Could 62 Million Homes Be Foreclosure-Proof?

[Chris_]

Could 62 Million Homes Be Foreclosure-Proof?

Over 62 million mortgages are now held in the name of MERS, an electronic recording system devised by and for the convenience of the mortgage industry. A California bankruptcy court, following landmark cases in other jurisdictions, recently held that this electronic shortcut makes it impossible for banks to establish their ownership of property titles—and therefore to foreclose on mortgaged properties. The logical result could be 62 million homes that are foreclosure-proof.

Mortgages bundled into securities were a favorite investment of speculators at the height of the financial bubble leading up to the crash of 2008. The securities changed hands frequently, and the companies profiting from mortgage payments were often not the same parties that negotiated the loans. At the heart of this disconnect was the Mortgage Electronic Registration System, or MERS, a company that serves as the mortgagee of record for lenders, allowing properties to change hands without the necessity of recording each transfer.

MERS was convenient for the mortgage industry, but courts are now questioning the impact of all of this financial juggling when it comes to mortgage ownership. To foreclose on real property, the plaintiff must be able to establish the chain of title entitling it to relief. But MERS has acknowledged, and recent cases have held, that MERS is a mere “nominee”—an entity appointed by the true owner simply for the purpose of holding property in order to facilitate transactions. Recent court opinions stress that this defect is not just a procedural but is a substantive failure, one that is fatal to the plaintiff’s legal ability to foreclose.

I came across this and thought it looked interesting.  Looks like someone could have made a big boo-boo.

http://www.yesmagazine.org/new-economy/homeowners-rebellion-could-62-million-homes-be-foreclosure-proof

[NHSparky]

So how does one go about proving that their home is in this system?

Given that my mortgage is held by a credit union, I wouldn't think I was likely to be in such a category--or would I?

[true_blood]

So how does one go about proving that their home is in this system?

Given that my mortgage is held by a credit union, I wouldn't think I was likely to be in such a category--or would I?

I'm thinking it may be the 96% of the homes that are under gubberment loans. (Seeing how the gubberment does 96% of the home loans nowadays.)
I don't really think this is an oversight neither. Think about it. If it involves HUGE money and ownership of something as huge as a house or house cost, wouldn't you think they would be on the ball and know EXACTLY where everything stands? I wouldn't be surprised if Lord Zero has his hand in this. I don't trust that dude worth a damn!

[JohnnyReb]

hmmmm.....now for 1/3 or maybe a 1/2 of what you owe on a house a lawyer will take your case and get the mortgage dropped.....you now have a free home...except you owe the lawyer a large fee..... and for another fee he'll finance that charge for you by putting a mortgage on your home for his 1/3 or 1/2 fee of it's value.

I can see the TV ad's now.......maybe even an all lawyer channel on cable/satelite.

[true_blood]

hmmmm.....now for 1/3 or maybe a 1/2 of what you owe on a house a lawyer will take your case and get the mortgage dropped.....you now have a free home...except you owe the lawyer a large fee..... and for another fee he'll finance that charge for you by putting a mortgage on your home for his 1/3 or 1/2 fee of it's value.

I can see the TV ad's now.......maybe even an all lawyer channel on cable/satelite.

YUP!! What a slap in the face to those who pay their bills on time and didn't over spend, like myself.
IT PISSES ME OFF!! We reward failure, but shit on success and capitalism.

[Ptarmigan]

A bigger mess got MUCH BIGGER.

[debk]

YUP!! What a slap in the face to those who pay their bills on time and didn't over spend, like myself.
IT PISSES ME OFF!! We reward failure, but shit on success and capitalism.

I don't think it's just an issue of who doesn't pay their bills....

I just glanced through several articles discussing this MERS thing....kind of important to me, since I list and sell foreclosures.

As many of you may know, the majority of people who have tried to modify their mortgage....for ANY REASON....have not been able too. The homeowners have approached their lenders, who have either strung the homeowner along, or flat-out refused to talk to them.

I've been listing and selling foreclosures for 8-9 years. Those who got loans they couldn't ever really afford, were foreclosed on 2-3 years ago. Those that are being foreclosed on now, the majority, have 1) had their financial situation change - they lost their jobs and can't find replacement job at same income level. 2) the value of their home has reduced so much that their payments are ridiculously high for what the home is worth. 3) for whatever reason, their house is on the market, or has been, and the house either won't sell because of a saturated market, or they cannot get anywhere near a sales price for the amount of the mortgage. I'm doing reports now, on houses that were purchased 10-20 years ago, more often than those purchased 5 years ago.

