She is taking up this forclosure business and running with it.

And Abdul - what makes you think this isn't in the interest of the public in MA?  If she is an aspiring gov - which I'm unconvinced of - and you are suggesting she is doing this for political gain - wouldn't that mean that the public is interested in it?

HAMP has probably done more harm than good if you're a homeowner looking for help; if you're a lender or mortgage servicer, HAMP hasn't hurt you one little bit.

But, here's the thing: does Romney not know how many foreclosed/short sale homes are already on the market?  Homes that no one has to be "allowed" to buy, or given permission to rent out, or fix up or live in once the deal goes through?  It sure doesn't seem like it.  

I've mentioned before that my daughter and her boyfriend are looking to buy.  One house that had possibilities was purchased for $385K in 2007 and mortgaged - first and seconds - up to $360K.  Owner defaulted, Freddie Mac bought it at auction from Sun Trust in December, 2010 for $306K.  Freddie Mac listed it for $245K, and the price has been dropped to $175K.  It is now under contract (kids decided it was too close to the road, and not on a big enough lot - but a 2,600+ sq ft home for that price in a semi-rural location is a steal).

There are all kinds of homes just like this sitting on the market, with asking prices dropping, dropping, dropping.  And as much as I want my kids to be able to take advantage of the market, I have to tell you that every time I look up a property's deed of trust, and see MERS, I wonder whether the story it tells is true.  And I think about how buyers have been and will continue to profit from someone else's tragedy - one that might not have had to happen.  And the prevalence of MERS in the land records here does make me worry about chain of title.

That just shouldn't be.  If lenders short-cut the process, there should be a consequence for them - but that's what the 50-state agreement that Obama's so hot for is going to help them avoid to a significant degree.

What I don't get is how flooding the market with more foreclosed homes that will sit empty because there aren't enough buyers is going to help anything.  It would make more sense for banks to write down loans to the current value of the properties so that the people who live in them can continue to live in them.

Back when the foreclosure fraud settlement was purportedly only going to cover robo-signing abuses, the price tag was going to be $17 billion.

Now that the Obama Administration is desperately trying to craft a settlement deal to include origination problems, the price tag has grown to $25 billion.

Under the proposed terms of the settlement -- which could total $25 billion -- banks would get broad legal immunity from state lawsuits in exchange for refinancing underwater loans, those mortgages where borrowers owe more than their homes are worth, the sources said.

The deal could provide some relief to the battered U.S. housing market and clear up some uncertainty about banks' legal exposure that has been a drag on their shares.

Banks have been holding out on a multi-billion-dollar settlement because they wanted broader legal immunity than state attorneys general were prepared to offer.

Originally, the states were only considering immunity for shortcuts taken during mortgage servicing and foreclosures, including the so-called "robo-signing" of documents to evict people behind on their mortgages.

In recent days, the state attorneys general agreed to release major banks from claims that they made legal errors when first originating the loans, such as approving loans for borrowers without verifying any income, according to two people familiar with the talks.

That means for all the additional things the banks would get immunity for-at the very least, the liars loans and the predatory lending, all the things they're getting hammered for in reps and warrants suits, though the language might well immunize securitization failures-banks would pay just an additional $8 billion.

That, in spite of the fact that FHFA filed lawsuits against the banks that might be worth $40 billion, with $11.5 billion from Bank of America alone.

So basically Obama wants to fund HAMP 2.0 by letting banks out of at least 80% of what they stand to lose in court.

Frank Bevilacqua purchased property in Haverhill out of foreclosure from U.S. Bank. Apparently, Bevilacqua invested several hundred thousand dollars into the property, converting it into condominiums. The prior foreclosure, however, was bungled by U.S. Bank and rendered void under the Ibanez case. Mr. Bevilacqua (or presumably his title insurance attorney) brought an action to "try title" in the Land Court to clear up his title, arguing that he is the rightful owner of the property, despite the faulty foreclosure, inasmuch as the prior owner, Rodriguez, was nowhere to be found.

