Reading between the lines, it would appear that GE's missing the numers may have been related to BSC's bailout and the new PDs facility at the FED which resulted in a sharp decline on the value of CDSs for Bear, LEH, etc.
Any views/confirmation of the possibility GE "screw" the quarter numbers by betting against financials. Did Immelt want to pull out a "GS type stunt" but failed?
What the law says vs. what Average Joe hears: "Well, I was gonna hurry up and move out, but hey, I have 150 days...that's alot of rent-free living".
Also: "Well, I was gonna fight to keep the house, but forclosures have got to be fairly common, expected, and perhaps forgivable, if they are gonna change the law to help me and screw the bank."
Also: "That empty house next to mine, you know the one I'm whose lawn I'm mowing and trees I'm watering, well it's gonna be empty for a while. Which means my house is gonna keep going down!"
Sounds good to this lawyer, and excellent as to not shafting the tenants, and the proof of ownership thing too.
By the way, anent my post on another thread, the lost note pleadings often in Miami-Dade, DON'T have a copy of a note attached. some just have a summary of the note, which is just plain wrong, when it's an adjustible mtg.
And the lengthening would be nice, but nowadays, here at least, nobody can sell or refinance, so it does no good.
People who seem to have equity, even if you assume a20-30% haircut off peak, can't refinance. Even a 40% haircut.
Yours truly used to stretch things out and people almost always either got current or sold, because that's how i picked my clients. Now, nothing's moving at all. I don't think MD is quite as bad ashere.
Legal junkies may also be amused to note that this law specifically allows that "proof of ownership" of a loan required to be provided with the docket file may be certified copies of mortgages, notes, and assignments in lieu of the originals. That should end all the hoo-haw over missing originals.
Tanta, I tried to pay the grocer with photocopies of hundred dollar bills (you know legal tender). He disagreed with your assertion.
Tanta, I tried to pay the grocer with photocopies of hundred dollar bills (you know legal tender). He disagreed with your assertion.
So you're telling me that if you try to make a mortgage payment with an "e-check" instead of a physical ink-signed original, I should just refer you to the FC attorneys?
Follow the LACK of money:
The lean government infastructure that deals with foreclosures is overwhelmed. They are not known for their adaptive nature and need extra time. Not to worry, I hear that housing has bottomed.
Tanta writes:
[Tanta, I tried to pay the grocer with photocopies of hundred dollar bills (you know legal tender). He disagreed with your assertion.]
So you're telling me that if you try to make a mortgage payment with an "e-check" instead of a physical ink-signed original, I should just refer you to the FC attorneys?
No, I'm just pretty darned sure there are originals of the $100 floating around and my photocopies. The Treasury will issue you new currency if you can prove the destruction of the original.
Repeat substituting your financial instrument of choice.
I find it incredibly dangerous to allow the possibility of multiple valid certificates of ownership for a single thing. If the original is lost then what needs to happen is to have a new replacement issued not accept photocopies and a promise.
By the way, anent my post on another thread, the lost note pleadings often in Miami-Dade, DON'T have a copy of a note attached. some just have a summary of the note,
Well, if it has just a summary attached to it, then it's what you could call a "Lost Note and Lost All Copies of It, Too Affidavit." I have never in all my years in this business seen one or executed one. Even after a bad flood at one lender I did business with, there was a photocopy of a bunch of soggy bits reassembled on the copier plate for me.
I just habitually use the term Lost Note Affidavit to mean Lost Original Ink-Signed Note Affidavit.
Jeebus on a Flat Bed, but every time I look at a loan file these days there are TEN copies of the note in there. If you really have a servicer who can't even scrape up a copy, you got yerself a serious incompetent.
I find it incredibly dangerous to allow the possibility of multiple valid certificates of ownership for a single thing
Well, maybe that's our problem here.
A promissory note is not a "certificate of ownership." It is not a title--that'd be your deed--and it is not a beneficial interest in the security property--that'd be your mortgage or DOT, which is recorded in the land records, whatever happens to the original.
Your note is your promise to pay. It is a contract, not a certificate.
If you think people don't go to civil courts on other matters with a copy of a contract, you're naive. Have you noticed that all YOU have is a copy of your note?
... but then again the tenants have all rights they had under the old owner. That seems perfectly fair to me, and it especially protects tentants "recruited" into a property by a desperate owner just before foreclosure.
The "recruited" tenant may have been given an extremely generous lease that the new owner (the bank) now has to honor. Is there any protection against this?
Second, the law specifically does not "extinguish" a lease in a foreclosure: the new owner of the property has all rights vis-a-vis the tenants that the old owner did, but then again the tenants have all rights they had under the old owner. That seems perfectly fair to me, and it especially protects tentants "recruited" into a property by a desperate owner just before foreclosure.
So do you think it possible for lenders to write into their contract language forbidding owners to lease out the property without 'notification'... then require any lease be immediately 'breakable' upon foreclosure... Not part of the law but included in the terms of the loan contract to get around the law?
I can't imagine that provision of the law would be much of a hurdle if the lender really wants them out after FC.
Not in this statute. I'm sure there's some other statute or precedent under which the bank could sue to break the lease if it was for 99 years at $100 a month.
So do you think it possible for lenders to write into their contract language forbidding owners to lease out the property without 'notification'... then require any lease be immediately 'breakable' upon foreclosure... Not part of the law but included in the terms of the loan contract to get around the law?
I don't think so . . . I guess our lawyers should chime in there. The thing is, it's a double-edged sword for lenders. There will be cases where a borrower can get bona-fide tenants paying market rent and therefore not end up in foreclosure. To prevent them from renting the thing in case you do have to foreclose would be kinda self-defeating.
I do think lenders will start putting an "Assignment of Rents" rider on all mortgages, not just those that are "officially" originated as investment properties. That does give the lender some rights to demand at least a copy of the lease.
I do think it is interesting how every little detail in these new laws, bailouts, and foreclosure assistance programs gets modeled out to the nth degree to see who will take it in the shorts. Somebody's gonna get stuck with a loss in this mess. Hence the objections from various stakeholders to anything that cuts into their take. It's a prescription for gridlock on solving the actual problem. Of course, I think all these attempts are mostly delaying the inevitable. I guess it is hard to know for sure what will actually spread the pain most evenly.
If you think people don't go to civil courts on other matters with a copy of a contract, you're naive. Have you noticed that all YOU have is a copy of your note?
Of course, exactly. They prove to the satisfaction of the courts that they have a legitimate claim/standing/whatever that they then produce in lieu of the original documentation. If they have the original they don't need that step. Problem is as currently practiced if they don't have the original they don't want to be bothered with that step.
I am suspicious that somebody might try running a Mel Brooks' "The Producers" scam.
If the crazy clause about tennant rights in 7-105.6 is entered into law, it will take about 5 mintues for every shady investor and every third deadbeat in the State of Maryland to figure out that they can rent the property to their Brother-in-law/friend/Mother/Son, for 5 years at $10/month. No doubt there will be legal challenges on this issue.
Well, Rob, I know you're suspicious. I just don't know why you want to enshrine that in law.
You are aware, are you not, that with computers these days it would take most of us a couple minutes, outside, to forge a new original note? The only thing on one that is "original" is the inked signature.
In fact, I know of lenders who ask borrowers to execute multiple copies of the note, so that should one get misplaced there's another original.
It'd be a cold day in hell when you'd get me to sign two $200,000 original notes, unless "DUPLICATE DUPLICATE DUPLICATE" were printed all over them in watermark. But then again, somebody like you would refuse to allow that watermarked copy to "count," so there'd be no point to it.
Frankly, you strike me as the kind of person who likes to complain about "bureaucracy" and "red tape," even while you keep imagining ever more improbable scenarios that then demand ever more "bureaucratic" solutions. Pretty soon, if this "originals only!" crowd gets its way, the foot-high stack of mortgage paperwork will get to two-foot-high, and costs will go up to store and certify custody of those three extra originals, and then the bitching about the red tape and sea of paperwork will start up again.
Perhaps we need to start requiring that mortgage notes be signed in blood. That way DNA testing would be able to determine if a note is original or nog.
There are attempts underway--have been for years--to close "e-mortgages" with electronic notes. It'll be a while before that catches on, but it's inevitable. I'm sure that twenty years ago the idea of buying something with a credit card without being present to sign the slip sounded wildly implausible to people.
Until then, though, we will have endless opportunity to philosophize about what an "original" really is, and why, outside art collections and urine tests, anyone much cares.
"...this law specifically allows that "proof of ownership" of a loan required to be provided with the docket file may be certified copies of mortgages, notes, and assignments in lieu of the originals."
In the spate of recent cases regarding proof of ownership issues - have the documents proffered to the court been certified, or simply duplicates? If they had been certified, I don't see why they weren't accepted by the courts in the first place.
Nope, the good old fashioned MD mortgage (like all the rest of them) still describes the property by legal description with the following:
TOGETHER WITH all the improvements now or hereafter erected on the property, and all easements, appurtenances, and fixtures now or hereafter a part of the property. All replacements and additions shall also be covered by this Security Instrument. All of the foregoing is referred to in this Security Instrument as the Property.
"Easements, appurtenances, and fixtures now or hereafter" have been around, as legal terms, since Richard the Lionheart, so it's not like there isn't plenty of statute and precedent for that. It has always been a breach of your mortgage to take out fixtures, and it will always probably not be prosecuted in most cases, although in states with a deficiency judgment allowed (like MD) it isn't wise to lower the FC sale price by much.
Amusing anecdote about a somewhat related concept concerning 'multiple valid certificates of ownership for a single thing'
The original of your birth certificate is worthless - it will not be accepted for a passport, for example, as my father found out a while ago. Only a copy of your birth certificate is valid for use to prove your birth/citizenship. That is, only a copy is accepted to uniquely prove your birth/citizenship.
Essentially, this is due to the fact that the original is supposed to be kept in a single location, under unbroken supervision, and thus a copy ensures that the original remains intact and correct. Which ironically makes the original worthless in all other contexts. At least for the State Department, and the DMV.
