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yikes indeed
what a piece of trash
...And then you stop paying the mortgage; after all, it's not in your name anyway.
Thirst?
You go grrrl, Tanta. Another exquisite read.
(Isn't anyone just a broker anymore?)
The sanitary engineers came by this morning to pick up my alimentary byproducts.
dude where's my media
Business as usual.
Is he saying that most mortgages AREN'T callable upon sale?
Ben Jones has a foreclosure blog with links to various states laws which may be helpful,you can link to it from HBB.I would expect a story like this from USA today one of those days that the Editor is at the golf course ( I understand he is a part time contract employee)
Wow, Tanta, what a nasty rant for so early in the morning.
First, if you really wanted to know more about Certified Mortgage Planers, it isn't that hard to do.
Certified Mortgage Planner - Wikipedia, the free encyclopedia
In about 60 seconds, you would learn that the field of mortgage planning arose to alert consumers to the fact that mortgage brokers are agents, not fiduciaries or advisors.
Really, it seems you are advocating that underwater home-owners NOT seek out help or counseling to try to arrange short sales with their lenders, in lieu of just mailing in the keys. Is that so?
If you think they should seek such counseling, at least to learn their options, where do you think they should start? Whom should they call?
Ghostbusters?
I don't understand your obsession.
When did you finally realize that MSM (yes, that includes the NYT) regularly publishes poorly-written articles with misinformation?
Just recently? Please.
As for the gist of the story, it's correct, many so-called well-off are going to be stuck. Why do you expect scientific journal accuracy and textbook ready quality from a rag?
You really should start considering valium.
So, rich, are you telling us you're a "certified mortgage planner"?
Is he saying that most mortgages AREN'T callable upon sale?
Well . . . no. That's where the "you don't tell the lender" part comes in.
Tanta, they're just setting up the next report in a continuing series:
Homeowners Stunned By Lawsuits After Following Reporter's Advice
Geez, Tanta, why do you feel the need to ruin a perfectly good "story" with facts, laws, consequences, etc.
You start doing that and pretty soon the entire edifice of the media will come crashing down. Let's deal with one collapsing economic segment at time if we can, OK?
"It really is that simple. The seller moves out. You settle at the lawyer's office. Nobody tells the lender anything. You start making the payments."
Let's also think what kind of lawyer could be on the seller's side to advocate this? It's the moral equivalent of a seller co-signing a mortgage for some buyer. The seller just gave away the house without changing his/her own liability.
And yet someone could get away with this crap. There are a lot of weasels capable of it.
Transferring the deed without telling the mortgage company?
Wouldn't they notice when the payments come in someone else's name?
As for the gist of the story, it's correct,
Including the "gist" that anybody in a non-judicial foreclosure state can just walk away from their mortgage without recourse?
Or the "gist" that you can assume a non-assumable mortgage?
Or the "gist" that lenders routinely approve short sales that a relitter says are "fair?"
Or the "gist" that says borrowers had, quote, "the best intentions, [but] life job losses, divorces, deaths changed their financial circumstances?"
Which gist, exactly?
Rich people are stupid?
obody knew. nobody.
Keep it up guys...
Tanta still hasn't delivered the second part of that RESPA post. She still needs reasons to hate us.
Besides, stories like these sell papers. You sell hope to those who've screwed themselves and righteous indignation to those who didn't.
I mean really, it's not like some blogger from Podunk calling them on the carpet is going to make a difference.
...a Los Angeles real estate consultant [...] the ARM she took on her $1.5 million home. The introductory rate was 7.9 percent for two years and payments were $6,541.
I take it her credit was already crappy to be paying such a high teaser? Or were jumbos that much higher than conforming?
The thing that got me about the article was how several of the "victims" were RE Agents (LOL "consultant"). Whocoodanode, indeed.
Transferring the deed without telling the mortgage company?
Wouldn't they notice when the payments come in someone else's name?
Not if the "buyer" doesn't plan on making mortgage payments!
Look, this "Geller" is just recommending an old fraud: you convince some desperate person that you are "assuming" their loan, but all you're doing is trying to get them to deed the house to you. You then don't make any payments.
It won't work forever--the lender will eventually start foreclosure against the original owner, who will tell the lender that the title transferred.
The point of this scam was always not to occupy the property, but to refinance it and run with the cash or sell it again to a sucker between the time the deed transferred and the time the lender caught on. Geller seems to think that you could just get that desperate former owner to keep making mortgage payments for five years after having "sold" the house to you. Right.
If you paid the seller a fair price, the seller could retire the mortgage. The only way this scam works is you "paid" the seller a few grand to sign over the title, thinking that the loan was being assumed. And there's no way that will work out if you then refuse to make the guy's mortgage payments for five years.
I just can't figure out why rich's blood didn't curdle over this calm recommendation to defraud and squeeze some poor desperate owner. This is the kind of thing Vinny the Loan Shark would suggest.
I love the term "real estate consultant." It is so comical it actually causes me chest pains from laughing so hard every time I hear somebody refer to themselves as such. There is a real estate agent in Arlington, VA, with a blog who specializes in condos and refers to himself as a RE consultant. And of course he insists that condo prices around here aren't coming crashing down...excellent consulting work on his part. Personally I find that the waste management consultant that magically makes my trash disappear is about 100X more valuable than a "RE consultant."
In theory, oughtn't the servicer notice when the pmt starts coming from someone else every month? I assume from Tanta's sketches of how servicers achieved economies of scale that nothing would happen practice. But in theory?
Thank you Tanta. Nice piece.
Acerbic.
The assumption that $100K annual income is "affluent" deserves a chuckle. Are there even any major cities left where that "affluent" income will buy a median priced SFH?
Amazing.
Ralph, read it again:
Many sellers will want you to pay off the loan. Of course they will. But they are motivated, remember? So you tell them that you aren't going to do that just yet. When will you? Maybe in a year or three. Maybe in five years. A motivated seller can be convinced to sell to you because they are relieved that someone else is stepping into their shoes.
There aren't going to be any payments made by someone else.
And if the seller is this motivated enough, tell 'em to throw in one of their credit cards, too. Sure, I'll make the payments on time.
The conceptual problem here is you see something like this in the paper, and because you understand the issues, you call BS. And yet you assume that they're not similarly correct(ok, totally screwed up) about pretty much anything else. As Bo Pilgrim used to say, It's a mind boggling thing.
I always trust people important enough to have websites named after them.
RHONDAPORTER.COM
Vinny the Loan Shark would suggest that you refer to him as a Distressed Lending Broker.
Thank you. You know if you dont' pay, things get broken. Just saying.
Thanks for that explanation, Tanta.
Obviously Ralph and I would be very skinny, malnourished criminals.
(I thought it was just some dodge to avoid closing costs.) Never occurred to me that the poor shlub who signed over the title was still on the hook for the mortgage.)
Great post Tanta. This sort of thing drives me nuts; does absolutely NO ONE in the media take time to do even cursory fact-checking on what they're reporting on?
I think Dirt Now has better sources than the NYT.
First of all, I really want to know what a "certified mortgage planning specialist" is. As a certified mortgage nonsense detector, I call BS.
Well, here's her site.
The Mortgage Porter
Rhonda also blogs on Rain City Guide
I'm still lost about this whole title sign-over thing. If you don't plan on moving in, you don't get free rent. If you try to refi, doesn't the new lender see the lien and pay the new loan in trust to a lawyer to ensure the old loan gets paid off? If the vendor had equity for you to take out, presumably you'd have to pay him for it. If the old note holder moves to FC, does the deed transfer prevent that? The lien's against the property, not the vendor.
Thanks Tanta, I've been wondering about that CMPS designation too. Check out The CMPS Institute - Empowering Mortgage & Financial Planning Industries looks like an originator who's pipeline was drying up and got wise to setting up a certification for originators/LO's. I believe it's now endorsed strongly by Barry Habib, Sue Woodard, and the CTX crew. And not endorsed by National MBA. Hmmmm.
As a certified mortgage nonsense detector, I call BS.
not sure bear stearns will be able to help you out there...they don't seem to be too skilled at detecting mortgage nonsense.
In most states people sign two loan documents. One puts a lien on the house for the value of the mortgage. The other is a loan contract between the borrower and lender. Some of these loans can be transferred, but it not common today.
If someone presents you a house in exchange for making his or her mortgage payments AND there is a change in title, the bank likely has every right to call the loan today. After all, the loan contract was probably violated and the lien ignored. In court, the previous owner might even be able to claim there was NOT a clean transfer of title...
Aw c'mon folks,fact checking is like,SOOOO 20th century.
Research? Why bother? If it was searched once, why do it again?
Tanta,
In my state (Alabama), foreclosure laws haven't changed substantially(except in allowing non-judicial foreclosures in 1986) since well before the Depression. Although the bankers recently tried to shorten the statutory period of redemption from one year to six months, they so far have failed.
Every conforming loan (and almost all loans these days are conforming) I close has a due on sale clause. It would be a huge fraud if the lawyer didn't point that out, no matter who he happened to represent in the transaction.
Neither are we a non-recourse state, so there are really three potential remedies--foreclosure, suing on the note, or foreclosure followed by a deficiency lawsuit. There is no requirement to choose one over the other.
That said, many folks do just walk away. It is very difficult to collect a judgment on someone that has left their last known residence for parts unknown, and so the reality is that market here probably acts more like a non-recourse state than not.
My fav is the "sample interview questions" he provides the media with on his press page:
Book Richard for your radio or television show
At this point, Times ought to at least clarify whether Geller and his anonymous homebuyer aren't the same perso
I'm still lost about this whole title sign-over thing.
Of course you are. You're smarter than a Times reporter.
Start at the beginning: you are looking for a "motivated seller." In other words, you're looking for someone in financial distress who can't sell legitimately because he's upside down.
You offer to do an "illegal assumption" by taking over title, but not having the loan formally assumed (that is, not going to the lender and having the lender approve you and process the paperwork to put the loan in your name).
Why would anyone want to assume an upside down mortgage?
No one would.
So Mr. Seller thinks he's out: you have taken the title to the house and you've said you'll make the payments.
Geller claims Mr. Buyer is getting "the mortgage interest deduction." Oh? How does that work? If the loan isn't in your name, you don't get the 1098.
You have to get to the next paragraph to see what's going on: the idea is that you tell desperate Mr. Seller that you will pay off that mortgage, but then you refuse to. Mr. Seller is screwed (or he's supposed to believe he is): he doesn't own the house anymore, but he's still forced to make payments or face foreclosure.
In fact, Mr. Seller is screwed because he'll have to get a lawyer to straighten this out--assuming he's innocent--but he can get title back if he proves Mr. Buyer defrauded it out of him.
Likely, of course, Mr. Seller is one of Mr. Geller's alter-egos. I didn't download the Top Secret Plan of Success, but I'd guess that it has something to do with the idea of a "round robin."
In any case, this scam, as I said, isn't perpetrated by people looking for a house to live in. It's perpetrated by people looking to flip the house quickly to a new buyer (and pocketing the cash) before the bank catches on. That requires a corrupt title company employee, but something tells me Mr. Geller knows where those can be found.
Or else it's a scam perpetrated by Mr. Seller: getting you to pay him $10,000 for title you think you'll have, and sticking you with having to make ridiculous mortgage payments in order to keep it.
Mike2 writes:
The assumption that $100K annual income is "affluent" deserves a chuckle. Are there even any major cities left where that "affluent" income will buy a median priced SFH?
dunno if Jacksonville actually counts, population-wise it's a "big" city, but it's not very dense...but 100k will buy some pretty decent housing right now...
hahah. here's another one of his sites:
http://www.quicklawsuitmoney.org/
his co is:
Calworth Glenford LLC
We are all NYT reporters now.
Another great piece, keep it up.
Keep it coming, Tanta.
Couple more paragrafs and i'l haves me a nue bidnez plane.
I can't speak to Rhonda Porter's certifications as a "mortgage planner", but I can say that she seems to be one of the more down-to-earth mortgage brokers I've seen in the blog-o-sphere. The recommendations she gives on raincityguide.com aren't completely off-base, and she even banters with the doom-and-gloomers (like me) at seattlebubble.com.
When I do finally decide to buy another house (in a few years) I might very well look her up.
Tanta usually I dont take as much offense of shotty journalism as you do but this whole piece is borderline criminal...
For once I to am outraged... The scary thing is everyone and their brother is now advocating walking way... They dont seem to understand what could really happen... Its just "cool" to talk about it now... Its kinda like communism when you're 16... A great idea till you grow old enough to get your head out of your $#%....
Be gentle with dear Rhonda Porter. She and her cohort manning the industry blogs here in Seattle believe strongly in their own virtue and public-mindedness. Comeuppances can be so rough.
My oh my!
With the Kristol's affair in the NYT
http://www.msnbc.msn.com/id/21134540/vp/23640435#23682026
there goes a 2nd embarrassing strike against NYT editors.
Unreal how fast the kwality has gone down out there.
from RGE... some of the posts are gut wrenching
I am so damn sick of this. Since summer nothing but bad news every freaking day. and yet, most of America is blind to this. All they see is their gas and food prices go up. If Nuriel is right (and I dont doubt it) there wont be lines at the banks waiting to withdraw money, there will be looting and anarchy. Our local branch of America has 3 ladies working in it. They will be toast when the masses come crashing through the door.... We will be witnessing insanity, national guard in the streets and god knows what else. Now I know why my friend and his wife are moving to Costa Rica. I wish I had the money to do the same. I am beginning to get real scared. scared and sick. Thanks George, Cheney, greenspan , Paulson et al. Good job.
here is another post.
I thought I was the only one feeling this way. Welcome compadre'. I have lost much weight since the summer, am probably going to lose my job/career in the coming months, can't sell my house to move into an apartment and have had to use my retirement money for medical issues/ payments. If things go the way they seem to, I and my family will have to move in with relatives, etc. because we will be homeless. Every night i ask my wife if she found a miracle that day. No miracles. I wish I was in a nursing home with dimentia so I wouldnt be experiecing the daily pain that I now am. My wife is the pillar, but she is cracking under the stress,also. I can go on. Once an executive, soon to be a bum. I surmise we aren't the only ones out there.
This reminds me of a hand-lettered sign I saw on a freeway off-ramp to where I live.
"For sale 4 BR 2 BA House Castlerock Owner Financed - No Credit Check"
Castlerock, Colorado is a community about 20 miles away in what was a high growth area (Douglas County) with many McMansions. Since this place has only 2 baths, I am thinking it is an older home.
And then buy the property "subject to" the existing mortgage.
Here's a more honest approach at least as legal and as least as likely to succeed as the strategy advocated by this "real estate consultant:" Break into the home, kill the owner, and bury him in the backyard. Squat in the house, selling the furniture on eBay to meet recurring expenses. When the furniture is gone or the Sheriff starts nosing around (whichever comes first), move on to the next house.
Wow. You're bashing me because I recommend that people (all people, not just "affluent") pull out their Notes and review them? Ouch. What's wrong with that?
I did not call anyone ignorant. Many people do not know the terms of their mortgage--especially ARMs. Perhaps they did when they obtained their mortgage and they're just rusty on the terms.
CMPS is a designation that is recognized by the CFP association and requires passing an exam after taking several courses. It is a designation that a mortgage professional can lose if a consumer files a valid complaint.
In MD you used to be able to do something called a land contract - escrow the deed and pay the seller, who paid the mortgage. Don't know if it's still around. But if the lender figured it out, they would of course claim this triggered the due-on-sale clause.
Actually, due on sales clauses are seldom enforced, and haven't been since the 80s.
In the 90s, I had a client who "assumed" the mtg of a seller. I warned him he could be foreclosed out, but he decided to take the risk.
He couldn't qualify for a loan at that time, but paid the difference between the selling price and the mtg amount. He made all the payments for at least 3 years while he owned the house, and then sold it to a buyer who did the same thing. And bought another house. His businesses went well and now he owns his house free and clear. So far as I know the second buyer continued to make the payments and was never foreclosed out. By that time the loan had maybe 6 years of seasoning.
Banks do not do periodic title checks.
They find out when an alert clerk notices that the insurance bill has a different name on it than the mtg. Nowadays, there are probably no alert clerks.
I repeat the assumption part is wrong, but the Buyers I've dealt with (after due warning) have all intended to make the payments and have made the payments.
Frankly if the payments are made on a loan which is, or has become 100%, the lenders should be happy it's not in foreclosure and is providing them with an continuing income stream, for a while at least.
Tanta - Since we're on the subject of mythology, here's another woman, from Atlanta, who didn't get the justwalkaway memo. We need to do more to inform these pre-foreclosed people that walking away is THE answer to all their life's problems, and who needs a house when you can take your 26 yr. old disabled daughter and go bando somewhere?
Video - Business, finance, and personal finance news from CNNMoney.com
Rhonda's been blogging for a while now, I think before there was rhondaporter.com it was rhondawhateverhermaidennamewas.com, I think fewer people read her blog now than ever - although CR is on her blogroll.
Personally, what boggles the imagination is that the reporter didn't seem to have even a whiff of indignation at the possibly "not completely aboveboard" implications of what he was writing about. (Hey, my excuse is that Chateau Bidet has been paid for for ten years.)
The Grey Lady got senile dementia or whatever the current misnomer is now?
Anonymous said: "When did you finally realize that MSM (yes, that includes the NYT) regularly publishes poorly-written articles with misinformation?"
...from which the bears here get a shockingly large amount of their arguments and "supporting" data, I would add.
S.
This is the DC MSA in a cliff note version for sure
Land contracts are still around, but seldom used.
You could acchieve the same thing with renting with an option to buy for less than, I believe 3 years.
You could repeat the less than 3 years thing and continue giving the buyer/renter some extra credit for extra mtg payments. Eventually the Buyer could qualify, or the parties might decide the lender was never gonna notice.
Wow. You're bashing me because I recommend that people (all people, not just "affluent") pull out their Notes and review them? Ouch. What's wrong with that?
I wasn't trying to bash you, Rhonda, I was trying to bash the reporter.
I'm perfectly willing to believe that you explained to the reporter why people should look at their notes and what they should be looking for, etc., but I don't have access to an interview between you and the reporter. All I see is what got printed in the paper. If you feel like you got made to sound a little goofy, blame the NYT, not me, for giving you one sentence with no follow-up. Frankly that's why I have a "no quotes for the media" policy. I've been in the same damned situation myself: I explain a whole bunch of stuff, and then get a snippet quoted that makes me sound like a freaking idiot.
And I am responding to months and months worth of reporting that cast people who didn't read their notes before they signed them as "those dumb subprime borrowers." I am not accusing you of having popularized that meme.
CMPS is a designation that is recognized by the CFP association and requires passing an exam after taking several courses. It is a designation that a mortgage professional can lose if a consumer files a valid complaint.
It strikes me as a high-falutin' title and a kind of "credential inflation." I am not making any claims about your own personal abilities; I don't know what they might be.
But am I going to apologize for making fun of the mad scramble to escape the reputation of mortgage brokers and real estate brokers by adopting fancy new titles like "consultant" and "specialist"? Nope. Not in this lifetime. Sorry.
I did not call anyone ignorant
Rhonda - you very much implied ignorance. "First step is to pull out your loan docs" - REALLY.
Shnaps, my blog has always been The Mortgage Porter (even before I married and took the last name Porter). Gee...I guess I could kept my former name and had my blog be "The Mortgage Witt" instead.
I'm not sure what you're getting at with the maiden name stuff. My website used to have my old name but I've been married for two years as of this April Fools-although I don't see how this is important to this topic.
Sniglet, I'm honored and will banter with you anytime.
Can anyone tell my why it would be a bad idea to review the Note of your mortgage? I still fail to see the reason why Tanta decided to pounce on me so early in the morning.
Wow, The prudent thing to do would be that someone should notify the AG and dept of consumer protection in this scumbag's state about the fraud this guy is advocating and has undoubtedly been a party to.
The picture of him on his website is hilariously pathetic - looks like he's been off on a bender.
Ronda's CMPS membership might want to rethink that CTX dude on your advisory board:
The Mortgage Lender Implode-O-Meter News Pick-ups: Ailing/Watch: CTX Mortgage Company (Retail)
Tanta, please state it more clearly in the article that anything ressembling what Mr. Geller is suggesting is clearly going into fraud territory.
Even being aware that this story was going down some type of fraud, I have trouble understanding how this thing even works.
The posts in the comments clarified a lot of things, but this. This guy is a huckester and needs one h*ll of a smack upside the head.
Thank you for enlightening and entertaining innocent bystanders!
In the 90s, I had a client who "assumed" the mtg of a seller. I warned him he could be foreclosed out, but he decided to take the risk.
He couldn't qualify for a loan at that time
Look. We need to pay attention to what we're seeing. We need to stop "filtering it" through our past experiences. The Gellers of the world expect you to do that: it makes what he is proposing sound more legit.
You're talking about a "desperate buyer." He's talking about a "desperate seller."
Schnaps,
I was talking casually with Jane from NYT during the 30 minute interview. This is the bit she pulled out and used for her article.
You don't know me and this is just "how I talk". I'm a visual person. When I say "pull out your note" I'm picturing someone pulling their note out of their filing cabinet.
I've been in the mortgage industry for 8 years; title and escrow for 14 years before this career. Many people do not know the terms of their mortgage...I would say a majority.
I deal with this day in and day out.
Obviously, you can twist the words that Jane quoted anyway you see fit to suit whatever it is you're trying to accomplish.
I know what I meant and I stand by it.
I'm reviewing Notes for consumers all the time. Today I'm meeting with a client just to do that. They think they need to refi--I don't think they do. But we will review the Note again so they can make an informed choice based on what their goals are. I also review Notes of those who are not my clients (or who originated the mortgage elsewhere).
These people are not ignorant in any way whatsoever.
Mike2, your comment about 100000 not being affluent... have you thought that through all the way?
$100,000 per year is more than 75% of the households in the US earn. In other words, it's in the top 25% of wage earners. If that's not affluent, we have a problem. Well, a lot of problems.
Something's a bit wonky with Haloscan.
Really, Rich? Really? Because I have cites for two cases in California, one of which is a Cal Supreme Court case, that says that mortgage brokers are fiduciaries. And per Shepards, etc. they are still good law.
Tanta, please state it more clearly in the article that anything ressembling what Mr. Geller is suggesting is clearly going into fraud territory.
He's smart enough not to say anything that is "clearly" fraud. Most of them are.
I am trying to force everyone to figure it out. I'm doing this as a public service. Everyone needs to read stuff like this and ask some basic questions, starting with "How could that make any sense?"
In other words, our commenters are doing exactly what they should--they aren't stupid, they're smart. Anyone with brains would have a hard time following the logic of this.
But after all, am I the only one who would object to this even if it were entirely legal? It is, you note, a story about taking advantage of a desperate human being for financial gain. Why doesn't this make everyone want to puke regardless of legal technicalities?
I also draw everyone's attention to the fact that I quoted at length from Geller's website (and said so). That quote did not come from the Times.
The Times is guilty of not doing basic review of a website it linked to and gave indirect credibility to. But the Times is not guilty of writing the text I quoted.
Something's a bit wonky with Haloscan
Maybe this guy is related to Uri Geller and he can bend code with his mind.
Tanta, thanks for the clarification. The bought title co. employee making the lien invisible is the key to the fraud, in one scenario.
Rhonda: Sure, I suppose reading the terms of your note can't hurt, but will it help? Pages of dense legalese, likely not very coherent because it was cut-and-pasted together from similar docs by the lawyer who wrote it. Some parts possibly inapplicable or illegal in the mortgagor's state. And it will boil down to: You have to make the nut. Every month. Or we take the house. I suppose one person in a thousand might discover they have an option ARM and are paying the fully amortizing rate...
Like Tanta said, you probably gave the NYT reporter a nice long explanation which got trimmed into the single quote...
"These people are not ignorant in any way whatsoever."
I think you're making the common mistake of confusing "ignorance" with "stupidity". They are a perfect example of ignorance. Whether they're stupid or not is a different matter.
You are to jaded to see there there may very well be folks out there who purchase home subject to the existing financing, make the payments and don't screw someone over.
What you fail to realize is that for a person who HAS to get out from under their payment and wants to not get hit with credit issues selling subject to is the only way. For you to assume that every single subject to transaction is fraud is ignorant.
Also, there are times where the seller , for whatever reason, is under the gun and simply doesn't have the time to sell for current market value. If someone has a TIME issue they have no choice but to sell at a discount thus your argument to sell at a price that extinguishes the mortgage doesn't always apply.
As the quote from Arty to Homer while taking out Marge to the HS Prom Arty tells Homer "There is a difference between Ignorance and stupidity" and Homer shouts back "NOT TO ME THERE ISN'T" So appropriate!
Rhonda Porter CMPS said: "...These people are not ignorant in any way whatsoever."
Thank-you for taking the time to respond. There's a tendency on this blog to focus on the exceptional "man bites dog" stories of extreme stupidity and excess, which sell more newspapers and attract more "eyeballs" than the far-more-common ordinary and above-board business transactions.
Sebastia
Re" "bucket of scum"
See: Easy liquidity scum
See also: SIFMA & Warsh as simple examples of industry wide nepotism and synthetic illusions, collusion, scum.
Brian writes:
"You are to jaded to see there there may very well be folks out there who purchase home subject to the existing financing, make the payments and don't screw someone over."
And why would any of them willingly, knowingly, assume an upside down mortgage if they are intending to pay it? And if the mortgage were not upside down, why would the seller not simply sell normally, and recover equity, without assuming huge risks?
Ralph Cramdown said: "...Sure, I suppose reading the terms of your note can't hurt, but will it help?"
then: "...I suppose one person in a thousand might discover they have an option ARM and are paying the fully amortizing rate..."
Not according to this blog.
S.
What you fail to realize is that for a person who HAS to get out from under their payment and wants to not get hit with credit issues selling subject to is the only way. For you to assume that every single subject to transaction is fraud is ignorant.