This MERS thing -today is the first I have heard of it -- could explain why lenders aren't willing to discuss loan modification with the homeowners. These same lenders who were given bailout money -by the government - for the purpose of salvaging the housing market.

No homeowner wants to lose their home.....and sets out to fail on their mortgage.  First time homeowners have been particularly susceptible to bad loan practices. They didn't know any better when a lender is sitting there saying that they (lender) will loan a buyer 105% on a house, and all the buyer has to cough up is $75 or 100 for a credit check and mortgage application fee....because it wasn't just ONE lender doing that type of loan....it was most, if not all, of them!  I, as their Realtor, could only tell them it's a dumb idea....but the only result was for me to lose the sale, and for the buyer to go to another Realtor who would encourage them to get that type of loan. Anybody who wants a home, paying more rent than a house payment will cost, and being told by a lender that they can make that happen...is going to do it!

Then in the mid 2000's --- property values dramatically increased in many places across the country, allowing many homeowners who were in nice houses, but small for their families, to go into a larger home. Builders went crazy building houses...at all price levels as there were buyers coming out of the woodwork, so to speak. Many homeowners put their first houses up for sale, made a "killing" on them to the "first time buyers"(getting 100% or better loans), and moved into houses, that at the time were priced at fair market value - for that specific market at that specific time ---plopped down a significant amount of money, that they had made from selling their first home....and thought they would have a great house, that would only increase in value over time, making for an incredible sure investment, as opposed to the stock market.

When the first time buyers got into trouble, lenders foreclosed, putting themselves in a situation that they helped create with 100% loans, causing the bottom of the pyramid of the housing market to collapse. As the rest of the economy started to collapse, those who had been in good financial situations started getting in trouble through job loss, inability to sell their homes due to lack of buyers and housing prices dropping.

We are in a vicious economic circle that started years ago with Greenspan screwing around with interest rates (prime) and Sept 9, 2001. It was the housing market that helped this country after 9/11, and it's the housing market that is going to bring us down.

Everything is so entwined that it continues to cycle furiously around, just like a wheel on a motorcycle...stop the wheel, and the bike falls over.  

The stimulus monies were supposed to stabilize the housing market....but the market can't be stabilized if those holding the money -refuse to use it for what it was purposed. The banks could have greatly slowed, even turned it around....had they chosen to. But they didn't....WHY NOT?

Perhaps there needs to be some in depth investigation into why didn't the banks use the stimulus monies to help homeowners? The banks didn't need to reduce the amount of money that homeowners borrowed...they needed to alter the terms of the loans. BIG difference! It would have helped to prevent the home values from decreasing - which affects every homeowner!

I hate to sound like a have a tin foil hat on my head....but the stimulus act to help the homeowners was put into effect in Nov 2008, with a Republican president being the one to sign it, but a Democratic president....who many distrust not because he's a Democrat....overseeing the disposition of the monies.

Now this MERS thing shows up.

Just what the hell is going on?

[Chris_]

The entire housing market scares us right now.  I am so glad we did not go through with any purchase last fall.  We want to rent until we have 15-20% to put down.  We don't want to touch any type of government loan, if at all possibly.  But from what I understand, 96% of all mortgages are owned by the government.  That bothers us and kind of scares me. 

We will sit back and watch round 2 of foreclosures hit while our rent continues to decrease.  At least if anything breaks at our apartment, we have a maintenance crew that fixes/replaces.

[Ptarmigan]

I don't think it's just an issue of who doesn't pay their bills....

I just glanced through several articles discussing this MERS thing....kind of important to me, since I list and sell foreclosures.

As many of you may know, the majority of people who have tried to modify their mortgage....for ANY REASON....have not been able too. The homeowners have approached their lenders, who have either strung the homeowner along, or flat-out refused to talk to them.

I've been listing and selling foreclosures for 8-9 years. Those who got loans they couldn't ever really afford, were foreclosed on 2-3 years ago. Those that are being foreclosed on now, the majority, have 1) had their financial situation change - they lost their jobs and can't find replacement job at same income level. 2) the value of their home has reduced so much that their payments are ridiculously high for what the home is worth. 3) for whatever reason, their house is on the market, or has been, and the house either won't sell because of a saturated market, or they cannot get anywhere near a sales price for the amount of the mortgage. I'm doing reports now, on houses that were purchased 10-20 years ago, more often than those purchased 5 years ago.

