Foreclosure Defense and Offense: Banks Hiding Losses — Paying the Debts of Borrowers

The most interesting part of this article is that our theory that third parties were actually paying the loan payments due to third parties that had “purchased” the mortgage loans, is validated.

This of couse presents an interesting problem in foreclosure defense: the defense of payment is now doubled — one for the money received by the STATED (at closing) mortgagee/payee which was paid the entire loan balance in full (plus around 2.5% premium) and second for the monthly payments that the STATED mortgagee/payee is now paying to the party to whom it sold the loan. One could obviously argue that the borrower has nohting further to do with this finacnial transaction, that there was a subsitution or novation, and that the security rights under the mortgage were eviscerated twice over.

The video is particularly instructive:

Banks Paying Debts of \”Borrowers\”

$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$

Beyond Subprime: Banks’ Top 5 Problem Loan Areas
Posted Jul 03, 2008 02:45pm EDT by Aaron Task in Investing, Recession, Banking
Related: FITB, ZION, CORS, WFC, AXP, XLF

The past few weeks have brought a serious rethinking of the “credit crunch is ending” mantra that was making the rounds on Wall Street in March and April.

Rather than ending, the credit crunch is moving beyond its subprime mortgage origins. According to Richard Suttmeier, chief market strategist of RightSide.com, the top five problem loan sectors to watch now are:

* Credit card debt
* Home equity loans
* Commercial real estate loans
* Commercial and development loans
* Derivatives generally ($182 trillion notional value)

Each of these potentially bad loan categories are rising among FDIC insured institutions, Suttmeier notes. Rather than pulling back, he says borrowers are tapping outstanding lines of credit while banks are using “tricks” (like making payments on behalf of debtors) in order to keep the loans in the “current” category.

This practice “has got to stop,” Suttmeier says.

The credit crunch? Not so much.

One Response

  1. Unfortunately, I voted for, gave money to and worked to get Obama elected. Since I have seen just how enbedded he is with the Banks who made bad loans, went broke, (sole from us) got our bail out (stole from us again) and now are holding back thousands of forclousers to dirve the price up (stole from us again ) I will do anything to get Obama out of office.

Leave a Reply

%d bloggers like this: