So who owns the house?

From Bloomberg:

Foreclosure Freeze May Sideline U.S. Homebuyers as Legal Worry Cuts Sales

A halt in home foreclosures at the largest U.S. mortgage firms may sideline buyers worried about legal issues, further depressing sales at a time when distressed properties account for almost a quarter of all transactions.

Revelations of mistakes in foreclosure proceedings are causing buyers to have misgivings about property titles, the right of home possession, said Richard DeKaser, chief economist at Woodley Park Research in Washington. Confidence in the legality of repossessions will cut foreclosure sales more than a reduction of available properties because the market already is flooded with repossessed homes, he said.

“The legal problems we’re seeing will hit sales as people worry about the legitimacy of the process,” DeKaser said. “The implications are that there’s been shoddy work.”

A reduction in foreclosure sales may result in a short-term boost to the nation’s median home price as buyers shy away from distressed properties, said Thomas Lawler, founder and president of Lawler Housing and Economic Consulting in Leesburg, Virginia.

In the second quarter, distressed homes — those that had received a default or auction notice or were seized banks — sold at an average 26 percent discount to properties not in the foreclosure process, according to RealtyTrac.

Any short-term boost to prices may be offset when a flood of properties are offered for sale after document problems are sorted out, Lawler said.

“Some people are breathing a short-term sigh of relief because the likelihood of distressed sales putting downward pressure on home prices has been put off,” Lawler said. “But no one is breathing a long-term sigh of relief because when these properties eventually come on the market, we’ll have both the confidence problem and the price problem.”

“The broader concern is that if banks took shortcuts here, what else did they do?” Sharga said. “Five years into this crisis, there’s no excuse for not having a process in place.”

Ownership questions may not arise until a home is under contract and the potential purchaser applies for title insurance, or even decades later as one deed researcher catches errors overlooked by another. A so-called defective title means the person who paid for and moved into a house may not be the legal owner.

This entry was posted in Foreclosures, National Real Estate, Risky Lending. Bookmark the permalink.

115 Responses to So who owns the house?

  1. grim says:

    From the Star Ledger:

    Exit tax a New Jersey riddle

    If you thought New Jersey’s jughandles were confusing, try wrapping your head around the state’s “exit tax.”

    Six years after it came into law, this elusive tax has achieved urban legend status. Many aren’t quite sure what it entails, how much of it has been collected or whether it really even exists. Even state officials are scratching their heads.

    The intended purpose, though, is clear: To prevent residents from moving out of state without first paying taxes on the sale of their homes.

    “People ask about it all the time,” said Marc Paolella, a relocation appraiser in Succasunna who takes to online forums in his spare time to field exit tax questions. “Part of the problem is that there’s no authoritative response.”

    It’s unclear who first coined the term “exit tax,” though it has become widely used to describe what some online critics have called “a kick in the pants seat on your way out” of New Jersey.

    According to the wording of the legislation, enacted under former Gov. Jim McGreevey to close a perceived loophole, the measure is actually a capital gains tax withholding that the state imposes each time a “non-resident taxpayer” sells a home.

    When such a seller eventually files his New Jersey tax return, he is refunded the difference between what is owed and what was withheld. (The state does not withhold this money from primary residents because they are expected to make the payment when they file their returns for the year.)

    But that’s where the jargon ends and the confusion begins. For starters, real estate professionals can’t seem to agree on how to interpret the law.

  2. grim says:

    From the Star Ledger:

    Sanofi-Aventis cutting 300 from NJ offices

    Sanofi-Aventis, the French drug maker with U.S. headquarters in Bridgewater, said it will cut 1,700 jobs from its U.S. commercial pharmaceutical operations.

    At least 300 people working in such areas as marketing, finance and IT at the company’s offices in Bridgewater are expected to be among the cuts. The majority of the jobs — an estimated 1,400 people — will be cut from the company’s field operations across the country.

  3. Want to get really creeped out? Who says history never repeats?

    “Today, we have three headlines of relevance. The first one comes from BusinessWeek as of October 9, “Finance Chiefs Warn Currency ‘War’ Is Risk to Growth” in which we read: “As the International Monetary Fund’s annual meeting began in Washington, policy makers warned that efforts to boost exports by embracing weaker currencies threatened to provoke protectionism and trade imbalances at a time when economic growth is already slowing. China was again the target of criticism as foreign officials called the yuan undervalued and pushed for its appreciation to be accelerated.” This was promptly followed by the Telegraph’s “IMF fails to strike deal over currency frictions”, in which we learn part two of the weekend’s key festivities: “The International Monetary Fund on Saturday night failed to reach agreement on tackling mounting global “frictions” over exchange rate policies despite US calls to deal with the issue more forcefully.” Which brings us to today’s game of ‘date the headline’, which comes, somewhere in time, from the New York Times: “US said to allow decline of dollar against the mark” in which we read a paraphrase of a quote by then Treasury Secretary James Baker III, together with some additional commentary: “‘I think if you look at the underlying economic fundamentals in this country, they’re very, very good,’ he said. But he added that the stock market appeared to be reacting to prospects of tax increases by Congress, the enactment of protectionist legislation to reduce foreign imports, and to fears of rising interest rates and inflation. He also said growth of computer-generated ”program trading” of securities had contributed to the size of the daily sell-offs.” Oddly enough, the situation described in the New York Times was identical, if not better, to what is transpiring right about now. As to what happened 24 hours after the original NYT article appeared, well, we all know that…”

    [snip]

    “For those who are still unsure, the original article can be found here, and the original date is October 18, 1987. And this time is not different. Well, maybe with one small difference: the Fed. Unlike in 1987, the Fed is now the primary driver in the market, and has to neutralize not only such mundane issues as constant domestic outflows from the capital market, but an increasing outflow by foreigners, which just like in 1987, are accelerating with each day that the dollar keeps trading lower and lower.

    In 1987, the market took its medicine quickly, and even though it was painful, manifesting in the form of October 19, 1987’s Black Monday, in which stocks lost almost 25% of their value in one day, this time no such market crash is assured, primarily due to the FRBNY’s dominance of the stock markets. Yet, in addition to death and taxes, the third sure thing is that no matter what, central banks will always, on a long enough timeline, lose to the market.

