Posted on September 21, 2011 by Neil Garfield
As is usually the case in American politics, homeowners have been divided into groups and then pit against each other. There are plenty of people who have not stopped paying on their mortgage, but they are still in trouble for the same reasons that others are in foreclosure. It is the commonality of interests of homeowners that is preventing them from presenting a single unified voice demanding reform. And it is the persistent view that opposing the current wave of foreclosures is in some way attacking the basic myth of personal responsibility as an American credo.
The entire country was victimized by the Banks in their mortgage madness and there is no mileage in blaming borrowers for bad mortgages designed by experts who knew exactly what they were doing. The whole scheme depended upon false inflated land values and bank control over the appraisers, underwriting procedures and mortgages terms. In a thirty year period the types of loans available mushroomed from 4-5 to more than 400 different variations of loan templates, [n]one of which could be understood by even Alan Greenspan, former head of the Federal Reserve (by his own admission).
The obvious correction back to true land values has left homeowners without any equity after they were hounded by hard-sell sales pitches to “use” the equity in their homes to fund other things. Besides the obvious wrong foundation of this pitch, it was based upon equity that did not exist but people were lured into the trap because the appraisal came in at $20,000 more than the amount on the contract, and the “bank” approved it. what the borrower did not know was that the appraiser was told the number that was needed, and it was made abundantly clear that they would never see any business if they didn’t tow the line and appraise the property at the figure given to them by the mortgage originators.
Now there are millions of homeowners are so far underwater that they will most likely never get out from under the crushing debt that was manufactured by mortgage originators who had no risk in the deal because they were using their own money to fund the loan. The reliance of the borrowers on these “lenders” was misplaced. They were pretender lenders and their approval of the dal was not a sign that experts had looked at he loan and deemed it a viable transaction, it was simply a ruse in which the mortgage originator was playing part and getting paid for it.
Today, after nearly 100 million mortgage transactions, and a nearly complete absence of proper paperwork, it is now apparent that mortgages were refinanced, houses were sold, and new homes were bought using this faulty paperwork, leaving a trail of corrupted title that cannot be corrected except on a case by case basis. The modification applications in which the applicant signs away rights to contest the paperwork doesn’t cure title although it might protect the bank from damage claims.
The message is clear. With few exceptions, most transactions over the past 10+ years do not present clear title, marketable title or even curable title. Anyone who has done a transaction during that period will find out in the years to come that the deal they did is not over and they may well find themselves in court without understanding of why they are there. When it comes time to move on, sell the house and buy another, the whole problem starts over again even if you never missed payment and never went through foreclosure. And if you bought a foreclosed home, there is good chance that the title is fatally defective. Check with your lawyer before you sign anything because you might be signing onto liability you never guessed existed.
Filed under: bubble, CDO, CORRUPTION, currency, Eviction, foreclosure, GTC | Honor, Investor,Mortgage, securities fraud Tagged: | bankruptcy, borrower, countrywide, disclosure,foreclosure, foreclosure defense, foreclosure offense, foreclosures, fraud, LOAN MODIFICATION, modification, quiet title, rescission, RESPA, securitization, TILA audit, trustee,WEISBAND
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