I had always assumed deeds worked the same way - that the original remained at a courthouse/registrar, and only copies were used when required, apart from those times a deed required additions, which were only done under supervision, with the copies being valid in all other cases.
"Of course, I think all these attempts are mostly delaying the inevitable."
These days, every month is a month further from that nervous breakdown.
If this helps families to hang in there one more month before they have to cram in with some not-too-thrilled relatives, then I'm all for it.
Here in NH, I believe we have really quick FC laws. I'm not really sure, but I wonder if delay would ever mosey up this way. I'm under the impression that NH is a pretty fiscally conservative state.
JD writes:
If the crazy clause about tennant rights in 7-105.6 is entered into law, it will take about 5 mintues for every shady investor and every third deadbeat in the State of Maryland to figure out that they can rent the property to their Brother-in-law/friend/Mother/Son, for 5 years at $10/month. No doubt there will be legal challenges on this issue.
JD | 04.12.08 - 1:10 pm | #
That was why I was wondering if the result will be for lenders to add a clause to the contract where they have to be notified in advance and can block a lease agreement if they find it 'problematic'... like a less than arms length lease agreement at well under 'market rents'.
Or does the law negate any such contracts... can a law even do that? Would it be such a prohibition be considered a 'taking'?
We went round-n-round on this a few months back... the rights of the contract holder (lender) vs the rights of the contract holder (tenant) with an irresponsible or unfortunate borrower 'walking away'... we got a lot of heat but not much light.
It'd be a cold day in hell when you'd get me to sign two $200,000 original notes, unless "DUPLICATE DUPLICATE DUPLICATE" were printed all over them in watermark. But then again, somebody like you would refuse to allow that watermarked copy to "count," so there'd be no point to it.
I have no problem with that. As long as whomsoever presenting the duplicate is aware that there is an original that could challenge their claim. You are correct, neither one of us would sign multiple "originals."
You are taking my concern to extremes. I agree "Originals Only" could never work. At the other extreme where we are now, assertions of lost originals when they aren't really lost isn't acceptable either.
Thanks for the analysis as always, Tanta: sometimes just knowing the nothingburger's made of nothing is worth something.
The stuff about the original notes, etc., just points to one of those longer-running "general issues" that is too diverse in its specific manifestations to have yet acquired a concrete name: most of the legal system's rules about the value of particular kinds of evidence only make sense in the context of some implicit assumptions about the economics of convincingly forging that evidence; as technology improves those implicit assumptions are increasingly unjustified, but the legal system has been very slow to react...where the trend is particularly pronounced the courts run the risk of becoming ad hoc personality contests: when neither side has evidence that they can prove beyond a reasonable doubt isn't forged, it's hard to find either side to have a preponderance of evidence in its favor, as there is no "evidence" to speak of.
Real estate seems unlikely to be where this dynamic starts playing out in earnest, because it throws off a lot of hard-to-forge data (mortgage payments, residential status, etc.); then again, it might, on account of the large amounts of money involved (at least for borrowers) and the increasing general perception that lots of untrustworthy actors were involved in mortgage origination.
someone: --If they had been certified, I don't see why they weren't accepted by the courts in the first place.
Tanta: - I don't either, but some respondents' attorneys have been trying to make hay over it. Ask Rob why anyone cares.
It's because it is property law. Rules that apply no where else apply to real property, just because. I can't imagine not being able to assign a patent because you couldn't find the original from the patent office with its gold seal. A certified copy from the patent office is legally the same thing.
I don't see Rob's point. Some pieces of paper are negotiable, like money. Other pieces of paper just memorialize a fact or agreement, like a contract. There is no actual problem with there being more than one copy of the latter, as long as you are sure it is accurate.
As long as whomsoever presenting the duplicate is aware that there is an original that could challenge their claim.
Well, see, that's the thing. We keep reading about attorneys going to town because the servicer is presenting a copy note or an affidavit, and there's all this hoo-haw about not having the originals. But the only party at risk would be the servicer (ie, that someone else with the original note would show up and get to foreclose in place of the servicer).
The reality is, you ask these people where they were sending their monthly payments--what they wrote in on the "pay to the order of" line of their checks, and you get one of two answers:
Uh, the same company who is here in court with a copy note trying to FC against me, or
Uh, I never made any payments.
Neither of those is much of a defense against foreclosure unless with 1 you can can prove that the payments were never past due. And you will prove that, by the way, with certified copies of cancelled checks, because you don't keep (or don't want to give away) your originals.
Neither of those is much of a defense against foreclosure unless with 1 you can can prove that the payments were never past due...
Tanta | 04.12.08 - 1:44 pm
You can take steps to prove date of delivery. Certified mail, for example. You could even have your check postmarked prior to putting it in the envelope.
Certification is the key.
Does anyone know if the docs that led to this brouhaha were certified? It would really help if we could get that cleared up.
Real estate seems unlikely to be where this dynamic starts playing out in earnest, because it throws off a lot of hard-to-forge data (mortgage payments, residential status, etc.);
That's exactly the thing here. Nothing leaves uneradicable footprints like a mortgage transaction. Loan sale contracts. Servicing contracts. Servicer payment histories. Cancelled checks. Recorded liens. Transfer of Servicing Notices sent to borrowers (as required by RESPA). Escrow analysis letters. The loss payee clause on your homeowner's insurance policy. A servicer could literally bring a wheelbarrow full of documents to the court to establish that 1) there was a loan 2) made to this person who 3) didn't pay as agreed.
I think some people really do believe this urban legend that there are shady servicers out there foreclosing on loans they don't even own. This, when the real problem if you want to worry about RE fraud is some creep forging a grant deed in your name, mortgaging the property without your knowledge, and absconding with the cash. What's funny about that? Well, if the mortgage lender had insisted on a certified copy of the grant deed from the county, instead of an original ink-signed one, the fraud might have been caught 'cause the county don't know nothing bout such a deed.
Tanta writes: If they had been certified, I don't see why they weren't accepted by the courts in the first place.
I don't either, but some respondents' attorneys have been trying to make hay over it. Ask Rob why anyone cares.
It'll matter when two people show up claiming the same loan. It'll matter when the terms as presented in court differ from what the borrowers copy reads.
Again, no problem with "certified," big problem with "asserted." I care because I see my rights diminished when it becomes acceptable to lie in court for the sake of expediency.
Feb. 22 (Bloomberg) -- Joe Lents hasn't made a payment on his $1.5 million mortgage since 2002.
That's when Washington Mutual Inc. first tried to foreclose on his home in Boca Raton, Florida. The Seattle-based lender failed to prove that it owned Lents's mortgage note and dropped attempts to take his house. Subsequent efforts to foreclose have stalled because no one has produced the paperwork.
``If you're going to take my house away from me, you better own the note,'' said Lents, 63, the former chief executive officer of a now-defunct voice recognition software company. . . .
"I probably have been to the Palm Beach County courthouse 100 times or more over the last five years, just to observe," Lents said. "In 99 percent of the residential foreclosure cases, plaintiffs are asking the court to accept a promissory note copy as the original because it is presumed lost."
Resistance doesn't come cheap. Lents has paid more than $120,000 in legal fees and costs so far to save his 5-acre, $2.5 million home. . . .
The guy's a deadbeat scam artist with a home purchased with ill-gotten gains, contesting FC because of a note copy. There is no question he isn't making payments. But OMG! His rights were violated because the lender had the temerity to submit a copy note!
Don't let's get off on philosophical ramblings about due process; I'm as AC an LU as anybody. This isn't about constitutional due process, this is about some archaic evidentiary requirement being abused to freeload.
(And this is exactly the kind of case I bet MD was thinking about when they specifically wrote "certified copy" into the law.)
You can take steps to prove date of delivery. Certified mail, for example. You could even have your check postmarked prior to putting it in the envelope.
That isn't the issue. We aren't talking about arguing over a late fee.
As I said in my post, nobody usually starts FC until the borrower hasn't paid in months. Now, in MD, you literally can't by law start until the 90th day after the first missed payment.
If you really had been making your payments, and that was your defense against FC, you would bring in cancelled checks to show that the servicer was cashing your checks!
It doesn't help you try to prove you mailed them. If you mailed checks for months and months that never cleared, someone is going to ask you why you failed to notice that and take steps to correct the problem.
Having the cancelled check with the servicer's endorsement right there on the back is pretty undeniable evidence that you are paying as agreed.
just for the informational purpose (i'm not seeing fc of my property in the future), at what point, is the process irreversible (aside from the borrower buying back the property)? at what point in the given time line example, could s/he restart (and pay back the missed payment) and still keep the house?
What would stop the RE fraud creep from having the grant deed recorded by the county and then taking it to a lender?
Funny you should ask . . . I just read about one in Chicago where they apparently tried that and got nowhere with some eagle-eyed old lady in the recorder's office who noticed something fishy. (So they "faked" the recording information, and got caught because they used the former Recorder of Deed's name!)
You get what you pay for with county government services, and I'm sure there are jurisdictions in which you could record your grocery list and get it back with the stamps on it. But I will tell you that I have done mortage business in counties where old LaVerne will toss that original mortgage right back at you, unrecorded, because she noticed that there was a correction to the zip code on page 12 that wasn't initialed by the borrower. Marvelous old besoms, Goddess love them.
No doubt in some of the "let's reduce government" localities the recorder's office just stamps shit and moves to the next problem . . .
just for the informational purpose (i'm not seeing fc of my property in the future), at what point, is the process irreversible (aside from the borrower buying back the property)? at what point in the given time line example, could s/he restart (and pay back the missed payment) and still keep the house?
In Maryland, the borrower can "reinstate" all the way up to one business day prior to the scheduled FC sale, by paying whatever total principal, interest, taxes, insurance, fees and legal costs were entered onto the FC docket. (Before the thing gets docketed, the borrower may demand a "payoff statement" from the servicer at any time with the total amount due to reinstate). MD has no "right of redemption," so once the sale is confirmed it's over.
Of course the servicer always has the right--but not the obligation--to "stop the clock" and enter into a forbearance agreement at any point before docket filing.
Some states have "redemption" periods after the FC sale, but MD didn't before this law and still doesn't.
Follow the link to the Freddie Mac economists' paper if you are curious about other states--there is a summary of timelines in the appendix.
Most often the "too good to be true" rental agreements are made by scammers who don't own the property. People who are about to suffer foreclosure often do leases or agreements with the credit challenged that require a year's payment up front. Very bad form.
You get your original deed back. You can get a certified copy at the recorder's office any time for a few bucks. You can also get a certified copy of the mtg, which is just as good as the original.
I'm pretty sure Fannie/Freddie has an assignment of rents in there, but I'm home, so can't check.
Tanta--in at least 95% of the cases, they claim they've lost the note. Under Florida law, you are supposed to say how you came to lose it. Of course, they haven't lost it, so they just claim they don't know what happened to it, or who had custody of it when it was "lost". You have to give an affidavit under oath to set your summary judgt, which would usually confirm the complaint's
allegations. Now, I may be quaint, but I think lying under oath is a baaaad thing. Nowadays it isn't even somebody from the server who is making this affidavit, but some chick with the law firm, a lawyer, who should know better, who says she knows and who claims to have a power of atty, which is never attached. It's always a woman; I guess we are willing to work for less, doing a boring job.
Excuse me this is laziness squared.
And I repeat, in about 10-15% of the cases, we aren't given a copy or the copy is wrong. Now, I'm sure there are a zillion copies lying around somewhere, but I strongly suggest that that the servicer doesn't really know where that is. It takes them 6 months to a year to come up with them.
It used to be that a copy was attached to the complaint, with the original safe, presumably, at the law firm, and the original note & mtg was produced at the summary judgt. Really, no problema.
And it seems to me that a market rate lease ought to be honored. Why not? The properties are being trashed. The lenders mostly aren't selling the properties, just accumulating them. They would get a stream of income plus tenants, who, even if not ideal, are not teenagers or homeless drug addicts. Even at 100 a month, keeping the joint from being trashed while you get around to selling it, is quite valuable.
Oh, fixtures are supposed to say. Fixtures are things, that if you remove them do some damage to the house, or property. So you can take all the appliances, legally, if they are not built in,
Now, what if you replace an expensive built in with a cheap one?
The lender isn't gonna know. I had people ask me this. There is no law on it as far as I know. Lenders certainly have no problem with your replacing formica with granite. I guess there is a good faith argument.
There is no case law I know of which describes a lender suing a borrower for taking out the fixtures. And I was just researching fixtures to see if concrete blocks left on a tax sale property constitute fixtures, especially when the tax deed foreclosee surrounded the blocks with fill, so the property would be damaged (leaving a hole) if the blocks were taken away. Much testosterone was spewed over this.
There is some case law on expensive commercial stuff such as elevators.
I had always assumed deeds worked the same way - that the original remained at a courthouse/registrar, and only copies were used when required, apart from those times a deed required additions, which were only done under supervision, with the copies being valid in all other cases.
This may not be true everywhere, but here in Wisconsin, "recorded" documents are copied or imaged, and the copy is made part of the public record. The original is returned to the party who sent it in.
Documents that are "filed" are retained by the Register of Deeds.
Deeds, mortgages and other real estate related documents are recorded. Birth and Death Certificates are filed.
lawyerliz, I'm not trying to defend lazy or incompetent servicers or foreclosure mills.
I am, however, someone who has executed a few LNAs in my lifetime. Since I was swearing under penalty of perjury that 1) we once had an original and 2) we can't find it and 3) we took all reasonable steps to locate it and 4) the copy attached hereto is a true and correct copy of the original to my personal knowledge, I wouldn't sign the thing until the file room supervisor went through the search steps, and also not until someone BROUGHT ME THE FUCKING FILE so I could look at it myself. That was the only way I could, with truth, solemnly swear that the copy note was true and correct.
So I get a touch annoyed by the implication that any LNA is an attempt to lie, cheat, or steal. Now, I'll say I've probably executed less than a dozen over the many years (I can remember doing a handful at once when a single shipment of notes to the custodian was lost by UPS; I had the correspondence from UPS, too.)
In fact it can't possibly take servicers six months to cough up docs for any legit reason. I could open every file in the file room in six months. They just don't want to, is the problem. I have no beef with them getting slapped around, and I did indeed applaud Judge Boyko et al. for doing so, because lazy incompetent servicing and FC-mill lawyering needs punishment.
For some reason, though, it always veers off into this armchair legal opinion that a copy is unenforceable.
And the borrowers are paying the foreclosing party (when they were paying) only about half the time. Same with the insurance.
Remember, I take these only when I think that there is a really good chance that it will be settled and the lender will be made whole, or almost whole.
And occasionally, there is a real defense. I have a client who has liens on the property. Her husband agreed to pay them as part of the divorce settlement. The lienors didn't bother her. She refinanced, and the title company chosen by the lender missed them. She lost her job. She got a new job. She found a hard equity lender to loan her enough money to bring the loan current. (She thinks she can pay both loans; the proposed second wasn't that much.) The 2nd was referred to me and I found the liens.
the foreclosing law firm found the liens too, and listed them, even tho they can't be foreclosed, because they are prior to the mtg. I have suggested several times that this is what title insurance is for, and that they should make a claim, but for reasons that passeth understanding, they refuse to make a claim. So, I say, there is a solution, there is a process in Fla for having the property declared homestead, giving the lienors time to challenge homestead, and if they don't you can sell or mtg the property within 6 months of making the claim. During the wait, the mkt completely and totally collapsed. The hard equity lender was not unwilling to play ball, and we haven't been able to find another one. Excuse me, the lender with its incompetent title examiner CAUSED this problem. And the foreclosing firm claim they are subrogated. Excuse me, they aren't, to be subrogated, you have to pay somebody something, which they haven't
Do I feel even one second of regret or remorse for defending this? Hell, no. The lady (if anything is worth anything, which it may not.) has a couple of hundred thousand dollars worth of equity in the property, even in this miserable mkt.
Now, what if you replace an expensive built in with a cheap one?
The lender isn't gonna know. I had people ask me this. There is no law on it as far as I know.
What we need to remember is that if you have a competent appraiser, your appraised value does not depend on "luxury" fixtures to any significant degree. If it does, it had better say so on the appraisal, if for no other reason than that becomes an issue with adjustments to the comps. If the subject property has granite and the comparables have formica, then IF granite has meaningful market value, you adjust the comps up to take it into account. In many cases the appraiser just doesn't assign it any value unless he believes that it has become a "market requirement." Like half-baths used to be "luxuries" and became requirements at some point.
It is an issue with some jumbo loan appraisals; I've seen some where a lot of value is given to marble indoor tubs, gold-plated faucets, built-in wine racks of some fancy wood, etc. Those things are a real issue for an awake lender, precisely because they can always get replaced with Sears stuff after the fact. So a wise lender either adjusts the value down if the appraiser gave too much value there, or adjusts the LTV down.
At some level, then, a lot of that is already "priced in" by the lender. It really is when the fixtures are ripped out leaving gaping holes in the drywall and stuff that problems come in. And as I said, if the state allows a deficiency judgment, it's in the borrower's best interest not to trash the property. That's where the lender recovers from a "trash out," not in suing to get the hot water heater back.
I could be mistaken, but it seems as if the deed is not possessed by the property owner in the Commonwealth of Virginia. But then, states as old Virginia tend to have their little quirks. Quite honestly, though I have seen a number of documents relating to home ownership in Fairfax, I never remember seeing an original deed, apart from historical records.
In Puerto Rico, I believe that notaries, who are super lawyers keep the originals. I didn't know that any of the states actually kept originals.
Originals of stuff like building plans and permits are kept, and the building and zoning offices do occasionally lose them. In the 50s, I'm told the building where this stuff was kept burnt down, and I would have like to have seen the documentation a couple of times and it was well and truly gone.
I find Virginia keeping original deeds passing strange: are you sure?
We have a Chicken Little panic about scam foreclosures by people who don't even own the note.
And a separate chicken dance over fraudulent insider leases allowing foreclosed owners to stay in their houses for 99 year.
Perhaps a shred of evidence that either phenomenon is actually happening is in order? Perhaps we could worry about real problems, since we currently have no shortage of those?
I mean, it's nice that everybody is feeling such tender solicitude for lenders' losses. But maybe the biggest threat to their bottom lines is not this outrageous violation of their sacred rights to toss out tenants. Maybe it's their recent habit of lending money to people likely to default in the first place.
Virginia statute provides for filming and imaging of the records so I doubt they retain the originals, especially given how snotty lenders are about getting their mortgages back.
But maybe the biggest threat to their bottom lines is not this outrageous violation of their sacred rights to toss out tenants. Maybe it's their recent habit of lending money to people likely to default in the first place.
No kidding.
You know, I usually spend my Saturdays on long pointless threads with people who want to argue that the comparable approach to market value is junk, and that all properties should be valued on the income approach.
Then, suddenly, when we talk about FC everybody wants to assume that the lender is harmed by an income-producing property that cannot be as easily sold as REO as a vacant one.
I keep returning to the idea that nobody ever said RE mortgage lending was risk-free, and shit happens like the tenant problem, and really your best idea is good underwriting and rational pricing up front and then you can afford to take your losses philosophically on that one deal in a thousand where you gots yerself a tenant problem.
Lurking here is that "free money" naive investor mentality that sez, whu? There's risk to having to foreclose? I thought it was just like taking the broken stereo back to Best Buy for a refund . . .
especially given how snotty lenders are about getting their mortgages back
Heh.
You mean "used to be snotty."
I used to be snotty as hell about it, because if I couldn't get a pool certified in 90 days, there'd be bodies lining the corridors. Nothing would piss me off more than having outstanding certification items because Cook Bloody County (it was always the big metro counties, not the little Podunk ones) couldn't return mortgages within a year.
But who is being snotty now? I look around and see these servicers going to court foreclosing on two-year-old loans and they apparently don't even have an assignment to cough up. You can't tell me they rode their recorders (and title underwriters) ragged to get the damned pools certified in 90 days, because if they had the docs would be in the files and this nightmare would end.
Sorry, but snotty custodians, like wrinkled reptilian underwriters and those sharp old broads at the Deeds office who make everyone's life a living hell are not the problem.
Perhaps the solution is to hire a lot more crotchety middle aged Wiccans. They could scry out problem documents and keep everybody in line with a few lumps of wax and carefully hoarded locks of hair.
Lurking here is that "free money" naive investor mentality that sez, whu
You mean, naive investors like banks, pension funds, and institutional money managers?
Your comment points to a much wider problem. Lenders and servicers are screaming bloody murder about changing the foreclosure exception to tenants' rights. That's because nobody in this entire Conga line, from the broker to the originator up through some fancy investment advisor, ever made plans for the actual risks of doing business. Now they' trying everything they can to weasel out of facing them.
nobody in this entire Conga line, from the broker to the originator up through some fancy investment advisor, ever made plans for the actual risks of doing business
Yup.
It's like my thing about the cramdowns: well holy jumpin' jeezus, lenders, BK ain't supposed to be any fun for ya.
I hate sounding like some cranky old fart all the time, but we used to fear BK and FC. We probably feared it too much sometimes and were too conservative. I dunno.
I do know that not fearing it enough has landed us all in a financial system catastrophe. You HAVE TO have negative consequences to lenders of loans going bad. That is so "duh" that I hate even typing it.
The problem is too many people still wanting to keep harping only on "negative consequences" to borrowers.
But I am sure you also made sure your closers and underwriters actually read the commitment prior to closing, and that the mortgage conforms to the commitment requirements.
But I am sure you also made sure your closers and underwriters actually read the commitment prior to closing
You're kidding me right? I'd fire anyone who just "read it."
If the MARKED UP commitment wasn't in that file, and my closers hadn't already asked you for every last one of those damned endorsements on the final, it was "former closers."
OK, sometimes I'd let the title underwriter work out some of the gnarlier mineral lease problems. But the day I relied on you to tell me I needed an ALTA 4 was the day I'd hang it up.
I have done a fair amount of due diligence lately and I see commitments in the file not only with no markups, but that still say "OWNER OF RECORD" as proposed insured. I am a way old fart . . .
for a second there i thought you had lost your marbles. why anybody would give up a life of sitting around jammy wearing cake eating is beyond me. that is what i aspire to.
OK, sometimes I'd let the title underwriter work out some of the gnarlier mineral lease problems. But the day I relied on you to tell me I needed an ALTA 4 was the day I'd hang it up.
You sound like a paralegal I work with...best damn lawyer in the region.
These days it's order the title on Monday, close on Friday. Underwriters on either side don't have time to understand what needs to be done or to fix the problems.
Regarding getting dressed: well congratulations! me too (only because i wanted to go to the bookstore and i was out of food).
I had to because I wanted to ski in shorts and t-shirt.
Regarding the topic: If you really had been making your payments, and that was your defense against FC, you would bring in cancelled checks to show that the servicer was cashing your checks!
Sadly, I don't get cancelled checks returned anymore. I held out as long as I could, but those days are now over. I also don't mail checks now, I send an electronic payment from the bank with my checking account. Then I verify that the next month's statement matches my spreadsheet. It works because I'm one of those "you can escrow taxes/insurance over my dead body" people. If my extra payments were at risk of being applied to escrow before principal I'd have to mail in that silly thing attached to the bottom of my statement.
Which doesn't change what I assume is the point...I could prove payment history if I had to, by bringing in relevant material. The nature of the material may differ.
Where I sympathize with Rob in this discussion is with reports of lenders claiming, as a routine matter of business, that they lost documents that they not only didn't lose, but which they apparently treat as the equivalent of post-dated checks, endorsing over the (lost?) original whenever they sell the loan.
alse of heart, light of ear, bloody of hand; hog in sloth, fox
in stealth, wolf in greediness, dog in madness, lion in prey.
Let not the creaking of shoes nor the rustling of silks betray
thy poor heart to woman. Keep thy foot out of brothel, thy hand
out of placket, thy pen from lender's book, and defy the foul
fiend. Still through the hawthorn blows the cold wind; says
suum, mun, hey, no, nonny. Dolphin my boy, my boy, sessa! let
him trot by.
baron samedi -
'Virginia statute provides for filming and imaging of the records....'
Ah yes, the days of microfilming in the early 1990s at a Virginia university's library - where the microfilming generally destroyed the original book, and the microfilm was often unusable in following years.
Things have undoubtedly changed over the years, but I'm pretty sure that the change in regulations was, ahem, acquired by the several companies involved in the microfilming business in the DC area. Microfilming was a surprisingly huge business in the shadows - and nobody seemed to care much about the output, just the signing of the contract and removal of all the paper taking up space. Space which then could be put to much more gainful use - like a teleconference facility, for example.
All 1980s to early 1990s memories - I'm sure that things are different, if not necessarily better, now.
Oh, as a side note - a lot of deeds in Virginia have historical value, much like documents where 'Washington surveyed this' is the big draw. It is likely that a lot of the older ones were seen as historically noteworthy, but since the 1950s/1960s, when the rapid growth of the suburbs replaced small farm plots in Northern Virginia, that attitude has likely disappeared completely.
But then, in front of the old Fairfax County courthouse in Fairfax City, there was the claim on a plaque that the Civil War's first shots (or casualty, or something 'first'), happened there. On Main Street, which is also Little River Turnpike, which was the first tollroad in the U.S. as we learned in school. At times, it felt like you could not turn around without noting something 'historically significant.'
However, it has all been pretty much bulldozered and paved at this point, so smudged or fuzzy microfilmed copies in an office where the last microfilm reader has a burnt out bulb, sounds about right.
Whatever - for every day Martin Owe Money delays foreclosure on these shmucks buying $400,000 townhouses on $50,000 a year salaries, I will delay my purchase of a house by several days to week. I am not buying into this BS, and they can just keep dragging out the pain; I won't bite and buy myself an overpriced POS like they want me to. That's my only real way of fighting back against this nonsense.
I am no fan of O'Malley. But, this is a good thing. My friend had a salary of approximately $120,000 a year when she purchased a home for $220,000. She made a downpayment of $50,000 and invested another $30,000 in home improvements. Her mortgage payments more than doubled in four years and her salary, due to loss of one source of income, was cut to about $65,000 a year. The mortgage company also engaged in a strange/huge excrow policy that cost even more in monthly installments. She had more than $150,000 worth of equity in the home. When she fell behind in payments, she communicated with the lender and attempted to work out a loan modification. She contacted project lifeline/hope for help,but they ultimately did not help. After sending a payment that would have placed her at one month behind in her mortgage, she went to North Carolina from Jan 12 to Feb 9, because her mother was dying and she needed to look after her affairs since her father was already deceased and her only other subling would not take the time. When she returned home, she found that her check had been returned by her mortgage lender, a foreclosure action had been docketed and her home had been auctioned. This all took place between Jan 14 and Feb.2. She had not received a prior letter of intent to foreclose from the mortgage lender or it lawyers. She had placed a dozen calls to the mortgage lender in her absence from home to make sure she was on track for a modification. She got passed around form person to person and department to department. Mostly, she left messages that were never returned. At no time did anyone at the mortgage lender mention that she was in foreclosure, they just told her they would get back to her. She, then, had to pay to hire a lawyer and filed exceptions to the foreclosure based on lack of proper notice to her. The court agreed thgat she had not received notice of the foreclosure and that her lender acted improperly. Nonetheless, the sale was ratified because actual notice was not required in Maryland before passage of O'Malley's new law. By March, she was forced out of her home of almost five years. She could not rent because her credit was destroyed in the foreclosure. She is now temporarily living with me in my smal, one bedroom apartment (my wife and two daughters got the family home in the divorce) Her life has been unfairly turned upside down. Bad mortgage foreclosures happen to good, responsible people that could afford their mortgages if the lenders acted fairly. Maryland's foreclosure laws badly needed this reform. If these new foreclosure laws had been in place just two months earlier, my new roommate would not have lost her home, her equity, her confidence, her stability, or her joy.
Thanks for sharing your friend's position, Charlie, and I hope it all works out for the better in the near future. Many thanks also to Tanta for providing her "descriptive" analysis of MD's new Foreclosure Law that took place in April, 2008. Everyone's comments have also helped me out tremendously in my situation.
I'd like to share with everyone what I have been going through over the past several weeks--specifically about the section where servicers "simply don't file Foreclosure papers in 15 days." Although my situation currently involves a Chapter 7 Bankruptcy in MD, I believe what I am going through with my 1st Mortgage holder is very relevant to this topic. I know this narrative is a bit long in the tooth but please grab a cup of coffee and have a "laugh" at what I've been going through:
I filed for Chapter 7 bankruptcy protection in MD at the end of April, 2008. At that time, both of my mortgages were current. From early May thru June 10 I kept calling Citimortgage (1st Mortgage holder) to let them know I had the funds for the May and, eventually, June payments in my account ready to be paid. All I needed to have answered before making the payments, was whether or not there were any good programs (such as Hardship Payment Plans, Refinancing, or other Loss-Mitigation Programs) for people like me in my situation to consider. Even after filing for Bankruptcy protection, we were going to be tight in making our mortgage payments; however, I refused to lose our home.
Well, during all of those calls from mid-May to early-June to Citimortgage, I spent anywhere from a total of six to eight hours being transferred from one customer service person to another explaining what I needed. None of those individuals were able to help me because my mortgage was under Bankruptcy protection. Therefore, I asked who could help me. They simply routed me back to the original customer service department! Quite frankly, all I needed was a "yes" or "no" answer about my question.
On June 4, someone at Citimortgage finally let me know that my account was being handled by a "Bankruptcy Counselor" based in India. Therefore, I called her and left three messages. That person did not--and has not to date--returned my calls. On June 10, my wife and I were served with papers from Citimortgage's attorney stating that a hearing was to be held July 10 in the Bankruptcy Court for a Motion of Relief of Stay. In other words, even though my Bankruptcy discharge takes place at the end of July, Citimortgage had its attorney file the Motion for Relief of Stay so they can start the Foreclosure proceedings immediately. Now also bear in mind that my mortgage was officially "late" by 10 days since I was current on April 30. In Citimortgage's system, I had missed the May 1 payment date at the end of May 31st with the Motion filed 10 days later!