    With the recent addition of the foreclosure scandal, it is now certain that the Fed is juggling one ball too many. Throw in global protectionism and all out currency war and the already stretched equilibrium fails. All it would take for a global reset, now that there is no backer to a consolidated central bank failure, is for one person to demonstrate Soros’ courage and tenacity from another Black day, this time Wednesday, and to call the Fed on its bluff. Whether one will ever emerge, is a different story.”

    http://www.zerohedge.com/article/date-headline

  4. grim (2)-

    I moved in a lost of those Sanofi-Aventis folks back in the day. Guess I should crank up a mass mailer to them. Probably more than a few about to be riding the Penske Express.

  5. grim says:

    I’m about ready to put a stake in the 2011 Spring Market. Looks like the probability is high it is going to be another dead one.

    The timing is playing out just right for this (new) foreclosure mess to be sorted out in time for a new wave of bank owned properties to depress the spring market.

  6. grim says:

    From Reuters:

    Don’t hold your breath on home appreciation

    You may see two full moons in a month before home prices start rising again across the U.S. The rip tide of a huge home inventory, increasing foreclosures, unemployment and more bank woes continue to roil the housing market in most regions.

    If you think you’ll see a profit from selling your home or hope to get a home-equity loan based on recent appreciation, you may have to wait a while — maybe a few years.

    A host of demons continue to bedevil the U.S. home market. The worst of these gremlins is unemployment. Home sales and prices are directly linked to the number of people working. A jobless rate around 10 percent doesn’t spur home sales.

    Nobody is in a hurry to buy homes. According to a recent report by Ned Davis Research, housing prices may not begin to appreciate until the jobless rate goes to 7 percent or lower.

    Once the jobless rate gets to about 6 percent, the firm estimates that home prices may begin to rise roughly 2 percent annually or track the historical level of inflation.

    “Yes, there is a light at the end of the dark housing tunnel,” writes Joseph Kalish, the report’s author, “but it will take at least two years and possibly more to get there.”

  7. grim says:

    From the AP:

    Foreclosure freeze could undermine housing market

    Karl Case, the co-creator of a widely watched housing market index, was upbeat three weeks ago. Mulling the economy while at a meeting at a resort near the Berkshires, Case thought the makings of a recovery were finally falling into place.

    “I’m a 60-40 optimist,” he said at the time.

    Today, Case’s mood is far more subdued. In scarcely two weeks, he and other housing analysts have watched as the once-staid world of back-office bank procedures has spawned a scandal that threatens to further unhinge the housing market.

    In the near term, the freezes could actually benefit both homeowners and the housing market. Homeowners would have time to live rent-free and chip away at their debt. Prices might stabilize because so many homes are penned up.

    But the long-term implications are grave. Only a month ago, housing watcher Mark Zandi, chief economist at Moody’s Analytics, predicted that a housing recovery would be under way by the third quarter of next year. Now he believes the foreclosure scandal could prolong the housing depression for at least another few years.

    The development is especially troubling given how large the foreclosure market is. Before the scandal erupted, forecasters at John Burns Real Estate Consulting predicted that 41 percent of residential sales this year would be on distressed properties. Typically, distressed properties account for 7 percent.

    Since housing is the engine that in the past seven recessions has pulled the economy out of recession, any further damage couldn’t come at a worse time.

    “As far as I’m concerned, anything that slows the foreclosure process is a bad thing,” Case said this week.

    The debacle injects yet more uncertainty into a frail recovery that is still trying to find its strength.

    “This is definitely one of the last things anyone needed to have to deal with,” says Diane Pendley, managing director of Fitch Ratings.

    Meanwhile, real estate agents who specialize in selling bank-owned properties say the market is locking up. Dorothy Buse, a Coldwell Banker agent in the Orlando, Fla., area, said that out of the 200 foreclosures she has listed for sale, 40 are now in the foreclosure freeze. Of the 40, 12 that were already under contract are now on hold. It’s now unlikely that anyone would want to make an offer on any of the other 160 homes.

  8. Nomad says:

    Grim –

    do you think once the procedure and paperwork processes are cleared up and foreclosures start to go on the market again, the process will be more efficient and take less time? If so, supply would jump quite a bit and drive down prices – wonder if this happens is this the straw that breaks the camel’s back or does the # of foreclosures just trickle onto the market and housing price declines are slow and steady for several years vs a big drop.

    Should be interesting.

  9. The foreclosure process will never be made efficient. Lenders are organized to make loans, not repossess collateral…and they aren’t fast learners.

  10. Nomad says:

    Polt –

    You don’t think this delay will enable them to turn the process into efficient production work? Doing so would be a double edge sword – they could get rid of the foreclosed homes “quickly” but more supply would drive down prices. Selling the properties more slowly probably means slightly higher prices since the market does not get flooded. What I do not know is what are the monthly costs to the bank to carry a foreclosed home on their books. If the bank sold the mtg, then did they not get their money and is their only skin in the game at this point the servicing obligations of the mtg? Also – who actually pays the property taxes when the home is in foreclosure or does this obligation just build and is paid (cents on the $) when the home is finally sold?

  11. renter says:

    One short sale was enough to insure I never entered the process again. Everyone involved was clueless including BOA. The second lien holder turned out to be the seller’s business partner. It all felt shady and I feel absolutely stupid for staying involved until BOA said no.

  12. Lamar says:

    Nomad, the party in possession of the note should be the foreclosing entity (note my use of the word “should”). Servicers generally execute foreclosures for interests that have been run through the MBS sausage grinder and fractionalized, but they still should be doing it on behalf of a legitimate noteholder…the prinicipals of the CUSIP of the MBS.

    Whoever forecloses on a house has pretty much the same expenses as a homeowner, unless it is one of the new, super-stupid lenders who decides the collateral is so worthless that they abandon it themselves. The foreclosing party must pay taxes, legal fees, upkeep, winterization, repairs, marketing fees, etc.

    Some smart lenders will get their REO into the hands of RE companies fairly quickly and require those RE companies and agents to take on a lot of the properties’ expenses as a condition of getting the listings.

