't see where greed comes in terms of the banks' failure to keep accurate records.

    The banks are paying a price for a lack of professionalism and the defaulting homeowners are reaping an undeserved windfall.


    While it is noted that the (5.00 / 1) (#23)
    by Anne on Wed Jan 12, 2011 at 10:01:44 AM EST
    concurring opinion characterized the actions of the mortgagees as "careless," it is my opinion that if you look at the totality of what is happening with foreclosures, "careless" is far too charitable and gives far too much benefit of the doubt to lenders fairly blinded by their greed.

    "Careless" is what you call something that happens once in a while, and when discovered, is corrected; when the law and the principles that underlie it are so routinely and blatantly ignored, it is no longer "careless," it is an established business practice - which doesn't, by the way, override the law and the legal requirements for establishing the right to foreclose on someone's property.

    And while it is also noted that there was, apparently, "no question" the borrowers were in default, there is no underlying discussion of whether the borrowers should ever have been given the mortgages in the first place.  Were these "liar loans," adjustable-rate, 100% financed and made on the basis of a "wink-wink" and "don't worry - your home is only going to increase in value, building your equity and allowing you to refinance to a low fixed rate?"  We don't know - but what we do know is that lenders were so hot to make loans they could instantly sell off on their way to being securitized, they were willing to do whatever they had to - even deceive borrowers as to the terms and effects of their loans, in order to get borrowers to sign on the dotted line.

    I will grant you that there were borrowers who got just as greedy, thinking they could flip properties and make a killing in the market - and their greed led them to make seriously bad decisions that were, nonetheless, helped along by greedy lenders who got to the point where, if you were breathing, they would make the loan.  I mean, what did they care - they were just going to sell it off, so it didn't matter to them if it was a good loan or a bad one.

    And, as has been pointed out to you, we are hearing more and more about foreclosures being done on homes that had no mortgages, where people paid cash for their property, where not a single payment was ever missed.  

    "Careless" is, in my opinion, an unfortunate way to characterize the real nature of what these lenders were engaging in.


    How about gross carelessness? (5.00 / 1) (#25)
    by kramartini on Wed Jan 12, 2011 at 10:13:18 AM EST
    I am speaking only anecdotally here, but the people who acted as mortgage originators who I know, aren't the brightest people I know.

    Many of them really believed their own BS...


    Business practice. (5.00 / 1) (#27)
    by Anne on Wed Jan 12, 2011 at 10:29:17 AM EST
    I don't think you can make a rational argument that the entire mortgage lending industry was staffed by people of questionable intelligence, and that somehow, these stupid people all managed to do the same things the same way, over and over and over.  And in spite of levels of internal corporate lending committees and chain of approval that extend far beyond authority and autonomy of the loan intake officer sitting across the desk from the borrower taking down information.

    When it's systemic, it's not stupidity, it's a business practice, one that somewhere, in large, wood-paneled corner offices and conference rooms, some highly-compensated, high-level  officers and managing directors of banks and mortgage companies designed for maximum return.

    You're really reaching now, and it isn't serving your case - it's just making mine.


    Really, Molly Bloom - a "1" for (5.00 / 1) (#35)
    by Anne on Wed Jan 12, 2011 at 11:32:23 AM EST
    calling what the banks have been doing a "business practice" and not just "carelessness?"

    I'd love to know the rationale behind that rating.


    mistake- sorry - corrected (none / 0) (#40)
    by Molly Bloom on Wed Jan 12, 2011 at 11:56:10 AM EST
    Molly - no problem, it just (none / 0) (#43)
    by Anne on Wed Jan 12, 2011 at 12:09:13 PM EST
    didn't make any sense to me in light of your comments and mine being so similar on this issue.

    These guys all went broke and would (none / 0) (#31)
    by kramartini on Wed Jan 12, 2011 at 11:02:15 AM EST
    be out of business but for Federal intervention.

