This is what is scaring the big boys that are siphoning every penny out of every American citizen whether they own property or not. If the rush toward strategic defaults continues, it is quite possible that many people will get a large share of the transfer of wealth from poor to rich. The fact remains that you can’t fool all the people all the time. If they are $200,000 under water and they see the writing on the wall, they know they will NEVER break-even. They ARE walking from the property and more of them will do so. Many of them are Judgment proof and have nothing to lose and everything to gain by either renting or buying another home, either way with much lower payments and probably seller financing.
But this doesn’t mean that strategic default is a magic bullet. There are ways to do it depending upon your specific situation. Do it right. Consult with an experienced, licensed and knowledgeable attorney before you do it.
Comment from ANONYMOUS
Alina
You are absolutely right in everything you have just said! And, this is not about liberal or conservatives – it is about an establishment that converted our U.S. industrial economy to an economy focused on American consumption – and the financial means to promote that consumption.
Financial institutions were/are given everything they want in Washington. After the US gave away manufacturing in this country, they needed to promote all they could to promote consumption. It was a concerted effort to siphon every dime out of the one major household asset – homes. Wall Street knew what they were doing, Americans were targeted and lied to. And, the media, government, and financial institutions, have the audacity to blame the people.
Incredible. Yes, Alina, we must keep fighting – and help each other – what ever way we can.
Below is an article by Mr. James B. Stewart – people like this should be exposed –
By JAMES B. STEWART
Fannie Mae ignited a chorus of criticism last week when it said it would deny government-backed mortgages for seven years to borrowers who walked away from their existing mortgages, had the ability to pay and didn’t make a good-faith effort to avoid foreclosure by negotiating with their lender. The government-owned mortgage-finance giant also said it will take legal action to recoup the loan balance against borrowers who “strategically default.”
I say it’s about time. These relatively affluent borrowers should pay a price—even if it is a modest one—for walking away from a contract. As it is, reports have been proliferating about homeowners who simply stop paying their mortgages, stay in their comfortable homes rent-free for the 18 months to two years or more it can take for the lender to foreclose, then get another government-backed loan and buy a new house. Who is to say they won’t do it all over again?
Nor will encouraging people to default do anything to stem the rising tide of foreclosures and its potentially debilitating effect on housing prices.
This is a looming crisis, given that an estimated one-quarter of all home mortgages are currently underwater, meaning that the house is worth less than the balance of the mortgage. The serious delinquency rate on mortgages backed by Fannie Mae has already soared to over 5%. Imagine if that leapt to over 20%.
Since Fannie Mae and Freddie Mac became wards of the federal government, we taxpayers are footing the bill, which the Congressional Budget Office now estimates will reach an astonishing $389 billion. That is likely to be far more than the bank bailouts and dwarfs the cost of rescuing American International Group.
So I was baffled by critics who equate this new policy to things like debtor’s prison. Asking people to pay their mortgages when they can afford to is hardly locking people in a prison for the rest of their lives.
These owners chose their homes and presumably liked them. They had no guarantee that housing prices would appreciate indefinitely and never decline.
As I have argued before, walking away from a mortgage now is like selling at the bottom of the market. Houses that are underwater now may not be for long once housing starts to appreciate. And despite a recent slump in the number of home sales, home prices are rising in most areas and have been for the past year.
Nor does home ownership convey a right to immediate mobility. Buying a home is a relatively long-term commitment, and most people expecting to move soon opt to rent instead. Even renting typically requires a one-year lease.
Anyone forced to move may have to sell at a loss, but they can also buy another home at lower market prices, unless they are moving from, say, Las Vegas to Manhattan. But that’s their choice.
I asked Fannie Mae spokeswoman Janis Smith whether she was surprised by the hostile reactions to the new policy, and sounding somewhat weary, she said, “We’ve seen it all.” She stressed that the new policy doesn’t apply to “hardship cases,” and that when defaulting borrowers reapply, Fannie Mae will consider the circumstances of their earlier default and, if warranted, grant an exemption.
In my view, “strategic default” is too kind a phrase for breaking a promise and breaching a contract. I recognize that there are plenty of people facing genuine hardship from a housing crisis not of their making. But people who have the means to pay their mortgages and instead opt for a free ride at taxpayer expense aren’t among them.
