jumped TFA at "payed"

KrispyKritter: jumped TFA at "payed"

LOL, I didn't notice that.

When I saw the housing market starting to tank, I stopped paying my $3k a month mortgage. That was about five years ago, and the bank has been threatening and fumbling to foreclose for about the last four years. All the while, I've been socking away the $3k a month into a separate account. When the numb nuts at BoA finally get their act together and throw me out, I'll have enough cash saved to buy a decent place outright. I'll live there, let my credit heal and then in five to seven years, I'll sell the new place for profit.

My father thinks this is completely immoral. But hey, the banks took their gambles and lost. Why can't I play too?

spentmiles: When I saw the housing market starting to tank, I stopped paying my $3k a month mortgage. That was about five years ago, and the bank has been threatening and fumbling to foreclose for about the last four years. All the while, I've been socking away the $3k a month into a separate account. When the numb nuts at BoA finally get their act together and throw me out, I'll have enough cash saved to buy a decent place outright. I'll live there, let my credit heal and then in five to seven years, I'll sell the new place for profit.

My father thinks this is completely immoral. But hey, the banks took their gambles and lost. Why can't I play too?

spentmiles: When I saw the housing market starting to tank, I stopped paying my $3k a month mortgage. That was about five years ago, and the bank has been threatening and fumbling to foreclose for about the last four years. All the while, I've been socking away the $3k a month into a separate account. When the numb nuts at BoA finally get their act together and throw me out, I'll have enough cash saved to buy a decent place outright. I'll live there, let my credit heal and then in five to seven years, I'll sell the new place for profit.

My father thinks this is completely immoral. But hey, the banks took their gambles and lost. Why can't I play too?

Ask your father where your inheritance is.

America has now offically turned into Nigeria.

That's what title insurance is for, dumbasses

Jacobin: That's what title insurance is for, dumbasses

The reporter said he did have title insurance but if this is as huge as he is saying how long before the title insurance companies go under.

StoPPeRmobile: Ask your father where your inheritance is.

Oh it's just spentmiles, he thrives on this kind of trolling. He's somewhat endearing at this point. Like old man who yells at cloud but for the lulz.

So buying a foreclosure without first conducting a title search has stopped being stupid and is now a fraud? If you can't get clear title, you don't buy. And even if you do get clear title, you still buy title insurance.

I am still trying to understand the rules behind this whole thing (being Canadian and all, and having no frame of reference for US laws).

How in the world can this be allowed to happen at this level and length. What the Fark? This whole thing seems totally bizarre and impossible!

/Yes I do own a house, and no I don't have a mortgage, but still? I have never heard of this sort of stuff up north of the border?

JackieRabbit: So buying a foreclosure without first conducting a title search has stopped being stupid and is now a fraud? If you can't get clear title, you don't buy. And even if you do get clear title, you still buy title insurance.

If he searched out the title while purchasing this house it would've been legit. What's going to snare it in legal limbo is that the company that signed off on the foreclosure paperwork turned out to be a robo-signer, discovered to have been signed suspiciously, and that this title was probably flagged after the fact.

spentmiles: When I saw the housing market starting to tank, I stopped paying my $3k a month mortgage. That was about five years ago, and the bank has been threatening and fumbling to foreclose for about the last four years. All the while, I've been socking away the $3k a month into a separate account. When the numb nuts at BoA finally get their act together and throw me out, I'll have enough cash saved to buy a decent place outright. I'll live there, let my credit heal and then in five to seven years, I'll sell the new place for profit.

My father thinks this is completely immoral. But hey, the banks took their gambles and lost. Why can't I play too?

After they forclose on you and sell your house, they might figure that it would be worth it to go after you for the difference. It's rare, but possible.

GBB: spentmiles: When I saw the housing market starting to tank, I stopped paying my $3k a month mortgage. That was about five years ago, and the bank has been threatening and fumbling to foreclose for about the last four years. All the while, I've been socking away the $3k a month into a separate account. When the numb nuts at BoA finally get their act together and throw me out, I'll have enough cash saved to buy a decent place outright. I'll live there, let my credit heal and then in five to seven years, I'll sell the new place for profit.

My father thinks this is completely immoral. But hey, the banks took their gambles and lost. Why can't I play too?

After they forclose on you and sell your house, they might figure that it would be worth it to go after you for the difference. It's rare, but possible.

Come at me, BroOfA.

KatjaMouse: JackieRabbit: So buying a foreclosure without first conducting a title search has stopped being stupid and is now a fraud? If you can't get clear title, you don't buy. And even if you do get clear title, you still buy title insurance.

If he searched out the title while purchasing this house it would've been legit. What's going to snare it in legal limbo is that the company that signed off on the foreclosure paperwork turned out to be a robo-signer, discovered to have been signed suspiciously, and that this title was probably flagged after the fact.

Yes, but robo-signing doesn't effect chain of title. Chain of title problems arise when mortgages are bundled up into investment instruments and sold. The security deed or other lien instrument shows that the originator of the mortgage holds the lien on the title, but they no longer have a legal right to do so. The unknown owners of the investment instruments are the ones who have the legal right. And, because they cannot be identified, the chain of title is broken. This can be a legal mess, but the court can be petitioned to dismiss any claim of security interest resulting from it. In other words, the investors lose and would have to go after the people who bundled the mortgages.

The problem with robo-signing is that if the foreclosure paperwork is defective, the foreclosure can be declared null and title reverts back to the owner who was foreclosed. That's bad for the new owner, obviously.