    Yes, it was systemic incompetence, people doing the same stupid thing over and over again not having any clue that housing prices might fall, no one showing the independence of thought to the possibility that the way to maximize return would be to STOP writing mortgages...


    actually yea... (none / 0) (#38)
    by CST on Wed Jan 12, 2011 at 11:47:51 AM EST
    everyone lives in a bubble, even bankers.

    For the most part I do think the industry was caught unaware.  They would've taken huge losses if not for the bailouts, and they didn't entirely know that would come.  As it is, a lot of them still took huge losses.  Most businesses don't intentionally run themselves and an entire industry into the ground.  Except of course those who figured it out in time to make a profit (Goldman).  But they are the exception not the rule.

    It was systemic, but it was systemic believing in their own B.S.  You make so much money, you are so invincible, it's impossible to see how you could possible be wrong about something so you make bigger and bigger bets, until you eventually lose.


    The more we learn, the harder it is, (none / 0) (#42)
    by Anne on Wed Jan 12, 2011 at 12:07:39 PM EST
    for me, anyway, to believe they didn't know this whole thing was going to crash, that the speed at which loans were being made and sold off wasn't an indication that they knew these loans were financial hot potatoes.  

    Maybe the bubble - and their huge size - led them to think there somehow wouldn't be any consequence unless they were the last one holding the hot potato when it all fell apart, but for the life of me I don't understand why anyone believed that bailing them out fixed everything - because it clearly didn't.

    The other shoe - the mortgage-backed securities aspect - has shown signs of dropping, but hasn't really, yet; when it does, I see much trouble ahead.


    Quick turnover of originated mortgages (none / 0) (#48)
    by kramartini on Wed Jan 12, 2011 at 01:30:45 PM EST
    is simply good inventory management.

    The originator's job is to write the mortgage and sell it into the market, not to hold onto it.

    Clearly, this creates incentives for fraud, and there was undoubtedly a lot of it.

    But fraud is not a sufficient explanation for the scope of the disaster we have seen.

    Even MBS's based on plain-vanilla 30-year amortizing mortgages with 20% down payments and no fraud took a big hit when housing prices fell.

    The complacency of the buyers of MBS's, and their failure to consider the possibility that housing prices might fall, was more to blame than the actions of the originators (whether motivated by greed or carelessness, or if you prefer, aggravated carelessness with a deadly weapon.)


    Since they weren't keeping the mortgage (none / 0) (#41)
    by Molly Bloom on Wed Jan 12, 2011 at 12:06:37 PM EST
    they had no reason to care. And every reason to make the borrowers look like they could afford the mortgage. This is a problem many of my peers have been expecting ever since lenders got rid of loan officers and the former loan officers set up business as independent mortgage brokers.

    The problem was exacerbated by securtization and the claims that the mortgage pools themselves were basically sound cause the rating agency said it was. Except it wasn't.

    It is every bit the failure to responsibly regulate and we all pay the price. But when one side of the debate will not countenance any economic regulatons, its very difficult to regulate, when that side (the economic conservaties) dominates the debate.


    It seems that the buyer of mortgage-backed (none / 0) (#47)
    by kramartini on Wed Jan 12, 2011 at 01:19:42 PM EST
    securities are the ones who screwed up here by failing to look out for their own interests.

    They failed to scrutinize what kind of meat went into the sausages they were buying.

    And while the rating agency analysis was for the most part sound based on historical patterns (that is, many of the problematic MBS's would have performed as advertised by the rating agencies had housing prices not cratered), no one seemed to have asked the question "what if" historical patterns didn't hold.

    Had the buyers of MBS's stepped back and thought  for like, five seconds, they would have realized that the unprecedented run up in prices had caused an increase in the volatility of housing prices (by definition!).

    Then they would have realized that the value of their collateral was less certain than it had been historically, and would have demanded higher interest rates for any given sliver of the mortgage cash flow stream.

    That in turn would have reduced the prices at which mortgage brokers could have sold mortgages and driven them to raise interest rates, to cut back lending (or go broke sooner!)