Baloney.
If you HAVE to get out and you don't have "time" to sell at market, you call your lender and offer a deed-in-lieu. Or you ask for a formal assumption. There isn't any legit way to "not get hit with credit issues." There is no free lunch. There has never been a free lunch.
Selling "subject to" is just a fairly reliable way to get out of the frying pan and into the fire.
What kind of proceeds will you get, selling this way? None? A few bucks? More than that?
Do you realize that I just quoted from a website that advocates people buying "subject to" and then refusing to pay off the loan?
RTFP!!!!
Mike2,
As part of a cpl in DC burbs that make around 150K well i agree with the question that Will that kind of affluence buy a median priced home anymore?"
Your question is valid as we are in the upper 25 or 10% the problem was people in that income could buy the median home which was 4X's their income and now the chickens are roosting on the affluent 100K incomers...
Not I , i understand that a broker could qualify me for buckingham palace.
It is up to the HO to say i understand i qualify however, as it takes 65% of my income i cant afford it.
Thats what the problem was, the ignorant assumed qualified by a professional meant the ignorant homeowner assumed that the RE professional knew something they didnt which was how they could afford it...
You have the mortgage interest deduction which lowers your taxes.
Yes, the IRS would never, ever notice that the name or other identifiers on the 1099-INT is different than the name of the filer of the tax return. A totally fool-proof plan!
Rhonda- I was pointing out that you've been blogging about mortgages for quite awhile, even if you have a relatively small readership. I know it's a huge coup for you to get a mention in the NYT, but I can't imagine that was the quote you were hoping for. You and I have in fact corresponded in the past, so I know a bit of your style.
Many people do not know the terms of their mortgage...I would say a majority...These people are not ignorant in any way whatsoever.
Do you see the contradiction in that statement? As Heliben pointed out, such people may not be stupid, but they are the very definition of ignorant.
This mess is like the blurred pornographic fantasies of whores sniffing coke and then having a hangover as they get ready to go back to work, and do it again, amen.
I'm gonna be a happy idiot
And struggle for the legal tender
Where the ads take aim and lay their claim
To the heart and the soul of the spender
And believe in whatever may lie
In those things that money can buy
where true love could have been a contender
Are you there?
Say a prayer for the Pretender.
Who started out so young and strong
Only to surrender.
YouTube -
$100,000 per year is more than 75% of the households in the US earn. In other words, it's in the top 25% of wage earners. If that's not affluent, we have a problem. Well, a lot of problems.
Kirk Spencer | 03.20.08 - 10:40 am
An Iraqi who makes an income in the top 25% of Iraq's wage earners is certainly not "affluent".
One last thing. Every home I have purchased subject to I got title insurance on. Yes, you can get title insurance on a subject to transaction.
Also, on page one of a HUD closing statement there is a line item just for Subject To.
Owner has a 300k house and a 150k mortgage. Has not made the March payment yet, has not ability to make the March or April payment and decides their best interest is to sell and SAVE their credit. At this moment in time their credit is good with no lates. A guy like me negotiates a deal with the owner to pay them 50k cash and purchase subject to the existing financing. The seller gets moving money and doesn't get any negative impact on the credit report. I make the payments because if I do what Tanta suggests and let the loan foreclose I lose my 50k and the house.
Not every subject to transaction is someone ripping someone else off. I solved this persons problem and prevented negative credit for this person.
World Of Uncertainty
History is supposed to rhyme not repeat. But in a here we go again scenario John Meriwether's Bond Fund Loses 24% on Credit-Market Plunge.
JWM Partners LLC, the investment firm run by ex-Long-Term Capital Management LP chief John Meriwether, lost 24 percent in its $1 billion fixed-income hedge fund this year through March 14, according to two people with knowledge of the matter.
Meriwether's Relative Value Opportunity fund was hurt as bond managers such as Peloton Partners LLP and Carlyle Capital Corp. were forced to sell securities to meet margin calls, said the investors, who asked not to be identified because JWM doesn't publicly disclose returns. The Greenwich, Connecticut- based firm, which is selling holdings to reduce borrowings and lower risk, didn't have any loans called, they said.
"There's been a lot of forced de-leveraging," said Benjamin Sarly, head of marketing at Sanno Point Capital Management in New York, a relative-value credit fund.
Meriwether declined to comment.
For more on Long Term Capital Management and John Meriwether please see Genius Fails Again.
The Great Unwind
In a better late than never message Citigroup warns The Great Unwind Has Begun.
The Great Unwind has begun, Citigroup Inc. strategists warned on Wednesday.
As markets and economies de-leverage across the globe, investors should avoid companies and countries that have grown to rely too much on borrowed money, they said.
That means favoring public-equity markets over hedge funds, private-equity and real estate, while leaning toward emerging market countries and away from developed nations like the U.S., the bank's global equity strategy team advised.
Within equity markets, the financial-services should be avoided because it's still over-leveraged, while other companies have stronger balance sheets, the strategists said.
During the last credit crisis in 1998, European banks were leveraged 26 to 1. In the early part of this decade, leverage grew to 32 to 1. Now the sector is geared 40 to 1 on average, according to Citi's European bank research team.
"The banks have a long way to go," the strategists said. "We would continue to avoid the sector while they are de-leveraging."
"We are now confronted by a broad bloodbath in the credit markets," Citigroup said. " The most leveraged paper is falling in value because it is leveraged, and now the least leveraged paper is also falling in value because it is owned by leveraged investors."
Investors should also avoid hedge funds themselves, along with private equity, Citi added. Both types of investment rely at least partly on borrowed money to generate returns.
"The U.S. shows up as the world's greatest consumer of external capital," Citi noted. So it "has the most to lose as this capital becomes less freely available."
The above is as close as you will ever see to a bank putting a sell recommendation on itself.
A World Of Uncertainty
ReportOnBusiness is writing about A World Of Uncertainty.
The rules of the game have now changed. Our global financial system has become so complex and opaque that we've moved from a world of risk to a world of uncertainty. In a world of risk, we can judge dangers and opportunities by using the best evidence at hand to estimate the probability of a particular outcome. But in a world of uncertainty, we can't estimate probabilities, because we don't have any clear basis for making such a judgment. In fact, we might not even know what the possible outcomes are. Surprises keep coming out of the blue, because we're fundamentally ignorant of our own ignorance. We're surrounded by unknown unknowns.
Commentators and policy-makers are still talking in terms of risk. Markets, they say, need to reassess and reassign risk across securities and companies. But, in reality, markets are now operating under uncertainty. No one really knows where the boundaries of the problem lie, what surprises are in store, or what measures will be adequate to stop the bleeding. And the U.S. Fed is making policy on the fly.
We do know, however, that we're not dealing with a liquidity problem. We face a massive solvency problem: Banks and investment firms aren't so much worried about financing their next investment; instead, they fear for their survival, because core assets - particularly loans on their books - have been suddenly and dramatically devalued. In this environment, the tools available to central bankers may not work. You can encourage people to borrow by pumping money into the economy, but you can't force people to lend.
You can't force people to lend. That is certainly one of the deflation arguments. But is uncertainty the reason or are the market participants finally realizing that in a world awash in overcapacity there is simply no good reason to lend and no legitimate reason to borrow?
From a practical standpoint it really does not make much difference. Without lending there is no economic expansion and there is no job creation. And while there may be world of uncertainty about what debt instruments are worth, there is still this certainty: The great unwind is in progress, it is nowhere near complete, and the entire process is going to be both long and painful.
Buying subject to on an house with zero equity is crazy. I'm talking about real investors purchasing properties from folks with equity who have a problem that can only be solved by someone with cash and the experience to make it work.
You know there are people out there that actually have equity.
"An Iraqi who makes an income in the top 25% of Iraq's wage earners is certainly not "affluent".
Marcus Aurelius | 03.20.08 - 11:06 am |"
True. God help us if Iraqi standards of living are our new baseline.
Trust me on this...
If the mortgage was not assumable and properly assumed by the new owner so that as a matter of state law the new owner is the debtor
I PROMISE you the new owner does NOT get the mortgage interest deduction or any other deduction.
It would be tax fraud.
An interest deduction cannot be taken except by one legally obligated to the creditor to make the payment as consideration for the forbearance of the use of money.
And why would any of them willingly, knowingly, assume an upside down mortgage if they are intending to pay it? And if the mortgage were not upside down, why would the seller not simply sell normally, and recover equity, without assuming huge risks?
Well because they've just been foreclosed on and 1.) couldn't get a mortgage in their name, and 2.) couldn't imagine renting.
Schnaps,
"Many people do not know the terms of their mortgage...I would say a majority...These people are not ignorant in any way whatsoever.
Do you see the contradiction in that statement? As Heliben pointed out, such people may not be stupid, but they are the very definition of ignorant."
And I'm not hear to pick apart words with you.
Ralph hit the nail on the head: "Rhonda: Sure, I suppose reading the terms of your note can't hurt, but will it help? Pages of dense legalese, likely not very coherent because it was cut-and-pasted together from similar docs by the lawyer who wrote it. Some parts possibly inapplicable or illegal in the mortgagor's state. And it will boil down to: You have to make the nut. Every month. Or we take the house. I suppose one person in a thousand might discover they have an option ARM and are paying the fully amortizing rate..."
This is why people should review their mortgage notes. If they don't understand, they should seek out a mortgage professional for help. If it's an ARM, they need to know how and when it adjust. What is the margin and indice it's tied to. Find out what the rate would be if the ARM were to adjust today...what's worse case?
My blog does not have the readership that Calculated Risk does...it's not meant to. I'm not gearred towards a "national" audience.
You know there are people out there that actually have equity.
That is what the lawyers would call a fact not in evidence.
What I KNOW is what I quoted for you IN THE BLOG POST:
Here's the deal you are looking for. If you are in an area with $150,000 houses, find a house where the motivated seller has a $150,000 mortgage. And then buy the property "subject to" the existing mortgage.
Trying to change the subject to talk about sellers with equity is not serving any purpose except to confuse everyone. A $150,000 mortgage on a $150,000 house is NOT A SELLER WITH EQUITY.
dunno if Jacksonville actually counts, population-wise it's a "big" city, but it's not very dense...but 100k will buy some pretty decent housing right now...
The story was in the New York Times, not the Jacksonville Times. 300K might get you a run down house in a bad section of the Bronx, but few would call that "affluent".
(1) Labelled "non-recourse mortgage walkaway states." Is this Geller simply incompetent, not understanding the difference between non-judicial foreclosure and antideficiency statutes?
Well Tanta, here is how it works. lender does a non-judicial foreclosure and sells the property on the courthouse steps to themselves for $100,000 -no one esle around to id. (And the mortgage is for $200,000)
The lender wails "oh but but there is a deficency of $100,000 so I want to collect from the borrower."
Nope- no going after the borrower until the lender gets a JUDGMENT from a court.
Now the lender has a wee problem in that the court is not going to be impressed with the lender doing the non-judicial/self-help foreclosure thing which may or may not have lead to afair price for the property. The lender will NOT a judgment from the court for the difference.
If they lender wants to collect on the difference between what the autction brings and what is owed, they have to d a judicial foreclsoure.
Stick to economic analysis and leave the legal analysis to those with the JD degree,
(2) The 2md half is merely describing and
(a) rental that covers the mortgage with some pretty wacky terms letting the tenant access the mortgage account; or
(b) an assumption of the mortgage - a fairly commonpractice. VA loans are assumable. The lender invaraibly requires notice of the proposed assumption and the right to refuse. Most loans have the condition that would trigger a default if the borrower tries to let someone assume the loan without getting the lender's approval or doing an assumption at all.
All this sounds like an assumption but the seller/buyer are not informiing the lender or getting its approval.
AN unapproved assumptin and transfer of the loan is risky for the seller -buyer can default, lender goes after them....
Also if the loan prohbiits assumptions or requires the lender's consent which was not obtained, and the lender finds out, it throws the loan into default.
Again, stick with what you know - and from this post it seems pretty clear that you do NOT have a law degree and NEVER practiced real estate law.
Ok my apolgizies. If I found a 150k house that had a 150k mortgage that was fixed at a reasonable rate AND which would break even or cash flow as a rental I would purchase that subject to in a heartbeat. I would still purchase subject to with zero equity if it made sense as a rental. I would even possible purchase a tiny bit upside down if it cash flowed.
Again, my apologizes for getting off point.
Will I'll admit that I didn't read my third mortgage. The first closing I did and my realtor was there holding my hand and explaining things. He even found a place where they were double-charging on some of the closing fees. But my second REFI with the same mortgage company...it seemed pretty old had and I just signed away. I probably SHOULD have been more paranoid, but....I suspect that part of the problem that we've had is that people began to regard biennial refinancing as a NORMAL thing.
Tanta, part of my reason for obtaining the CMPS designation two years ago was to try to distinguish myself from other lenders who were/are not as committed to go through the steps of becoming certified.
I don't agree with all of the "teachings" they offer...in fact, off the top of my head, I can't think of any association I would agree 100% with.
With that, I do have to get to work (my real day job)...I'll check back later tonight.
Thanks for expressing your views with the CR crowd, Rhonda. Just remember that there's no 'c' in Shnaps.
OMFG!! I finally got to the Geller part of the article. I gotta go outside and make a pavement pizza now.
Gee I get to defend Tanta and I have three law degrees...
At least one really big (really really big) state with nonjudicial foreclosure provides that after the auction sale, there is a time window during which the debtor may petition the court for a hearing to determine fair market value, and introduce evidence that the fair market value was above the buy-in price, and if successful may obtain a ruling that any subsequent deficiency judgment be limited to the amount by which the debt exceeded that fair market value, regardless of the lower buy-in price; but if that procedure is not followed, full deficiency is available above the buy-in amount, period.
Wow Tanta,
You need to go cry some place else you rant-o-fant. You pick out some stupid story that even the author admits, according to you, s/he heard it through the grapevine, and then attempt to cast a net over everyone that may try to negotiate the best deal possible for themselves when in a tough spot? What idots people like that are, trying to negotiate.
So, mouthpiece for the Countrywides of the world, please continue to defend the poor widdle ol' banks. Everyone knows that banks have no liability/copability in any of this s$#! storm that has transpired in the US. Do borrower share some of the blame too? Of course they do. But not to the level of criminal insanity that banks and brokerages do.
Everyone knows that the banks NEVER have their mortgage broker mignons stretch a truth, dress up the facts of the loan, have their AEs instruct exactely how to push them onto borrowers, dare I say it...even outright lie, and on and on. They never do things like package up BS loans, pay for fabricated quality ratings to dupe investors, completely mis-represent the loans in their securities prospectus, then sell them to unsuspecting investors, pension plans, et al.
Noooo, the poor widdle bankie is losing money on people who try to negotiate the best deal possible for themselves. They are starting to lose profits due to their criminal acts.
Whose fault is it when two parties agree to re-negotiated a loan amount? The borrower's or the bank?
"So, mouthpiece for the Countrywides of the world..."
Okay, that's the funniest thing I've read all week.
Don't these people understand that paying your bills and having a good credit rating are opposite sides of the same coin? The desperate seller in the example is trying to save his credit rating? Why, so he can go back through the same process again, of buying things he can't afford and riding that roller coaster of elation and despair.
Questions:
I can't pay my mortgage, I'm upside down on my loan, but I don't really want to mess up my credit rating. What should I do?
I'm grossly obese and need to lose weight, but I don't want to quit gorging myself on rich fatty food. What can I do?
I want to go to a top level university but my grades are really bad. What should I do?
I have emphysema but I don't want to quit smoking. What should I do?
I seriously doubt mortgage companies have any sort of verification system for mortgage payments. My mom sold before the bust, but I paid her tiny mortgage now and again when she got stuck with some unforeseen emergency (she's on a fixed income). Despite not having the same last name or being on the title, they took the payments without any note or call. Of course, the company in question was Countrywide...
Stick to economic analysis and leave the legal analysis to those with the JD degree,
I can't do that, Ann. Just can't. You JDs can get just as confused as everyone else.
I was not claiming that you can get a deficiency in a statutory (non-judicial) foreclosure.
I was--and am--claiming that a list of states in which non-judicial FC is allowed is not the same thing as a list of states in which deficiency judgments cannot be pursued.
And why are you telling me how legal assumptions work? I know how they work.
Once again, you are NOT READING THE POST. I don't care if you have a JD. The words "Nobody tells the lender anything" appear IN THE POST.
The fact of the matter is that the NYT article--by linking to that list--is giving its readers the impression that there are no deficiency judgments in the states listed. Yet I know for a fact that you can get one in at least two of the states listed. I have never researched all 50 states to get a list of "antideficiency" states, but I get asked for one a lot. That's why I was so interested and clicked on the link--I thought I was finally getting one.
But it's just a list of states in which lenders can pursue non-judidical FC.
$100,000 per year is more than 75% of the households in the US earn.
but it's close to the median in NYC, the city the newspaper is from.
The real point here is that reporters are supposed to leave biased words like "affluent" out of their reporting.
I seriously doubt mortgage companies have any sort of verification system for mortgage payments.
In reality, nobody cares who wrote the check, as long as it's attached to the coupon and has the mortgage account number on it. Most of that is automated, anyway. It's not like there's a squad of QC analysts slitting envelopes and examining checks before manually posting to an account.
These things get caught because someone does eventually stop making payments.
Okay, that's the funniest thing I've read all week.
Second-funniest. "Two Buck Upchuck" is supposed to be the funniest thing you've read all week.
ish - the difference is your Mom didn't quitclaim the deed to the property over to you.
Recently I got an email from a reader who has an ARM but doesn't remember what the index and margin are. She couldn't find her loan paperwork. I think a lot of people would be judgmental about that reader: that she's ignorant and stupid and unorganized. I suppose you can say that, if you get a kick out of judging people. I understand where Rhonda is coming from: Some people can remember the grade their kid made in algebra three years ago, but can't remember their index and margin. You can say those people are stupid, but maybe they're better, more attentive parents than you. Everyone can make an uninformed judgment about others.
My email correspondent said something more shocking than her ignorance of the details of her own loan: She called the servicer. "When will my loan reset? What's the index? What's the margin?" she asked.
The reply from the servicer: "We don't have your loan paperwork here. We can't tell you what your index and margin are. No, it doesn't matter that you have the loan number. Just wait. A few weeks before reset, you'll get a letter detailing your index and margin."
She didn't know her index and margin, and neither did the servicer.
The reply from the servicer: "We don't have your loan paperwork here. We can't tell you what your index and margin are. No, it doesn't matter that you have the loan number. Just wait. A few weeks before reset, you'll get a letter detailing your index and margin."
That's 100% horseshit. If I weren't a shill for Countrywide I'd denounce this kind of incompetent servicer.
Holden, I don't know how we got to arguing about all this anyway. My original point was about the way the Times article is written.
My general approach is this: if you have to bring in a bunch of assumptions about the world based on experiences you already have in order to make sense of a newspaper article, it may be that the article isn't really making a useful point. You are "finishing the thought" for the writer.
This is the classic strategy of bad writers: go short and sweet and make the reader do the rest of the work for you.
As someone who writes long tedious posts that try to explain things for the reader, rather than just dumping a quick quote on the reader, I feel qualified to get pissy about it.
I still fail to see the reason why Tanta decided to pounce on me so early in the morning. Rhonda Porter CMPS
Because she is a very unhappy woman, who has incidentally lost quite a bit of respect this morning. Like Cheney, she could care less, however.
one more time
YOU DAM WELL CAN GET A DEFICIENCY JUDGMENT IN MANY NON-JUDICIAL FORECLOSURE STATES AND DONT DRINK THE KOOL AID OTHERWISE
Hey we all know that The Old Grey Lady Ain't What She Used to Be, Ain't What She Used to Be. In fact she has declined shamefully and fast too. So no surprise here.
Tanta, there's a list of deficiency states on page 26 of this doc:
http://www.freddiemac.com/news/pdf/fmwp_0403_servicing.pdf
Doctor, my eyes have seen the years,
And the slow parade of tears without crying,
Now I want to understand,
I have done all that I could
To see evil and the good without hiding,
You must help me if you can
I remember reading about someone who wanted to popularize the term "nescience" to refer to not having knowledge about something you have no expectation of knowing as opposed to ignorance of facts you might be expected to know. I understand the word ignorance has come to be understood as stupidity in common parlance. I believe that Rhonda is trying to help people and saying "The first step,..." can actually be construed not as total ignorance, merely that in these matters the details are of paramount importance and shouldn't be entrusted to memory.
Thanks, bacon dreamz. You linked to that yesterday and I started reading it--it's good--but I didn't get that far.
Well, it sure makes hash out of Mr. Geller's list, doesn't it? According to Freddie Mac there are only six states in which deficiency is prohibited.
I'm going to stick up for Rhonda a bit here. I think she right both in saying that it isn't especially ignorant to not know the exact terms of your loan - most people don't if they haven't looked in a while; and that the first thing you should do if you want to change the terms is get the mortgage paperwork out and read it.
Holden Lewis wrote:
...a lot of people would be judgmental about that reader: that she's ignorant and stupid and unorganized. [...]
She didn't know her index and margin, and neither did the servicer.
You make judgmental sound like such a bad thing. Damn straight I say she -- and her servicer -- are both ignorant and stupid and unorganized. I make judgments about people and companies every day. Evidence like this leads me to believe that the rate of homeownership in the US has far eclipsed the available number of people smart/reliable/whatever enough to own their own property. This woman was one step away from not even remembering who her servicer was, and I'm supposed to believe she's capable of keeping the roof/plumbing/electrical in good repair? At the very least, this woman should've been in a 30 year fixed. More likely, someone should have power of attorney over her affairs. You can only have an ownership society if your schools can teach 90% of the population to be literate and numerate.
If I weren't a shill for Countrywide I'd denounce this kind of incompetent servicer.
Priceless.
Owner has a 300k house and a 150k mortgage. Has not made the March payment yet, has not ability to make the March or April payment and decides their best interest is to sell and SAVE their credit. At this moment in time their credit is good with no lates. A guy like me negotiates a deal with the owner to pay them 50k cash and purchase subject to the existing financing.
So somebody is willing to eat 100k in home equity to avoid a ding to their credit rating? Am I missing something here?
"Stick to economic analysis and leave the legal analysis to those with the JD degree"
Ha ha ha. My boss had a lawyer threaten him last year if he attempted to properly apply SAB-104 to a client. "I don't give a f#%& what SAB-104 says!!! I'll....click" (my boss just hung up on him)
One common thread amoung lawyers is that they know everything, or are at least willing to dumb down a topic until they can master it.
You linked to that yesterday and I started reading it--it's good--but I didn't get that far.
different paper, actually (the one from yesterday is brand new! i'm still excited about it--Freddie's first new paper in almost two years!), though that list might be in both. this one is older, but i remembered it had the list in there.
"Like Cheney, she could care less, however."
And, also like Cheney, she has a wrinkled reptilian snout.
If I weren't a shill for Countrywide I'd denounce this kind of incompetent servicer.
Awesome
Emma Anne, I am not disagreeing with the statement that "The first step for distressed homeowners" is to refresh their memory about their note.
I was trying to point out the lack of the rest of the steps that come next.
Click the link, read the sentence I quoted in context, and see if you understand what frustrated me? Please?
Rhonda didn't write the article. Some reporter did. Is what I am saying.
It got into Rhonda because I also had to scoff over this credential inflation business.
Having defended in criminal court a "consultant" in one of these scams, I can tell you what happens next: (a) The deed recipient never makes any payments; (b) He will rent it out to an unsuspecting tenant; (c) he will file a fraudulent bankruptcy in the seller's name, or his own, just before the foreclosure; and (d) then disappear with six plus months of rent pocketed. Geller is a p.o.s., and shame on the N.Y.T. for yet another bit of stellar reporting.
Teh stupid is strong in this thread. Somebody oughtta call the Eugenics Triage Truck.
Geller's website is PATHETIC! First of all, he's woefully misinformed about the impact of short sale vs. foreclosure on one's credit report. IMPACT IS EXACTLY THE SAME! Your FICO score will get creamed!
Secondly, the impact on a consumer's ability to qualify for a home loan in the future is EXACTLY THE SAME whether they go short sale or foreclosure. No institutional lender will touch you for two years under current guidelines. That's called "seasoning" and it's the same for short sale, foreclosure and deed-in-lieu.
No doubt Mr. Geller wants to buy YOUR home at short sale, get a discount from the bank, and attempt to sell it for a profit, all the while erroneously telling you that short sale is a breeze, with no impact on your credit or future qualifying ability.
Wrong...wrong...wrong...wrong........
If anyone doesn't believe me, simply write to Fair Isaac at cbhelp@fairisaac.com and pose the question: "If I go short sale or foreclosure, will the impact on my credit be the same?"
Include your phone number; they won't respond in writing (for obvious reasons), but they will discuss the matter with you by phone.
Why is the impact the same? Because nearly every lender on the planet reports (1) short sale; or (2) deed-in-lieu or (3) foreclosure as Score Factor Code #22--"serious delinquency, derogatory public record or collection"--which is exactly what deed-in-lieu, short sale and foreclosure are. The lender didn't get what he bargained for (paid in full), and he's going to inform his buddies in the lending community via your credit report.
Dear Rhonda,
And her assorted supporters or sock puppets, basically it comes to this.
IMO, You and your ilk are bottom feeding scum, who are trying to make money off the misery of others, that's what I think and nothing you've said here changes my opinion.
Not notifying the mortgage holder, potential scamming of both the lender and the borrower, there I was thinking that estate agents were the biggest scum.
btw as far as california is concerned, i am virtually certain the deficiency prohibition extends only to acquisition debt, not to refinancing (at least to the extent the refi exceeded the acquisition debt; perhaps what was left of the acquisition debt or perhaps its original balance, im not sure).
dont believe everything you read in simple stuff like that publication table; its much more complex.
except to ann i guess.