  13. Lamar says:

    In the Rust Belt states, you see another fun phenomenon: in the pre-foreclosure phase, the lender realizes the house is so worthless that it’s too costly to foreclose, so they refuse to foreclose (in essence, the lender abandons its interest in the property). Very often, the borrower has abandoned the property and assumed that the lender is going to take it back. In the meantime, taxes, liens and fines accrue…and the municipality tracks down the borrower, informs him that he still owns his home, and hits him with a massive bill.

    Cities like Buffalo have passed laws that now force lenders to get involved in maintaining certain homes in the pre-foreclosure stage, as well as forcing them to foreclose and take possession within a reasonable amount of time.

  14. Nomad says:

    #13 – article in the NYT probably 18 mos ago talking about how the city of Shaker Heights Ohio (near Cleveland) was actually maintaining the exterior of vacant homes out of fear that squatters would come into the abandoned homes and …

  15. Nomad says:

    Polt – so if I understand everything if the service or entity doing the foreclosure is getting paid a nice fee to maintain the home and keep it in saleable condition. The servicer however does not take the financial hit when the home is actually sold – those who bought the mtg during good times take the hit (except of course the bank out west that is run by ex-GS folk).

    Can I make a nice living servicing and maintaining a bunch of foreclosed homes? Will I get paid monthly so I am not on the hook for all the taxes, maint & lawncutting fees? How can I sign up to do this – gotta make a living somehow.

  16. A.West says:

    Government for the past 10 yrs has been working to put the squeeze on prescription drug profitability, NJ probably will pay the highest economic price for this agenda. Highest flying medical companies are now related to diabetes treatment, as type 2 diabetes explodes along with sugar/starch consumption globally.

    Right now the left likes to pretend that the future of the US economy is in making unicorn knob polishers (e.g. windmills, and “green” stuff), as well as productivity distractors (e.g. facebook and soap operas of the small and big screen, not useless), coupled with lots of very inefficient, overpriced infrastructure building handled by government agencies. Not all of this is entirely useless but it’s an awfully weak support for the world’s largest economy.

    I don’t know what the next big driver of US economic productivity is, but as always, it’s certainly not going to be something that politicians think it will be.

    Meantime, my emerging market stocks are back near 2007 highs, and few of these economies are engaging in economic navel gazing. Business is strong, because an increasing number of people want to get out of US$ assets, other than the governments and government linked entities (e.g. most banks) which have piled into T-bonds.

  17. A.West says:

    Whatever happened to the list of houses sold on nj.com? There used to be a database that took town-level dates and prices of homes sold. I know that zillow, etc. embed some home sale info, but it seems like lately there isn’t a good way to get a list of all the homes on a street that have sold. (3-4 yrs ago Domania used to have a tool that showed all homes sold on a street, or within a mile of an address, but that has disappeared too).
    Ideas?

  18. House Whine says:

    16-For those who have lost or will lose their NJ jobs in Pharma good luck finding another that pays anywhere near what they are used to. Even the admin staff used to do very well. I think those days are gone though. So when pharma jobs are lost in our state, so are the higher wages.

  19. Nomad says:

    #16 –

    Diabetes is a growth industry. Sick (no pun) but true. Pre-Diabetes among American youth is at epidemic levels. Bad diet and no exercise except pushing keys on a computer will make this industry solid for years.

    Want to really reinvigorate the US economy, bring heavy manufacturing back and put a tax on imports. Good for the US economy and security. Nothing like calling your enemy during wartime and asking for a load of steel.

  20. Fast Eddie says:

    House Whine [18],

    And yet, I still receive listings on a regular basis that include 3bd/2bth splits with harvest gold carpets and pink and black bathrooms with a price tag in the upper 500s to low 600s. How is it possible that any of this even sells at these list prices? Who would even consider it even if they had the means to qualify?

  21. A.West says:

    Forcing stuff to be manufactured in high-cost locations without competitive advantage, protected by tariffs, is a losing economic game. That was the recipe for decline in the US steel industry, and most of the benefits went to the steel unions, until the whole thing collapsed and was reborn with non-unionized mini-mills.

    The real future winning industries will be ones that will have global competitive advantage under free trade and without special protection. What the government could do is stop piling regulation on top of regulation on top of taxes.

    The US needs to turn the whole country into a “special economic zone” like China did with its southeastern coast. No taxes for 10 years, cut the burdensome regulations, offer decent transportation systems, and manufacturers from around the world flocked there to make stuff. Much like how Alabama/GA pulled in some of the best auto plants in the world.

  22. Mike says:

    House Whine No. 18 Those jobs will probably be given to an outsourcing company where the wages will be cut in half. The price of homes will have to adjust to this new norm.

  23. yo'me says:

    What makes manufacturing high cost is the over valued dollar.We can see the effect of this, when US currency is lower than the SDR ,export and manufacturing production is up.Most developed countries put their sight on a low value currency , the answer to export growth.Race to the bottom.
    Death to Globalization and Free trade.

  24. Lamar says:

    nomad (15)-

    I wouldn’t get anywhere near it. The people who would be paying for repair/maintenance on REO are notorious for being slow.

    If you have some juice to collect and can tie up lots of cash waiting to get paid, you can make a go in that business.

  25. Mike says:

    Copied from another blog: 0 I defaulted a year ago. I save the 4k monthly payments and will be moving into another house free and clear in 2 months. The money came in handy for fixing the place up.

    However, I did find appraisal fraud in my loan documents. I had planned to use this to contest my foreclosure in court, but it was not necessary, as the bank has yet to file the foreclosure case in court.

    The ironic thing is, when I applied 3x for a loan mod, they told me no, and that I had to miss 3 payments. When I missed them, I was told to pay up. Yeah right. Never again will I be a debt slave.

    However, I will NOT improve my credit. I like another poster, will use a prepaid phone to avoid bill collectors, use a check cashing store instead of a bank and cash for all future purchases. This way I can fly under the radar for any future bank action!

  26. jp says:

    for those on the market to BUY, what would you say is the right percentage away from the asking price to bid on a property that’s been recently listed? I know there are a host of factors, but I’m asking for ballpark figures…

  27. Nomad says:

    #21 –

    agree about the unions but people in america need to make more $$ to live than those in places like china where they live in a different way and standard. interesting that some industrial mfg (southern auto as you point out) are competitive. honda has midwestern factories that pay a good wage and are non-union and quite competitive too so how do you replicate this to steel, electronics and the slew of industries we have lost the last 30 years? without manufacturing (combo of heavy and light) this country can never look like it once did.

