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So Exactly Who Owns your Mortgage?
And what's with all the "Electronically" (Robo) Notarized Docs?
The best answer to these questions that I have seen to-date may be found in this March 5, 2011 MICHAEL POWELL and GRETCHEN MORGENSON NY Times Article, MERS? It May Have Swallowed Your Loan. The following excerpt was taken from that article:
Never heard of MERS? That’s fine with the mortgage banking industry—as MERS is starting to overheat and sputter. If its many detractors are correct, this private corporation, with a full-time staff of fewer than 50 employees, could turn out to be a very public problem for the mortgage industry. Judges, lawmakers, lawyers and housing experts are raising piercing questions about MERS, which stands for Mortgage Electronic Registration Systems, whose private mortgage registry has all but replaced the nation’s public land ownership records. Most questions boil down to this:
How can MERS claim title to those mortgages, and foreclose on homeowners, when it has not invested a dollar in a single loan?
Additional headlines on this subject can be found further down this page in the form of hyperlinks.
In a recent post to this website's "Foreclosure" blog (top of the page navigation tab "foreclosure" without the "?" symbol) with the title "A New Brand of Foreclosure" based on the book, Strategic Mortgage Default System, written by Paul Stevenson, there is certainly a different way for "underwater" homeowners to view their situations and as such provide another option to those who are open to the idea; So I wanted to change the way this page would reflect information about the foreclosure crises which is now prevalent throughout the country (some say throughout the world).
Having said that, you will notice a difference in how this page is presented. Our objective is to go directly to the information source by publishing actual foreclosure story headlines which I believe will be more useful to you than writing additional articles which could be biased. What isn't biased is the hard-hitting, powerfully depicted documentary The Heist, by Charles Ferguson which was recently published by the NY Times. See the film clips link towards the end of this page.
This Gretchen Morgenson NY Times Article headline and excerpt was published May16th., 2011 and provides a glimpse into a new investigation of the financial crises:
The inquiry appears to be quite broad, with the attorney general’s requests for information covering many aspects of the banks’ loan pooling operations. They bundled thousands of home loans into securities that were then sold to investors such as pension funds, mutual funds and insurance companies. It is unclear which parts of the byzantine securitization… Read more!
How a Financial Pro Lost His House Letting the Banks Off Easy A Foolish Time to Cut Housing Aid Expansion of Mortgage Program Is Limited in Scope In Cautious Times, Banks Flooded With Cash On the Road to Relief Citigroup to Pay Millions to Close Fraud Complaint Fannie Mae Knew Early of Abuses, Report Says Foreclosures Are Killing Us BofA Said to Keep Bankruptcy as Option for Countrywide Unit Mortgage REIT Regulatory Risks Continue To Surface Federal Regulators Sue Big Banks Over Mortgages U.S. Is Set to Sue a Dozen Big Banks Over Mortgages A Lifeline for Homeowners Attorney General of N.Y. Is Said to Face Pressure on Bank Foreclosure Deal Homeowners Need Help Commercial Lending Up Substantially in Second Quarter U.S. Seeks Ideas on Renting Out Foreclosed Property A.I.G. to Sue Bank of America Over Mortgage Bonds Consumers vs. the Banks Letting Bankers Walk Big Banks Easing Terms on Loans Deemed as Risks Big Bank Bailouts Stifled Local Lending $8.5 Billion Deal Near in Suit on Bank Mortgage Debt Oversight Group Did Not Refer Housing Complaints JPMorgan Settles Case With S.E.C. Leader of Big Mortgage Lender Guilty of $2.9 Billion Fraud Letting the Banks Off the Hook Wrongful Foreclosures Mortgage Woes Stall Bank of America Revival In Financial Crisis, No Prosecutions of Top Figures Banks Are Off the Hook Again New York Subpoenas 2 Foreclosure-Related Firms
Foreclosure Prevention Programs:
Home Affordable Mortgage Program
National Association of Foreclosure Prevention Professionals
personal financial services of America
This Excerpt from a Highlands Today article provides an excellent description of "Strategic Foreclosure 101" if you didn't get a chance to read The Book
Aside from a loan modification, we have all heard the terms foreclosure, short-sale, and deed-in-lieu of foreclosure. Each of these terms spells trouble for the homeowner - loss of home, reduced credit score, and negative social stigma. Although lenders in February filed fewer foreclosure actions in central Florida compared to a year earlier, a new strategy is on the horizon, an idea coined "strategic foreclosure."