—James B. Stewart, a columnist for SmartMoney magazine and SmartMoney.com, writes weekly about his personal-investing strategy. Unlike Dow Jones reporters, he may have positions in the stocks he writes about. For his past columns, see: http://www.smartmoney.com/commonsense
Comment from Anonymous —
Alina
You are absolutely right in everything you have just said! And, this is not about liberal or conservatives – it is about an establishment that converted our U.S. industrial economy to an economy focused on American consumption – and the financial means to promote that consumption.
Financial institutions were/are given everything they want in Washington. After the US gave away manufacturing in this country, they needed to promote all they could to promote consumption. It was a concerted effort to siphon every dime out of the one major household asset – homes. Wall Street knew what they were doing, Americans were targeted and lied to. And, the media, government, and financial institutions, have the audacity to blame the people.
Incredible. Yes, Alina, we must keep fighting – and help each other – what ever way we can.
Below is an article by Mr. James B. Stewart – people like this should be exposed –
By JAMES B. STEWART
Fannie Mae ignited a chorus of criticism last week when it said it would deny government-backed mortgages for seven years to borrowers who walked away from their existing mortgages, had the ability to pay and didn’t make a good-faith effort to avoid foreclosure by negotiating with their lender. The government-owned mortgage-finance giant also said it will take legal action to recoup the loan balance against borrowers who “strategically default.”
I say it’s about time. These relatively affluent borrowers should pay a price—even if it is a modest one—for walking away from a contract. As it is, reports have been proliferating about homeowners who simply stop paying their mortgages, stay in their comfortable homes rent-free for the 18 months to two years or more it can take for the lender to foreclose, then get another government-backed loan and buy a new house. Who is to say they won’t do it all over again?
Nor will encouraging people to default do anything to stem the rising tide of foreclosures and its potentially debilitating effect on housing prices.
This is a looming crisis, given that an estimated one-quarter of all home mortgages are currently underwater, meaning that the house is worth less than the balance of the mortgage. The serious delinquency rate on mortgages backed by Fannie Mae has already soared to over 5%. Imagine if that leapt to over 20%.
Since Fannie Mae and Freddie Mac became wards of the federal government, we taxpayers are footing the bill, which the Congressional Budget Office now estimates will reach an astonishing $389 billion. That is likely to be far more than the bank bailouts and dwarfs the cost of rescuing American International Group.
So I was baffled by critics who equate this new policy to things like debtor’s prison. Asking people to pay their mortgages when they can afford to is hardly locking people in a prison for the rest of their lives.
These owners chose their homes and presumably liked them. They had no guarantee that housing prices would appreciate indefinitely and never decline.
As I have argued before, walking away from a mortgage now is like selling at the bottom of the market. Houses that are underwater now may not be for long once housing starts to appreciate. And despite a recent slump in the number of home sales, home prices are rising in most areas and have been for the past year.
Nor does home ownership convey a right to immediate mobility. Buying a home is a relatively long-term commitment, and most people expecting to move soon opt to rent instead. Even renting typically requires a one-year lease.
Anyone forced to move may have to sell at a loss, but they can also buy another home at lower market prices, unless they are moving from, say, Las Vegas to Manhattan. But that’s their choice.
I asked Fannie Mae spokeswoman Janis Smith whether she was surprised by the hostile reactions to the new policy, and sounding somewhat weary, she said, “We’ve seen it all.” She stressed that the new policy doesn’t apply to “hardship cases,” and that when defaulting borrowers reapply, Fannie Mae will consider the circumstances of their earlier default and, if warranted, grant an exemption.
In my view, “strategic default” is too kind a phrase for breaking a promise and breaching a contract. I recognize that there are plenty of people facing genuine hardship from a housing crisis not of their making. But people who have the means to pay their mortgages and instead opt for a free ride at taxpayer expense aren’t among them.
—James B. Stewart, a columnist for SmartMoney magazine and SmartMoney.com, writes weekly about his personal-investing strategy. Unlike Dow Jones reporters, he may have positions in the stocks he writes about. For his past columns, see: http://www.smartmoney.com/commonsense
Filed under: bubble | Tagged: strategic defaults |
Cannot reserve the name – the name is gone. Only the “pools” remain – but not as organized under the original trust. And, do not think any of us have the influence or power to purchase the orphan “pools.”
Wish we did.
neidermeyer-
You said, “I didn’t have the cash to actually create a new trust but I had the cash to reserve the name”.