This MERS thing -today is the first I have heard of it -- could explain why lenders aren't willing to discuss loan modification with the homeowners. These same lenders who were given bailout money -by the government - for the purpose of salvaging the housing market.

No homeowner wants to lose their home.....and sets out to fail on their mortgage.  First time homeowners have been particularly susceptible to bad loan practices. They didn't know any better when a lender is sitting there saying that they (lender) will loan a buyer 105% on a house, and all the buyer has to cough up is $75 or 100 for a credit check and mortgage application fee....because it wasn't just ONE lender doing that type of loan....it was most, if not all, of them!  I, as their Realtor, could only tell them it's a dumb idea....but the only result was for me to lose the sale, and for the buyer to go to another Realtor who would encourage them to get that type of loan. Anybody who wants a home, paying more rent than a house payment will cost, and being told by a lender that they can make that happen...is going to do it!

Then in the mid 2000's --- property values dramatically increased in many places across the country, allowing many homeowners who were in nice houses, but small for their families, to go into a larger home. Builders went crazy building houses...at all price levels as there were buyers coming out of the woodwork, so to speak. Many homeowners put their first houses up for sale, made a "killing" on them to the "first time buyers"(getting 100% or better loans), and moved into houses, that at the time were priced at fair market value - for that specific market at that specific time ---plopped down a significant amount of money, that they had made from selling their first home....and thought they would have a great house, that would only increase in value over time, making for an incredible sure investment, as opposed to the stock market.

When the first time buyers got into trouble, lenders foreclosed, putting themselves in a situation that they helped create with 100% loans, causing the bottom of the pyramid of the housing market to collapse. As the rest of the economy started to collapse, those who had been in good financial situations started getting in trouble through job loss, inability to sell their homes due to lack of buyers and housing prices dropping.

We are in a vicious economic circle that started years ago with Greenspan screwing around with interest rates (prime) and Sept 9, 2001. It was the housing market that helped this country after 9/11, and it's the housing market that is going to bring us down.

Everything is so entwined that it continues to cycle furiously around, just like a wheel on a motorcycle...stop the wheel, and the bike falls over. 

The stimulus monies were supposed to stabilize the housing market....but the market can't be stabilized if those holding the money -refuse to use it for what it was purposed. The banks could have greatly slowed, even turned it around....had they chosen to. But they didn't....WHY NOT?

Perhaps there needs to be some in depth investigation into why didn't the banks use the stimulus monies to help homeowners? The banks didn't need to reduce the amount of money that homeowners borrowed...they needed to alter the terms of the loans. BIG difference! It would have helped to prevent the home values from decreasing - which affects every homeowner!

I hate to sound like a have a tin foil hat on my head....but the stimulus act to help the homeowners was put into effect in Nov 2008, with a Republican president being the one to sign it, but a Democratic president....who many distrust not because he's a Democrat....overseeing the disposition of the monies.

Now this MERS thing shows up.

Just what the hell is going on?

The loaner and loanee are just as bad. Just look at Countrywide. They tampered with the forms of people who clearly should of not gotten the mortgage.

[debk]

The loaner and loanee are just as bad. Just look at Countrywide. They tampered with the forms of people who clearly should of not gotten the mortgage.

It still comes back to the lender, Ptarmy.

A borrower has to provided documentation to support their numbers....UNLESS they got a loan where the lender did not require ANY documentation.

I had two ARM's with Countrywide. I didn't have to provide any documentation - at all - on the second one! They called me up, towards the end of my first one when it was going to re-determine the interest rate, and asked ME if I wanted to refinance. I said ok....they were going to put the closing costs into the new loan.

I knew that I couldn't qualify on paper, but I also knew that I could make the payments.

A week before I was to close, they called and said I had to not only provide a bunch of information, but I also had to provide my divorce papers from 14 years prior!! I refused. I said "YOU CALLED ME, I didnot call YOU, and you said that YOU called ME because I had never missed a payment and you wanted to keep me as a customer. Now, you have a choice, you can either go through with what YOU GUARANTEED, or I will go to the Wells Fargo lender in my office, or sell my house. Either way, YOU lose, if you don't go through with this loan."

