Foreclosure-gate, and we thought NAMA was bad

Sticky_Fingers

*Mods, didn't know what forum to put this in so please move if required

I was browsing youtube tonight and came across a very interesting video concerning what has been going on in the US property sector and how they are currently dealing with a potentially massive problem with regards the legality of foreclosing on people houses. I won't even attempt to try and summarise what the hell is going on but it looks like we may be in for some more interesting times if this isn't sorted out sharpish. I am amazed that such a massive cockup hasn't been mentioned over here on the news because this could have far reaching consequences if it actually blows up in their faces.
(Video below, links to sources in the description box and well worth a read)

https://www.youtube.com/watch?v=ib6lLP6dLdU

Overheal

It's not news, its been going on for 2 years. But I read Consumerist, and they track this sort of thing. It's just now they feel like giving it media attention.

Victor

tl:dw There may be issues proving the chain of ownership of properties whose mortgages were securitised in some states in the USA.

Sticky_Fingers

Victor wrote: »

tl:dw There may be issues proving the chain of ownership of properties whose mortgages were securitised in some states in the USA.

I'll give you the cliff notes:

1 You go the the bank to get a mortgage and they make you sign 2 pieces of paper, one being the mortgage the other being the note.

2: The bank keeps the mortgage and puts the note along with a shed load of others into mortgage backed securities which they sell onto other investors. A copy of the note is electronically scanned into a system called MERS (mortgage electronic record system).

3: Since the note is now basically a bond any transfer of ownership of the note must be recorded so its clear who owns it. The banks have not been doing this and in some cases the note has been physically destroyed. So now the only record of the note is in the MERS system.

4: When you get into arrears the bank then forecloses on you but in order for it to be legal the bank has to produce the mortgage and the original note, in many cases the MERS copy won't do it has to be the original document with your signature on it. In many cases they have no idea where it is or who owns its so they create a document called a lost note affidavit which must state who owned the note and when. Since there is no record of the chain of ownership the banks have basically been making up information on the lost note affidavit, so they are basically making forged documents and submitting them to the court so they can get the foreclosure through.

5: People have been copping onto the fact that the banks are lying through their teeth and submitting fraudulent documents and thus have been able to stop the foreclosure from proceeding.

Its a absolute mess since no one knows who owns the note and thus many of the major banks in the US have had to suspend all foreclosures until it is cleared up. Added to this the investors who bought the notes off the banks are up in arms are probably going to sue them. It could end up costing the banks a fortune but on the plus side at least people get to stay in their homes a bit longer before they are turfed out onto the streets.

jimmycrackcorm

But don't we have deeds and land registry records here to prove ownership?

mikemac

jimmycrackcorm wrote: »

But don't we have deeds and land registry records here to prove ownership?

We do

I would think this mess wouldn't happen in Ireland but I'm not certain