You can only have an ownership society if your schools can teach 90% of the population to be literate and numerate.
If you're counting on schools in order to achieve an ownership society, good luck.
Otherwise, can we stop referencing Jackson Browne songs here? I'm having a hard time maintaining focus.
too long.
if a journalist is wrong you should be able to point it in 1-2 quotes and 3-4 lines at the most.
Unlike Cheney, however, she hasn't actually shot anyone yet...
i vote for "lawyers in love" [with tanta]
"Unlike Cheney, however, she hasn't actually shot anyone yet..."
You don't know that for sure. She may, by the end of this thread.
(the one from yesterday is brand new! i'm still excited about it--Freddie's first new paper in almost two years!)
Now I know what to get you for your birthday,...we live in vastly different worlds,...
I have to leave the house for a few minutes to go to the store.
Please try not to shoot anyone while I'm gone.
Two things:
First there seem to be a lot of articles in newspapers that suggest homeowners do things that are entirely unethical and sometimes illegal. Our local newspaper published an article in which a realtor suggested that homeowners who could no longer pay the mortgage rent the place out--not to help pay the mortgage, mind you, but to get a little money on the way out the door. (I sent an email to the author of the article, suggesting that tenants should at least be warned that renting a house in danger of foreclosure was not a good idea--never heard back.) Real estate reporters are connected to the industry and seem to be willing to report any silly thing they suggest.
Second it's likely that many lenders are choosing non-judicial foreclosure when possible--even though it may mean writing off hundreds of thousands--because judicial foreclosure would require a trial and, at trial, a good lawyer for the homeowner would examine every aspect of the lending process. And many lenders would not want that kind of scrutiny.
Now I know what to get you for your birthday
if you give me a copy of a freely available paper that i already have for my birthday, i'll never speak to you again.
If you ask me, the article should have made the point about how hopeless and chaotic this has all become. Guys like Geller and the folks at youcanwalkaway.com are in business because people are in hopeless situations and really don't know what to do. If you are in the trenches of a hopeless situation regarding your house, and you haven't reached the mental breakdown stage, and you call your lender, do any of you really know what happens next? I'd like to see an article that gets to the meat of why short sales aren't getting approved, when it is the only thing that makes sense in so many situations.
Really, though, isn't any foreclosure a walk away? A failing of both parties to remedy the situation? I hope that NYT writer read these comments, because the real reporters should be addressing the very challenging subject of why this is happening and going deeper than jingle mail. Which, if you ask me, is akin to the welfare recipients driving cadillacs. Remember that? Remember the outrage that caused against people that legitimally were on welfare?
Kelly
socalgirl -
I am so glad you brought up the fact that a short sale or even a modification gets reported as derrogatory. If you really read through gellers site and the walkaway site, you will see that they are also saying that if you buy the information they will be able to, or MAY be able to wipe out the credit ding. That is a huge SCAM. You can't wipe out truthful derrogs, without some kind of fraud.
The NYT is perpetuating fraud by promoting Gellar. Why not take the other low hanging fruit and warn people about the people who are finding ways to cash in on their hopelessness? THAT article would have been easy.
The two websites quicklawsuitemoney.org and Richard Geller's have the same picture with two different names! I guess they could not afford more stock photos!
Really, though, isn't any foreclosure a walk away
For the purposes of these discussions, no. I understand where you are coming from, but we've discussed the distinctions we're trying to make many times previously. Distinctions that might help separate the abuses from the normal cases of hardships.
What I take from this report is that some (like Rhonda) are trying in good faith to give the people in trouble a list of options they might be able to use, and others who will, in the guise of trying to help, cause more harm and grief. I believe Tanta is trying to alert people they need to think carefully about what they're going to do, because just because someone else got away with it, doesn't mean it's legal!
I am shocked! Shocked! That the New York Times linked me to a site that promotes mortgage scams and fraud. Families lose their houses and credit to scams like this.
if you give me a copy of a freely available paper that i already have for my birthday, i'll never speak to you again.
Okay, I'll think of something else.,..maybe I can get one of those green rubber band thingies from a Countrywide shill,...
Thank you Tanta. You are a breath of fresh air. Some of the reporting on the financial crisis has been horrible. I expected better from The Times
Owner has a 300k house and a 150k mortgage. Has not made the March payment yet, has not ability to make the March or April payment and decides their best interest is to sell and SAVE their credit. At this moment in time their credit is good with no lates. A guy like me negotiates a deal with the owner to pay them 50k cash and purchase subject to the existing financing.
So somebody is willing to eat 100k in home equity to avoid a ding to their credit rating? Am I missing something here?
Yes you are. We are talking about more then just a credit score. You are talking about a person who doesn't have the luxury of time to sell a house the old fashioned way BECAUSE this person doesn't have the means to service this mortgage debt on a monthly basis going forward. If this person could borrow and/or pay their mortgage I would be the first to suggest selling through a real estate agent the old fashioned way. However, when this person does not have the means to service the debt nor the time to sell via a real estate agent they are left with one choice. Sell to a guy like me who has the cash. My cash solves their problem and I get to earn a fair return on my cash for doing so. It is very surprising to most people the conditions under which owners will sell to a cash buyer. Some of the absolute best buys in my life have come from landlords who were under absolutely no distress whatsoever. The most common situation is a landlord who has a brother/sister etc. living in a home who hasn't paid rent in months. The owner can no longer continue to pay the mortgage on this property while this family member is not paying rent. Further, this owner is not willing to actually evict a family member for fear of the relations with the rest of the family. We buy from that situation more often then any other situation out there.
I have to leave the house for a few minutes to go to the store.
oh great, look, you guys drove Tanta to drink. i think everybody needs to take a deep breath and calm down.
Shnaps, my apologies (on the "c")...
Holden Lewis, thanks... in fact, I believe you may have done an article on how few home owners know what their mortgage is or was it a bankrate survey?
Historically, the lender discovers the transfer when the homeowners insurance policy comes in with a different insured, or when the property taxes are verified. With this, it's more likely they'll notice when the NOD is filed!
In bad times like now, when mortgages are upside down, if someone is mnaking the payment the lenders tend to not call the note, due upon sale. (they may be dumb, but they're not totally stupid).
Of course, this guy is someone who went to a recent "Buy With No Money, No Credit" seminar, and now he's an Expert!
I guess the Anarchist Cookbook is legal to sell, but it might be illegal to do some of the things described therein.
Fortunately, the NYT never (as far as I know) did a feature on the A.C. or its author - who, incidentally, is a born-again now. We can only hope that Mr.Gellar has a similar Epiphany at some point.
"Click the link, read the sentence I quoted in context, and see if you understand what frustrated me? Please?"
Tanta, I agree with you about this article. And I too, have been interviewed in depth, only to have the one quote from me in the article make me look like an idiot.
oh great, look, you guys drove Tanta to drink.
Don't flatter yourselves.
I went down to the local Amish market and got a salad and 1/4 of a huge freshly baked cheesecake.
The next idiot who insults me is going to face me going back for the apple strudel. You have been warned.
Thank God! I thought she had gone down to the hardware store for bullets!
One person is a valid statistical sample if repeated in newspapers often enough. Loan review should be fully automated. Real journalists aren't required to credit sources if they are from blogs. Cramdowns create a moral hazard. The olympics should replace figure skating with full contact fighting. Excel is for work.
Kicker | 03.18.08 - 10:06 pm | #
(Note: It wasn't me! I'm just tattling.)
That link from your Google Page rank 6 page to Geller's PR2 page is extremely valuable. All by itself it will cause his site to come up much higher in the search engines. Website owners will pay several hundred dollars for such a lovely on-theme link.
(If there is a "nofollow" tag I didn't see, ignore that. Otherwise, check into adding it to some of your links.)
Tanta,
I'm jealous as take a break at work sipping lousy office coffee. Speaking of cheesecake, I still haven't gotten around to trying your cheesecake recipe but I think I will this weekend. It looked really good.
Tanta continues to do a great job exposing shady types in real estate. We should write to NY Times to criticize their shoddy journalism.
Yes you are. We are talking about more then just a credit score. You are talking about a person who doesn't have the luxury of time
You're just taking advantage of people who don't understand FC law.
Hey, all you JDs out there! You ever heard of a state in which sale proceeds over the amount of the debt didn't have to be paid to the debtor?
If you lose a $300K house to FC and you owe $150K, you'll get a check for $150 less FC expenses. Brian is basically suggesting that the FC expenses would add up to $100K, and that's NONSENSE.
It's apparently Disinformation Day and nobody told me.
If there is a "nofollow" tag I didn't see, ignore that. Otherwise, check into adding it to some of your links.)
Well, I'm happy to do what I need to as a Good Net Citizen, but I don't understand how to do the "nofollow tag" you're talking about.
If anyone can educate me on that, I'd appreciate it. Even though I am a Countrywide shill, I'm teachable.
Tanta -
I think Rhonda and you probably have more to agree about than disagree about. As a rule, I am no friend of brokers (she's actually a correspondent lender, iirc), and have been quite confrontational with her in the past on many issues, and she has responded by demonstrating a very deep knowledge of lending and refreshing ethics and handled my sometimes accusatory banter with poise and professionalism.
As far as her title - you might consider it title inflation, but given the slimy snakes that have inhabited the depths of the brokerages these last few years, if you were an ethical broker that felt a fiduciary responsibility to your clients, wouldn't you also want do anything you possibly could do to differentiate yourself from the scaly scum?
Anyway, go read her stuff on Rain City Guide and decide for yourself. I consider you, Jillayne, who also also writes at RCG and reads and quotes you even more voraciously than me, and Rhonda to be 3 beacons of light in the dim and dangerous world of lending.
"Anyone can sell their house to someone else as long as they are still the owner, and title will transfer. Even if there are loans still on the house. Doesn't matter."
This article and this paragraph are so misleading, it's no wonder we're in a mtg mess.
The scheme sounds fraudulent and seems to ignore recording statutes: The mtg is a lien on the property and is recorded. So, a deed could be recorded w/o the lender's consent, but eventually, the lender will discover the transfer of title. On the other hand, is the deed even recorded in this scheme? Also, a lender must consent to the assumption of the mortgage. A buyer cannot legally just start paying a mtg because they bought the property unless the lender consents. This scheme would nullify state recording statutes and therefore is illegal and unenforcable. The whole thing stinks.
It's disgusting that the media reports it in such a way to make it sound legit.
This article shows another problem: many journalists are poorly educated on the subjects about which they report. Journalists can disseminate erroneous info, which confounds the problem further.
But biliruben, read the NYT piece again.
Rhonda wasn't the only one with a fancy title.
Do you think all the other ones with a fancy title are of Rhonda's quality?
That's the trouble with that strategy. The scumbuckets just adopt the new title that you have now "legitimated."
Dear Rhonda -
"If it's an ARM, they need to know how and when it adjust. What is the margin and indice it's tied to. Find out what the rate would be if the ARM were to adjust today...what's worse case?"
Signing legally binding documents you don't understand in the first place, only to come to that realization in the last place.
"This is why people should review their mortgage notes. If they don't understand, they should seek out a mortgage professional for help."
Yeah, and perhaps some independent legal counsel in the first place, perhaps avoiding the rinse and repeat cycle in the last place.
"My blog does not have the readership that Calculated Risk does...it's not meant to. I'm not gearred towards a "national" audience.
Rhonda Porter CMPS"
Irregardless; if you make a choice to blog, you should know (in the first place) that it is within the realm of all possibility, that your written words potentially can/do reach a global audience.
It's disgusting that the media reports it in such a way to make it sound legit.
It's really starting to piss me off that I now have to DEFEND THE TIMES.
You folks just gotta read better. You just gotta.
I WAS QUOTING FROM GELLER'S WEBSITE. THE NYT DID NOT WRITE ABOUT THE "SUBJECT TO" SCAM. I WAS CRITICIZING THE TIMES FOR QUOTING THE GUY ABOUT FC LAW, ABOUT WHICH IS HE APPARENTLY IGORNANT. I WAS NOT ACCUSING THE TIMES OF RECOMMENDING ILLEGAL ACTIVITY. THE TIMES IS GUILTY OF LINKING TO A WEBSITE IT APPARENTLY DID NOT READ OR DID NOT UNDERSTAND.
This will all get much too tedious if I end up accused of claiming that the Times wrote something it did not write.
Sol,
"perhaps some independent legal counsel in the first place, perhaps avoiding the rinse and repeat cycle in the last place."
I totally agree. On the East coast, buyers are more likely to hire an atty to represent them in a RE closing, so hopefully, their atty will explain terms & conditions of the purchase & mtg, PARTICULARLY an ARM which could re-adjust to a much, much higher rate.
On the West coast and west of the Mississippi, people usually don't have attys to represent them in a purchase, so they rely on the brokers (oh, excuse me, I should say "RE & mtg certified professional advisers";) for advise. I think this reliance is misplaced. As someone said, brokers are not fiduciaries to buyers (or sellers), so buyers & sellers should not rely on brokers.
