This is all just a little bit over my head. I think mainly because I'm getting bits and pieces. Is the jist of it that these banks are not going through proper due process in the foreclosure? and therefore, these homes have been illegally seized and resold? or is that another story I am getting a whiff of and this is something else? Bottom line, I am thoroughly confused and want to know what this means... not just in business, but to me as a homeowner, and potential purchaser of a home in short sale or foreclosure.
There is no one simple answer. This is a spider web of systemic fraud which has gone on since....well, 1913 when the FED was established, to 1999 when the Glass-Steagall Act was repealed (Glass Steagall prohibited banks, investment banks and insurance companies from combining. Ooops! Now they're too big too fail.) by Phil Gramm of TX.
All that set the stage for "easy credit ripoffs...Good Times". But to your point, the mortgage lenders thought they would save a relative few pennies by forming a Delaware Corp. to electronically register titles, because there are title fees every time a note changes hands. They needed a way to circumvent those so they could chop up all these "liar loans" and repackage them Grade AAA rated investments multiple times without paying fees. This is MERS (Mortgage Electronic Registration System).
MERS changed the need to keep a hand signed wet-inked note into a fee-free electronic one. The problem is, the banks shredded the originals and if asked cannot produce them. That's a problem because it makes the loan agreement null and void per their own fine print.
This doesn't mean free houses but it does mean lawsuits galore from title insurance companies, evicted homeowners and any note holder who cares enough to ask...
SHOW ME THE NOTE!
Gonzalo Lira On What Brian and Ilsa Said To Their Bank: ?Show Me The Note? | zero hedge
This Is What Brian and Ilsa Said To Their Bank: ?Show Me The Note?
So the week before last,
I wrote about Brian and Ilsa, a retired couple in their mid-to-late sixties, living in a house in the Southwest that had?unremarkably?gone underwater.
They had tried to refinance their home mortgage, under the auspices of the HAMP, the Home Affordable Modification Program. HAMP was part of the Financial Stability Act of 2009?the famed ?Stimulus Package?.
Under this program, the principal of Brian and Ilsa?s mortgage loan would remain the same?they would not be getting a free ride. (Some readers mistakenly thought that they would. See note at bottom.)
But though the principal of their mortgage loan would remain the same, the period of their mortgage would be extended?and the loan itself would be refinanced with a lowered mortgage rate of 2.75%, from the 6.25% of the original mortgage.
Therefore, their monthly payments would go down roughly 40%?a significant amount for them, especially after their retirement savings had taken a big hit following the Global Financial Crisis.
What had been dreadful about Brian and Ilsa?s case was that, though they qualified for HAMP?and indeed, HAMP had contacted them, at least initially?they were given the bureaucratic runaround for several months, before they were finally allowed into the program.
And then, three months after their mortgage had been lowered, with no warning, they were told that they in fact did not qualify?even though the program fit them like a glove.......
.....Last Monday, October 4, after I had finished interviewing them and was busy writing my original post on the pair, Brian mulled over what I had told him about chain-of-title and the Mortgage Mess?I can just see him, head lowered, looking up: The epitome of the Kubrick Stare.
Brian dashed off an e-mail to his bank that night?a quick post, where he explicitly said, ?I want to see the loan note where it says I owe you money, or else I?m contacting my lawyer and halting payment on my mortgage.?
The very next day, someone from Wells Fargo called them.
Not a machine, not a customer service rep in India?an actual, honest-to-God, alive-and-kicking bank executive.
She apologized profusely about the HAMP screw up?said that Brian and Ilsa qualified, they qualified, they qualified!, and that she would be the one to ?straighten out their situation?.
Brian and Ilsa couldn?t talk that Tuesday, when the bank executive called. And for various reasons, they couldn?t talk Wednesday either?they finally talked to the bank executive on Thursday . . .
. . . and during those three days, it was the executive who chased them: Two e-mails to their AOL account, two phone calls on their answering machine.
On Thursday, when they spoke, the bank executive was sweetness and light?she told them that Ilsa and Brian qualified for HAMP, that they would get refinanced, that they would not have to pay the difference in mortgage of the last three months??Your lower mortgage rate is locked in!?
And as to the $84 penalty fee, which had driven Brian in particular up the wall: It was waived.
Ilsa told me, ?It was the nicest conversation we?ve ever had with a bank executive.?
The executive promised to have the papers drawn up, ready to be signed before November 1.
That?s right: November first. After dicking them around for months on end, Wells Fargo all of a sudden went from turtle-speed to light-speed?to warp-speed?boom!?just like that. They didn?t even engage thrusters, Captain?it was warp drive the instant Brian e-mailed that threat.
Threat?, you say. What threat was that?
The threat Brian laid down, in the e-mail he sent Monday night:
Show me the note, mother****er!
That threat.
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I'm still a novice at understanding all this because it isn't skin deep. This thing cuts to the core of our country. Moving the power from the people to the banks. We are indebted servants with just enough shiny things to keep us occupied.
I don't cheer on hard times. I am a proponent of justice. And what's more, I would rather deal with it by taking one swift kick in the nuts over a slap in the face every day of my life. Bring it on so we can make it right.
I recommend reading Zero Hedge articles and just as important, the comments. A lot of smart smart people on there.
http://www.zerohedge.com/
Forgot one more...
http://market-ticker.org/
Read those two sites for cut-to-the-chase market truth. Yes, it's heady complicated stuff, but that's what keeps us in the dark. Time to light up the dark.