Land Court Judge Keith Long (ironically the same judge who originally decided the Ibanez case) closed the door on Mr. Bevilacqua, dismissing his case, but with compassion for his plight.

"I have great sympathy for Mr. Bevilacqua's situation -- he was not the one who conducted the invalid foreclosure, and presumably purchased from the foreclosing entity in reliance on receiving good title -- but if that was the case his proper grievance and proper remedy is against that wrongfully foreclosing entity on which he relied," Long wrote.

[snip]

The SJC agreed with Judge Long that Bevilacqua did not own the property, and therefore, lacked any standing to pursue a "try title" action in the Land Court. The faulty foreclosure was void, thereby voiding the foreclosure deed to Bevilacqua. The Court endorsed Judge Long's "Brooklyn Bridge" analogy, which posits that if someone records a deed to the Brooklyn Bridge, then brings a lawsuit to uphold such ownership and the "owner" of the bridge doesn't appear, title to the bridge is not conveyed magically. The claimant in a try title or quiet title case, the court ruled, must have some plausible ownership interest in the property, and Bevilacqua lacked any at this point in time.

The court also held, for many of the same reasons, that Bevilacqua lacked standing as a "bona fide good faith purchaser for value." The record title left no question that U.S. Bank had conducted an invalid foreclosure sale, the court reasoned.

The WSJ:

The highest court in Massachusetts ruled that a homeowner who bought a foreclosure that hadn't been properly conducted by the foreclosing bank in 2006 didn't have legal ownership of the property.

The decision by the Supreme Judicial Court casts a cloud over the legal ownership of any properties in Massachusetts where banks didn't properly convey title when foreclosing. The problem has gained attention nationwide because of banks' use of "robo-signing" and other dubious practices that may have broken chains of title on foreclosures.

David Dayen:

Think about that. Banks who failed to convey title during foreclosure have clouded the title of any property for the foreseeable future, meaning that whoever buys up the foreclosed property may not be the legal owner. And extrapolating that out, all the homes across the country where the banks failed to convey title properly through securitization has clouded the titles there. That means tens of millions of homes pretty much have no legal ownership chain.

"Allow investors to buy homes, put renters in them, fix the homes up and let it turn around and come back up,"

it's not like there's a long line of investors, just a dyin' to buy those empty properties, all over the country. the situation is so dire in some areas, the banks have taken to razing foreclosed on properties, and donating the now empty lots to the jurisdiction they're in. true, they have to eat the cost, but the liability risk on the empty houses was far greater.

one positive result is that those properties still occupied won't have their values continually decreased by virtue of those empty, rotting houses. as well, the bank does get some tax benefit for the donation of land to the city/county. the cost of razing the improvement is capitalized as part of the basis of the land.

Dragging out the process will delay recovery.  The sooner the overhang in housing is cleared, the better.  The interests of the state AG's (aspiring governors) don't necessarily align with those of the public.

"Allow investors to buy homes, put renters in them, fix the homes up and let it turn around and come back up,"

Give the nobility discounted property so they can charge the surfs* to occupy the space they once owned... for a handsome profit of course.

Me, I think we should tell the investors to go F themselves and start figuring out how to get the surfs* back into their homes.

As long as these huge bad debts hang over the US economy we will end up up with Japan's/Great depression's slow deflation over 10-20 years.  Discharging the debt quickly should be our goal.

The quickest solution is to give the houses free and clear to the home owners.  This would cause an immediate large scale stimulus as these home owners would have lots of income to spend.  This comes with a huge moral hazard and most voters would hate it.

Best solution: Take any mortgages owned by the government and reduce the debit size to that of the market value of the house less the amount already paid directly by the home owner.  The amount of value gained by the home owner is limit to what they fairly paid in and their monthly payments are reduced.  This avoids the moral hazard and gets the bad debt out the system very quickly.  It would also be quite popular with the general public and stimulate the economy.