I think the public needs to be educated on what is a "fiduciary" and what duties brokers owe to buyers & sellers.
sigh.
no matter what recording statute (race, race/notice, notice), a bona fide conveyance is effective when the deed is handed over, period, stick a fork in it.
recordation is not required for the conveyance to be effective.
recordation is simply a method of providing constructive notice to the world of the existence of an interest in property. it does not validate the interest.
a quitclaim deed from A to B on real property P, whether or not recorded, does convey all that A can convey thereby to B, lien or no lien.
liens are not title.
liens are not notes.
a note may be due on sale or due on conveyance but that doesnt negate the validity of a conveyance of property subject to lien unless you have a restraint on alienation embedded therein, which would in many cases be unenforceable anyway.
unbelievable.
Sorry about the misunderstanding, but I did not say that the NYTs published the scheme nor expressly condoned it.
However, by linking to Geller's website and not expressly condemning Geller, some readers may view the scheme as being legit.
More importantly, people like Geller are out there and unless the general public is advised to stay away from the Gellers of the world, more pain ensues.
"That's the trouble with that strategy. The scumbuckets just adopt the new title that you have now "legitimated."" - Tanta
I don't disagree with you, Tanta. A title with meaning and teeth ala the ABA would be the obvious solution and a worthy goal. Do you get there from the bottom up or the top down? Legislating a broker has fiduciary responsibility to their client would be a big step towards making other titles beyond "broker" unnecessary.
SoCalGal writes:
Geller's website is PATHETIC! First of all, he's woefully misinformed...
I'm guessing he's not, himself, woefully misinformed; he's just misinforming potential marks.
WillyK: all he got out of it was a few months of rent??? Crime is hard work and ought to pay better.
I suppose that's a sign of just how hard the real estate market has fallen. You used to be able to get these properties flipped before anyone caught on, but I guess it's getting harder for the straw buyer to get a note.
In one case I know of "Mr. Seller" (probably not the same Mr. Seller as in the current post) even made the mortgage payments until they could complete the flips. I thought it was a bit odd to leave the paper trail of an actual check, but as Tanta points out nobody ever even starts looking at the transaction until the first mortgage payment is missed.
Tanta, there's a list of deficiency states on page 26 of this doc:
Freddie Mac News Center p...3_servicing.pdf
bacon dreamz | 03.20.08 - 12:04 pm | #
Be careful. I live in Oregon, and, based on my conversation with a bankruptcy attorney, Oregon is a non-recourse state whether or not it is a purchase money mortgage or a refinance. This chart is out of date, I think.
Fred,
I hear you. But should people, who are already in trouble with mtgs, be encouraged to convey title w/o giving notice to the world? Don't you think that makes a bad situation worse?
if you knew how many clients i have who pull this, you would understand. i defend them. it doesnt mean on a blog we shouldnt present the truth.
the truth is no one should ever transact real estate without counsel. there are competent lawyers who can do plain vanilla closings for $500.
my point is that no one should play at this no matter what.
too much is at stake.
as it happens im a tax / transactions lawyer not a real estate lawyer, althought they overlap, and im much more concerned with the tax disasters that people will get themselves into.
Fred,
"the truth is no one should ever transact real estate without counsel. there are competent lawyers who can do plain vanilla closings for $500.
my point is that no one should play at this no matter what.
too much is at stake."
I am on the same page with you, so that's why I didn't feel the sarcasm was necessary. Restraint on alienation brought back fond memories of Property in 1st yr law school, but IMO, that's not relevant to the subject at bar.
I just don't want to see people, who have already been hurt, be further damaged by gimmicky schemes that lead to more pain.
i wasnt trying to be sarcastic, just annoyed at those (not you) who dont know what theyre doing pontificating.
i hate property law.
But, Tanta, news reporters need to take some minimal responsibility for checking out what their sources say. In one recent case a reporter got on the internet and found a lawyer who said that tenants could defend against eviction lawsuits in foreclosure actions. Most of the time that's not true, and tenants who try to defend against such actions will find themselves living in trailers. I wrote to the reporter and she said that she'd correct the information in a future article. Still waiting.
who do you think goes to journalism school anyway.
dont confuse them with the facts.
go talk to your dog about it, about as productive.
usually when they interview me i ask if i can just mail in a written dialog and do both sides. even then they mangle it.
Hey, all you JDs out there! You ever heard of a state in which sale proceeds over the amount of the debt didn't have to be paid to the debtor?
This right is so old, it is the origin of the very term "equity." It refers to homeowners' "equity of redemption," their right to claim at equity, not at law, sale proceeds over a satisfied debt.
NYT shouldn't be using/quoting such a scumbag of a source, though. They aren't directly legitimizing the scam, but they are legitimizing the scammer.
Guess what? I actually read the article AND the post! woo hoo.
READ THE ARTICLE!!!
This post is awesome and this list of comments is the best reading I've had in years. Go Tanta!!!
The NYT uses a confidence man as a source and has a link to his website. That's classic.
Be careful. I live in Oregon, and, based on my conversation with a bankruptcy attorney, Oregon is a non-recourse state whether or not it is a purchase money mortgage or a refinance.
See, one reason I have never tried to prepare a list of state deficiency provisions is because it's so damned complicated. Fred isn't the only one who hates property law.
According to the Oregon State Bar Association (sounds like a credible source to me, they've all got JDs I bet), deficiencies are allowed in Oregon for judicial or non-judicial FCs, purchases or refis, unless the property is the principal residence of the owner or the owner's spouse or child.
That's why it's so hard to write a chart that says "allowed" or "not allowed."
We regularly get people claiming that "FCs" in general are recourse or not based on CA law. That's either because disinfo is available on the web or because Californians tend to think of themselves as the center of the universe. Beats me.
Site Error
NYT shouldn't be using/quoting such a scumbag of a source, though. They aren't directly legitimizing the scam, but they are legitimizing the scammer.
Precisely.
And why this is so funny: we only just recently got to the point that respectable media types would stoop to linking to websites. It took a long time to convince editors that they could evaluate a blog and decide that it might have enough credibility to mention in the hallowed newspaper.
So now what have we got? Some moron reporter doing a quick Google search, finding a "list" of "nonrecourse states," and then actually interviewing the scumbucket without noticing he's a scumbucket.
I bet you $20 someone at NYT is saying right now, "see, I told you the internet is unreliable."
Guess what? I actually read the article AND the post! woo hoo.
I'd offer you a bite of my cheesecake if I could, but Haloscan has limitations in that respect. Will you take a gold star?
It's readers like you who keep me going. And, um, cheesecake.
We regularly get people claiming that "FCs" in general are recourse or not based on CA law. That's either because disinfo is available on the web or because Californians tend to think of themselves as the center of the universe. Beats me.
I moved to Oregon from California about a year ago, and the center of the universe happily came with me. Sorry, Californians.
It's readers like you who keep me going. And, um, cheesecake.
Whew! You stopped at the cheesecake! I was almost afraid to refresh the comments for fear I was going to read, "Okay, people-- that's it! I've bought the apple strudel ... I'm raising it to my mouth... When you read about my death in Amish ecstasy tomorrow, just remember, you made me do it!!!"
Will you take a gold star?
well well well. and just what gave you the impression that you had the authority to hand out gold stars?
"It's readers like you who keep me going. And, um, cheesecake."
Do the kickbacks from Countrywide help? Are they the ones supplying the cheesecake, through their Amish intermediaries?
and just what gave you the impression that you had the authority to hand out gold stars?
It's the only authority I have.
If I could hand out credentials for Certified Mortgage Nonsense Detectors, the world would be a very different place.
Too true to be good.....
From NYT: And when you most need to refinance you cant the crux of the crunch.
From WSJ: But he said investors are concerned CIT will have to refinance maturing debt at a higher cost.
CIT's Woes Likely to Trickle Down - WSJ.com
So how are homeowners materially more stupid then the 'smartest guys in the room' who made the same fundamental mistake of borrowing short term to purchase (invest?) in long term, illiquid assets?
I'll admit that the homeowners they haul out for these articles seem to be not that bright. But on the other hand, don't they teach the mba's and finance guys about how there are, like, cycles and some sort of mismatch of assets and liabilities may be a problem rather then an arbitrage opportunity?
This is just a rhetorical rant, but I am somewhat obsessed about how (almost) all the problems boil down to this same basic dynamic. I am sure I could find much better examples, but it boils down to the same thing. I guess that a lot of people feel like it is obvious that housing was overpriced, and especially looks so in retrospect. And that maybe god couldn't figure out the valuation of a cdo^2. But people need to live somewhere and no one has ever explained why the world needed cdo^2's.
Just saying.
And on a more serious note...
From the NYT's corrections page:
"Readers dissatisfied with a response or concerned about the paper's journalistic integrity [emphasis added] may reach the public editor at public@nytimes.com or (212) 556-7652."
"Okay, I'll think of something else.,..maybe I can get one of those green rubber band thingies from a Countrywide shill,...
sdtfs"
An ex-shill has one up for sale now on ebay.
It's the only authority I have.
ok, fine, but i'm still in charge of giving you your gold stars. let's see, you get two for yesterday, and for today, you just get a rainbow sticker because it looks like somebody stole the rest of the gold stars from my desk drawer.
"Signing legally binding documents you don't understand in the first place, only to come to that realization in the last place. "
But that is how people are. Honestly, how many people on this thread have an up-to-date will? Less than half, I bet. Everyone knows they should have one. But most people don't. Talking about what people should do, when they clearly don't do it, isn't a good way to decide policy, IMO.
And Fred, I hated property law too. But my dim memory is if you have real property conveyed to you, and you don't record it, you are subject to the claims of a second good faith buyer of the same property.
"But that is how people are. Honestly, how many people on this thread have an up-to-date will? Less than half, I bet. Everyone knows they should have one. But most people don't. Talking about what people should do, when they clearly don't do it, isn't a good way to decide policy, IMO."
Since you are quoting me; I for one have an up-to-date will, among other things.
"bucket of scum" is being kind.
It's funny that he thinks a lame ass disclaimer will protect him from the same type of sellers who are suing lenders over legal contracts that are enforceable.
He couldn't be more wrong on so many things. looking forward to the follow up when this clown gets sued.
i was talking about quitclaim deeds. but in general it works like this:
assuming we're talking about modern life and recording statutes, there are three kinds, race, notice, and race/notice.
under none of these is recordation a requirement for the validity of a conveyance per se.
the recording statutes serve as a way of determining PRIORITY OF TITLE WHEN THERE ARE MULTIPLE GRANTEES FROM A COMMON GRANTOR.
oversimplified, priority of title refers to what happens when there are multiple grantees of a common grantor.
in a race jurisdiction, knowledge of the prior grant is irrelevant, whichever one records first wins.
in a notice jurisdiction, knowledge is relevant; if you are a subseqeuent purchaser for value then if you had knowledge of the prior conveyance from the common grantor the conveyance to you is invalid. THIS KNOWLEDGE CAN BE CONSTRUCTIVE OR ACTUAL. CONSTRUCTIVE KNOWLEDGE IS WHAT RECORDING IS DEEMED TO GIVE THE WHOLE WORLD (THERE ARE OTHER WAYS TOO).
in a race/notice jurisidiction, it works as a notice statute until there has been a subsequent grantee without notice from the common grantor, when it becomes a race statute.
in these cases, incidentally, recordation is still not an ingredient of a valid conveyance; rather it can, depending on the circumstances, DIVEST title which passed by a prior conveyance.
this is why i hate property law.
sorry it should have said divest title which otherwise would be valid by reason of prior or subsequent conveyance depending on notice and statute.
no more i quit. i had to do this in 1979 but not anymore
I believe Tanta is trying to alert people they need to think carefully about what they're going to do, because just because someone else got away with it, doesn't mean it's legal
I might add, '...just because someone else said they got away with it..."
In fact, that statement might be shortened to "...Tanta trying to get people to think."
Oh, and by the way, us Californians are the center of the universe, even if we have moved to other states.
Cheesecake is better with fresh blueberries, not the frozen kind.
cheesecake should be made of ricotta cheese and some sugar and some lemon juice.
anything else is mucilage.
Talking about what people should do, when they clearly don't do it, isn't a good way to decide policy, IMO."
Emma,
Good point, so what do we do? Put plain english warnings, explanations and examples on ARMS, so that people understand what they're getting into.
Something like this: Your starting rate is 5%, but your loan will adjust in 2 years and depending on the 10 yr Treasury (or whatever the rate is based on), your rate could INCREASE 2 % above the rate, etc. So, when the adjustment occurs, your rate could INCREASE to 8% and then your monthly payment would be $__________.
"Good point, so what do we do?"
somebody stole the rest of the gold stars from my desk drawer.
Sorry. I had to give one to TruthRequired for figuring out that Tanta was just a double-secret operative for the Tan Man all this time.
Whew! You stopped at the cheesecake! I was almost afraid to refresh the comments for fear I was going to read, "Okay, people-- that's it! I've bought the apple strudel
Well, as long as she stayed away from the sticky buns.
The recession is over!!!!!
Lawyers will increase spending more then enough to lift us up over the next 18 months to end any sign of a slowdown.
Hurrah!