    This would have moderated the housing price rise and possibly prevented the bubble from bursting so catastrophically.


    And I don't think that greed can possibly (none / 0) (#26)
    by kramartini on Wed Jan 12, 2011 at 10:21:00 AM EST
    explain a catastrophe of this magnitude.

    The housing bust is at its core a matter of poor judgment on a massive scale.

    Consider that in parts of the country even conventional 30-year amortizing mortgages, with accurate documentation, 20%+ down payments and borrowers who have kept their jobs and never missed a payment are still underwater.

    The core of the problem is that buyers, lenders, politicians and government regulators never considered the possibility that housing prices might fall.

    Now that reality has set in, everyone is playing a game of musical chairs hoping to avoid the inevitable losses that all parties are responsible for.

    (I am really glad that I sold my house in 2005 and have been leasing ever since, paying lower rent every year.)


    Where's the windfall? (5.00 / 1) (#28)
    by Warren Terrer on Wed Jan 12, 2011 at 10:47:53 AM EST
    They still owe the money. It's not their fault if the bank didn't properly secure the debt via a valid mortgage. If you don't do the mortgage right, then there's no mortgage. Why is this such a difficult concept for you?

    Getting to live rent free without a mortgage (none / 0) (#29)
    by kramartini on Wed Jan 12, 2011 at 10:57:05 AM EST
    payment is a windfall.

    Like finding a $100 bill on the ground or inheriting from a rich relative or the credit card company failing to post a charge to my account (like that would ever happen!)


    That the court affirmed the decision (none / 0) (#34)
    by Anne on Wed Jan 12, 2011 at 11:29:34 AM EST
    that the banks in question did not have the right to foreclose does not hand the borrowers a "free" home.  The mortgage is not invalid, and neither is the note: some entity owns them.  The problem for the banks in question in Ibanez and LaRace is that they couldn't prove they owned the mortgage - that doesn't extinguish the debt or the mortgage that secures the property to it, it just muddies the water as to who does own the mortgage.  

    Here's Adam Levitin, via Naked Capitalism:

    There's still a valid mortgage and valid note. So in theory someone can enforce the mortgage and note. But no one can figure out who owns them...Ibanez did not address any of the trust law issues revolving around securitization, but there might be problems assigning defaulted mortgages into REMIC trusts that specifically prohibit the acceptance of defaulted mortgages. Probably not worthwhile risking the REMIC status to try and fix bad paperwork (or at least that's what I'd advise a trustee)....


    Which brings me to a critical point: Ibanez and Harp involve mortgage chain of title issues, not note chain of title issues. There are plenty of problems with mortgage chain of title. But the note chain of title issues, which relate to trust law questions, are just as, if not more serious. We don't have any legal rulings on the note chain of title issues. But even the rosiest reading of Ibanez cannot provide any comfort on note chain of title concerns.

    This is really complicated stuff that I don't pretend to be able to sort out, but the one thing I think I know is that the voiding of the foreclosures in the Ibanez case does not void the debt or the mortgage.  Maybe you have a free home in the sense that you have no idea where to send any payments you might be able to make, but I think, at some point, the chickens are going to have to come home to roost, and unless you've been making payments into a separate account from which you can write a check to get current when you finally get the certified letter informing you what you have to pay to do that - or else -  eventually, you probably are going to be out on the street.


    But in the meantime they get to live rent free (none / 0) (#45)
    by kramartini on Wed Jan 12, 2011 at 01:01:30 PM EST
    until the mess is sorted out.

    So the windfall is very short-term, I agree.

    And they may end up being real losers in this if the banks take revenge by getting deficiency judgments against plaintiffs who challenge the documentation.

    I do not know Massachusetts law, but in many states banks that use expedited foreclosure procedures can only take the house, but in a formal lawsuit can get a deficiency judgment for the excess of the note principal + interest over the sale price of a foreclosed home that is sold for less than the balance due.