I was completely dumbfounded by this Motion and asked my attorney how this could be--especially after my numerous conversations with Citimortgage about having the funds in my account and only needing one simple question answered. My attorney's office, I eventually found out, really only cares about getting paid before doing anything substantial. They did, however, advise that I should make the payments immediately with the "hopes" of having the Motion withdrawn.
Therefore, I went to the Citibank branch location on June 16 with both my May and June payments in hand. (Citibank is obviously a corporate family member with Citimortgage) However, my payments could not be accepted in the bank's system--but no one knew why. The branch manager also spent two to three hours on the phone with Citimortgage customer service representatives with the same round and round results I had experienced. Finally, we were told the payments could not be accepted in the system because a legal proceeding had begun. The bank manager, who was now fuming with anger, contacted the Manager of Citimortgage's Executive Complaints Department. That manager apologized to both me and the bank manager and stated that he would have the matter resolved. The manager also verified that I had never missed a payment and that Citimortgage's records did indeed show that I had called numerous times before the Motion was filed with all of my information included in the notes.
The next day, I received a call from Citimortgage's Bankruptcy Department stating that my payments needed to be mailed to Columbus, OH. The very next day, I mailed the payments via certified mail with the envelope signed for on June 20.
I let everyone know I had sent the payments and that the payments were in Citimortgage's hands. Well, days and days passed but the checks were not cashed--even though I had well over $3334 in my account to cover the payments! I then called Citimortgage's Bankruptcy department and they advised they were awaiting word from their attorney on whether or not to process the payments.
Now here I am, I'm trying with all my might to make the May and June payments but nothing was/is happening. At the same time, I had to respond to the Clerk of the Bankruptcy Court with my official Response by June 30 (otherwise, it would not be considered in the judge's file).
I hand-delivered a detailed three page letter to the Clerk and mailed copies to everyone involved. I also sent a copy to Citimortgage's Manager of Executive Complaints (that was mentioned above) and he had the following reply:
"My goodness, I don't know what to say. I have already got this in the hands of the top bankruptcy managers and should have something solid to tell you on Monday. Again, I would like to apologize and assure you that this is not intentional. Your concerns are a priority to me and I am going to get this resolved. Please look forward to a call from me on Monday to follow up and advise you what has been done to rectify this situation." Unfortunately, I have not heard back from this Manager since his reply was sent on June 27.
I finally received an email from my attorney's office on July 3 (which is not representing me at the July 10 Motion hearing because I do not have the hundreds of dollars available immediately). To paraphrase, Citimortgage's attorney would Withdraw the Motion if I paid the July payment AND his $700 attorney's fees immediately! I let everyone know that I would have the July payment when I got paid again on July 16 but could not make the July payment on July 3rd. I have not heard back from anyone to date.
Now does this make sense? Again, I've been trying to make my May and June payments since June 16 and Citimortgage has had those payments in hand since June 20! Because of one delay after another by Citimortgage, I'm now forced to jump through hoops even more and come up with the July payment AND their attorney's fee of $700..."immediately!" Quite frankly, I feel I am being financially blackmailed/extorted without any fault of my own. I have also wasted many hours of my own time dealing with this matter as well as having to take off a couple of days of work just so I could make all the calls/visits and prepare and personally deliver the paperwork to the Clerk! All of this has also taken a toll on my personal relationship with my wife as neither of us can rest knowing that Citimortgage wants to Foreclose on our home only TEN days after being considered late (again, my mortgage was current at the end of April with only 40 days having passed since the the May 1st payment was due and the Motion being filed on June 10).
Today is July 7 and I have to appear before the Bankruptcy Judge in a couple of days. I honestly do not know what will happen at the Hearing but I will be honest and state everything that has happened to date.
Well, there you have it folks. I hope you didn't spill your coffee all over yourselves during this narrative. If anyone has any advise, I sure would/could appreciate it (please keep it polite, however). Thanks to all!
IOW, Nothingburger?
-Jaso
Reading between the lines, it would appear that GE's missing the numers may have been related to BSC's bailout and the new PDs facility at the FED which resulted in a sharp decline on the value of CDSs for Bear, LEH, etc.
Any views/confirmation of the possibility GE "screw" the quarter numbers by betting against financials. Did Immelt want to pull out a "GS type stunt" but failed?
Kindasomethingburger, but not HOLYSHITBURGER.
OT, but still germane ...
Wachovia Tightens Standards for Home Loans Nationally
Bloomberg.com
Trying to soften the merket blow so the stock doesnt trade in the teens come 4/18
I think the good governor was confusing the 15 day grace period with default and that to him "foreclosing" means starting not completing.
I opened a thread for you off topic people above this post. Go use it.
The law serves other purposes:
Political: "Hey, we're doing something! We care!
What the law says vs. what Average Joe hears: "Well, I was gonna hurry up and move out, but hey, I have 150 days...that's alot of rent-free living".
Also: "Well, I was gonna fight to keep the house, but forclosures have got to be fairly common, expected, and perhaps forgivable, if they are gonna change the law to help me and screw the bank."
Also: "That empty house next to mine, you know the one I'm whose lawn I'm mowing and trees I'm watering, well it's gonna be empty for a while. Which means my house is gonna keep going down!"
Sounds good to this lawyer, and excellent as to not shafting the tenants, and the proof of ownership thing too.
By the way, anent my post on another thread, the lost note pleadings often in Miami-Dade, DON'T have a copy of a note attached. some just have a summary of the note, which is just plain wrong, when it's an adjustible mtg.
And the lengthening would be nice, but nowadays, here at least, nobody can sell or refinance, so it does no good.
People who seem to have equity, even if you assume a20-30% haircut off peak, can't refinance. Even a 40% haircut.
Yours truly used to stretch things out and people almost always either got current or sold, because that's how i picked my clients. Now, nothing's moving at all. I don't think MD is quite as bad ashere.
Legal junkies may also be amused to note that this law specifically allows that "proof of ownership" of a loan required to be provided with the docket file may be certified copies of mortgages, notes, and assignments in lieu of the originals. That should end all the hoo-haw over missing originals.
Tanta, I tried to pay the grocer with photocopies of hundred dollar bills (you know legal tender). He disagreed with your assertion.
Tanta, I tried to pay the grocer with photocopies of hundred dollar bills (you know legal tender). He disagreed with your assertion.
So you're telling me that if you try to make a mortgage payment with an "e-check" instead of a physical ink-signed original, I should just refer you to the FC attorneys?
Follow the LACK of money:
The lean government infastructure that deals with foreclosures is overwhelmed. They are not known for their adaptive nature and need extra time. Not to worry, I hear that housing has bottomed.
The law serves other purposes:
Political: "Hey, we're doing something! We care!
The pickle on the nothingburger.
Now you want fries with that?
Tanta writes:
[Tanta, I tried to pay the grocer with photocopies of hundred dollar bills (you know legal tender). He disagreed with your assertion.]
So you're telling me that if you try to make a mortgage payment with an "e-check" instead of a physical ink-signed original, I should just refer you to the FC attorneys?
No, I'm just pretty darned sure there are originals of the $100 floating around and my photocopies. The Treasury will issue you new currency if you can prove the destruction of the original.
Repeat substituting your financial instrument of choice.
I find it incredibly dangerous to allow the possibility of multiple valid certificates of ownership for a single thing. If the original is lost then what needs to happen is to have a new replacement issued not accept photocopies and a promise.
By the way, anent my post on another thread, the lost note pleadings often in Miami-Dade, DON'T have a copy of a note attached. some just have a summary of the note,
Well, if it has just a summary attached to it, then it's what you could call a "Lost Note and Lost All Copies of It, Too Affidavit." I have never in all my years in this business seen one or executed one. Even after a bad flood at one lender I did business with, there was a photocopy of a bunch of soggy bits reassembled on the copier plate for me.
I just habitually use the term Lost Note Affidavit to mean Lost Original Ink-Signed Note Affidavit.
Jeebus on a Flat Bed, but every time I look at a loan file these days there are TEN copies of the note in there. If you really have a servicer who can't even scrape up a copy, you got yerself a serious incompetent.
I find it incredibly dangerous to allow the possibility of multiple valid certificates of ownership for a single thing
Well, maybe that's our problem here.
A promissory note is not a "certificate of ownership." It is not a title--that'd be your deed--and it is not a beneficial interest in the security property--that'd be your mortgage or DOT, which is recorded in the land records, whatever happens to the original.
Your note is your promise to pay. It is a contract, not a certificate.
If you think people don't go to civil courts on other matters with a copy of a contract, you're naive. Have you noticed that all YOU have is a copy of your note?
... but then again the tenants have all rights they had under the old owner. That seems perfectly fair to me, and it especially protects tentants "recruited" into a property by a desperate owner just before foreclosure.
The "recruited" tenant may have been given an extremely generous lease that the new owner (the bank) now has to honor. Is there any protection against this?
Second, the law specifically does not "extinguish" a lease in a foreclosure: the new owner of the property has all rights vis-a-vis the tenants that the old owner did, but then again the tenants have all rights they had under the old owner. That seems perfectly fair to me, and it especially protects tentants "recruited" into a property by a desperate owner just before foreclosure.
So do you think it possible for lenders to write into their contract language forbidding owners to lease out the property without 'notification'... then require any lease be immediately 'breakable' upon foreclosure... Not part of the law but included in the terms of the loan contract to get around the law?
I can't imagine that provision of the law would be much of a hurdle if the lender really wants them out after FC.
Yes/no?
Is there any protection against this?
Not in this statute. I'm sure there's some other statute or precedent under which the bank could sue to break the lease if it was for 99 years at $100 a month.
I really like the part about renters. How many renters do credit checks on the landlord when renting a house? It would seem prudent these days.
So do you think it possible for lenders to write into their contract language forbidding owners to lease out the property without 'notification'... then require any lease be immediately 'breakable' upon foreclosure... Not part of the law but included in the terms of the loan contract to get around the law?