Questions:
* How did you “reserve the name – Option One Mortgage Loan Trust 2007-FXD2”?
* How much did you pay?
* Under what heading of the prospectus did it specifically state that the trust is registered in Delaware?
Fight the good fight … Finish the race … Keep the Faith,
Lisa~
Here is a very good article here in Living Lies which makes reference to TILA, RICO, Deceptive Lending Practices…Excellent pointers…Wells Fargo, Option One, American Home Mortgage Relationship
http://livinglies.wordpress.com/2010/03/30/wells-fargo-option-one-american-home-mortgage-relationship/
Lisa D , Zinger & DinSFLA
It was right there in the prospectus can’t say it was “detective” work ,, just reading several hundred pages … and YES it very specifically states that the trust is registered in Delaware (although they give it a Wisconsin mailing address)… I’m sure they will counter that they’re operating as you say under some other state where registration is not mandatory but we all live in the real world and when they say something and it is demonstrably not true that is a problem… as far as I’m concerned it throws the entire structure created by the PSA in doubt.
There’s a lot of good info in the PSA and prospectus. I especially like where WF states in one of the shortest and to the point sections that they are buying the mortgages with OPM and that they immediately assign them out and retain no interest (they own the servicer and they name themselves as trustee to control the flow of information out to the real financiers/lenders although they would never characterize it that way) . That **sorta** conflicts with the pages and pages of WF as my lender in the closing docs… I’m thinking TILA …
Alina~
Thank you … I haven’t thought about appeal yet, as the Order denying my MTD has not yet been entered.
Please email me at MrsDiamond@msn.com
Lisa D,
Are you appealing the judge’s decision? Give me your email address and I will send to you a letter from the OCC stating the NBA does not cover trust powers.
Alina,
Thank you for your response.
My issue is not with my State laws that govern Trusts as I already lost that argument at the Motion to Dismiss for Lack of Capacity phase. The judge ruled that because the Trustee was registered as a “National Association” (US Bank NA), then they were not subject to state registry regulations.
My issue is, IF the Trust says it’s registered in Delaware … then it had better be registered. BUT I am having trouble locating that exact claim in the SEC docs. From what I see the “registry” referenced is that of the principle bank (CSFB), and not the Trust.
Can someone please explain the differences between an Express Trust and a Common Law Trust, and where in the SEC docs this designation is made … AND what difference that makes with regards to Standing.
Lisa D,
Great info. I want to add one thing – in the State of Florida, a common law trust must be registered with the state pursuant to F.S. § 609. Check your state statutes to see if there is a similar requirement. Also, do not confuse an “express trust” with a “common law” trust. Common law trusts are also referred to as statutory trusts, Massachusetts trusts, and business trusts. Again, check your state’s statutes.
@ LISA D
the real questions now-are the loans actually in the hands of trusts as a matter of law as a result of failed filings and what happens to proceeds of collection of foreclosure proceeds??
This post is a Must Read…Too long for me to post here…
http://stopforeclosurefraud.com/2010/07/04/must-read-missing-link-s-bank-of-new-york-v-michael-j-raftogianis/
How did you find out the trust information… does that come when you contact the bank and ask for the information in QWR or ???
Neidermeyer~
Good detective work!
I have the same issue. My adversary “Trust” also failed to register with the Div of Corporations in Delaware. I thought I had a KNOCK-OUT PUNCH, Lack of Standing due to Lack of Corporeal Existence!!! But the more I looked at the PSA and Prospectus it became clear that the references to “Delaware” registry were for the Depositor or Parent Bank, and NOT the “Trust”.
So I used a very knowledgeable source in the LL network to ask, exactly where in the SEC docs the registry of the “Trust” is referenced. The answer I got back was:
“the bad news is that the Trust is usually created as a common law trust under the state of NY and does not need to be registered with the Dept. of Corporations.”
But, if that were true, why ARE so many of the “Trusts” truly registered in Delaware???
I would appreciate the input and/or advice of other posters here to settle this issue. It could be a big winner for many people.
I am positively giddy like a little schoolgirl.
Wells Fargo failed to create the trust named in my prospectus and PSA in the state of Delaware… totally blew it! I don’t know how they filed the original quarterly report before they blew off the SEC in the “15” filing but it was probably created by a team that did all the filings paperwork. I didn’t have the cash to actually create a new trust but I had the cash to reserve the name …
Option One Mortgage Loan Trust 2007-FXD2
***********************
Hey Wells Fargo… try suing me in the name of the trust or trustee!!! your PSA is invalid ,, ALL OF IT … I hope the Royal Bank of Scotland sues your ass off.