    Seems like Ford has figured out a part of the equation – streamlining product offering for better mfg efficiencies

    BTW – mini mills were the beginning but Wilbur Ross took a bunch of traditional mills (LTV) through BK and got rid of the legacy pension benefits, reduced the size of the workforce and a larger portion of income was bonus based. He then sold it all to Mittal.

  28. Fast Eddie says:

    jp [26],

    20% off the list price. Period! In order for the long term trend line to revert back to the mean, everything needs to repriced at 20% less than current list. In essence, even if you offered 20% under the list, you’d still be bidding at ask price. If anyone feels insulated, move on to the next dreamer. Seriously. It’s your money so it’s in your control. There’s nothing more complicated about it. They can accept now or accept later. Take it from someone who’s navigated through shark infested waters many times before. It’s what’s in your best interest, no one else.

  29. jp says:

    Fast Eddie, thx.

    it would probably offend the seller. seller bought at peak at 500K+ and is offering at high 300’s. so that’d mean I would bid low 300’s.

  30. Lamar says:

    jp (26)-

    Is the stock market going to go up or down tomorrow?

  31. Mr Hyde says:

    A West 21

    The real future winning industries will be ones that will have global competitive advantage under free trade and without special protection. What the government could do is stop piling regulation on top of regulation on top of taxes.

    Free trade is a guaranteed race to the bottom unless there is a level playing field. If china can employ slave labor and lacks any real environmental regulation, then you cant really call it free trade when the same manufacturing would face labor and environmental regulations in the US or EU. The only only way to implement any sort of free trade is to institute a standard floor that states the minimum requirements that all are to meet. if you don’t meet those standards, whether your American, Chinese, or Indian, there would be an equalization tariff applied. In such a system you are driving the system to choose the most efficient and best producers to dominate as opposed to the current “free trade” system which drives the purely the cheapest producers to dominate the system at all costs.

    Unless the US decides to its OK to force its own population into slave labor and merrily poison the food, air and water we all depend on, then we will never compete with china or other similar producers.

    Its farcical to hold two individuals (i.e. China & US) to different standards and then expect them to “compete”. The runner who isn’t allowed to dope will never beat the runner who can pump themselves full of the latest performance enhancer.

  32. Lamar says:

    jp (29)-

    If the house is competitively-priced and you lop 20% off a realistic number, you will be roadkill. Granted, the vast majority of homes in this market are sucker-priced, not market-priced.

    Keep in mind, though, that when a properly-priced home hits this market, buyers are so starved for value that they jump those listings like lions on a sick wildebeest.

  33. Lamar says:

    hyde (31)-

    There are a whole host of items for which it makes no sense to try and “reach back” to onshore their manufacture. For example, we don’t need to reclaim the manufacture of typewriters; let the Third World do it.

    Our problem is in both identifying types of manufacture that do make sense to re-establish, and in developing new industries in which we can be almost monopolistic first-movers. The latter is a function of our dying educational system. We still have enough creative brainpower to cook up the new ideas, but our general workforce isn’t educated enough to follow through with the manufacture.

  34. Lamar says:

    I have already heard the term “beggar thy neighbor” five times since Friday.

  35. Mr Hyde says:

    Clo/Pol/Lamar/Doom

    In the Rust Belt states, you see another fun phenomenon: in the pre-foreclosure phase, the lender realizes the house is so worthless that it’s too costly to foreclose, so they refuse to foreclose (in essence, the lender abandons its interest in the property). Very often, the borrower has abandoned the property and assumed that the lender is going to take it back. In the meantime, taxes, liens and fines accrue…and the municipality tracks down the borrower, informs him that he still owns his home, and hits him with a massive bill

    I remember reading that there was some way for an owner to “disavow” ownership of a house if they walk on it. I don’t remember the details though. I remember it didn’t alter the standing of the mortgage but pushed ownership back on the bank. It was an article referencing the housing mess in buffalo and how some homeowners who walked were trying to cover their rear end.

  36. Lamar says:

    Wil E Coyote…cliff…beep-beep…plunge…leg-spinning air run…splat.

    “In this week’s update of “insiders selling to idiots”, we find that the ratio of shares sold to bought by insiders is once again in the four digit range: 1,169 to 1 to be specific. In the past week, insider buying in S&P 500 companies amounted to only $286,000, the bulk of which was in MEMC (WFR). As for the selling: well, it appears ORCL insiders just can’t wait to dump as much as they can as fast as possible. Oracle was promptly followed by such overpriced stalwarts as Google, Marriott, Autozone and Salesforce. We wonder if these insiders provide direct or indirect kickbacks to the HFTs who keep bidding the stock up at incremental penny losses, yet are fully compensated for “providing liquidity” by the exchanges in the good ole’ liquidity rebate system. The silver lining: this certainly is an improvement on last week’s 2,341-1 ratio. Perhaps even the idiots are getting skittish about owning stocks without having access to the Fed’s backstop facilities. Also, keep in mind that the primary dealers have about $60 billion in Bills to repurchase past the End of quarter window dressing. Unfortuantely, for the players in the hot potato game, this capital can only come from stock sales.”

    http://www.zerohedge.com/article/insider-selling-buying-update-1169-1

  37. Lamar says:

    hyde (35)-

    I’m no attorney, but I’m guessing it may be some sort of deed-in-lieu action via a quitclaim deed. Hard to imagine a bank in the kind of position we’re discussing even acknowledging a quitclaim deed (for a host of reasons).

    My understanding is that the courts in these Rust Belt areas are forcing lenders to assert their interests and maintain these properties.

  38. Mr Hyde says:

    Lamar/Clot

    There are a whole host of items for which it makes no sense to try and “reach back” to onshore their manufacture. For example, we don’t need to reclaim the manufacture of typewriters; let the Third World do it.

    Agreed. But by not enforcing some sort of equalization of critical industries you are asking to be sucked dry from the inside out. Its not only a matter of economics, but also a matter of national security.

    lets also be honest with ourselves about what the current model of free trade really represents to us. Its a chance to offshore the negative impacts of manufacturing such as pollution and utilize slave level labor to leverage prices so low that the average electronics become disposable devices. That is not efficient in any real sense of the word. What it is, is highly profitable for the corporations involved in the short to medium term. The net effect is negative for the population as it concentrates wealth up the food chain.