I don't think so . . . I guess our lawyers should chime in there. The thing is, it's a double-edged sword for lenders. There will be cases where a borrower can get bona-fide tenants paying market rent and therefore not end up in foreclosure. To prevent them from renting the thing in case you do have to foreclose would be kinda self-defeating.
I do think lenders will start putting an "Assignment of Rents" rider on all mortgages, not just those that are "officially" originated as investment properties. That does give the lender some rights to demand at least a copy of the lease.
I do think it is interesting how every little detail in these new laws, bailouts, and foreclosure assistance programs gets modeled out to the nth degree to see who will take it in the shorts. Somebody's gonna get stuck with a loss in this mess. Hence the objections from various stakeholders to anything that cuts into their take. It's a prescription for gridlock on solving the actual problem. Of course, I think all these attempts are mostly delaying the inevitable. I guess it is hard to know for sure what will actually spread the pain most evenly.
"Of course, I think all these attempts are mostly delaying the inevitable."
You know, if you delay long enough, you just die before you have to deal with the inevitable.
If you think people don't go to civil courts on other matters with a copy of a contract, you're naive. Have you noticed that all YOU have is a copy of your note?
Of course, exactly. They prove to the satisfaction of the courts that they have a legitimate claim/standing/whatever that they then produce in lieu of the original documentation. If they have the original they don't need that step. Problem is as currently practiced if they don't have the original they don't want to be bothered with that step.
I am suspicious that somebody might try running a Mel Brooks' "The Producers" scam.
Kindasomethingburger
aka "tofu burger."
(Y'all can use the comment thread to beat on me about it, if you want.)
You've been a bad girl Tanta, I'm going to have to give you a spanking.
If the crazy clause about tennant rights in 7-105.6 is entered into law, it will take about 5 mintues for every shady investor and every third deadbeat in the State of Maryland to figure out that they can rent the property to their Brother-in-law/friend/Mother/Son, for 5 years at $10/month. No doubt there will be legal challenges on this issue.
Well, Rob, I know you're suspicious. I just don't know why you want to enshrine that in law.
You are aware, are you not, that with computers these days it would take most of us a couple minutes, outside, to forge a new original note? The only thing on one that is "original" is the inked signature.
In fact, I know of lenders who ask borrowers to execute multiple copies of the note, so that should one get misplaced there's another original.
It'd be a cold day in hell when you'd get me to sign two $200,000 original notes, unless "DUPLICATE DUPLICATE DUPLICATE" were printed all over them in watermark. But then again, somebody like you would refuse to allow that watermarked copy to "count," so there'd be no point to it.
Frankly, you strike me as the kind of person who likes to complain about "bureaucracy" and "red tape," even while you keep imagining ever more improbable scenarios that then demand ever more "bureaucratic" solutions. Pretty soon, if this "originals only!" crowd gets its way, the foot-high stack of mortgage paperwork will get to two-foot-high, and costs will go up to store and certify custody of those three extra originals, and then the bitching about the red tape and sea of paperwork will start up again.
Perhaps we need to start requiring that mortgage notes be signed in blood. That way DNA testing would be able to determine if a note is original or nog.
og=not. It appears that my fingers are fatter than usual this morning.
There are attempts underway--have been for years--to close "e-mortgages" with electronic notes. It'll be a while before that catches on, but it's inevitable. I'm sure that twenty years ago the idea of buying something with a credit card without being present to sign the slip sounded wildly implausible to people.
Until then, though, we will have endless opportunity to philosophize about what an "original" really is, and why, outside art collections and urine tests, anyone much cares.
Anything about the borrower's rights in taking out fixtures? That seems to be a hot topic these days.
My name is my name! I own west side Baltimore.
"...this law specifically allows that "proof of ownership" of a loan required to be provided with the docket file may be certified copies of mortgages, notes, and assignments in lieu of the originals."
In the spate of recent cases regarding proof of ownership issues - have the documents proffered to the court been certified, or simply duplicates? If they had been certified, I don't see why they weren't accepted by the courts in the first place.
Nope, the good old fashioned MD mortgage (like all the rest of them) still describes the property by legal description with the following:
TOGETHER WITH all the improvements now or hereafter erected on the property, and all easements, appurtenances, and fixtures now or hereafter a part of the property. All replacements and additions shall also be covered by this Security Instrument. All of the foregoing is referred to in this Security Instrument as the Property.
"Easements, appurtenances, and fixtures now or hereafter" have been around, as legal terms, since Richard the Lionheart, so it's not like there isn't plenty of statute and precedent for that. It has always been a breach of your mortgage to take out fixtures, and it will always probably not be prosecuted in most cases, although in states with a deficiency judgment allowed (like MD) it isn't wise to lower the FC sale price by much.
If they had been certified, I don't see why they weren't accepted by the courts in the first place.
I don't either, but some respondents' attorneys have been trying to make hay over it. Ask Rob why anyone cares.
If you really have a servicer who can't even scrape up a copy, you got yerself a serious incompetent.
Tanta | 04.12.08 - 12:35 pm
It's not beyond reason to suggest that's exactly what we have.
euuu...what happened to "read more" ?
Amusing anecdote about a somewhat related concept concerning 'multiple valid certificates of ownership for a single thing'
The original of your birth certificate is worthless - it will not be accepted for a passport, for example, as my father found out a while ago. Only a copy of your birth certificate is valid for use to prove your birth/citizenship. That is, only a copy is accepted to uniquely prove your birth/citizenship.
Essentially, this is due to the fact that the original is supposed to be kept in a single location, under unbroken supervision, and thus a copy ensures that the original remains intact and correct. Which ironically makes the original worthless in all other contexts. At least for the State Department, and the DMV.
I had always assumed deeds worked the same way - that the original remained at a courthouse/registrar, and only copies were used when required, apart from those times a deed required additions, which were only done under supervision, with the copies being valid in all other cases.
"Of course, I think all these attempts are mostly delaying the inevitable."
These days, every month is a month further from that nervous breakdown.
If this helps families to hang in there one more month before they have to cram in with some not-too-thrilled relatives, then I'm all for it.
Here in NH, I believe we have really quick FC laws. I'm not really sure, but I wonder if delay would ever mosey up this way. I'm under the impression that NH is a pretty fiscally conservative state.
JD writes:
If the crazy clause about tennant rights in 7-105.6 is entered into law, it will take about 5 mintues for every shady investor and every third deadbeat in the State of Maryland to figure out that they can rent the property to their Brother-in-law/friend/Mother/Son, for 5 years at $10/month. No doubt there will be legal challenges on this issue.
JD | 04.12.08 - 1:10 pm | #
That was why I was wondering if the result will be for lenders to add a clause to the contract where they have to be notified in advance and can block a lease agreement if they find it 'problematic'... like a less than arms length lease agreement at well under 'market rents'.
Or does the law negate any such contracts... can a law even do that? Would it be such a prohibition be considered a 'taking'?
We went round-n-round on this a few months back... the rights of the contract holder (lender) vs the rights of the contract holder (tenant) with an irresponsible or unfortunate borrower 'walking away'... we got a lot of heat but not much light.
It'd be a cold day in hell when you'd get me to sign two $200,000 original notes, unless "DUPLICATE DUPLICATE DUPLICATE" were printed all over them in watermark. But then again, somebody like you would refuse to allow that watermarked copy to "count," so there'd be no point to it.
I have no problem with that. As long as whomsoever presenting the duplicate is aware that there is an original that could challenge their claim. You are correct, neither one of us would sign multiple "originals."
You are taking my concern to extremes. I agree "Originals Only" could never work. At the other extreme where we are now, assertions of lost originals when they aren't really lost isn't acceptable either.
Thanks for the analysis as always, Tanta: sometimes just knowing the nothingburger's made of nothing is worth something.
The stuff about the original notes, etc., just points to one of those longer-running "general issues" that is too diverse in its specific manifestations to have yet acquired a concrete name: most of the legal system's rules about the value of particular kinds of evidence only make sense in the context of some implicit assumptions about the economics of convincingly forging that evidence; as technology improves those implicit assumptions are increasingly unjustified, but the legal system has been very slow to react...where the trend is particularly pronounced the courts run the risk of becoming ad hoc personality contests: when neither side has evidence that they can prove beyond a reasonable doubt isn't forged, it's hard to find either side to have a preponderance of evidence in its favor, as there is no "evidence" to speak of.
Real estate seems unlikely to be where this dynamic starts playing out in earnest, because it throws off a lot of hard-to-forge data (mortgage payments, residential status, etc.); then again, it might, on account of the large amounts of money involved (at least for borrowers) and the increasing general perception that lots of untrustworthy actors were involved in mortgage origination.
someone: --If they had been certified, I don't see why they weren't accepted by the courts in the first place.
Tanta: - I don't either, but some respondents' attorneys have been trying to make hay over it. Ask Rob why anyone cares.
It's because it is property law. Rules that apply no where else apply to real property, just because. I can't imagine not being able to assign a patent because you couldn't find the original from the patent office with its gold seal. A certified copy from the patent office is legally the same thing.
I don't see Rob's point. Some pieces of paper are negotiable, like money. Other pieces of paper just memorialize a fact or agreement, like a contract. There is no actual problem with there being more than one copy of the latter, as long as you are sure it is accurate.
As long as whomsoever presenting the duplicate is aware that there is an original that could challenge their claim.
Well, see, that's the thing. We keep reading about attorneys going to town because the servicer is presenting a copy note or an affidavit, and there's all this hoo-haw about not having the originals. But the only party at risk would be the servicer (ie, that someone else with the original note would show up and get to foreclose in place of the servicer).
The reality is, you ask these people where they were sending their monthly payments--what they wrote in on the "pay to the order of" line of their checks, and you get one of two answers:
Neither of those is much of a defense against foreclosure unless with 1 you can can prove that the payments were never past due. And you will prove that, by the way, with certified copies of cancelled checks, because you don't keep (or don't want to give away) your originals.
Neither of those is much of a defense against foreclosure unless with 1 you can can prove that the payments were never past due...
Tanta | 04.12.08 - 1:44 pm
You can take steps to prove date of delivery. Certified mail, for example. You could even have your check postmarked prior to putting it in the envelope.
Certification is the key.