P.S. I’ll relinquish the name to you for the sum of $5,000,000.00 …
If any lawyers want to do something with this drop me a line … brian_tracy AT cfl.rr.com
For decades “we the people” could never get the accounting straight at Fannie/Freddie/HUD, etc.
Katherine Austin Fitts wanted to find out why HUD was missing $59 Billion and was turned away.
Frank Raines & co had their way at Fannie, got a slap on the wrist and US Taxpayers pays the legal bills for him and his accomplices.
Then there was David Kellermann (CFO of Freddie) who offed himself (so we were told).
The facade has been removed, gloves are off… welcome to fascism!
Ian,
Here is something for you and others here to contemplate:
Our governments complicity is clearly evident! Where were the thousands or tens of thousands of the regulators, charged with auditing the banks???
In the late 90’s and early 2000’s… where were the regulators that were supposed to police the banks?
Our government has failed us and the rest of the world in the most miserable way…
Yes, our government is an acssessory to the greatest fraud ever!!!
This 4th of July, I said: God help America… for the first time ever
and I am not a religious person
To Cristine Springer- if your auditing and digging around yields clues suggesting that the government is behind all this, then please tell all, there are many curious readers here whose own experiences may help to connect the dots. And your own findings may help someone else avoid a pitfall or a trap.
The more I audit and dig around, the more it just looks like our government is behind all of this.
Anonymous said:
“Whether Fannie or Freddie (or Wall Street) CURRENTLY owns your loan – is another question – something not addressed by any court to date. Further, securitization of receivables and loan ownership are two different things. My contacts tell me that the note always remained with the bank – even though receivables were passed-through by an off-balance sheet conduit. Again, I go back to FASB new rules – and the TILA Amendment that defines a “creditor.” ”
That’s very interesting. BAC told me that Fannie Mae held my note at the time I sued them. Of course, BAC also said before I sued them that BAC was the holder, not Fannie Mae. And BAC wanted us to believe that an assignment from MERS to BAC was necessary to foreclose.
It’s so simple yet so convoluted…like maybe the fact that the banks kept the loans is why Fannie’s policy has become for MERS to do an assignment to the servicer. In my case, my servicer is the successor to the originator, so Fannie may have never actually held my note at all. I suppose BAC and Fannie could argue that BAC held the note all along and is justified in taking my house–which they aren’t, for a number of reasons.
But I plan to find out who among my defendants–which are BAC, Bank of America, Recontrust, Fannie, and MERS–holds this frigging note, if any of them. Who has possession of it and who was it negotiated to. Does it even still exist? Was it “repurchased” by Fannie? Charged off? Sold to junk debt buyers?
Thanks, Anonymous.
dny
They were – and are. Fannie Mae/Freddie Mac, as a “creditor/direct lender” purchased mortgages from “table funder” originators – and securitized their receivables with the aid of investment banks. The process continues today – but with much stricter guidelines.
On the other hand, Wall Street purchased mortgages themselves (non-agency) and securitized their own receivables. MERS allowed cover-up of all – and many mortgages were not even MERS. All was done to prevent liability of the actual creditor. All structured to prevent knowledge of the real creditor/lender at origination – and today. Well thought out plan by representative attorneys – many of these law firms now closed down. We were duped.
ANONYMOUS:
Thanks. When you state your opinion that, “Fannie and Freddie, even as a guarantor, and not as a direct lender (which they were) were supposed to offer very affordable refinances – yeah right.” – what jumps out to me is “as a direct lender (which they were).” Do you mean “were” as in “before securitization of loans” or “were” as in still are? In other words, is it your anonymous, non-legal, etc. etc. opinion that Fannie and Freddie were/are the funding source for (table funded) GSE loans?
THE A MAN
I hear you. The people are suffering – and the government just keeping hoping and a wishing things will be Okay.
Mr. Obama – take off your camera good charm – it will not solve our problems – fight for the people. There are just too many people who have been harmed by this administration’s blind eye to the housing crisis and foreclosures. Restore people to what they were – before they were victims.
And, home or not, we vote. Or, will they take that away next?? Do you lose your right to vote if you no longer have an address??