  39. Lamar says:

    Sorry- a little background- a deed must be acknowledged in order to be valid.

  40. NJGator says:

    Clot-You haven’t been around these parts lately, have you?

    http://www.northjersey.com/news/104702484_Pipe_bomb_found_outside_house.html

  41. Mr Hyde says:

    Clot/Lamar

    I liked the suggestion posted the other day when Moose and i were debating. That is if the note isn’t being paid and the bank cant show clean/legit paper work showing their standing to foreclose, then the state should auction the house off to the highest cash bidder within 30 calendar days.

  42. Mr Hyde says:

    It’s so rare to find a mortgage’s note legally assigned to its supposed trust, that Max Gardner, or… “O. Max Gardner III,” if you don’t know him, I suppose, who is considered by many to be at the top of any list of the country’s consumer bankruptcy attorneys, and who has also become expert in the issues surrounding the mortgage meltdown and resulting foreclosure and credit crises, has often told the hundreds of attorneys around the country that follow his thinking on the issues and legal remedies, that if anyone ever finds a deal where the note was correctly endorsed to the trust, he or she should bronze it and hang it on their wall.

  43. Mr Hyde says:

    More fun

    Even if the foreclosure has long since passed, a loophole in the way mortgages are recorded can create a serious title defect for future owners. Title analysis performed this month by AFX Title has detected this error to be common in random samples of properties it reviewed. “This could affect the property ownership of millions of homes nationwide” said David Pelligrinelli, of AFX Title. “The mortgage recording method which created this title flaw did not exist until recently. As title abstractors are just seeing this problem emerge now but a wave of title claims is coming over the next year or so.”

    The problem is created through a break in the chain of mortgage ownership. Until the 1980’s, most mortgages were loans between the homeowner and a bank, who lent the money directly. More recently, the mortgage financing system transformed into an international system of securitization, with mortgage lenders packaging their loans into securities, bought and sold by investors like stocks. These transactions even split individual mortgages into sections, where each loan could have parts owned by different investment banks

    http://4closurefraud.org/2010/10/10/mandelman-the-signin-or-pardon-me-mr-banker-but-your-remic-is-showing/

  44. Mr Hyde says:

    HAHA Obama’s Release of Mortgage was RoboSigned and i suppose you could argue that its not legit!!!

    http://4closurefraud.org/2010/10/10/4closurefraud-exclusive-president-obama-falls-victim-to-chase-robo-signer/

  45. Mr Hyde says:

    So if you don’t have wet signature proof that you paid off your mortgage and the Release of Mortgage and/or deed is robo signed, i guess you didn’t really pay off the note….

  46. Lamar says:

    gator (40)-

    Using 2″ pipe for a bomb isn’t my style. :)

  47. Lamar says:

    hyde (41)-

    I have no problem with that, either. Frontier justice generally works well.

  48. Lamar says:

    I fall into the Molotov school of bombs and incendiaries. I would want to ignite, deliver and survey the effectiveness of my work (were I to be into that sort of thing).

  49. Mr Hyde says:

    Clot,

    Your statement of RE being dead for 20 years might not be so far off. The hits just keep on coming!

    …..If the loans weren’t assigned to the REMIC trusts, then someone should have been paying the taxes due, corporate taxes at the highest rate, which is about 35%. Of course, no one has paid taxes on these loan proceeds as they’ve been inside REMIC trusts… or not. Yes, that sounds like it’s at least tax fraud… but what do I know? And selling mortgage-backed securities all over the world that were missing the mortgage-backed part, well… that sure sounds like securities fraud, but who am I to say?

    So, who does own the loans? Not the originator, because they already sold the loan and were paid in full. Not the trust, because if the loan was never assigned to the REMIC trust, then it’s illegal to transfer it now, and forging documents or signing thousands of affidavits isn’t going to cut it. And if it’s the investors, well… their remedy is “in equity” and the credit default swap has already provided such equitable relief. I suppose someone could argue that the bond insurer should own something, but you’d never be able to tie their payments to an individual property, and besides, they were never a party to anything here.

    http://tiny.cc/vwos6

  50. Al Gore says:

    “Chinese financial sources believe President Barack Obama is too busy fixing the US economy to concentrate on the extraordinary implications of the transition from the dollar in nine years’ time. The current deadline for the currency transition is 2018.

    The US discussed the trend briefly at the G20 summit in Pittsburgh; the Chinese Central Bank governor and other officials have been worrying aloud about the dollar for years. Their problem is that much of their national wealth is tied up in dollar assets.

    “These plans will change the face of international financial transactions,” one Chinese banker said. “America and Britain must be very worried. You will know how worried by the thunder of denials this news will generate.”
    http://www.independent.co.uk/news/business/news/the-demise-of-the-dollar-1798175.html

  51. Al Gore says:

    Fed Certain to Act in November In a Big Way: Survey

    “Market participants forecast that the Fed will announce plans to purchase $500 billion in assets at the conclusion of the upcoming meeting, the first time the question has been asked.

    Despite the $500 billion average, expectations for the November announcement span a range from $100 billion to as high as $1.5 trillion.

    But the larger numbers are outliers, with 83 percent of respondents saying they expect the Fed to announce incremental targets for its portfolio size on a monthly or quarterly basis, rather than a single, so-called “shock and awe” strategy as it did in 2009. ”
    http://www.cnbc.com/id/39606951

  52. Mr Hyde says:

    Al,

    anything less then a trillion QEII and i bet we see a crash. Also not that a week or so ago you asked about your mortgage. From the recent news ont he matter it appears that it is likely F’d. Maybe you could bribe the group managing your mortgage to robo sign a Release of Mortgage.

  53. Al Gore says:

    53.

    Hyde,

    Yeah, Im sure the note is in limbo somewhere. Better I know now 2 years into the mortgage rather than 20 years from now when the mortgage is paid off. Ill have to lawyer up but wont do that until I want to refinance. There is going to have to be some legislation passed to clean this mess up. Ill just to have to wait and see how this debacle shakes out.