Read more... Strategic Foreclosure 101
This Andrew Martin/Michael Powell NY Times Article headline and excerpt was published December 17th., 2010 and brings to light what could be the beginning of several lawsuits against "Big Banks":
The attorneys general of Arizona and Nevada on Friday filed a lawsuit against Bank of America, accusing it of engaging in “widespread fraud” by misleading customers with “false promises” about their eligibility for modifications on their home mortgages. Click here to read more!
Take a look at the following links to make your own determination regarding the effectiveness of this method. This is especially important because it concerns a matter as emotional as mortgage foreclosures and folks being evicted from their homes:Settling Foreclosure Abuses Freddie Mac’s Former Chief May Face S.E.C. Action How Far Will Housing Prices Fall? More Loan-Modification Options for the ‘Underwater’ Bank Chief Rejects Idea of Reducing Home Loans Should Fannie and Freddie Go? Mortgage Modification Overhaul Sought by States Case on Mortgage Official Is Said to Be Dropped 3 Banks Warn of Big Penalties in Mortgage Inquiries New York Courts Vow Legal Aid in Housing Housing Crash Is Hitting Cities Once Thought to Be Stable A Reservist in a New War, Against Foreclosure Bet on Foreclosure Boom Turns Sour for Investors Foreclosed Homeowners Go to Court on Their Own Bank of America to Create Troubled Loans Unit From Struggling Owners to Stable Renters What’s Good for G.M. Is Good For Homeowners Auditors See Rising Defaults in Rural Loans Judges Berate Bank Lawyers in Foreclosures Facing Scrutiny, Banks Slow Pace of Foreclosures Opening the Bag of Mortgage tricks A Mortgage Nightmare's Happy Ending New Housing Crash Trend and Obvious Severe Risks in 15 Key Charts The Fed and Foreclosures Fewer Delinquent in Paying Mortgages Voices of Foreclosure Speak Daily About Desperation Foreclosure Mess Prompts Growing Number of Public Officials to Slow Down Process 5 MORE Foreclosure Myths - BUSTED! Is Foreclosure Crises Overblown? Learning to Love Foreclosures? Intermission, at Best, in Battle Over Foreclosures
Mortgage Foreclosure Crises: Causes, Effects & Justifications!
Over the last two years there were many questions asked about what caused the mortgage meltdown and subsequent foreclosure crises. There was plenty of speculation to go around as well as a lot of blame and finger pointing towards certain groups of home buyers who bought homes they couldn't afford; towards the FHA which encouraged unqualified people to buy homes; and towards mortgage brokers and some mortgage lenders who originated bad loans.
There was probably some truth in all of this speculation, but we all now know that groups of home buyers (whether they were qualified or not) could not have created the circumstances which led to the mortgage meltdown because, even if they had the knowledge and expertise to write their own mortgage loan applications and get them approved and closed, they could not have packaged and sold them as securities on the stock exchange. There's no home buyer group(s) I'm aware of with such a license that would permit it/them to do so.
The FHA had been insuring mortgage loans for almost seventy five (75) years when the first signs of problems in the mortgage industry were detected in late 2007 into early 2008 and had not packaged loans and sold them as securities (Ginnie Mae dealt with FHA-insured loans on the secondary market), but rather protected mortgage lenders against default through the insurance paid by mortgagors (borrowers) known as mortgage insurance premium (MIP) and continues to do so today.
A number of ortgage brokers and some mortgage lenders did originate what was known as subprime mortgages (unconventional, non-traditional, non-FHA, non-VA, non-PMI mortgage loans) which carried very high risks for the home borrower based on low initial interest rates (and mortgage payments based on those rates) for short terms, at the end of which an adjustment in the monthly payment and the interest rate on which is was based caused severe payment shock and many homeowners defaulted. Initial terms ranged from six (6) months (LIBOR) and one (1) year (1 year ARM) to two (2) years (2/28 ARM), three (3) years (3/27 ARM) and were among the more popular subprime loan programs, but there were also five (5) year terms (5/1 Year ARMs), seven (7) year terms (7/1 ARMs) and up to 10 year (balloon) term loans which adjusted at the expiration of the respective terms for the ARMs and due in full for the balloon.
