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EDITOR’S NOTE: This Reuters report is no news to many who are trying to sell a home. Buyers are scarce and when they show up they low-ball their offers because the realtors are confessing that it is possible — even probable — that a house being sold today for $300,000 might not fetch a gross of $275,000 this time next year.

So Sellers are contending with nick-picking. Buyers are doing inspections and other things and finding what they can to demand lowing the price the price below the contract amount. And of course there is the title problem. How can the Buyer get clear title when there is or was a loan on the property that was subject to a securitization claim? Whose to know if the right party is properly representing itself as the creditor or servicer for the creditor in the absence of a chain of documents establishing that fact?

The facts are clear: title is at best clouded and at worst incurably defective. Based upon interviews with people in the title industry whose living depends upon making a correct assessment of the status of title, along with my own analysis, my opinion is that out of the 6 million foreclosures processed so far in this mortgage mess, 99% are fatally defective. That same figure should be applied without foreclosure if there was a loan in the chain of title that was or is subject to a claim of securitization.

It all comes down to the comment of a Hedge fund manager I was speaking with some months back. He said that he and his colleagues would leap at the chance to bet against the validity of the mortgages if such a vehicle existed. The marketplace has decided: there is a growing demand for documentation and other instruments that will hedge against the probability that title is clear and a growing demand for a hedge instrument that presumes that title is completely messed up, courtesy of the Banks.

American Homeowners Cooperative is working on an answer — a vehicle that will provide either cash to those who have given up the fight or a level playing field for those who want to modify their mortgages regardless of whether they are behind in payments. But more on that later.

The main point is that without stopping these foreclosures and without restoring clear title on the foreclosures that have already been improperly processed, there won’t be a solution to the housing market, the mortgage mess or the prospects for economic recovery. The same analysis applies to al the other homes that have or think they have mortgages and payments due where the homeowners is dutifully paying monthly. The cold reality is that they could be foreclosed anyway, as we have already seen, and that when it comes time to sell, they won’t be able to give a warranty deed without exposing themselves to enormous liability that title insurance won’t cover.

This enormous problem is dragging down the entire economy, employment prospects the value of our currency and making our prospects bleak at best. The current obstacle to a resolution is (1) the banks and servicers that pretend to serve as middlemen for investors and borrowers while they screw both sides and (2) the ignorance of cooperation (or both) of government that refuses to accept the reality and thus permits continuing losses to pile up for investors who advanced the money in the first place and borrowers who borrowed it under false pretenses of Banks who hid the real terms of the transaction from both investors and borrowers.

September pending home sales down for third month

A real estate for sale sign is displayed outside a home in Chandler Heights, Arizona June 2, 2011. REUTERS/Joshua Lott

WASHINGTON | Thu Oct 27, 2011 10:02am EDT

(Reuters) – Pending sales of existing U.S. homes dropped for a third successive month during September, a real estate industry group reported on Thursday, though a sales index was above year-ago levels.

The National Association of Realtors (NAR) Pending Home Sales Index, based on contracts signed in September, was down 4.6 percent to 84.5.

Economists polled by Reuters ahead of the report were expecting sales to edge up 0.1 percent rather than to decline.

Lawrence Yun, the NAR’s chief economist, noted the index was still above its level in September 2010 of 79.4 but said the housing market was constrained by numerous factors.

“A combination of weak consumer confidence and continuing tight lending criteria held back home buyers, even though the private sector added nearly two million net new jobs in the past 12 months,” Yun said.

Pending home sales in September fell in every region of the country from August levels.

(Reporting by Glenn Somerville, Editing by Andrea Ricci)

8 Responses

  1. @All of you,

    I am in full agreement! Why modify something that doesn’t exist? The only way I would ever consider it is if I had the uncontestable proof that i am sitting across from the person(s) having shelled out the money for my loan. And even then, I would negotiate the living life out of that modification: banks screwed up because investors wanted more, more, more! But for investors’ greed, banks would not have found anyone to sign up for their too-good-to-be-true deals. The interests investors were getting on their 401K, their stocks, their investments were never, ever enough. Greed from A 2 Z.

    It’s called speculation: they gambled on products they knew nothing about and never questioned the insanely high and quick returns they were getting, in complete defiance of all good common sense and . I am earning less than half of what I earned 5 years ago while working twice as hard and i never speculated.

    We’re all in the same boat. We all have got to take a loss until things get better. Right now, what i know is that the bank enriched itself and a slew of people got insanely wealthy. I will do everything to see mine eat the loss.

  2. A modified LIE it’s still a lie, a modified FRAUD it is still and always will be FRAUD…….


    We had such high hopes for you…oh well…it was good while it lasted…

  4. I’m open to signing new documents, but ONLY if…1) 80% of Fair Market Value and 2-3% interest. 2) No waiver of my future legal rights and standard terms – no funny business. 3) NO MERS! 4) No securitization. 5) The people who give me this deal take FULL RESPONSIBILITY for any title problems.

    I’d be leery even then – even if they agreed to take full responsibility, what if they go out of business and future claims arise?

  5. Modifing a mortgage is only saying to the Bankster “steal a little less from me”

  6. Amen, E Tolle…

  7. American Homeowners Cooperative is working on an answer — a vehicle that will provide either cash to those who have given up the fight or a level playing field for those who want to modify their mortgages

    This may look logical at first glance, but on closer inspection, it is in reality simply more predatory behavior heaped upon a populace that’s already been beaten senseless by Wall Street tactics. Not only is it not at all helpful towards the beleaguered borrowers it pretends to aid, I’d actually toss it in with other reprehensible fixes that go nowhere. Neil, why are you proffering this?

    The “vehicle that will provide cash” is simply those that “have” taking the last remaining assets from those that “have not”, or that are about to have not due to a rigged system that caused all of the problems to begin with. Of course the argument can be made that these people are “giving up the fight” and that that fact makes it alright, as they’re going to lose everything anyway. That doesn’t pass closer scrutiny for a number of reasons. For one thing, it’s somewhat akin to emptying the pockets of a poor soul who’s been beaten senseless and left for dead by the side of the road. She’s not going to need those items anymore, so what’s the harm?

    This tactic also removes the right of redress down the road if in fact these issues get sorted out against this maniacal system and in favor of borrowers who have been harmed. If in fact you’ve been legally parted from any claims for a small sum, you’re officially screwed, right?

    The last point is possibly the one I find most disturbing coming from Living Lies. After reading this site for the better part of three years now, and learning an awful lot from Neil and the contributors herein, I have to admit to being totally dumbfounded by any suggestion of modifying a mortgage. Neil’s own admission in the setup for this piece states that 99% of mortgages are infected with fraud. How could anyone condone modifying the very fraud that eats away at the same social disintegration Neil has written so eloquently about on so many previous occasions? I’ve asked this question on this site for over three years running….how does one modify fraud?

    I would like to be proven wrong on my assumptions here. Please do.

  8. Money money money moneeeee! Moneeeee!

    Yes sireee. American homeowners cooperative to the rescue. How noble. How high-minded. How lucrative….

    Livinglies morphing into the savior of the US economy. Truly mind boggling in it’s audacity

    Takes a wall attested to beat a wall streeter

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