Election 2010: Teabaggin' the Ds & Rs - Page 65

Greedy,Greedy,Greedy · 10-12-2010, 12:49 PM

Quote:

Originally Posted by Cletus Miller

Yes, but assuming that (1) the sale already happened, and (2) the buyer got a mortgage, there is title insurance and the insurers are likely going to have to handle the litigation. Also, unless the purchase was *actually* at the auction (which, at least here, has been pretty rare), the lender probably paid for owner's title insurance as the seller of REO--which, of course, is part of why the insurers needed to say "no more for now".

Title insurance benefits the lenders unless the buyer pays extra here. And the mortgage should never be for the whole value of the property.

One of the properties I'm looking at was a recent foreclosure. We might well buy without a mortgage, or with a very small one. This discussion is leading me to think I need to be even warier about it that I already was.

Cletus Miller · 10-12-2010, 12:59 PM

Quote:

Originally Posted by Tyrone Slothrop

Sen. Shelby: "while the Nobel Prize for Economics is a significant recognition, the Royal Swedish Academy of Sciences does not determine who is qualified to serve on the Board of Governors of the Federal Reserve System."

Ah, good stuff.

I'm surprised he didn't point out it isn't *actually* a Nobel Prize.

Cletus Miller · 10-12-2010, 01:02 PM

Quote:

Originally Posted by Tyrone Slothrop

What you're saying suggests that the banks' misrepresentations are all the more pernicious because they are being made against litigants who, as a practical matter, won't challenge them. This means the adversarial process won't get the facts right, and that undermines the legitimacy of the judicial system.

Not even as a practical matter. The misrepresentations are primarily (not exclusively, of course) being made in actually uncontested cases--the lenders are seeking default judgments of foreclosure.

Tyrone Slothrop · 10-12-2010, 01:16 PM

Quote:

Originally Posted by Cletus Miller

Not even as a practical matter. The misrepresentations are primarily (not exclusively, of course) being made in actually uncontested cases--the lenders are seeking default judgments of foreclosure.

And even where there is counsel defending the action, Sebby says it's not cost-effective to challenge the representations.

Cletus Miller · 10-12-2010, 01:18 PM

Quote:

Originally Posted by Tyrone Slothrop

And even where there is counsel defending the action, Sebby says it's not cost-effective to challenge the representations.

Yep.

Tyrone Slothrop · 10-12-2010, 01:31 PM

Quote:

Originally Posted by Cletus Miller

Yep.

Though I suppose that may change. Before the current mess, judges just weren't going to believe that the banks would screw that up, but now they'll probably be too receptive, if anything, to the idea.

Adder · 10-12-2010, 01:44 PM

Quote:

Originally Posted by sebastian_dangerfield

Moving on to substance, you'd have a point if the affidavits were unsupported and made in bad faith.

Cletus has my proxy. But I'm not sure that knowingly signing a false affidavit (i.e., one saying "i've checked the documents") can ever be in good faith.

Adder · 10-12-2010, 01:48 PM

Quote:

Originally Posted by Tyrone Slothrop

Recklessness is not good faith. Again, over to Barry Ritholtz, since he addressed exactly this point just a few hours ago:

I'm not sure that my instincts are quite as aggressive as his, but we have allowed financial institutions in this country to get away with all sorts of shit and perhaps we ought to try stringent enforcement now and see how that works.

Everyone is a criminal! Is not a terribly good way to persuade, but seem to be par for the course for a certain class of people who are just so darn mad at the banks!

Adder · 10-12-2010, 01:52 PM

Quote:

Originally Posted by sebastian_dangerfield

Anything holding up the foreclosure process, and by extension, delaying the bottoming out of the housing market, is bad.

That's a fun little mantra, but the implication is "let the mills run!" and let any bank take any house they like (almost).

Cletus Miller · 10-12-2010, 01:55 PM

Quote:

Originally Posted by Adder

Cletus has my proxy. But I'm not sure that knowingly signing a false affidavit (i.e., one saying "i've checked the documents") can ever be in good faith.

Believe that they are qualified as "to the best of my knowledge", which is why the established process is the defect, rather than the "robo-signer". Were the report delivered to him to actually lay out all of the info in a summary--could easily fit everything necessary in about 2 dozen data fields--then it could be reviewed very quickly and signed off on. The guy signing the affidavit need not spend 20-60 minutes, as Ritholtz suggests, but *someone* (probably in India) with at least marginally appropriate training does.

Tyrone Slothrop · 10-12-2010, 02:03 PM

Quote:

Originally Posted by Adder

Everyone is a criminal! Is not a terribly good way to persuade, but seem to be par for the course for a certain class of people who are just so darn mad at the banks!

Interesting that Ritholtz's day job is CEO of a Wall St money management firm. Maybe atypical of the class of people you have in mind.

Cletus Miller · 10-12-2010, 02:04 PM

Quote:

Originally Posted by Adder

That's a fun little mantra, but the implication is "let the mills run!" and let any bank take any house they like (almost).

I really think that having a bit of a pause over the slow sales months might be beneficial, especially if the banks use the opportunity to develop some sort of pricing model that they can use in f/c, REO and short sale situations. Especially the last, which involves sinking the least resources into the courts, but which has been hindered by a combination of the banks having no good idea what is an acceptable short bid for a given house and underestimating the real costs of pursuing a (proper) foreclosure, a better accounting of which they will soon have.

Cletus Miller · 10-12-2010, 02:05 PM

Quote:

Originally Posted by Tyrone Slothrop

Interesting that Ritholtz's day job is CEO of a Wall St money management firm. Maybe atypical of the class of people you have in mind.

Didn't you hear the news about the aggregate comp on "Wall Street" this year? Barry's just mad that they're taking money out of his, and his investors', pockets.

Cletus Miller · 10-12-2010, 02:50 PM

Quote:

Originally Posted by Replaced_Texan

FWIW, I have found this series to be helpful in untangling the mess in my head.

John Carney explaining things in a single post, here.

Hank Chinaski · 10-12-2010, 03:26 PM

Quote:

Originally Posted by Cletus Miller

Not even as a practical matter. The misrepresentations are primarily (not exclusively, of course) being made in actually uncontested cases--the lenders are seeking default judgments of foreclosure.

see, the "error" is that the bank say they have looked at the chain and they have a proper chain. a few times a Judge has asked to see the chain, and surprise, there is a break in the chain. If the Judge asks, I assume the break in the chain must be because the document doesn't exist AND can't be easily supplemented (e.g. signed today).

so what you have is a debtor with no argument he shouldn't get kicked out other than the bank that holds the loan can't prove it holds the loan. it is clear no other bank has shown up to claim the loan so it is likely the bank does own it, they just have no complete proof.

so then what happens? I'm really just wondering. w/o foreclosure the occupant gets to stay, right? Sebby said "it'll get fixed," but I don't get how. the one entity with an interest in booting the guy out has a glitch in the chain.

can it be fixed by saying "I've checked the papers and we have a big fucking break in ownership, but Judge, we do own the loan, and we can't let the deadbeat stay?"

seriously. Bank can't fix a gap. what happens?