Did mortgage brokers and some lenders originated bad (subprime) loans? The answer to that question is a qualified yes; And many of those lenders are now out of business. A visit to the mortgage lenders implode meter will reveal that since 2006, 387 major U.S. lending operations have "imploded". These failures consisted primarily of subprime lenders or subprime lending departments of major conventional lenders.
Of course, none of this article's content thus far completely addresses completely the cause(s), effect(s) and/or justification(s) relating to the foreclosure crises, because this writer is just not in a position to provide answers satisfactory enough to address all the still unanswered questions surrounding this issue; But the information provided is certainly accurately enough to raise additional questions by all those affected, including displaced home owners who have lost their homes to foreclosure as well as the many whose mortgages are now "underwater" (mortgage balance higher than the property value). In fact, major players involved in the mortgage meltdown and foreclosure crises are some of the same that received a bailout from the federal government and continue to be some of the most powerful entities in the industry with the ability to buy a great deal of influence (lobbyists with access to lawmakers) that it was necessary to appoint a special inspector general to investigate one aspect of the overall crises, a bailout the federal government. so I thought it necessary to include an excerpt from one of the special inspector's articles to provide some perspective as to why there is still a dearth of answers relating to the mortgage foreclosure crises, which after all, is at the heart of the bailout.
One thing I can say with some certainty: The problem was not caused by any particular groups of home buyers and it certainly wasn't caused by the FHA, which has grown in market share since the crises began. This excerpt is from a NY Times article written by NEIL M. BAROFSKY (OP-ED CONTRIBUTOR). It was published on 3-29-11 with the title, Where the Bailout Went Wrong. Mr. Barofsky is former special inspector general of the bailout program. Here's the excerpt:
From the perspective of the largest financial institutions, the glowing assessment is warranted: billions of dollars in taxpayer money allowed institutions that were on the brink of collapse not only to survive but even to flourish. These banks now enjoy record profits and the seemingly permanent competitive advantage that accompanies being deemed "too big to fail."
That program has been a colossal failure, with far fewer permanent modifications (540,000) than modifications that have failed and been canceled (over 800,000). This is the well-chronicled result of the rush to get the program started, major program design flaws like the failure to remedy mortgage servicers’ favoring of foreclosure over permanent modifications, and a refusal to hold those abysmally performing mortgage servicers accountable for their disregard of program guidelines. As the program flounders, foreclosures continue to mount, with 8 million to 13 million filings forecast over the program’s lifetime. The entire article can be viewed at the NY Times
This excerpt from a Mother Jones article published by seems to hit at the heart of the problem by exposing some of the illegal activities that have taken place in these foreclosure cases:
A Florida notary's stamp is valid for four years, and its expiration date is visible on the imprint. But here in front of Ice were dozens of assignments notarized with stamps that hadn't even existed until months—in some cases nearly a year—after the foreclosures were filed. Which meant Stern's people were foreclosing first and doing their legal paperwork later. In effect, it also meant they were lying to the court—an act that could get a lawyer disbarred or even prosecuted. "There's no question that it's pervasive," says Tom Ice of the backdated documents—nearly two dozen of which were verified by Mother Jones. "We've found tons of them."
Read more... Exclusive: Fannie & Freddie's Foreclosure Barrons
This excerpt from Huffington Post article shows how simple requests (demands?) made by homeowners are creating huge problems for banks:
Modern-day home mortgages have been so sliced and diced by rapacious financiers that some homeowners are successfully delaying -- or even blocking -- foreclosures through the simple tactic of demanding that banks produce the original mortgage note, which amazingly enough is often not so easy for them to do.
Largest Bank Will Resume Foreclosure Push in 23 States Foreclosuregate: Time to Break Up the Too-Big-to-Fail Banks Avoid Foreclosure Market Until the Dust Settles Don't Forget the Kanjorski Amendment ForeclosureBlues Class Action Complaint in the State of Kentucky in which the Defendant is MERS Citigroup, Ally Sued for Racketeering Over Database FraudClosures: Systematic Foreclosure Fraud The Aggregate Picture on Mortgage Delinquencies and Foreclosures Mortgage Default as Economic Stimulus How the Banks Put the Economy Underwater Homeowners Facing Foreclosure Demand Recourse The Fed Won't Join Banks at Supreme Court Fed Won't Join Supreme Court Appeal on Loan Disclosures The Mortgage Morass From a Maine House, a National Foreclosure Freeze Mortgage Mess May Cost Big Banks Billions 4 things buyers need to know about robo-signing and the foreclosure freeze Chase Acts to Broaden Foreclosure Reviews Bankers Ignored Signs of Trouble on Foreclosures All 50 States Start Inquiry Into Foreclosures A Foreclosure Tightrope for Democrats After Foreclosure, a Focus on Title Insurance The Foreclosure mess: We All Need to Calm Down Flawed Foreclosure Documents Thwart Home Sales
In a recent documentary about the mortgage meltdown which kick-started the whole economic crises and devastated our economy to the point of the brink of another depression, you get a historical and a powerful depiction of how it all started; Who did and didn't do what; And possible criminal activities that went unpunished. Film clips of the documentary are available at Film clips from Inside Job - Catastrophic Meltdown. It is Must-See viewing!