How could this be really happening?
dny
Fannie and Freddie’s purchase of mortgages was greatly covered up. As I posted below, even if they were a guarantor, default of the issuer transfers title back to the guarantor. All the SPVs have defaulted – evidenced by swap payoff. Fannie and Freddie, even as a guarantor, and not as a direct lender (which they were) were supposed to offer very affordable refinances – yeah right.
But, Fannie and Freddie were involved in massive subprime refinancing – do you know that most subprime mortgages were refinances?? This was all hidden and covered up. As I have also said, many loans have been removed from the Fannie/Freddie website – even if they were a Fannie/Freddie loan – and are now untraceable – because Fannie/Freddie rid themselves of some loans – although many remain on their balance sheet.
You confuse the SPV – Wall Street was issuers of Fannie/Freddie Mac SECURTIZED loans – and also direct non-agency Wall Street creditor who securitized their receivables. Wall Street was the broker (issuer) for Fannie/Freddie owned loans that passed through the Fannie/Freddie receivables – but Wall Street also purchased loans for their own non-agency issues – removal of their own receivable balance sheets into an off-balance sheet conduit. These Wall Street financial institutions have covered up their direct purchase of the loans. Wall Street, like Fannie and Freddie are direct creditor – who just passed through their receivables – nothing more. A Trust is simply a holding place for the subsidiary depositor – purchaser of the loans – who passes through the parent corporation’s receivables. It is nothing more.
What has confused the courts is the old “holder of note” – and right to enforce – law. But, as the NJ judge astutely points out – enforcement is by negotiation or by possession. In order to be in possession – there must be proper transfer – and possession at the time of foreclosure. If there was never proper transfer/conveyance to an SPV – and if the SPV has been subsequently dismantled – then the trustee does not have legal transfer right to enforce the note. .
Whether Fannie or Freddie (or Wall Street) CURRENTLY owns your loan – is another question – something not addressed by any court to date. Further, securitization of receivables and loan ownership are two different things. My contacts tell me that the note always remained with the bank – even though receivables were passed-through by an off-balance sheet conduit. Again, I go back to FASB new rules – and the TILA Amendment that defines a “creditor.”
Ohio Court was onto this in 2007 – but somehow went silent after that. Receivables “pool” pass-throughs are not the same as individual loan ownership. This is simple accounting. And, I like to use the word “dismantle” rather that dissolve – because the Trusts have been torn apart – their original structure – dismantled – gone- over – and any remnants consolidated onto the Wall Street parent bank’s balance sheet.. There should be no more hiding under the original trust name.
Government knows this – they know their days are numbered to promote the foreclosures. They are hoping to get as many foreclosures through until an attorney nails them in an influential court.
Attorneys should love this challenge. But, they have to be in it for more than money – they need to want to love to make a name.
dny
Love your post – I have heard the same – and that commercial borrowers strategically default all the time. Oh, but will Fannie go after them? – do not think so – Fannie was a residential mortgage lender.
Let me pile on some irony:
The Wall Street Journal reported (February 6, 2010) that none other than the MORTGAGE BANKERS ASSOCIATION arranged for a (greatly reduced principal on loan) short sale of its headquarters building in Washington, D.C. (see at http://online.wsj.com/article/SB10001424052748704829704575049111428912890.html?mod=WSJ_hpp_LEFTWhatsNewsCollection )
(I had heard previously that the MBA had “defaulted” on ITS loan on the building.) From the article:
“Like millions of American households, the Mortgage Bankers Association found itself stuck with real estate whose market value has plunged far below the amount it owed its lenders.
“But the trade group for mortgage lenders is refusing to say exactly how it extracted itself from that predicament.”
Sooo…. Apparently there really are two standards: one for peasants, another for the ruling class. Rulings “in equity” preserve the order of things for those elevated enough to enjoy the luxury of being able to determine for themselves if financial commitments are “economically imprudent” to continue. The peasants, I guess, should be grateful to keeps their heads attached to their necks and still allowed to serve the “betters.”
It is strange that when individual homeowners strategically default the corporations and bigwigs cry foul. Apparently it is OK for the bigwigs to walkaway from labor contracts, pensions etc with a strategic default via Chapter 11 etc.
The Blackstone group recently walked away from a NY apartment complex deal when the property went underwater. Also JP Morgan did the same on some office buildings in the Bay area. And others have done the same as well.
