Not so fast to the banks..Mass Supreme court seals a blow to banks..
:good:
GOOD!
Restores my faith. I knew that one had to happen sooner or later, with the banks playing it so fast and loose and with banks flipping mortgages amongst each other, willy nilly. That had been on my mind, that someone sooner or later would say "Hold the phone, Mr. Banker... Can you actually DOCUMENT that you in fact legally entitled to foreclose this asset?"
Lo and behold, they couldn't.
Damn sloppy on their part. Time for them to slow down and do it right.
This reminds me of when my dad tried to fight a traffic ticket. The cop had his license number wrong by one digit. The judge asked "Were you driving the car that was pulled over by this officer for speeding?". Sort of kills that defense ...
Just put these people under oath, and ask them "Did you pay stop paying your mortgage?" These idiots that lied on their mortgage applications, bought houses they couldn't afford, under loan terms that didn't fit their circumstances, shouldn't be rewarded by the courts ...
TPR
Bleeding-heart demo-lib that I am, I agree with you on that. Did these people sign a contract to borrow and pay back some money? Did they buy something they thought would go up in value that instead went down? I don't see any answers but "yes" to those questions.
Did the realtors, lenders, appraisers, etc. give these people a false expectation of the outcome of their actions, in many cases they did but if somebody convinces me to invest in a gold mine and I get the shaft, I don't think I have anybody to blame but myself.
The F Word
If borrowers were irresponsible, then there's not any reason why they should be let off the hook. People need to accept responsibility for their own actions.
There are however also plenty of cases where FRAUD occurred, for example where mortgage brokers and others swindled borrowers with a bait-and switch, by luring them in with low fixed rates, which once the paperwork was signed, magically became unfavorable adjustable rate mortgages which then rapidly became unaffordable for the borrowers.
And, of course, this was not a problem for the mortgage brokers, because they resold the mortgages off to other banks (who likewise probably did not know about the swindle) before the ink was even dry.
The FRAUD discussion and investigation needs to be a lot more aggressive on all fronts.
The F Word
I haven't heard about the lenders that were fraudulently preparing contracts for fixed rates and swapping those out with adjustables. I do know that a lot of people were lured into the mortgage market with teaser rates on adjustables with the wink and nod that they could refinance to a fixed rate in a year or two when the property they were "buying" increased dramatically in value even though they had no possible chance of making the payment on the projected adjustable rate. That's when the bubble in r.e. prices burst and the stuff hit the fan. There were some smart people caught up in it buying everything in sight, thinking that there was no way to lose, wrong.
The F Word
Personally, I think that there were numerous people who just were not paying attention. The attitude seemed to be "the bank would not approve me if I could not afford it". I was pre-approved for my loan.... the first thing I did was get on the internet and found a mortgage calculator and punched in the numbers. "Wait a moment- the mortgage payment ALONE is HALF of my take home pay!" I knew that would not work since there would be escrow for taxes and such. So, I punched in principal amounts until I found a payment I was comfortable with and bought a smaller house than I originally wanted. When I asked the mortgage officer flat out, "how could I be approved for such a loan?", the response was "we usually assume (there we go again, we know what that means) that there are two people". Well, there were not two people in my case.
That being said, I heard stories of people being outright swindled. One story was of a woman in Boston who was earning something like $19/ hour and approved for a condo with a price tag of (I believe) well over $200k. Turned out that the mortgage company had erased here income figures and forged an inflated income. Some red flags should have gone off for the woman (like how can she afford THAT payment), but none did. She bought and subsequently lost the condo.
The F Word
There were a whole raft of little hole in the wall mortgage brokers that sprung up overnight that were engaging all manner of tactics. There were definitely many who played it fast and loose.
It was all about churn, they weren't interested in the longterm interest, they were only interested in making the sale and making their money at closing. They then resold and dumped the bad mortgage as soon as they left the closing table.
I'd wager those banks to whom they sold the bad mortgages were in many instances completely snookered, too, for example with inflated income figures.
The F Word
Well, the little hole in the wall mortgage originators were not the only ones side-stepping rules. Fannie Mae and Freddie Mac do not securitize sub-prime loans, so the Wall Street banks started doing this themselves and trading with each other and/or looking for private investors to sell to. Bear Stearns, Lehman Bros., and AIG were caught holding the biggest bags. I don't feel bad for them, either. They knew they were taking on much greater risk than normal. It was all aided by the bond rating agencies that surmised that a single sub-prime borrower was "junk", but if you roll a 1000 sub-prime borrowers into a security, then it's worthy of the highest credit rating ... go figure that on out ...
The F Word
I thought on this forum the F-word was F*nce 😉
The F Word
Yep, there needs to be a very extensive investigation on all fronts.
There were folks like Goldman Sachs who led the charge on these ponzi-scheme securitizations like derivatives, and others like Bear Stearns tried following suit, though without fully understanding what Goldman Sachs was doing - and meanwhile, Goldman Sachs and others were in some instances setting up and BETTING on failure with the credit default swaps. Some of this stuff was more tangled and crooked than anything the best mob bookie ever came up with.
The ratings agencies like Moody's were also in part bamboozled, as some of the securitization schemes were complex and convoluted and difficult for them to appropriately rate - yet at the same time, they rely on the banks for income and compete for market share, so it turns into a situation where the fox was guarding the henhouse.
Huge mess, on all fronts. I think people need to be in jail, and that the financials need to be unraveled too - obscene amounts of dough were made unethically by some of the masterminds - and that should be unraveled and undone.
The F Word
Not if you want to know the true location of the PROPERTY LINE.
The F Word
> I thought on this forum the F-word was F*nce 😉
🙂
I have no sympathy for these banks.
They are the ones that are demanding $300 surveys to cover their billion dollar businass.
It is all too common that when I go to research title of a property there is little or no paper trail that includes a property description when some banks are involved.
Many times their deeds of trust will refer to some obscure document that does not actually contain a proper description of the property, if and when it actually is the correct reference.
In their haste to close and to bypass getting a proper survey, the recording information is left blank because they did not do any research.
That is if they even took the time to record. Many mortgage papers are still sitting in a drawer at some banks and lawyers offices.
The banking industry is failing itself by taking shortcuts and not paying for services necessary to proper business activity.
There were clauses written into mortgage contracts that would keep the buyer on the hook using a signed contract stating that in the event the buyer couldn't qualify for the financing terms they were interested in, they would accept a substitute mortgage with whatever terms they qualified for.
Real estate purchase paperwork is like software licences: nobody reads it, because the volume and the density of the language is overwhelming to the end user. Hiding behind an obscure clause in an impenetrable contract is a reasonable defense only when it can be shown that a reasonably prudent person would be aware of the terms and thus able to protect his interests. I doubt that the banks could successfully make that case for the vast majority of real estate loans, and that they should bear a healthy portion of the responsibility for the loan failures.