I closed a week later, with an interest rate that was 4% LESS than the prior note. (single divorced women - even when employed are discriminated against on mortgage loans  ) They lowered my interest rate to the current interest rate at the time. And I still never missed a payment.

The only bad thing was, I sold it 45 days, prior to the 3 yr ARM being up, and it cost me $7200 for "early sale". 

I could only have gotten a new loan with Wells, if M had co-signed it.

The lender is the one who takes the risk if they are willing to give a No-Doc loan. The buyer hopes to be able to fulfill the loan repayment, but it's the lender who is responsible for offering the loan.

FHA and VA guidelines are very strict, and a lender has to provided extensive documentation to support income and debt of the borrower in order to get the loan. It's been that way for the 13+ years, that I have been a Realtor. There is NOTHING at all....to stop a borrower from changing those factors AFTER the loan has gone through and the closing and possession has taken place.

A lender does not tell a borrower....after the closing has taken place...that the borrower can't quit their job, have a child, buy a car -a boat - furniture, get a divorce....regardless of what type of loan the borrower has.

During the time of loan application, up until the day of closing....the "numbers are accurate". All FHA loans require a re-verification of employment, income and debt...within so many hours of closing...usually 24 hours. Even conventional does....M moved money from one account to another, a week prior to closing on our house, for the downpayment. (I forgot to tell him he couldn't  ) and the lender went nuts! Once he explained and provided documentation that both accounts were his, it was ok. If he had done it the day before....we would not have been able to close on time. 

 

[true_blood]

That is why I say that I wouldn't be surprised if Lord Zero has his hand in it somehow. I don't trust him worth a damn!!
(I think a lot of the problems occur when the banks close down as well. There are over 100 bank failures for the year, so far.)

[debk]

That is why I say that I wouldn't be surprised if Lord Zero has his hand in it somehow. I don't trust him worth a damn!!
(I think a lot of the problems occur when the banks close down as well. There are over 100 bank failures for the year, so far.)

I don't know if it's Obama's hand in it.....but there's something going on that isn't kosher.

There was a big article today, in our local paper, that I read after I wrote the above. About mortgages and all the money that was to help homeowners, and hasn't been used. 

[true_blood]

I don't know if it's Obama's hand in it.....but there's something going on that isn't kosher.

There was a big article today, in our local paper, that I read after I wrote the above. About mortgages and all the money that was to help homeowners, and hasn't been used. 

You are correct. Something fishy is definitely going on.

[Ptarmigan]

It still comes back to the lender, Ptarmy.

A borrower has to provided documentation to support their numbers....UNLESS they got a loan where the lender did not require ANY documentation.

I had two ARM's with Countrywide. I didn't have to provide any documentation - at all - on the second one! They called me up, towards the end of my first one when it was going to re-determine the interest rate, and asked ME if I wanted to refinance. I said ok....they were going to put the closing costs into the new loan.

I knew that I couldn't qualify on paper, but I also knew that I could make the payments.

A week before I was to close, they called and said I had to not only provide a bunch of information, but I also had to provide my divorce papers from 14 years prior!! I refused. I said "YOU CALLED ME, I didnot call YOU, and you said that YOU called ME because I had never missed a payment and you wanted to keep me as a customer. Now, you have a choice, you can either go through with what YOU GUARANTEED, or I will go to the Wells Fargo lender in my office, or sell my house. Either way, YOU lose, if you don't go through with this loan."

I closed a week later, with an interest rate that was 4% LESS than the prior note. (single divorced women - even when employed are discriminated against on mortgage loans  ) They lowered my interest rate to the current interest rate at the time. And I still never missed a payment.

The only bad thing was, I sold it 45 days, prior to the 3 yr ARM being up, and it cost me $7200 for "early sale". 

I could only have gotten a new loan with Wells, if M had co-signed it.

The lender is the one who takes the risk if they are willing to give a No-Doc loan. The buyer hopes to be able to fulfill the loan repayment, but it's the lender who is responsible for offering the loan.

FHA and VA guidelines are very strict, and a lender has to provided extensive documentation to support income and debt of the borrower in order to get the loan. It's been that way for the 13+ years, that I have been a Realtor. There is NOTHING at all....to stop a borrower from changing those factors AFTER the loan has gone through and the closing and possession has taken place.

A lender does not tell a borrower....after the closing has taken place...that the borrower can't quit their job, have a child, buy a car -a boat - furniture, get a divorce....regardless of what type of loan the borrower has.