Many homeowners were duped by lenders, appraisers etc.
And where were the Fannie Mae and Freddie Mac con artists with their multi million dollar bonuses. They are still on the govt. dole for their paychecks and perks.
Are you kidding me?
I think every homeowner should default and get a refund of all the funds they paid into the bogus non-existent loans they created out of thin air so they could borrow more funds from the Feds and sold behind our backs and profited up the ying yang. Homeowners don’t owe the banks a g-damn dime. And most of them can’t prove it, either.
This is well worth the watch.
PR = Public Relations
Could you all please let us know what the initials are at first use at least…. so new to this issue people can follow?
JUDGE SCHACK DOES IT AGAIN! TOSSES OUT US BANK FORECLOSURE!
http://stopforeclosurefraud.com/2010/07/05/judge-schack-does-it-again-tosses-out-us-bank-foreclosure/
ANONYMOUS-
You write “But, Fannie/Freddie, who purchased the loans from the originator, remains the creditor.”
I respectfully disagree. Since the May 2006 settlement with the SEC and OFHEO, Fannie had agreed NOT to purchase loans for its own portfolio. I have reason to believe that the GSE securitization “loans” are purchased not by Fannie, but by an SPV said to be “sponsored by Fannie Mae” (or Freddie Mac). I’ve seen this described in the annual statements of large banks – Just what does “sponsored” mean? Fannie then supposedly “guarantees” the payments to the certificates issued by a “Trust” with Fannie as “Trustee” (?) via the SPV. How did the loans get from the SPV to the “Trust” or did they never get there? As you have asked, does the original purchasing (or table funding) SPV still exist? Who knows.
Ultimately Fannie and Freddie seem simply to be insurors to unknown third party SPV’s. If the SPV is NOT Fannie/Freddie (which it mustn’t be to be bankruptcy remote), then isn’t calling Fannie or Freddie “the creditor” a little like calling your car insurance company “the creditor” for a car loan – instead of the auto loan “lender,” in simplistic terms – since the insurance company would theoretically payoff the loan if the car were totalled? I mean, the money for the loan did not/does not come from the auto insurer any more than the money for a mortgage comes from Fannie or Freddie. Must look to the role of the SPV in GSE securitizations.
I just don’t see the GSE’s actually being “the creditor” – despite what the revered Federal Reserve might say.
As to Fannie’s claims of revenge against strategic defaulters… At present or in future… How would anybody know that Fannie / Freddie are/would be involved in a mortgage loan, except from the tiny form notation at bottom of a mortgage and note? There simply is no other pre-disclosure of a GSE’s involvment. Isn’t this threat by Fannie an admission of an undisclosed pre-arranged joint venture-type relationship between a “lender” and Fannie / Freddie and yet another undisclosed entity, the SPV? (TILA violation?) What does a “Fannie-backed loan” REALLY mean? How can the typical narrative, “Your loan was sold in the secondary market” be true if Fannie, Freddie threaten to “cut-off” future borrowers? I think this recent pre-emptive strike by Fannie is similar to Fannie’s recent indignant objection to the Federal energy improvement assistance program that relies on liens on properties. The GSE’s obviously were/are/intend to be deeply involved in the underwriting and originating of home loans, including predatory home loans, and the “sold in the secondary market” narrative is a smoke screen and a lie.
Now only two or three (government-owned) “mortgage securitizers” exist and are threatening borrowers who were by most measures screwed during the mortgage meltdown and who certainly had no idea that they would be allegedly entering into a business contract with a so-called GSE. With these recent protestations, the GSE’s are sounding more and more like a cartel every day.
I enjoy arguing but I’m not an attorney, so don’t rely on anything above, it’s probably complete bull$%t.
PRETTY SOON PEOPLE WONT HAVE FOOD TO EAT.
WHAT ARE THE BANKS TALKING ABOUT
THESE BANKSTERS ARE PSYCHOPATHS. JUST LIKE MANSON, JIM JONES, PAL POT MILOSOVIC STALIN.
AND GOOD OLD DEUTSCHE BANK AND ADOLF HITLER.
GOD BLESS AMERICA
Dave Krieger, on July 5, 2010 at 8:32 am
YOU made a great point I had forgotten… many underwater CAN’T selll to get out because the housing has devalued so much…. due in a large part to hasty foreclosures and rotten handling of the economy by government.