  54. Mr Hyde says:

    Clot,

    More potential dirt. I have heard rumblings of issues with the software that calculates your mortgage payments has never been certified or checked to see that it is consistent with the mortgage origination docs. Apparently there have been a few people who have dug deep enough and found that the calculated payments were slightly off from what was laid out in the original mortgage docs. I would imagine that the effects of a slight error can add up significantly over a 30yr amortization schedule.

  55. Caveman says:

    We should make a TV show spinoff called:

    “So whose House is it anyway?”

  56. Double Down says:

    “The real future winning industries will be ones that will have global competitive advantage under free trade and without special protection.”

    There is no such thing as “global competitive advantage” with slave/child labor combined with piracy/IP theft in China and 3rd world countries.

    Free trade? A naive pipe dream.

  57. Poltroon says:

    hyde (49)-

    It’s a house of cards, built on a foundation of sand.

    I’m still considering amending my call of 20-40 years for a recovery to 50-100 years.

  58. Poltroon says:

    al (51)-

    Anything less than a 3 trill QE announcement is a big-time “sell the news” event.

    Hell, waking up in the morning now constitutes a sell the news event.

  59. Poltroon says:

    hyde (54)-

    Don’t worry. The SEC is on the case.

    http://www.kewego.com/video/iLyROoaftM7P.html

  60. Poltroon says:

    doubledown (56)-

    We’ve gone protectionist before (Smoot-Hawley). How’d that work out?

  61. Mike says:

    I know it’s been all over the media and this blog that the banks are holding off there foreclosures means the prices will be coming down even more. Would’nt you think that if there’s less out on the market for sale it would drive the prices of the existing homes higher? Guess fear would be one of reasons.

  62. prtraders2000 says:

    Mike

    I agree. Seems like faulty logic to me. I’ve been waiting now for too many years and I don’t see this as anything but bad news for me. I’m sure that anyone that has listed a house recently, or is planning to, is feeling a littler more confident in their chances of coming close to getting their asking price. There are a whole lot of people out there that for whatever reason feel like they must buy (they just don’t frequent this board). Those folks will be paying more now than if these self imposed freezes did not happen.

  63. Poltroon says:

    There is a real chance that homes on the market right now that are not subject to foreclosure might see a bit of a price spike. However, the inventory is still glutted, and there are woefully few buyers. My best guess tells me that the ultimate lack of final demand (how many times a day do we hear THAT phrase?) continues to drive prices lower.

  64. Poltroon says:

    Remember that in many markets, sales are dominated by REO, FK’s in process and other distress-type sales. Take all that away…and not much else is left.

  65. A.West says:

    Where the US could be winning globally is in highly capital intensive and highly intellectual property intensive businesses. Arguably we still are winning in the latter. Unskilled labor is a dead end in the US, except for government jobs. The case of Germany shows that capital intensive industries can succeed without low cost labor, if you continue to move to higher value added products. Nobody in the US will ever get rich making $2 flip flops, even if tariffs turn them into $20 flip flops, which would ultimately just be hidden transfer payments to US low-skilled labor, and misdirect resources.

    The problem I see is that new capital and knowledge intensive industries do not locate in places where taxes are high and rising, regulatory burdens are increasing, business is getting bullied, and the rule of law is being eroded. Hello USA. So US corporations have a lot of cash right now, believe it or not, and could be investing significant capex over the next few years. Guess which destination is becoming less attractive, out of the 20 or so feasable global locations for new investment?

  66. nj escapee says:

    A West, that train has already left the station. Capital flight is in progress. Most firms are building out significant infrastructures in China and India to handle high value added work / enterprise. Unfortunately, I have to work with it everyday.

  67. Mr Hyde says:

    67 Nj escapee

    Nothing a little global conflict and a few well placed air bursts cant handle.

  68. Barbara says:

    I know that this debacle is a god send to the market anarchists in the room, but I see this as another govt manipulation. It all comes right on the heels of news stories and undeniable eye witness accounts of abandoned properties, shadow inventory on RealtTrac often out numbering sale by owner by 3-1 in some towns…I suspect there will be a solid two tiered market that will showcase the “legit” properties and ghettoize the “troubled” properties. This IS the floor.

  69. Janus says:

    68. yep, and Dylan Ratigan was saying this AM that fannie and freddy were fed bad debt and crap loans that You and I as taxpayers will probably be on the hook for in Bailout out Ver 2.0. Oh the fun never stops. Freakin zombie banks and their B.S.

  70. bklynhawk says:

    What do you guys think about this?

    Massive N.J. Fire Forces Residents From Their Homes

    KEANSBURG, N.J. (CBS 2 / WCBS 880) — A massive fire leveled an entire condominum complex under construction in New Jersey Monday.

    http://newyork.cbslocal.com/2010/10/11/fire-guts-condo-complex-in-monmouth-county-monday/

  71. Orion says:

    (70) Gotta recoup some money in any shape or form. First call is to insurance company.

  72. Simply Ravishing HEHEHE says:

    Many Wall Streeters still in denial on bonuses
    Banking pros haven’t gotten memo on how much lower their year-end pay will be, a survey says. The new reality: Go back 20 years, when bonuses were about one tenth what they were last year.

    http://www.crainsnewyork.com/article/20101011/FREE/101019990#

  73. Nomad says:

    So is there a play now for a home seller to own their home free and clear and advertise to potential buyers as no mtg worries w /clean title? Perhaps a good emotional play for a relo purchaser who “must” buy a home and is under some purchase pressure although if this were July it would play into the sellers hands better.

  74. sas3 says:

    #65 A.West,


    “The case of Germany shows that capital intensive industries can succeed without low cost labor…”

    “The problem I see is that new capital and knowledge intensive industries do not locate in places where taxes are high and rising, regulatory burdens are increasing, business is getting bullied,…”

    Discarding the hyperbole from the second sentence, there is a major contradiction between the two…

    About the hyperbole, how are businesses getting bullied? When some helpless lefties raise a concern that hidden foreign money is trying to buy elections? Or when the President vetoes a bill that allows banks to foreclose properties without even looking at the paperwork?

    S

  75. Al Gore says:

    Re: MERS and the MBS.