Move over mom and apple pie, second hand stories of litigious, over burdened borrowers is the most American thing I have ever heard of.
Russ writes:
dunno if Jacksonville actually counts, population-wise it's a "big" city, but it's not very dense...but 100k will buy some pretty decent housing right now...
The story was in the New York Times, not the Jacksonville Times. 300K might get you a run down house in a bad section of the Bronx, but few would call that "affluent".
Russ | 03.20.08 - 11:28 am | #
Excellent strawman Russ...point was the original poster made reference to big cities in general not NYC specifically...Jax, FL is 6th or so in the USA by population...
Uh, Tanta, California is the center of the universe. I know, because I live here. After all, I can plant Spring flowers now, while most of the rest of you will have to wait another month, at least.
that she's ignorant and stupid and unorganized. I suppose you can say that, if you get a kick out of judging people.
It's no so much a "kick" as a necessary part of loaning people money. If you're stupid and ignorant and unorganized, you likely are a higher risk borrower.
point was the original poster made reference to big cities in general not NYC specifically
Sorry, try again. The point the original poster made about big cities in general was the strawman.
Jacksonville as a metro area is around 50th, city proper is sort of a...what's the word... strawman.
I am not a fan of the Certified Mortgage Planners. The main reason why is that the loan originators who have attended the three day event report back to me in the classroom (I'm an instructor) what happens at the CMPS events. The LOs are taught how to network with financial planners and trade leads in order to help homeowners "plan" to use their equity and their mortgage as a financial tool for wealth (like that's even a reality anyomre.) LOs say that each afternoon/evening, the audience is subjected to sales pitches for coaching systems, and so forth.
At the end of the 3 days, the LOs must pass a test in order to use the CMPS designation.
Since I'm a teacher, hey, I'm all for education, but the problem here is that BRAND NEW LOs who know nothing about state and federal laws governing mortgage lending, are able to hold themselves out as quasi-financial planners.
I called BS on the CMPS last year; Tanta is right. If the bar is set too low so that almost anyone can achieve it, the designation is meaningless.
Foreclosure rescue scams are the new growth area.
Where do you think all the predatory lenders ended up?
I can't believe the NYT editor let this one through.
Probably a dead thread by now but I'd rather know that loan officer has processed a loan, underwritten a loan and maybe even closed a loan at some point in their history than that they have some letters after their names. Heck, I'd settle for processed a loan-like really processed, the way we used to, you know, with documentation and all.
Hmmm. Well, I went for a 15-year fixed mortgage because nobody in the mortgage business could explain the variety of ARMs to me in such a way that I could accurately assess the risk of payment vs. expected cash flow. And I'm enough of a quant that Moody's was seriously thinking of hiring me. Heh.
By the way, to all you JDs out there, how much overlap is there between English real estate law and US real estate law? I ran into some of the weirder versions of U.K. real estate regulations when in London and was wondering whether we had imported the complete caboodle, 100-year leaseholds and all.
about 15% of english property law has been obsoleted in most us states, some of the weirder estates and differences between profits and easements are not the same or the differences no longer used, and so on.
I'm a big fan of Rhonda's personally, but I agree with Jillayne. It seems like the CMPS was invented as a way to make "equity extraction" sound sophisticated, when in reality it was used to convince people to tap as much cash as possible.
I know Rhonda doesn't use it that way - but I know too many people who push "equity management" to get people to cash-out refi as many times as possible.
Loan originators can't get a good designation because (1) there isn't a unified designtation that means anything (like NASD) and (2) most consumers don't care anyway - they're still listening to whomever pitches the lowest rate.
Loan originators should be regulated as a stockbroker is. Required to take a test and pass it. Required to register w/ HUD who should expend their enforcement of originators AND realtors.
15 years in this business and I have yet to see a regulator. When I have called regulators to report fraud, I was ignored.
Yes, a mtg broker says more regulation is very welcome!!! I see it as leveling the playing field and weeding out the bad apples. But perhaps the consumer is actually happy with hearing a low rate that really doesn't exist....
I read Rhonda regularly. Read her stuff and you'll get a pretty good sense of her. Common sense advice, like "know your mortgage", consistent with her quote.
Here in WA state, there are plenty of new regulations coming: mortgage brokers required to act in a fiduciary manner, licensing since Jan 07 (with testing and CE training), and clearer disclosures of loan terms coming.
Obviously, a lot of it has come too late, but at least it has come.
Morgan - excellent call on point #2!
At the consumer level, these acroymns are utterly meaningless.
Fred--thanks!
I just got back from out of country and have read over the comments and seen the NY Times story.
I don't know what you guys think. I help people every day who are in a terrible mess. I offer a very good product with lots of testimonials and many people who are grateful for the help.
My product is a home study course that costs $17.97 to try out, which covers shipping and handling, and $97 if you keep it. Most people keep it.
regards
--Richard
And one more thing I feel I should respond to:
Is this Geller simply incompetent, not understanding the difference between non-judicial foreclosure and antideficiency statutes?
I know quite a lot about the differences actually.
Non-judicial foreclosure in general lets a borrower get foreclosed on and not owe anything on their first mortgage, assuming the first is the mortgage that forecloses (as it usually is these days.)
What is inaccurate about that?
Trustee sales usually do not let the lender pursue a deficiency judgment. There are some exceptions but in general this is so.
Calling someone a "bucket of scum" is hardly polite and I don't appreciate it.
regards
--Richard
Geller--
"Non-judicial foreclosure in general lets a borrower get foreclosed on and not owe anything on their first mortgage, assuming the first is the mortgage that forecloses (as it usually is these days.)"
The problem is that you are using "non-judicial" and "non-recourse" as if they go hand in hand. "In general" doesn't cut it. "Non-judicial" literally means "no judge". It doesn't mean "off the hook" like "non-recourse" does.
But all of this is just a side issue. You obviously weren't called a "bucket of scum" by Tanta because of this. Are you really going to sit there and suggest that, as a buyer, I should go up to someone who owes $150K on a house that is worth $150K, in this market environment (declining house prices whose monthly mortgage payments are still way above monthly rental payments), and suggest to a seller that this makes any sense at all?
My best friend is a real estate investor and has done many "subject to" deals, because he was self-employed and didn't have top-notch credit. However, he only did "subject to" deals when prices were rising and other circumstances made the situation viable (renters covering all or most of the monthly payments, place needed improvements to get top dollar, etc.). Pretty safe to say that the situation is not exactly ideal today.
Now that we know Tanta is a Countrywide double agent, I can go back and read her posts with a different point of view.
I got interested in how she's communicating with the mother ship and I think I'm onto something. At first I tried a simple letter transformation, but the code (or cypher) is too tricky. So then I thought to do a word frequency analysis and, voila! Pay dirt. She uses certain words like mortgage and responsibility far more often than the general populace. I think a few more days should be enough to crack the code. The truth is out there,...(cue eerie music)
So then I thought to do a word frequency analysis and, voila! Pay dirt. She uses certain words like mortgage and responsibility far more often than the general populace. I think a few more days should be enough to crack the code. The truth is out there,...(cue eerie music)
sdtfs | 03.21.08 - 5:29 am
Now that's the funniest thing I've seen all day! While you're at it, you can run grammar check and spell check on all her posts to confirm Why-should-me's complaint the other day about her incompetence with the English language...
I know quite a lot about the differences actually.
Non-judicial foreclosure in general lets a borrower get foreclosed on and not owe anything on their first mortgage, assuming the first is the mortgage that forecloses (as it usually is these days.)
What is inaccurate about that?
Trustee sales usually do not let the lender pursue a deficiency judgment. There are some exceptions but in general this is so.
Besides what Chris G. just explained to you, may I point out that you seem confused about a state in which a lender may foreclose non-judicially and a state in which a lender has to do that?
I am reminded of a discussion we had a while ago about some guy--this one was in the Washington Post--accusing National City of unfairness because NCC wouldn't subordinate a second lien.
The guy showed up in our comments, and had us know that his loan officer had told him, back when his loan was originated, that second lienholders "always" allow subordinations. He, the LO, had "never" in 12 years seen it not happen.
Well, the fact is, as we pointed out, that it might have been rare over the last 12 years, but that wasn't because the lenders didn't have the right to refuse to subordinate. This thoughtless assumption that things will always go on the way they have--there will always be refis, there will always be HPA, things that are "options" will always be "obligations"--is part of what got us into this mess.
You are in essence telling people that lenders will always foreclose non-judicially in preference to judicially because in the past they have done it that way.
I'm here to suggest to you that it's possible that was then and this is now, especially if you scumbuckets keep encouraging people to defraud lenders. Lenders may decide it's time to make some examples of some people, and we may find they have the legal right to do that. I can't assure anyone a lender will pursue every remedy under the law it is entitled to pursue, but you can't assure anyone a lender won't.
I hand out my advice about these matters for free. I would think that for $97 bucks you could stop confusing the issue.
Is anyone really surprised by this latest bit of fantasy?
Calling someone a "bucket of scum" is hardly polite
How about 'unprincipled'?
Calling someone a "bucket of scum" is hardly polite
Oh, yeah, I forgot to be polite to a scumbucket. Silly me.
We were talking upthread about the problem of reputable people (people like Rhonda) wanting to escape the taint of "mortgage broker" by adopting some fancy new title. I pointed out that the scum just adopt the new title, too. I was asked, basically, what the alternative is.
My alternative is to call a scumbucket a scumbucket. In other words, if I am "polite" to Geller, then I'll use the same terms to describe him that I would use to describe Rhonda Porter. That forces Rhonda to try to find a new title, and the cycle rinses and repeats.
How about Rhonda (and Morgan and Jillayne and all our decent friends on the front end) just stick with being loan originators or RE agents of some sort and we scrape up the guts to call out the scumbuckets for what they are?
Perhaps we could reclaim our profession instead of trying rhetorically to escape its taint? Just askin'.
Richard Geller writes:
"I just got back from out of country"
Someplace without an extradition treaty?
Hi Tanta, I will continue reading your blog because you write great stuff. And I appreciate it.
We are speaking of different categories of borrowers.
For example, most of my work is with people who have few assets. Almost all of them have a negative net worth.
They got in over their head because they speculated in real estate.
The laws in many states such as California encourage speculation in real estate. Buying with little or no money down was a rational act to buy an option on an asset that was appreciating spectacularly.
Sadly, their speculation was often rational because they don't stand to lose all that much even if they are upside down. It was also official US government policy to extend credit to homebuyers with little or no equity.
Yes I understand the difference between non-recourse, non-judicial and judicial foreclosure, but you can't get into minute details in a newspaper article when as a practical matter there is often little difference. The trustee sales are going to go forward and the lenders aren't going to push judicial foreclosure on borrowers with no assets if they can foreclosure more cheaply and quickly.
As a practical matter, lenders are not pursuing these sorts of people through non-judicial foreclosure.
BTW, I do think that the story of the second mortgages needs to be told.
Unlike in past slumps, the second mortgage holders lack any equity and will not, therefore, reinstate the first mortgage and foreclose on the borrower.
These second mortgages are and always have been "wiped out" in terms of equity protection.
So you have:
This indeed is a huge story.
And, short sales are an improvement in your credit over foreclosure.
First, there is no public record report of a Notice of Default, assuming a borrower arranges a short sale before such a notice is filed with the county recorder or courthouse.
Second, short sales are reported usually as "paid - settled for less than the amount owed". Rather than as a foreclosure.
Third, there is more room for negotiation in a short sale than in a foreclosure. Including negotiation on issues of credit.
Fourth, if a borrower does a short sale, that borrower can often remain current in her payments, eliminating what would otherwise be 90, 120 or more days late.
BTW, the article mentioned a principal reduction and some people here doubt that it happened. Well, it happened and it is a much bigger story than is indicated in the article.
I thank you for your terrific work and I appreciate the opportunity to comment here.
regards
--Richard
The "don't tell the lender part" is usually unnecessary. The mortgage "Due on Sale" clause might not be triggered by the mortgagor (borrower) putting the land into a trust, and appointing the "buyer" as a trustee. At least that's the theory. I haven't seen this litigated by lenders who have bigger issues than enforcing DOS clauses that were drafted in the 20% interest rate era to prevent "wrap-around financing."
If a non-performing loan suddenly starts performing, the lender isn't going to fuss. The real problem with this is for the "seller" - it still has an obligation on the note.
Richard, flattery is going to get you nowhere. I don't care what your Day's Inn weekend How To Succeed In Business course told you.
You wrote the shit I quoted on your website, not in the NYT. Don't tell me the problem is that the Times article was too short.
And I notice you keep dancin' around your advice about these "subject to" sales.
If you are telling people who are basically insolvent that they probably don't have to worry about getting hit with a deficiency judgment, then you ought to be put in jail for trying to collect $97 for that bit of wisdom.
And if you're telling people who are basically insolvent to go assume some existing underwater mortgage in a declining market while failing to abide by the covenants in the note and mortgage, I'm telling people that you're about as "helpful" as a large-caliber bullet wound.