We chose not to walkaway when we should have because we could not sell for enough to pay off…. so thinking we were around the bend from economic recovery we drained everything….. banks wouldnt’ work with us and we still ended up in foreclosure. NOW WE KNOW the fraud that has happened as w e have fought the wrong procedures to foreclosure and are now fighting the fraud. Even knowing of fraud they refused to come to the table and negotiate and proceeded to the foreclosure hoping we would go away..
When it comes to Fannie and Freddie … the government now claims to own them … does that mean we can sue them for breach of contract and fraud under the Federal Tort Claims Act? Not everyone went FHA, VA or some other guaranteed loan. Many of these loans were conventional, especially the predatory ones. Let’s not lose sight of the fact that strategic default may not hurt conventional lenders at all who made money off of the bailouts and the U.S. taxpayer. The counties got hurt because MERS and its inner circle of charter members (which include Fannie and Freddie) used an electronic wall to hide all of their loan activity from borrowers. I do not feel sorry for Fannie and Freddie. They are part of the problem.
They are the reason counties are struggling to maintain services that recordation fees would help provide. These standardized “smart money” articles are fluff when compared to the real truths soon to come out. People have been shot to death on street corners because they refused to give up a cheeseburger. What kind of reaction will you have when John Q. Public learns what really happened and who caused it?
The origination of the obligation was misrepresented by way of the terms, the conditions, and false appraisals. More than likely the loan was never perfected for Fannie and Freddie to purchase. This government needs to re-think going after the homeowner. These S.O.B.s need to pursue the originators and the appraisers. Better yet a few Senators, Congressman, and the C.E.Os who created this mess. These people are the true culprits. There is no recovery in sight for those who can afford the payment. Thus we are under house arrest in a deflated ghetto. Consequently, we have to either walk away or remain in usury. Again, this government prefers to punish the innocent and set the guilty free.
Just another separate thought here. Fannie Mae/Freddie Mac loans were securitized, but if you have a Fannie/Freddie loan – they are your creditor – not the securitized trust. Why is it that if your mortgage loan was a private issue (non-agency) securitization your creditor is unknown?
The May 2009 TILA Amendment clearly states that security investors in REMIC pass-throughs – are not the creditor. Once whole loans are converted to securities by accounting removal of receivables into an off-balance sheet conduit, the certificates to the trust are, in effect, rights to a pro-rata share of the “pool” of removed receivables. This is the same process for securitization of Fannie/Freddie loans. But, Fannie/Freddie, who purchased the loans from the originator, remains the creditor. It stands to reason that with non-agency paper, the Wall Street banks who purchased the loans from originator, is also your creditor. The TILA Amendment supports this.
As I have said many times, all certificates to a Trust are sold to the security underwriter – who retains certificates for itself – and sells some certificates to other financial institutions. If we follow the securitization path of agency paper – Fannie/Freddie remain the creditor. Stands to reason – the Wall Street bank for non-agency paper – is the creditor.
However, as the NJ case Alina provided states, the focus of standing/real party in interest relies heavily on the right to enforce the note. The NJ case does not discuss “creditor.” Yet, identity of the creditor is mandatory in bankruptcy. This is why, and I am not an attorney, bankruptcy may be a good idea to be used in conjunction with a challenge to foreclosure action – as long as bankruptcy attorney will litigate to force the identity of the creditor.
My point here is that borrowers for agency securitizations have a creditor – Fannie/Freddie, but borrowers for non-agency securitizations are being denied the right in courts to know their current creditor. Instead, foreclosure attorneys focus on a Trust – set up years ago – and now dismantled, to force foreclosure. There is a reason for this – that is to conceal the current creditor. Many things have happened since the Trusts were originally set up – including the possible sale of your loan many times over. Courts should be focusing on today – not the time of the Trust set-up.
Interesting section from Federal Reserve’s opinion on TILA Amendment regarding Ginnie Mae – guarantor of securities – Quote::
“The Board has received a letter from the Department of Housing and Urban Development’s Office of General Counsel, in its capacity as legal counsel for the Government National Mortgage Association (Ginnie Mae),
seeking to clarify Ginnie Mae’s status under Section 404(a) of the 2009 Act. Ginnie Mae guarantees securities that are collateralized by mortgage loans. HUD’s letter states that, as the guarantor of these securities, Ginnie Mae obtains equitable title in the mortgage loans but further states that the issuers of the securities retain legal title to the loans that collateralize the securities. According to HUD, legal title to the loans is not conveyed to Ginnie Mae unless the
issuer of the securities defaults in its obligations. If the securities issuer defaults, Ginnie Mae can immediately extinguish the securities issuer’s interest in the loans and take legal title. Based on HUD’s representations and legal opinion regarding Ginnie Mae’s status, the Board believes that the requirements of Sec. 226.39 do not apply to
Ginnie Mae until it finds the issuer in default and acquires legal title to the loans.”