    Does anyone have a rough number on how mnay trillions worth of MBS’s were are out there? Even if the FED expanded their balance sheet to 5 trillion thereby purchasing another 3.75 trillion of these uncollateralized MBS’s would it even make a dent in the overall scheme of things?

  76. yo'me says:

    In the most profound financial change in recent Middle East history, Gulf Arabs are planning – along with China, Russia, Japan and France – to end dollar dealings for oil, moving instead to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar.

    If all this countries currencies are allowed to run their own printing press ,that is suppose to be good for commerce?Will all the countries holding our debt specially China,Japan,Europe.Germany take a collapse Dollar as payment? No country can force the US in making payments of its debt other than the Dollar.They maybe able to force the US to pay in other Currency for oil but what will that do to the value of the dollar.
    The US has the most vote in the IMF followed by Japan.All this other countries are meaningless.

  77. jp says:

    Lamar

    probably too late, but tomorrow is “Turnaround Tuesday” and the market barely moved today. so either the market will be flat or slightly better.

  78. Al Gore says:

    79.

    “Adam Smith warned in Wealth of Nations 1776/ No country in the history of the world has ever paif off its debt. They have always defaulted. We will be no different.”

    Maurice Armstrong.
    http://www.martinarmstrong.org/files/The%20Athenian%20Real%20Estate%20Panic%20&%20Banking%20Crisis%2010-1-2010.pdf

  79. Mr Hyde says:

    Al
    I believe the total US MBS market is about 8-9 trillion

  80. Mr Hyde says:

    Yome 80

    they have been threatening/planning that change for years. Not news.

  81. borat obama says:

    First

  82. Yikes says:

    Holy S$!T

    Al Gore says:
    October 10, 2010 at 10:52 pm

    “Democrats in the Senate on Thursday held a recess hearing covering a taxpayer bailout of union pensions and a plan to seize private 401(k) plans to more “fairly” distribute taxpayer-funded pensions to everyone.”

    http://market-ticker.org/cgi-ticker/akcs-www?post=168743

    When does the panic begin? When it hits the MSM?

  83. Lamar says:

    barb (68)-

    You think so? Go ahead and get long. I’ll take the other side of that trade every day of the week.

    The “two-tiered” market is a fantasy conjured up by people who don’t like the way the one-tiered market of reality is behaving. Jeff Otteau has taken to saying that if all the speculatively-priced homes in NJ were removed from the market, things would be just fine. Sounds great…but it’s not reality, and it’s not going to happen.

    “This IS the floor.”

  84. Lamar says:

    Red Alert (75)-

    Sastry dry-humping unicorns yet again.

  85. Lamar says:

    jp (79)-

    It all works. Until it doesn’t.

    “probably too late, but tomorrow is “Turnaround Tuesday” and the market barely moved today. so either the market will be flat or slightly better.”

  86. Confused In NJ says:

    “Democrats in the Senate on Thursday held a recess hearing covering a taxpayer bailout of union pensions and a plan to seize private 401(k) plans to more “fairly” distribute taxpayer-funded pensions to everyone.”

    The jokes on them, the dollar will be worthless, as will the 401K’s valued in dollars.

  87. Shorre Guy says:

    ” A massive fire leveled an entire condominum complex under construction in New Jersey Monday”

    What good luck for the builder. Keansburg is a dump and the builder likely makes out far better this way than if he or she actually had sold all the units.

  88. Shorre Guy says:

    “20% off the list price. Period! In order for the long term trend line to revert back to the mean, everything needs to repriced at 20% less than current list”

    The key in any negotiations is to be able and ready to walk away. If people selling houses face a string of people offering low-ball prices and refusing to meet absurd counteroffers, things will quickly move lower.

  89. Shorre Guy says:

    Stu,

    How are you mending?

  90. Shore Guy says:

    Gator,

    What is the latest with your new neighbor — the one unemcumbered by housing costs?

  91. Barbara says:

    Lamar,
    the two tiered market has been loosely in effect for two years. Short sales quickly earned the reputation of being slow moving and often failing. On the street, realtor to client, the short sale stink kept busy people away and moved them into the standard buyer seller situation. Finally, those short sales piled up and the pressure was on within banking to let them go. Short sales in my neighborhood that had the asking at actual debt load and hadn’t moved in two years, suddenly sold at a fraction of the original ask. People on these boards started talking about early 2011. And now THIS…..ooooopsies, paperwork isn’t in order. Go long? Depends, how many years do you think you’ve got left? Godot isn’t coming. I’m not saying we are going to see a RE bull market as a result, I’m saying we are going to see the brakes put on a slide that has been 3 years overdue. This paperwork stuff is wagging the dog.

  92. grim says:

    Finally, those short sales piled up and the pressure was on within banking to let them go. Short sales in my neighborhood that had the asking at actual debt load and hadn’t moved in two years, suddenly sold at a fraction of the original ask. People on these boards started talking about early 2011. And now THIS…..ooooopsies, paperwork isn’t in order. Go long?

    My thought is the repercussions of the “paperwork issue” might create a situation where accepting/approving short sales begins to look like a more viable/economical alternative to foreclosure. There is significantly less paperwork (and liability) involved. With moratoria in place, REO inventory has no choice but to build. Banks may begin to reconsider alternatives that can reduce the incoming inventory, and do it in a more politically correct way.

  93. Barbara says:

    grim and Lamar, you know more about this stuff that I do, I just look at the timing. I hope you guys are right.

  94. Shore Guy says:

    “Banks may begin to reconsider alternatives that can reduce the incoming inventory, and do it in a more politically correct way.”

    Ahh. Lightning strikes?

  95. Shore Guy says:

    If banks cannot show ownership of the note, does it really matter whether they try to FK or allow a short sale? The owner of the note is the one who can approve either and, with the cuisinarting of these loans, who, in fact owns them and is in a position to approve either foreclosure or a short sale?

  96. Fabius Maximus says:

    #96 grim

    I think the end play here is that all the RE REO gets spun out into a seperate part of the bank, does a Chapter X, and takes the time to clean up the titles they bought and sold. They warrant the SIV’s toclean up claims from that side on the back of a slow liquidation of the inventory.

    Everyone’s a winner!

  97. Lamar says:

    Shore (99)-

    Quaint, the way you act as if rule of law is still in effect.

  98. Shore Guy says:

    Clot,

    I am a dinosaur.

