Much has been said and written about various scams involving bid-rigging. That’s where the parties involved agree to not bid against each other in exchange for getting title to the foreclosed property at a low price. It’s illegal. It’s a violation of the Sherman Antitrust Act. And if anyone other than an investment bank does it, they are likely to go to jail. But if you are an investment bank and you do it, but not directly in your name, nobody goes to jail. And that, in my opinion, is the problem.
Nobody asks how such schemes are even possible. To ask would be to question the viability of the foreclosure process itself. If there was a real creditor with a real stake the process bid-rigging scams would be virtually nonexistent because the only rational motivation of true creditor would be to get the highest possible price for the property — not the lowest.
But the other question is why the DOJ does not delve into whether the foreclosure was a scam. In my opinion, the answer is a conclusive yes. The absence of a real creditor in the foreclosure means that the foreclosure action is a scam. And the presumption that somehow, somewhere a real creditor is going to get the money is just wishful thinking based on neither any allegation of a foreclosure mill nor any evidence of that.
As a constitutional issue courts don’t have the power, right or authority to accept a virtual creditor in lieu of a real creditor in foreclosure cases. That is because the legislature has banned that practice.
The legislature of each state banned that idea by requiring that, as a condition precedent to the enforcement of a security instrument (mortgage). the claimant must have paid value in exchange for legal ownership of the underlying obligation. See UCC 9-203 adopted verbatim in all U.S. jurisdictions.
In plain language, the legislature has spoken and only the legislature can change that. One of the reasons the legislature did that is to avoid bid-rigging.
Filed under: foreclosure |
Correct again Neil. And the politicians? What are they sleeping — or being paid for prime time talk shows? They don’t care. A) They know and ignore B) They don’t care C) They are idiots. D) All of the above. I pick D.