So, what I'm seeing is that the "investigative reporter" is confusing two completely different problems, neither of which is necessarily fraud. Yet both problems are so serious that they threaten to utterly destroy the real estate industry. If homeowners start challenging foreclosures because of broken chains of title and the judges rule in their favor, the mortgage and all claims of title are dismissed and the mortgage nullified. The homeowner walks away with full title and no mortgage payment. This very real possibility is scaring the hell out of both mortgage bankers and real estate brokers. It's scaring the Fed, too, since if the housing market completely collapses, the entire economy will go with it.

JackieRabbit: KatjaMouse: JackieRabbit: So buying a foreclosure without first conducting a title search has stopped being stupid and is now a fraud? If you can't get clear title, you don't buy. And even if you do get clear title, you still buy title insurance.

If he searched out the title while purchasing this house it would've been legit. What's going to snare it in legal limbo is that the company that signed off on the foreclosure paperwork turned out to be a robo-signer, discovered to have been signed suspiciously, and that this title was probably flagged after the fact.

Yes, but robo-signing doesn't effect chain of title. Chain of title problems arise when mortgages are bundled up into investment instruments and sold. The security deed or other lien instrument shows that the originator of the mortgage holds the lien on the title, but they no longer have a legal right to do so. The unknown owners of the investment instruments are the ones who have the legal right. And, because they cannot be identified, the chain of title is broken. This can be a legal mess, but the court can be petitioned to dismiss any claim of security interest resulting from it. In other words, the investors lose and would have to go after the people who bundled the mortgages.

The problem with robo-signing is that if the foreclosure paperwork is defective, the foreclosure can be declared null and title reverts back to the owner who was foreclosed. That's bad for the new owner, obviously.

So, what I'm seeing is that the "investigative reporter" is confusing two completely different problems, neither of which is necessarily fraud. Yet both problems are so serious that they threaten to utterly destroy the real estate industry. If homeowners start challenging foreclosures because of broken chains of title and the judges rule in their favor, the mortgage and all claims of title are dismissed and the mortgage nullified. The homeowner walks away with full title and no mortgage payment. This very real possibility is scaring the hell out of both mortgage bankers and real estate brokers. It's scaring the Fed, too, since if the housing market completely collapses, the entire economy will go with it.

Like that will happen.

The headline really doesn't make sense. SUBBY FAILS

Wait.... people are reading this article after it mentioned the topless reporter? (new window)

pag1107: Wouldn't your title insurance cover this?

Yes it would.

Title insurance is mandatory when you use a mortgage to purchase a home, so most people have it. It is optional for cash buyers, but you'd be an idiot not to get it when there isn't an absolutely clear title on the property. I wouldn't buy a house or parcel of land without it.


GBB: After they forclose on you and sell your house, they might figure that it would be worth it to go after you for the difference. It's rare, but possible.

Some states are non-recourse states. If the home is your primary residence, the mortgage holders are generally prohibited from coming after you for the remaining principle on your loan. The most they can do is refuse to allow a short sale and instead foreclose as quickly as possible. Foreclosures have a larger impact on your credit and ability to get a mortgage in the future than a short-sale.

Even in a recourse state, some mortgage holders will write off the debt because the amount is too small or they know you're so flat broke that any attempt to collect would simply drive you into bankruptcy. But that is usually more the exception than the rule.


spentmiles: My father thinks this is completely immoral. But hey, the banks took their gambles and lost. Why can't I play too?

Does he find the idea of a strategic foreclosure or short-sale immoral, or the fact that you're continuing to occupy the home while the bank files paperwork to evict?

I personally have no problem with strategic foreclosures. The mortgage contract that you entered into with the bank had a clearly defined exit clause, including the penalties that such an exit would include. You're not breaking any laws. And while they were rare for people before the housing meltdown, they were fairly common in the commercial market. In fact, the threat of a default is a common tactic when trying to renegotiate new terms for commercial real estate.

I can see how many people would frown upon occupancy of a home when you're in default. But as long as you're taking care of the house, you're keeping the property from turning into a blight. Try driving through some of the exurbs here in Phoenix where every 6th house is bank owned. The neighborhoods have gone to shiat. You think the banks are going to pay for landscaping crews to come by and take care of the weeds?

maddogdelta: Wait.... people are reading this article after it mentioned the topless reporter? (new window)

since the reporter's name is PAUL, I kept reading

StoPPeRmobile: Like that will happen.

It's a very real possibility. So real that the Fed has had special meetings about it. Several banks already have stopped making mortgages on all but a few very carefully scrutinized properties.

I know this is a problem because I ran up against it last year, when buying a foreclosure. I was a week away from closing and we were waiting on the title search. The search attorney found that the bank (Countrywide) that had made the mortgage on the property to the owner that sold the property to the owners who had been foreclosed had never filed a release of the security deed during that transaction. BofA made the new mortgage at about the same time they bought Countrywide. In the confusion, many of Countrywide's records were misplaced, including all the paperwork on the original mortgage. BofA said they didn't have a mortgage on the property and had turned everything over to Freddie Mac after the foreclosure was complete. But an unreleased security deed was on file and that meant that the chain of custody was defective. My transaction could not go forward. Luckily my bank extended the time needed to resolve the issue. BofA told me to fark off, since as far as they were concerned the matter was closed. Freddie Mac was clueless about what to do, even though it meant that they'd be stuck with the property forever. So I hired an attorney who tracked down the attorney who did the original closing. He had records of a successful wire transfer from Countrywide to BofA paying off the original mortgage. Legally, this was enough and he filed a Attorney's Affidavit with the courthouse that the security deed had been satisfied. This released the deed and repaired the chain of title and my bank closed. But other banks aren't doing this. If a defect is found in the title, they simply withdraw their offer to make the mortgage and walk away. This is happening to a lot of people.