Want to Foreclose? Show Me the Paper!

Since October 2008 I’ve been writing here about problems in mortgage backed securities (MBS). There is more evidence surfacing in bankruptcy courts that the paperwork for the underlying mortgages wasn’t provided correctly for the new bond holders, leading to delayed or denied foreclosure proceedings.

New York Times’ Gretchen Morgenson is reporting new successes in cases from Florida and California. A judgment on a home in Miami-Dade County (FL) was set aside on February 11 when the new mortgage holder could not produce evidence that the original mortgage lien had been assigned. In one of the California cases, the lender tried for foreclose on a mortgage that had previously been transferred to Freddie Mac!

The earliest decision I’ve seen is from Judge Christopher A. Boyko in Cleveland. Plaintiff Deutsche Bank’s attorney argued, “Judge, you just don’t understand how things work.” In his October 31, 2007 decision to dismiss a foreclosure complaint, Boyko responded that this “argument reveals a condescending mindset and quasi-monopolistic system” established by financial institutions to the disadvantage of homeowners. The Masters of the Universe were anxious to pump out mortgages into MBS so they could continue to earn fees – making money at any cost.

One element of the newest Homeowner Bailout program is to allow bankruptcy court judges to modify mortgage loans. If the types of cases decided in OH, FL and CA continue to spread, that may not be necessary. The first question in any foreclosure procedure will become: can you prove a lien?

This raises further questions about those “toxic assets” that Geithner and Bernanke are so anxious to buy up at taxpayer expense. According to the Morgenson article, some MBS holders are trying to force the mortgage originator to take back the paper. However, many of the worst offenders are already defunct.

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Mortgage back securites

Mortgage back securities have been in down ward tail spin since the fed announced there winding down of there purchasing of mortgage back securities by the end of 2013. This has caused a huge adverse affect on Mortgage rates see for yourself.

reverse mortgage lenders

This information is excellent - very objective - and a good plan I believe for use of funds - The reverse mortgage program is now enjoying some positive feedback in the news/media and I believe more will have this heart to heart with their parents and come to the same conclusion. Equity is the largest part of one wealth (usually) and most are not fully prepared for retirement - thus accessing this equity is crucial and the how is with a reverse mortgage.



I was checking out some updates on the Maine reverse mortgage website and while I was searching google for some information I found your article here. I think that main problem here is the main concept of the capitalism mentality: everything is for sale and the modern capitalist man makes money no matter what. Well, that is not a guideline which you can apply in all the fields. The real estate business is indeed a market where you can have a profitable business, but when you start throwing people in the street because of the crisis. That is not a direction I would promote. I'm just thinking about the future... if lots of people become homeless and some of them have even lots their jobs, my question is: who will build the future of the country?