  99. Lamar says:

    sx (100)-

    Blow the mf’er up!!!! Wonder if the famous whiskey company of the same name showed up with some refreshments for all the shooters.

  100. Shore Guy says:

    The Palestinians have again shown that they are intent on never missing an opportunity to miss an opportunity:

    http://www.bbc.co.uk/news/mobile/world-middle-east-11519969

  101. Shore Guy says:

    Clot,

    Next thing you know the government will wipe out bond holders in favor of third parties.

  102. Libtard says:

    Lots of hail out there tonight.

    Shore…just got back from the doc. Went for the cast over the boot. He said I could heal quicker with it and was impressed by how well I’m doing so far. I’m in the cast now until the 27th and then the boot and physical therapy. I asked if I could do Cancun over the holidays this Winter and he said I will have no problem as long as I’m not playing volleyball. He even said I’m good to travel to Austin in early November. So I am very happy. I even got the red cast since I’m going to the Rutgers Army battle on Saturday at the New Meadowlands Stadium. Best of all, he said the more I move around, the quicker it will heal. This is good because I just can’t sit still. Even with a non-weight bearing leg.

  103. Yikes says:

    Mike says:
    October 11, 2010 at 9:51 am

    Copied from another blog: 0 I defaulted a year ago. I save the 4k monthly payments and will be moving into another house free and clear in 2 months. The money came in handy for fixing the place up.

    However, I did find appraisal fraud in my loan documents. I had planned to use this to contest my foreclosure in court, but it was not necessary, as the bank has yet to file the foreclosure case in court.

    The ironic thing is, when I applied 3x for a loan mod, they told me no, and that I had to miss 3 payments. When I missed them, I was told to pay up. Yeah right. Never again will I be a debt slave.

    However, I will NOT improve my credit. I like another poster, will use a prepaid phone to avoid bill collectors, use a check cashing store instead of a bank and cash for all future purchases. This way I can fly under the radar for any future bank action!

    in theory this sounds fun and well … but if you have a family, you’re not doing/trying this. just not practical.

  104. Lamar says:

    shore (104)-

    Wait until after the election. Under cloak of darkness, Bojangles signs that bill sitting in his pocket, the media moves on to another disaster du jour, and the banksters resume running riot over what’s left of the middle class.

    Bojangles is in the middle of his election cycle, and he’s gonna have to dance extra hard to suck in the bankster money this time around. Note how his little thug, Axelrod, has already moved out of the White House in order to position himself to do his boss’ dirty work.

    God bless America? God damn America. That hack, Rev. Wright, was spot on with that call.

  105. Lamar says:

    I looked out across
    The river today
    I saw a city in the fog and an old church tower
    Where the seagulls play
    I saw the sad shire horses walking home
    In the sodium light
    I saw two priests on the ferry
    October geese on a cold winter’s night

    And all this time, the river flowed
    Endlessly to the sea

    Two priests came round our house tonight
    One young, one old, to offer prayers for the dying
    To serve the final rite
    One to learn, one to teach
    Which was the cold wind blows
    Fussing and flapping in priestly black
    Like a murder of crows

    And all this time, the river flowed
    Endlessly to the sea
    If I had my way I’d take a boat from the river
    And I’d bury the old man,
    I’d bury him at sea

    Blessed are the poor, for they shall inherit the earth
    Better to be poor than a fat man in the eye of a needle
    And as these words were spoken I swore I hear
    The old man laughing
    ‘What good is a used up world and how could it be
    Worth having’

    -Gordon Sumner

  106. SG says:

    U.S. Economy Is 11.5 Million Jobs Short, EPI Says (CHART)

    Even though the unemployment rate remained flat at 9.6 percent in September, the labor market would now need to add a total of about 11.5 million jobs to restore the pre-recession rate, according to analysis from Heidi Shierholz, an economist with the Economic Policy Institute.

    The economy lost about 95,000 jobs last month, including temporary Census workers. Not including Census positions, roughly 18,000 jobs were lost, as the private sector addition of 64,000 jobs couldn’t offset the 83,000 jobs cut by state and local governments, whose unusually severe deficits have lead analyst Meredith Whitney to predict that the next major financial crisis will come from municipal debt defaults. The state and local cuts included 58,000 teaching jobs.

    According to Shierholz’s analysis, the economy is down about 8.1 million jobs from where it was when the recession began, in December 2007. Considering population growth, the economy should have added 3.4 million jobs during the recession, Shierholz notes. To fully recover, the country would need to add 11.5 million jobs.

    That’s a huge number, and population growth continues to make it bigger. To fully recover in five years, Shierholz says, the country would need to add 300,000 jobs “every month for that entire period.”

  107. Essex says:

    THE SECOND COMING

    by: W. B. Yeats (1865-1939)

    URNING and turning in the widening gyre
    The falcon cannot hear the falconer;
    Things fall apart; the centre cannot hold;
    Mere anarchy is loosed upon the world,
    The blood-dimmed tide is loosed, and everywhere
    The ceremony of innocence is drowned;
    The best lack all conviction, while the worst
    Are full of passionate intensity.

    Surely some revelation is at hand;
    Surely the Second Coming is at hand.
    The Second Coming! Hardly are those words out
    When a vast image out of Spiritus Mundi
    Troubles my sight: somewhere in the sands of the desert
    A shape with lion body and the head of a man,
    A gaze blank and pitiless as the sun,
    Is moving its slow thighs, while all about it
    Reel shadows of the indignant desert birds.
    The darkness drops again; but now I know
    That twenty centuries of stony sleep
    Were vexed to nightmare by a rocking cradle,
    And what rough beast, its hour come round at last,
    Slouches towards Bethlehem to be born?

    “The Second Coming” is reprinted from Michael Robartes and the Dancer. W.B. Yeats. New York: Macmillan, 1921.

  108. Mike says:

    Wow Essex that was pretty strong, now I’m awake

  109. JJ says:

    Shore Guy says:
    October 11, 2010 at 10:50 pm

    Clot,

    Next thing you know the government will wipe out bond holders in favor of third parties.

    How dare you insult us bond holders!!! My interest income is used to buy more bonds so you can pay me more interest. If Ambac can pay its coupon then subprime sludge should pay.

Comments are closed.