The other side of foreclosure
Having a home foreclosed on an individual or couple can be devastating to them personally as well as financially. This blotch on their credit rating stays for quite a few years. They probably think their chances of ever owning a home again are nil because they don’t think they can get another mortgage after a foreclosure. Fortunately for these unfortunate individuals, it is possible to obtain a mortgage after foreclosure proceedings that resulted in the loss of your home.
Foreclosures Slow as Document Flaws Emerge Foreclosure Furor Rises; Many Call for a Freeze Mortgages: One in Five Borrowers Will Default Top Fed On Government's Foreclosure Prevention Efforts: 'Three Years Of Failed Policies' Tarp Watchdog Neil Barofsky: Government Bailout Has Increased Risk Of Economic Crises Foreclosures Had Errors, Bank Finds Short Sales Resisted as Foreclosures Are Revived Foreclosures Profit Some Equity Firms U.S. Tries to Ease Wider Worries Over Foreclosures Editorial of The Foreclosure Crises NY Times Editorial: It's getting messier! Bank of America to Freeze Foreclosure Cases! Homeowners’ Rebellion: Could 62 Million Homes Be Foreclosure-Proof? California Court Rules: MERS Can’t Foreclose, Citibank Can’t Collect Foreclosures Slow as Document Flaws Emerge California Bankruptcy Court Holds That MERS Cannot Transfer Note For Want Of Ownership Landmark Decision Promises Massive Relief For Homeowners And trouble For Banks Let The Lawsuits Begin: Banks Brace For A Storm Of Litigation The Subprime Trump Card: Standing Up To The Banks MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC v. NEBRASKA DEPARTMENT OF BANKING AND FINANCE Protecting Home Ownership and Family Wealth Foreclosures Profit Some Equity Firms Helping Homeowners to Refinance
Although it’s possible to get a mortgage after foreclosure, it takes a lot of careful preparation. You’ll be rebuilding from ground zero or starting from scratch. There’s a lot that will need to be done, with the first thing being rebuilding your credit rating. This needs to be your first priority. Although you’ll probably want to start looking for another home soon, it’s better to wait a while. Banks determine what interest rate they charge on what your credit rating is, which in your case, won’t be good. If you do manage to get a mortgage so soon after foreclosure, your interest rate is going to be very high. This will also result in higher monthly payment amounts, which may leave you in a tight cash flow situation. You’ll find yourself having difficulty meeting your monthly obligations once again. This, in turn, will make it difficult to rebuild your credit scores.
It’s best to wait anywhere from one to two years before trying to get a mortgage after foreclosure of another home. Two years is usually ample time for you to get some other debts paid off as well as show a steady flow of monthly bills paid on time. This time when you apply for a loan, your credit scores will be much higher, thus lowering the interest rate you’ll be charged on your new mortgage.
There are different steps you need to take to rebuild your credit scores and prepare that mortgage after foreclosure. Take a realistic look at your budget, checking your income against your expenses. Determine where you can cut back the spending. Use this extra money towards paying off debts and saving for a down payment. The amount you can put as a down payment will also help to lower your monthly payments.
It’s very important during this time to pay all your debts on time, especially ones that get reported on the credit report. You may want to sign up for automatic payments, so you know they’re getting paid on time. You may consider getting a gas credit card or a secured credit card. Make small purchases so you can make the small monthly payments on time each month. This will show up on your credit report when you try to get your mortgage after foreclosure. After some good shopping around, you’ll find the home of your dreams as well as a reputable lender that will put their faith in you.
Being practical is an essential requirement in dealing with the ever changing economic landscape. None of us can be sure of what new developments will take place in the coming days and months, but there is one thing we can be sure of and it is this: Achievement is often the result of decisive action taken at opportune moments.