    So they might end up on the street and stuck with a debt that can only be shed via bankruptcy.


    the problem wih that argument (none / 0) (#50)
    by Molly Bloom on Wed Jan 12, 2011 at 02:19:22 PM EST
    1. in this market the bank is going for a deficieny anyway. Which means the homeowner is headed for bankruptcy court at the appropriate time to discharge that debt. Who cares if it is 150k or 200k.

    2. Fighting the foreclosure may be the best vehilce to avoid a deficinecy judgment if you can force a deed in lieu of foreclosure and an agreement not to pursue a deficiency judgment; or a short sale or short payoff with n agreement not to pursue a deficiency judgment.

    Why do you think borrowers are hiring foreclosure defense specialists? It is frequently in the their economic self interest.

    Point 2 is valid although I am not sure about (none / 0) (#51)
    by kramartini on Wed Jan 12, 2011 at 06:16:19 PM EST
    point 1.

    The specific case that launched this discussion involved Massachusetts's expedited (extra-judicial) foreclosure process, so I don't think that a deficiency was at issue.

    But you are right that the borrower's negotiating position may have improved by stalling the process, if the buyer's intent is to re-negotiate the mortgage and keep the home.

    Once it is clear to the banks that it will take them a lot of time and expense to gather the paperwork to force the issue, they may be more open to compromise.


    Or like (none / 0) (#36)
    by Warren Terrer on Wed Jan 12, 2011 at 11:36:49 AM EST
    not having a valid mortgage but foreclosing anyway.

    Also a Windfall . . . (none / 0) (#49)
    by rea on Wed Jan 12, 2011 at 02:16:55 PM EST
    --getting to foreclose on a house when you're not the mortgage holder.  

    Of course greed.. (none / 0) (#21)
    by kdog on Wed Jan 12, 2011 at 09:52:04 AM EST
    comes into play...they were in such a rush to bundle mortgages and fleece investors before the bubble burst, they couldn't be bothered to keep the paperwork straight...that's not greed?

    As for undeserved windfalls, borrowers have a long way to go to catch up to lenders in that department....if some folks get a free house in order to maintain our traditions of due process and liberty & justice for all, or whats left of those traditions anyway, so be it.


    Not losing sleep over undeserved windfalls... (none / 0) (#22)
    by kramartini on Wed Jan 12, 2011 at 10:00:55 AM EST
    Reminds me of my favorite Community Chest card:

    "Bank error in your favor, collect $200!"


    That was a good card! (none / 0) (#44)
    by kdog on Wed Jan 12, 2011 at 12:38:20 PM EST
    The worst?  The one where you have to pay an assesment for street repairs:)

    Correct (none / 0) (#46)
    by kramartini on Wed Jan 12, 2011 at 01:05:05 PM EST
    That was the absolutely worst card to draw--could lose the game for you...

    Not greed, unprofessionalism... (none / 0) (#24)
    by kramartini on Wed Jan 12, 2011 at 10:09:22 AM EST
    This is just a symptom of complacency and poor back-office management.

    You have no evidence that a "rush to bundle mortgages and  fleece investors" was responsible for these problems. Indeed, had the originators been deliberately perpetrating the type of fraud that you  allude to, they would have been far more careful in documenting the transactions so that they wouldn't be forced to take back their own garbage.

    Never ascribe to evil that which can be explained by stupidity. There is far more of the latter in this world...


    The banks made tens of billions (none / 0) (#30)
    by observed on Wed Jan 12, 2011 at 10:58:43 AM EST
     if not more, by lying about their mortgages.
    They already made book, dude.

    No, the banks got slaughtered wholesale (none / 0) (#32)
    by kramartini on Wed Jan 12, 2011 at 11:03:38 AM EST
    when they were caught with their pants down holding mortgages and mortgage paper.

    That's capitalism n/t (none / 0) (#37)
    by Warren Terrer on Wed Jan 12, 2011 at 11:40:52 AM EST
    Not before handing out oodles in bonuses--- (none / 0) (#39)
    by observed on Wed Jan 12, 2011 at 11:55:02 AM EST
    which they are already doing again.