Does anyone know if the docs that led to this brouhaha were certified? It would really help if we could get that cleared up.
Real estate seems unlikely to be where this dynamic starts playing out in earnest, because it throws off a lot of hard-to-forge data (mortgage payments, residential status, etc.);
That's exactly the thing here. Nothing leaves uneradicable footprints like a mortgage transaction. Loan sale contracts. Servicing contracts. Servicer payment histories. Cancelled checks. Recorded liens. Transfer of Servicing Notices sent to borrowers (as required by RESPA). Escrow analysis letters. The loss payee clause on your homeowner's insurance policy. A servicer could literally bring a wheelbarrow full of documents to the court to establish that 1) there was a loan 2) made to this person who 3) didn't pay as agreed.
I think some people really do believe this urban legend that there are shady servicers out there foreclosing on loans they don't even own. This, when the real problem if you want to worry about RE fraud is some creep forging a grant deed in your name, mortgaging the property without your knowledge, and absconding with the cash. What's funny about that? Well, if the mortgage lender had insisted on a certified copy of the grant deed from the county, instead of an original ink-signed one, the fraud might have been caught 'cause the county don't know nothing bout such a deed.
Tanta writes:
If they had been certified, I don't see why they weren't accepted by the courts in the first place.
I don't either, but some respondents' attorneys have been trying to make hay over it. Ask Rob why anyone cares.
It'll matter when two people show up claiming the same loan. It'll matter when the terms as presented in court differ from what the borrowers copy reads.
Again, no problem with "certified," big problem with "asserted." I care because I see my rights diminished when it becomes acceptable to lie in court for the sake of expediency.
Does anyone know if the docs that led to this brouhaha were certified?
They weren't just "certified." They were accompanied by an AFFIDAVIT OF LOST NOTE. Sworn statement under penalty of perjury, that is.
Sure, you can lie on an affidavit, but then you can lie on a certification, too.
I care because I see my rights diminished when it becomes acceptable to lie in court for the sake of expediency.
Oh yes, let's all be very high-minded about this. All in favor of perjury, raise your hands, OK?
For heaven's sake, Rob, these things only came up in contested FCs. You remember this guy?
Calculated Risk: Lost Note Affidavits & Skeletons in the Closet
Feb. 22 (Bloomberg) -- Joe Lents hasn't made a payment on his $1.5 million mortgage since 2002.
That's when Washington Mutual Inc. first tried to foreclose on his home in Boca Raton, Florida. The Seattle-based lender failed to prove that it owned Lents's mortgage note and dropped attempts to take his house. Subsequent efforts to foreclose have stalled because no one has produced the paperwork.
``If you're going to take my house away from me, you better own the note,'' said Lents, 63, the former chief executive officer of a now-defunct voice recognition software company. . . .
"I probably have been to the Palm Beach County courthouse 100 times or more over the last five years, just to observe," Lents said. "In 99 percent of the residential foreclosure cases, plaintiffs are asking the court to accept a promissory note copy as the original because it is presumed lost."
Resistance doesn't come cheap. Lents has paid more than $120,000 in legal fees and costs so far to save his 5-acre, $2.5 million home. . . .
The guy's a deadbeat scam artist with a home purchased with ill-gotten gains, contesting FC because of a note copy. There is no question he isn't making payments. But OMG! His rights were violated because the lender had the temerity to submit a copy note!
Don't let's get off on philosophical ramblings about due process; I'm as AC an LU as anybody. This isn't about constitutional due process, this is about some archaic evidentiary requirement being abused to freeload.
(And this is exactly the kind of case I bet MD was thinking about when they specifically wrote "certified copy" into the law.)
Tanta,
What would stop the RE fraud creep from having the grant deed recorded by the county and then taking it to a lender?
You can take steps to prove date of delivery. Certified mail, for example. You could even have your check postmarked prior to putting it in the envelope.
That isn't the issue. We aren't talking about arguing over a late fee.
As I said in my post, nobody usually starts FC until the borrower hasn't paid in months. Now, in MD, you literally can't by law start until the 90th day after the first missed payment.
If you really had been making your payments, and that was your defense against FC, you would bring in cancelled checks to show that the servicer was cashing your checks!
It doesn't help you try to prove you mailed them. If you mailed checks for months and months that never cleared, someone is going to ask you why you failed to notice that and take steps to correct the problem.
Having the cancelled check with the servicer's endorsement right there on the back is pretty undeniable evidence that you are paying as agreed.
just for the informational purpose (i'm not seeing fc of my property in the future), at what point, is the process irreversible (aside from the borrower buying back the property)? at what point in the given time line example, could s/he restart (and pay back the missed payment) and still keep the house?
thanks
What would stop the RE fraud creep from having the grant deed recorded by the county and then taking it to a lender?
Funny you should ask . . . I just read about one in Chicago where they apparently tried that and got nowhere with some eagle-eyed old lady in the recorder's office who noticed something fishy. (So they "faked" the recording information, and got caught because they used the former Recorder of Deed's name!)
You get what you pay for with county government services, and I'm sure there are jurisdictions in which you could record your grocery list and get it back with the stamps on it. But I will tell you that I have done mortage business in counties where old LaVerne will toss that original mortgage right back at you, unrecorded, because she noticed that there was a correction to the zip code on page 12 that wasn't initialed by the borrower. Marvelous old besoms, Goddess love them.
No doubt in some of the "let's reduce government" localities the recorder's office just stamps shit and moves to the next problem . . .
just for the informational purpose (i'm not seeing fc of my property in the future), at what point, is the process irreversible (aside from the borrower buying back the property)? at what point in the given time line example, could s/he restart (and pay back the missed payment) and still keep the house?
In Maryland, the borrower can "reinstate" all the way up to one business day prior to the scheduled FC sale, by paying whatever total principal, interest, taxes, insurance, fees and legal costs were entered onto the FC docket. (Before the thing gets docketed, the borrower may demand a "payoff statement" from the servicer at any time with the total amount due to reinstate). MD has no "right of redemption," so once the sale is confirmed it's over.
Of course the servicer always has the right--but not the obligation--to "stop the clock" and enter into a forbearance agreement at any point before docket filing.
Some states have "redemption" periods after the FC sale, but MD didn't before this law and still doesn't.
Follow the link to the Freddie Mac economists' paper if you are curious about other states--there is a summary of timelines in the appendix.
Most often the "too good to be true" rental agreements are made by scammers who don't own the property. People who are about to suffer foreclosure often do leases or agreements with the credit challenged that require a year's payment up front. Very bad form.
Lawyerstuff:
You get your original deed back. You can get a certified copy at the recorder's office any time for a few bucks. You can also get a certified copy of the mtg, which is just as good as the original.
I'm pretty sure Fannie/Freddie has an assignment of rents in there, but I'm home, so can't check.
Tanta--in at least 95% of the cases, they claim they've lost the note. Under Florida law, you are supposed to say how you came to lose it. Of course, they haven't lost it, so they just claim they don't know what happened to it, or who had custody of it when it was "lost". You have to give an affidavit under oath to set your summary judgt, which would usually confirm the complaint's
allegations. Now, I may be quaint, but I think lying under oath is a baaaad thing. Nowadays it isn't even somebody from the server who is making this affidavit, but some chick with the law firm, a lawyer, who should know better, who says she knows and who claims to have a power of atty, which is never attached. It's always a woman; I guess we are willing to work for less, doing a boring job.
Excuse me this is laziness squared.
And I repeat, in about 10-15% of the cases, we aren't given a copy or the copy is wrong. Now, I'm sure there are a zillion copies lying around somewhere, but I strongly suggest that that the servicer doesn't really know where that is. It takes them 6 months to a year to come up with them.
It used to be that a copy was attached to the complaint, with the original safe, presumably, at the law firm, and the original note & mtg was produced at the summary judgt. Really, no problema.
And it seems to me that a market rate lease ought to be honored. Why not? The properties are being trashed. The lenders mostly aren't selling the properties, just accumulating them. They would get a stream of income plus tenants, who, even if not ideal, are not teenagers or homeless drug addicts. Even at 100 a month, keeping the joint from being trashed while you get around to selling it, is quite valuable.
Oh, fixtures are supposed to say. Fixtures are things, that if you remove them do some damage to the house, or property. So you can take all the appliances, legally, if they are not built in,
Now, what if you replace an expensive built in with a cheap one?
The lender isn't gonna know. I had people ask me this. There is no law on it as far as I know. Lenders certainly have no problem with your replacing formica with granite. I guess there is a good faith argument.
There is no case law I know of which describes a lender suing a borrower for taking out the fixtures. And I was just researching fixtures to see if concrete blocks left on a tax sale property constitute fixtures, especially when the tax deed foreclosee surrounded the blocks with fill, so the property would be damaged (leaving a hole) if the blocks were taken away. Much testosterone was spewed over this.
There is some case law on expensive commercial stuff such as elevators.
rent_to_own writes:
I had always assumed deeds worked the same way - that the original remained at a courthouse/registrar, and only copies were used when required, apart from those times a deed required additions, which were only done under supervision, with the copies being valid in all other cases.
This may not be true everywhere, but here in Wisconsin, "recorded" documents are copied or imaged, and the copy is made part of the public record. The original is returned to the party who sent it in.
Documents that are "filed" are retained by the Register of Deeds.
Deeds, mortgages and other real estate related documents are recorded. Birth and Death Certificates are filed.
lawyerliz, I'm not trying to defend lazy or incompetent servicers or foreclosure mills.
I am, however, someone who has executed a few LNAs in my lifetime. Since I was swearing under penalty of perjury that 1) we once had an original and 2) we can't find it and 3) we took all reasonable steps to locate it and 4) the copy attached hereto is a true and correct copy of the original to my personal knowledge, I wouldn't sign the thing until the file room supervisor went through the search steps, and also not until someone BROUGHT ME THE FUCKING FILE so I could look at it myself. That was the only way I could, with truth, solemnly swear that the copy note was true and correct.
So I get a touch annoyed by the implication that any LNA is an attempt to lie, cheat, or steal. Now, I'll say I've probably executed less than a dozen over the many years (I can remember doing a handful at once when a single shipment of notes to the custodian was lost by UPS; I had the correspondence from UPS, too.)