Why are you getting people who are flat broke so worried about their credit reports? If they're flat broke they might well come out better in foreclosure--the lender eats all the expense and effort in that case, and in a short sale you are of course suggesting the borrower pay a real estate agent out of money they haven't got. Let me guess: your special plan for getting that BPO to come it at the "right" number involves paying for it, no?
Here's a news flash: when these folks go to get new credit, someone is going to expect them to be solvent. If they've got some money, the lender might accept a "hardship" explanation of a prior FC. If they're waving around a credit report showing "just" a "settled for less" on the mortgage and they're still broke, there will be no new credit granted.
The predators picked the pockets. The pockets are now empty. Jillayne called you on this one.
Haloscan's buggered again. The last comment I see after I refreshed is:
BirdsEye | 03.21.08 - 9:36 am
I seem to specialize on getting in at the tail-end of dead threads. So be it.
I followed a link a few weeks ago from Crooks & Liars and wound up here. My bent has been political heretofore - but economics has been both the dog and the tail-that-wagged-it in politics. Since I have to live in both worlds, I have had more than a passing interest in economics since Nixon delinked the dollar and I made precious metals profits in the seventies.
So I spend a lot of time here now.
Fact is, IMO, 90% or more of the investigative reporting these days happens in places just like this. Media consolidation has meant elimination of competition and drastic reductions in the number of reporters, fact checkers, researchers - the people who actually dig up the news and verify it.
Most outlets of the MSM rely on their reputations and the fact that there is no one with a megaphone loud enough to gainsay them. The NYT is no different. They are unusual only in that they still DO occasionally have a real story (They employ Paul Krugman and William Krystal)- but it is surrounded by so much drek (like the amateurish crap TANTA dissected here) that it is the proverbial jewel in the dungheap.
We followers of politics piss and moan about this on a daily basis. What is happening is that the MSM are quickly becoming irrelevant as news sources. Anybody who wants to know what is going on comes here - or to other places on the net where objective truth is still an issue.
If this guy is ever deposed, I know how it will go:
The R-Rated CEO
Time to leave. I still like your stuff Tanta.
regards
--Richard
Tanta, I am sorry to report but you finally got something wrong.
There is indeed a major difference between a scumbucket and a bucket of scum. The former is merely an odious container. The latter is both that disgusting vessel and the putrid contents therein. A scumbucket, while objectionable, is not capable of spreading noxious content and contaminating others. Clearly we are dealing with a case of a bucket of scum seeking to spread its tainted cargo. That the container appears auto-refilling makes things all the worse.
Here, all who think there are wiseass ways out of legal problems.
SUBSTANCE RULES OVER FORM ALMOST ALWAYS.
I flatly guarantee you no literate court (and you know who you are) would be fooled by a deed to an intervivos trust with an unrelated third party beneficiary.
Jesus, that is so obviously a disguised sale that it's not even funny.
And the tax people would hold it so as well.
You want out of a mess, best way is to know what you're doing before you get in one; then use a competent dedicated attorney. There are at least seven I know of in the US, and it's only 11.18AM so I might meet another one today.
I want to point out one reason that people who are "dead broke" may be very concerned about their credit reports.
With "universal default" provisions in credit card agreements, individuals with large amounts of CC debt and non-extortionate interest rates may be willing to do almost anything to keep that credit rating. If you owe, say 50k in CC debt, a bump from 8% to 29% is ruinous.
Not getting into other issues here or whether that debt is dischargeable in BK or not - but most people believe that it is not these days.
Again, I only say that to point out that preserving a credit rating may be about more than desire to buy a SUV with a big screen flat panel TV in it - and it is well established that most people who get in over their heads do so because of a medical crisis , divorce, or job loss.
I have been on both sides of that coin. Injured on the job, denied benefits, slowly strangling over a period of years - with a divorce thrown in.
Now I have no debt and rent. I'm not exactly in favor of my tax dollars bailing out the imprudent grasshoppers while we prudent ants remain priced out of the housing market - but every hardship case was not the result of stupidity or malfeasance.
Again, I only say that to point out that preserving a credit rating may be about more than desire to buy a SUV with a big screen flat panel TV in it - and it is well established that most people who get in over their heads do so because of a medical crisis , divorce, or job loss.
But that is why valiant commenters tried to point out a couple hundred comments ago that a short sale is a "derogatory" on your credit report, and you cannot guarantee that CC lenders with a universal default provision won't take advantage of it.
I can promise you that mortgage lenders and investors--and I'm talking GSEs here with some real clout as well as the big banks and so on--are not going to put up with a situation in which people's negative mortgage performance is "hidden" in order to escape the CC lenders.
I am not minimizing the harm to people who are broke and getting yanked around by the CC people. I am trying to point out that if we let the "credit repair" scams go on, then mortgage lenders will end up making new loans to people whose past experience with a mortgage was not successful.
There used to be a valid point to a lender getting a credit report: to see how you handled debt in the past.
Geller is advocating a scenario in which people can end up with credit reports that do not give a true picture of what went on last time they tried being a homeowner.
Again, I'm not defending the CC lenders taking advantage of the situation via universal default. But I also don't want us to end up in Bubble II because we "wiped out" the data that might allow us to make better credit decisions in the future.
It is not unknown that a servicer will agree, as part of a workout, to report your debt as paid-in-full if you cooperate and make at least some token payment as part of a short sale or deed-in-lieu. They understand about carrots and sticks. But if you are cooperating and verifying your financial situation sufficiently to prove your hardship, it isn't so misleading to have your account reported as PIF rather than settled.
It's crazy to think they'll agree to report you as PIF if you tried to screw them with some lowball BPO, to return to the scam under consideration.
i thought (and can be wrong) that there are a few legitimate non-profit (the real ones, not the phony ones) credit counseling services that can arrange lowered interest rates and the like in these cases.
if so its not like you're in debt jail forever, or am i wrong?
i thought (and can be wrong) that there are a few legitimate non-profit (the real ones, not the phony ones) credit counseling services that can arrange lowered interest rates and the like in these cases.
Yes, there are, but I'll tell you the ratio of scummy "credit repair" outfits to bona fide credit counseling services is probably 100:1.
That is why I and the commenters above are so damned hostile about slapping down the Gellers of the world when we find them.
If you want a number for a reputable service in your area, call the nearest HUD Field Office for a referral. Or try the Hope Now number.
DO NOT look in the Yellow Pages or try a Google search. You'll get Geller and colleagues.
NB: And don't assume that "non-profit" means jack anymore. A lot of these outfits are "non profit" because they're funded by credit card lenders, and all they're going to do is make sure that BK-dischargeable debt gets paid first.
I hope there is no confusion about the point I was making and what I meant by it. I was only responding to a poster who suggested that the only reason to preserve a credit rating was to pile up more consumer debt - not endorsing some hare-brained scam.
I can't imagine living in a place that could be foreclosed at any time (like after I had made timely payments for years and like six months before final payoff) even if I made every scheduled payment.
I did want to respond to the widely promoted disinformation about debtors in general - even though I am happily debt-free and could provide anecdotes myself about irresponsible debtors.
"Non-Profit" by definition only indicates that the corporation cannot pay dividends to shareholders. The executives of non-profits can take whatever salary is granted, by themselves or others.
There may be some other state level regs, but there are many states in which you can incorporate.
Fred,
Nowdays, Credit counseling that arbitrate lower payments, rates, terms actually is as derogatory as a BK.
Hello all-I am a new reader to this blog and am impressed by the comment conversation, which I read all of this morning re the NYT article:
I believe I can add a bit to it:
Tanta writes: I WAS CRITICIZING THE TIMES FOR QUOTING THE GUY ABOUT FC LAW, ABOUT WHICH IS HE APPARENTLY IGORNANT.
After all, igornance is bliss.
After all, igornance is bliss
You seem to be the only one who noticed that.
Tanta,
What about Jane, my dear? Ms. Birnbaum? You know, the alleged reporter. It's quite possible the name is as fictitious as Victor Applegate III - writer of the illustrious Tom Swift pulp in the fifties.
If she's a real mirror fogger, she's the NYT gatekeeper and she's the one who ought to be tarred and feathered.
Richard Geller is just one of thousands of scamsters. Ms. Birnbaum should be fired and possibly barred for malpractice - if there is such a thing for reporters. I know this will be shocking but have you considered that Mr. Geller just may have paid Ms. Birnbaum for that nice writeup?
If so I believe that qualifies for disciplinary action on the part of the Times.
Trouble is that even the Grey Lady has turned into a conduit for infomercials what with advertising being down in the hole and all.
"It was also official US government policy to extend credit to homebuyers with little or no equity."
i don't think so. it was official us policy to let the 'free' market rape and pillage the american people, but i don't remember them proscribing exactly how they were to do that.
meli
no one has ever explained why the world needed cdo^2's.
Just saying.
Ziggurat | 03.20.08 - 3:52 pm |
Tanta, stop me when I screw up.
Zig, if I can call you that, that's just obvious. You start with a bunch of loans that are toxic sludge and make a REMIC out of them, using fancy math and bad assumptions to turn most of the sludge into AAA stuff. But you can't turn all of that into AAA - and everyone wants to buy AAA. So you take the still-crappy-looking stuff from a bunch of REMICs, using fancy math and bad assumptions to turn most of the sludge into AAA stuff. (That shouldd sound familiar, BTW) That's a CDO. But there's still stuff in the CDO that's not AAA. So you take the the still-crappy-looking stuff from a bunch of CDOs, using fancy math and bad assumptions to turn most of the sludge into AAA stuff. That's your CDO^2.
How could we ever have lived without that?
Tiresome. The blogging world is getting too tiresome.
By the way, every blog chain I've read this week has sh$# spelled out loud and plainly. We really aren't bothering to hold to higher standards at any level anymore, are we?
If you have real arguments then why not make them instead of making personal attacks.
Ad hominem attacks are just a sign of laziness.
I talk to people every day who are in deep trouble. I refer them to others, I sometimes help them, sometimes I just make them feel better.
I don't charge thousands of dollars for giving worthless advice.
So why am I being attacked here?
I finally figured why some people are upset about this article.
You must think that people like me are encouraging fatcats to exploit the system and borrow hundreds of thousands or millions and then not pay it back.
That's all I can think of. I can't imagine why there is no much venom over this otherwise.
I try to be accurate. You can't go into all the little details in an article like this one. There is room for disagreement also.
For instance, in California, it is possible for lenders to pursue a borrower judicially even if the borrower and lender have the normal note and deed of trust arrangement.
In theory, if the loan is a refi the lender could get a deficiency judgment by pursuing judicial foreclosure, even in California.
But this rarely happens so why worry about it provided you aren't a borrower with other assets. If you are, then you may want to think about it.
Too nuanced for an article like this one.
Another thing: there can be personal liability just about everywhere for second mortgages. Just the nature of how the loans have been made -- with the second mortgages pretty much under water universally. So second mortgages can be said to be "Recourse" loans in almost all instances.
This thing is a bit complicated because it all depends upon if you have assets or not, which state you live in, whether you have one loan or two.
What is true, regardless of what state you are in, is that the system since 2001 actively encouraged people to get into big debt. It worked like this: big loans were made to people who couldn't afford to service debts that size. The idea was to put huge commissions on the books of the banks who had by this time become nothing more than glorified mortgage brokers.
So rich and poor dived in and saw real estate homebuying as an option: either they could make even more money, huge cash-on-cash returns, or they could walk.
I sold my real estate well before the S--t hit the fan. I saw this happening because I was in a similar cycle in California in the early 1990s.
But millions of people lack an understanding of economics and history. They saw their neighbors seemingly get rich. They saw how easy it was. They saw the lenders pushing huge loans on them.
This is no different than other booms preceding it except that it was bigger in magnitude than many. If you go back 100 or even 180 years you will see other similar booms caused by credit expansion.
This one was bigger due to no anchoring in any pretense of a gold standard, perhaps. And the Fed and other central banks were trying to reflate to prevent a deflationary collapse post-tech boom and stock market crash.
But it's always the same. Asset inflation fueled by easy money. And a people that are turned into speculators to copy the easy riches that they observe their neighbors making.
My role in this is to help people out and make a good living doing so. You can write and comment and talk and blog and I hope you make a good living doing that.
regards
--Richard
regards
--Richard
I can haz tjeezekake too?
(Promise, I'll read every linky all thru ... like, really!)
For the record:
My name is Tom Geller, and Kaplan Publishing will release my book, "Save My Home: 10 Steps to Avoiding Foreclosure" in May.
I expect some people will confuse Richard Geller and myself. We're not related and have never met, to the best of my knowledge.
Incidentally, in the book I recommend that people avoid for-profit "mortgage consultants." I believe the same information -- and better -- is available from nonprofit sources for free, and that the best person to talk with lenders et al. is almost always the principal. The only exception I can think of is when other legal actions are involved.
Having said that, I don't know Richard Geller's services, and can't comment on them specifically. Cheers,
--Tom Geller
Author, "Save My Home: 10 Steps to Avoiding Foreclosure"
Save My Home: 10 Steps to Avoiding Foreclosure | Fight foreclosure intelligently, effectively, and with dignity