Isn’t it ironic that the recessions we’ve experienced over the past few decades seem to have a pattern?
“(remember they aren’t adjusting the value of the loans at all) I beg to differ. Our loan went up nearly 15,000.00 in order to get the modification. Technically, the HAMP program skimmed any equity we had on our home. We bought at 85,000 in 2005, and even at that time it was lower than everything else. By 2007, our home was worth 112,000. It has since dropped but ironically our new modified loan is equal to what we are / were worth.
* how can this government expect to get richer when they’re banking on money that no longer exists? The US government needs to wake up and realize the American people will not be able to flip the bill for their frivolous spending. It’s not the American people who caused this crisis in the first place. There will be a loud roar. This is the sound of the American people rising up against the US government and the corruption. 2012 will bring change.. just not the type you were expecting.
How much did this guy get paid to write the article?
$10 bucks or $180,000 a year?
http://foreclosureblues.wordpress.com/
Fannie wants to penalize. My “ARSE”…I have the solution!
When Fannie Mae announced that she was going to start to penalize people who walk away from underwater mortgages it created a fire storm of angry individuals.
She said it would step up efforts to pursue deficiency judgment—seeking to recoup the difference between the loan balance and the net proceeds of the foreclosure sale—against so-called “strategic” defaulters in states where such suits are allowed. Fannie also will lengthen to seven years, from five, the amount of time borrowers who go through a foreclosure must wait before getting a new loan.
So here is my solution, grab a pen and write this down:
* Homes have lost not a little but an enormous amount of it’s value up to 70% in some areas.
* In my opinion it is going to take more than 7 years to see any hope in Real Estate stabilization.
* Who wants to buy today when we read about possibly 8 million shadow foreclosures that will ultimately bring down the market further to dust?
* We the tax payers are the owners so who the hell asked us if this is appropriate? Were any of us invited to this meeting and discuss this? Did we have a say in this like we never do? DISCLOSURES?
* What about the possible millions that were denied a modification from no fault of their own? Oh but the Obama Administration admitted this too…too…too…late 🙁 Who will be responsible for those who were improperly foreclosed on?
* With the taxes and insurance sky rocketing, it only makes sense to rent for a while.
* Deficiency Judgment? Do you realize what this little pot you stir will cause?? Hmmm think about it.
* Credit who wants credit? We don’t even know where our own money is being used.
* Who do we have to contact to foreclose on Your “arse” Fannie??? After all you are owned by us… Do not bite the hand that feeds you!
You see the threat really has no impact.
Trust is earned my friends and we have absolutely none at the moment.
The evil thing here is that instead of going after the true Run A Ways “the banks” who stole the cash you go after the ones who feed you and behind our back you feed them???
http://stopforeclosurefraud.com/2010/06/30/fannie-wants-to-penalize-my-arse-i-have-the-solution/
PS our housing market is not expected to improve for almost 20 years.
I used to agree with you that those that could afford it should not walk away… but now I say WHY NOT>>> of COURSE they should. The banks and government have offered modifications and WHAT A JOKE THAT IS>….. THESE PEOPLE that are not just underwater they are DROWNED and I think it was by design… people were targeted for these loans, The crash was designed and they are smart to get out while they can to protect their assets….They have already spent THOUSANDS AND THOUSANDS and will lose all of that money invested… they will lose the down payment and any money that did go to principle.
IF THEY DON”T – as the market further collapses (remember they aren’t adjusting the value of loans at all) those people COULD end up losing jobs or facing reduced income or tax hikes will kill disposable income makeing it harder to avoid default or draining retirement savings as many of us early fools did. Government and Banks have helped themselves… Banks are making money several ways from one piece of property – I do not feel one bit sorry and encourage everyone to get out while they can. UNLESS AMERICA WAKES UP we are going to be crushed.
Being foreclosed on might have been the best thing to happen to us for the eyeopening we are getting about finance and government.