During the time of loan application, up until the day of closing....the "numbers are accurate". All FHA loans require a re-verification of employment, income and debt...within so many hours of closing...usually 24 hours. Even conventional does....M moved money from one account to another, a week prior to closing on our house, for the downpayment. (I forgot to tell him he couldn't  ) and the lender went nuts! Once he explained and provided documentation that both accounts were his, it was ok. If he had done it the day before....we would not have been able to close on time. 

 

No argument from me. I think the government played some role too.

[RobJohnson]

I don't think it's just an issue of who doesn't pay their bills....

I just glanced through several articles discussing this MERS thing....kind of important to me, since I list and sell foreclosures.

As many of you may know, the majority of people who have tried to modify their mortgage....for ANY REASON....have not been able too. The homeowners have approached their lenders, who have either strung the homeowner along, or flat-out refused to talk to them.

I've been listing and selling foreclosures for 8-9 years. Those who got loans they couldn't ever really afford, were foreclosed on 2-3 years ago. Those that are being foreclosed on now, the majority, have 1) had their financial situation change - they lost their jobs and can't find replacement job at same income level. 2) the value of their home has reduced so much that their payments are ridiculously high for what the home is worth. 3) for whatever reason, their house is on the market, or has been, and the house either won't sell because of a saturated market, or they cannot get anywhere near a sales price for the amount of the mortgage. I'm doing reports now, on houses that were purchased 10-20 years ago, more often than those purchased 5 years ago.

This MERS thing -today is the first I have heard of it -- could explain why lenders aren't willing to discuss loan modification with the homeowners. These same lenders who were given bailout money -by the government - for the purpose of salvaging the housing market.

No homeowner wants to lose their home.....and sets out to fail on their mortgage.  First time homeowners have been particularly susceptible to bad loan practices. They didn't know any better when a lender is sitting there saying that they (lender) will loan a buyer 105% on a house, and all the buyer has to cough up is $75 or 100 for a credit check and mortgage application fee....because it wasn't just ONE lender doing that type of loan....it was most, if not all, of them!  I, as their Realtor, could only tell them it's a dumb idea....but the only result was for me to lose the sale, and for the buyer to go to another Realtor who would encourage them to get that type of loan. Anybody who wants a home, paying more rent than a house payment will cost, and being told by a lender that they can make that happen...is going to do it!

Then in the mid 2000's --- property values dramatically increased in many places across the country, allowing many homeowners who were in nice houses, but small for their families, to go into a larger home. Builders went crazy building houses...at all price levels as there were buyers coming out of the woodwork, so to speak. Many homeowners put their first houses up for sale, made a "killing" on them to the "first time buyers"(getting 100% or better loans), and moved into houses, that at the time were priced at fair market value - for that specific market at that specific time ---plopped down a significant amount of money, that they had made from selling their first home....and thought they would have a great house, that would only increase in value over time, making for an incredible sure investment, as opposed to the stock market.

When the first time buyers got into trouble, lenders foreclosed, putting themselves in a situation that they helped create with 100% loans, causing the bottom of the pyramid of the housing market to collapse. As the rest of the economy started to collapse, those who had been in good financial situations started getting in trouble through job loss, inability to sell their homes due to lack of buyers and housing prices dropping.

We are in a vicious economic circle that started years ago with Greenspan screwing around with interest rates (prime) and Sept 9, 2001. It was the housing market that helped this country after 9/11, and it's the housing market that is going to bring us down.

Everything is so entwined that it continues to cycle furiously around, just like a wheel on a motorcycle...stop the wheel, and the bike falls over.  

The stimulus monies were supposed to stabilize the housing market....but the market can't be stabilized if those holding the money -refuse to use it for what it was purposed. The banks could have greatly slowed, even turned it around....had they chosen to. But they didn't....WHY NOT?

Perhaps there needs to be some in depth investigation into why didn't the banks use the stimulus monies to help homeowners? The banks didn't need to reduce the amount of money that homeowners borrowed...they needed to alter the terms of the loans. BIG difference! It would have helped to prevent the home values from decreasing - which affects every homeowner!

I hate to sound like a have a tin foil hat on my head....but the stimulus act to help the homeowners was put into effect in Nov 2008, with a Republican president being the one to sign it, but a Democratic president....who many distrust not because he's a Democrat....overseeing the disposition of the monies.

Now this MERS thing shows up.

Just what the hell is going on?

Great insight, Deb!