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High court to decide if you can legally own a house a bank didn't have the right to sell to you
By adamg on Tue, 05/03/2011 - 7:13am
Yes, it's another mortgage-scandal case. Rich Vetstein considers Bevilacqua v. Rodriguez, in which the Supreme Judicial Court heard arguments yesterday - on the heels of its decision on shoddy mortgage paperwork:
This case, which national legal experts are watching closely, may determine the rights of potentially thousands of innocent purchasers who bought property at foreclosure sales that have been rendered invalid after the Ibanez ruling.
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Comments
Someone can make that right
A lot of the financial firms that knowingly did criminal things that caused most of the current foreclosures most of the recent foreclosures... have many billions of dollars that could be used to help undo the harm to individuals.
What's To Decide?
If somebody supposedly sells me the Brooklyn Bridge, do I have a right to claim real ownership?
The people who were unjustly foreclosed still own the property, period. The unfortunate second buyers do not. The bank should be liable for all costs involved for both the former and the latter.
What other rational decision could there be?
Suldog
http://jimsuldog.blogspot.com
Agreed
But since The Banks clearly own the politicians, it wouldn't surprise me if They had a judge or two in pocket as well. Not to mention Their batallions of elite mercenary lawyers.
Give the original owners the
Give the original owners the option: they get the property back, along with a big payment to compensate them, or they get a huge payment and the current 'owners' can keep their current terms. The current 'owners' should also get something, since, how'd you like to buy a house and then someone tells you that your house could be taken away because a bank messed up. All these payments are coming from the banks.
Give? - maybe buy
If they were foreclosed on in error, they still own the property - but that means they then owe the mortgage and back taxes as well. They would have to pay that and THEN they can sue for damages (for example rent or other housing payments while they were thrown out of their houses).
Keep in mind though that foreclosures all go through a legal process - the bank can't just take the house. The argument in almost all of these cases is not that the owners were mistakenly put out of their houses - the principal argument is that this was the result of bad paperwork and/or legal counsel. Virtually all of these cases involve people who were not current on their payments and the banks was within their rights to foreclose, but they didn't follow correct procedure.
You can't just hit reset - you have to hit rewind - and if you do I'd estimate that 95-99% of these people still end up not owning their prior home when the dust settles.
Forclosure is foreclosure
The foreclosures were illegal only because holder of the title was unclear because of all the derivatives and splitting and selling of mortgages nonsense.
But while the foreclosure may have been 'illegal', it still means the original owners weren't paying their mortgages. So suppose the first owners DO get their house back. Then what? They couldn't may the mortgage back then - are they all going to suddenly have the money to pay those same mortgages now???
There we go. This matter has
There we go. This matter has nothing to do with unfair forclosure. This is about record keeping, not practice. And the whole thing is not good for anybody - banks, the originally forclosed or buyers. And the longer it takes to sort out, the worse it will be for the real estate market and the economy as a whole.
There are two problems in the whole mortgage mess. First, people got mortgages they could never pay back, and second, those mortgages were packaged and sold without proper risk assignment. This case involves the first problem only. And the heart of the first problem is not that people got tricked into bad mortgages. Those people should never have been loaned the money in the first place. And as a result, they would have had no house to 'lose.'
The corrective is not to give those people money. The corrective is no make sure we go back to the time when you needed a significant down payment, money in the back and a good income to get a mortgage in the first place. In other words, the standard business practice of 30 years ago.
And the banks were doing so
And the banks were doing so many shady shell games that they couldn't keep track of the paperwork, to the point that they couldn't even straighten it out to do a legal foreclosure.
Seems like penalizing the banks on illegal foreclosures is one of the few, small ways that we can stick it to the banks, who thus far have largely escaped with our economy's money.
And you think penalizing
And you think penalizing banks is a win-win? Do you really think that banks have vaults full of gold coins just sitting there, like Scrooge McDuck? The less money banks have, the less they can loan. The less they loan, the less businesses buy and the fewer employees they can hire. Yeah, that's a great idea... we'll screw those greedy banks.
Banks don't loan real money.
Banks don't loan real money. The more they loan money they don't have, the more imaginary money they get to loan. And the more real money their executives take home. Throw the executives in jail, seize their assets, penalize the banks as a warning to other banks, and then maybe you'll see some return to sanity, possibly in time to save the economy.
The title insurance sellers
Must be quaking in their boots. I mean isn't that why you buy title insurance? I would be surprised that you could buy title insurance at all on a foreclosed property these days.
Generally, you can't.
Generally, you can't. Even if you could, the premium on it is astronomical. My wife and I were house-hunting back when Ibanez first came down, and panic ensued. We actually had an offer accepted on a place in Roslindale, only to have the title search come back with (obviously) a huge red flag on it. Interestingly, the place we were looking at had been bought and sold twice since the foreclosure than had been rendered moot, with both sales coming before Ibanez. We would have been able to buy the place (at a steep discount, since the seller knew he was peddling tarnished goods) and get title insurance on it at a fairly modest premium, but only by using the previous owner's title insurance as collateral.
That sounds (to me now) like the shadiest thing I've ever heard of--exactly the sort of turtles-all-the-way-down logic that triggered this whole housing mess in the first place, but we seriously contemplated it at the time, because the price was right. Our attorney also mentioned that he didn't think Ibanez would hold for long before the legislature did something about it. (In his defense, he also told us to run away from the deal as fast as possible) That was more than two years ago, though, and I haven't seen any movement on it in that time.
What a mess, for everyone involved.
More idiocy from Coakley
This jumped out at me from Vetstein's blog:
So, because someone bought a house that someone walked away from because they couldn't pay a subprime "liar's loan" they have to have it taken away from them because the documents weren't all posted in the Registry of Deeds when the mortgage was securitized?
This is a huge problem, for the real estate market, for the wider economy and for the neighborhoods that now have large numbers of empty and blighted properties that can't be bought and fixed. There are a lot in Dorchester, Hyde Park, Mattapan, and Roxbury.
There are a lot in
And everyone is clamoring to buy a home in the combat zones!