In fact it can't possibly take servicers six months to cough up docs for any legit reason. I could open every file in the file room in six months. They just don't want to, is the problem. I have no beef with them getting slapped around, and I did indeed applaud Judge Boyko et al. for doing so, because lazy incompetent servicing and FC-mill lawyering needs punishment.
For some reason, though, it always veers off into this armchair legal opinion that a copy is unenforceable.
baron samedi, I keep waiting for someone to bring up torrens filings.
Of course, I'll weep openly if they do, but still . . .
And the borrowers are paying the foreclosing party (when they were paying) only about half the time. Same with the insurance.
Remember, I take these only when I think that there is a really good chance that it will be settled and the lender will be made whole, or almost whole.
And occasionally, there is a real defense. I have a client who has liens on the property. Her husband agreed to pay them as part of the divorce settlement. The lienors didn't bother her. She refinanced, and the title company chosen by the lender missed them. She lost her job. She got a new job. She found a hard equity lender to loan her enough money to bring the loan current. (She thinks she can pay both loans; the proposed second wasn't that much.) The 2nd was referred to me and I found the liens.
the foreclosing law firm found the liens too, and listed them, even tho they can't be foreclosed, because they are prior to the mtg. I have suggested several times that this is what title insurance is for, and that they should make a claim, but for reasons that passeth understanding, they refuse to make a claim. So, I say, there is a solution, there is a process in Fla for having the property declared homestead, giving the lienors time to challenge homestead, and if they don't you can sell or mtg the property within 6 months of making the claim. During the wait, the mkt completely and totally collapsed. The hard equity lender was not unwilling to play ball, and we haven't been able to find another one. Excuse me, the lender with its incompetent title examiner CAUSED this problem. And the foreclosing firm claim they are subrogated. Excuse me, they aren't, to be subrogated, you have to pay somebody something, which they haven't
Do I feel even one second of regret or remorse for defending this? Hell, no. The lady (if anything is worth anything, which it may not.) has a couple of hundred thousand dollars worth of equity in the property, even in this miserable mkt.
Now, what if you replace an expensive built in with a cheap one?
The lender isn't gonna know. I had people ask me this. There is no law on it as far as I know.
What we need to remember is that if you have a competent appraiser, your appraised value does not depend on "luxury" fixtures to any significant degree. If it does, it had better say so on the appraisal, if for no other reason than that becomes an issue with adjustments to the comps. If the subject property has granite and the comparables have formica, then IF granite has meaningful market value, you adjust the comps up to take it into account. In many cases the appraiser just doesn't assign it any value unless he believes that it has become a "market requirement." Like half-baths used to be "luxuries" and became requirements at some point.
It is an issue with some jumbo loan appraisals; I've seen some where a lot of value is given to marble indoor tubs, gold-plated faucets, built-in wine racks of some fancy wood, etc. Those things are a real issue for an awake lender, precisely because they can always get replaced with Sears stuff after the fact. So a wise lender either adjusts the value down if the appraiser gave too much value there, or adjusts the LTV down.
At some level, then, a lot of that is already "priced in" by the lender. It really is when the fixtures are ripped out leaving gaping holes in the drywall and stuff that problems come in. And as I said, if the state allows a deficiency judgment, it's in the borrower's best interest not to trash the property. That's where the lender recovers from a "trash out," not in suing to get the hot water heater back.
Tanta,
When lenders complain about about $200 dollar loan policies and 3 day turn around time, it's nice to be able to show them the alternative.
Anyone who has stood in line at the DMV trying to transfer title to a mobile home can testify as the wonders of private enterprise.
baron samedi-
thanks - as near as I can tell ( http://www.fairfaxcounty.gov/dta/realestate_faq.htm#17 ), in Virginia, the Circuit Court Clerk is responsible for deeds, which seems to include holding them.
I could be mistaken, but it seems as if the deed is not possessed by the property owner in the Commonwealth of Virginia. But then, states as old Virginia tend to have their little quirks. Quite honestly, though I have seen a number of documents relating to home ownership in Fairfax, I never remember seeing an original deed, apart from historical records.
In Puerto Rico, I believe that notaries, who are super lawyers keep the originals. I didn't know that any of the states actually kept originals.
Originals of stuff like building plans and permits are kept, and the building and zoning offices do occasionally lose them. In the 50s, I'm told the building where this stuff was kept burnt down, and I would have like to have seen the documentation a couple of times and it was well and truly gone.
I find Virginia keeping original deeds passing strange: are you sure?
Too funny.
We have a Chicken Little panic about scam foreclosures by people who don't even own the note.
And a separate chicken dance over fraudulent insider leases allowing foreclosed owners to stay in their houses for 99 year.
Perhaps a shred of evidence that either phenomenon is actually happening is in order? Perhaps we could worry about real problems, since we currently have no shortage of those?
I mean, it's nice that everybody is feeling such tender solicitude for lenders' losses. But maybe the biggest threat to their bottom lines is not this outrageous violation of their sacred rights to toss out tenants. Maybe it's their recent habit of lending money to people likely to default in the first place.
rent_to_own and lawyerliz,
Virginia statute provides for filming and imaging of the records so I doubt they retain the originals, especially given how snotty lenders are about getting their mortgages back.
LIS > Code of Virginia > 17.1-240
But maybe the biggest threat to their bottom lines is not this outrageous violation of their sacred rights to toss out tenants. Maybe it's their recent habit of lending money to people likely to default in the first place.
No kidding.
You know, I usually spend my Saturdays on long pointless threads with people who want to argue that the comparable approach to market value is junk, and that all properties should be valued on the income approach.
Then, suddenly, when we talk about FC everybody wants to assume that the lender is harmed by an income-producing property that cannot be as easily sold as REO as a vacant one.
I keep returning to the idea that nobody ever said RE mortgage lending was risk-free, and shit happens like the tenant problem, and really your best idea is good underwriting and rational pricing up front and then you can afford to take your losses philosophically on that one deal in a thousand where you gots yerself a tenant problem.
Lurking here is that "free money" naive investor mentality that sez, whu? There's risk to having to foreclose? I thought it was just like taking the broken stereo back to Best Buy for a refund . . .
especially given how snotty lenders are about getting their mortgages back
Heh.
You mean "used to be snotty."
I used to be snotty as hell about it, because if I couldn't get a pool certified in 90 days, there'd be bodies lining the corridors. Nothing would piss me off more than having outstanding certification items because Cook Bloody County (it was always the big metro counties, not the little Podunk ones) couldn't return mortgages within a year.
But who is being snotty now? I look around and see these servicers going to court foreclosing on two-year-old loans and they apparently don't even have an assignment to cough up. You can't tell me they rode their recorders (and title underwriters) ragged to get the damned pools certified in 90 days, because if they had the docs would be in the files and this nightmare would end.
Sorry, but snotty custodians, like wrinkled reptilian underwriters and those sharp old broads at the Deeds office who make everyone's life a living hell are not the problem.
Perhaps the solution is to hire a lot more crotchety middle aged Wiccans. They could scry out problem documents and keep everybody in line with a few lumps of wax and carefully hoarded locks of hair.
Lurking here is that "free money" naive investor mentality that sez, whu
You mean, naive investors like banks, pension funds, and institutional money managers?
Your comment points to a much wider problem. Lenders and servicers are screaming bloody murder about changing the foreclosure exception to tenants' rights. That's because nobody in this entire Conga line, from the broker to the originator up through some fancy investment advisor, ever made plans for the actual risks of doing business. Now they' trying everything they can to weasel out of facing them.
nobody in this entire Conga line, from the broker to the originator up through some fancy investment advisor, ever made plans for the actual risks of doing business
Yup.
It's like my thing about the cramdowns: well holy jumpin' jeezus, lenders, BK ain't supposed to be any fun for ya.
I hate sounding like some cranky old fart all the time, but we used to fear BK and FC. We probably feared it too much sometimes and were too conservative. I dunno.
I do know that not fearing it enough has landed us all in a financial system catastrophe. You HAVE TO have negative consequences to lenders of loans going bad. That is so "duh" that I hate even typing it.
The problem is too many people still wanting to keep harping only on "negative consequences" to borrowers.
Tanta writes:
I used to be snotty as hell about it...
But I am sure you also made sure your closers and underwriters actually read the commitment prior to closing, and that the mortgage conforms to the commitment requirements.
But I am sure you also made sure your closers and underwriters actually read the commitment prior to closing
You're kidding me right? I'd fire anyone who just "read it."
If the MARKED UP commitment wasn't in that file, and my closers hadn't already asked you for every last one of those damned endorsements on the final, it was "former closers."
OK, sometimes I'd let the title underwriter work out some of the gnarlier mineral lease problems. But the day I relied on you to tell me I needed an ALTA 4 was the day I'd hang it up.
I have done a fair amount of due diligence lately and I see commitments in the file not only with no markups, but that still say "OWNER OF RECORD" as proposed insured. I am a way old fart . . .
I have done a fair amount of due diligence lately
you've been moonlighting on us?
That's "lately" in relation to how long it's been since I had to call up some title company and bitch about getting a 6.2 instead of a 6.
These days I just get emails from colleagues describing the horrors they find in loan files.
for a second there i thought you had lost your marbles. why anybody would give up a life of sitting around jammy wearing cake eating is beyond me. that is what i aspire to.
why anybody would give up a life of sitting around jammy wearing cake eating is beyond me. that is what i aspire to.
Hey, I actually got dressed this morning.
But yes, this is what you should aspire to and I am not crazy enough to leave it for the bad old days of looking at loan files all day.
Hey, I actually got dressed this morning.
well congratulations! me too (only because i wanted to go to the bookstore and i was out of food).
OK, sometimes I'd let the title underwriter work out some of the gnarlier mineral lease problems. But the day I relied on you to tell me I needed an ALTA 4 was the day I'd hang it up.
You sound like a paralegal I work with...best damn lawyer in the region.
These days it's order the title on Monday, close on Friday. Underwriters on either side don't have time to understand what needs to be done or to fix the problems.
Re: Hey, I actually got dressed..
Is that just for civilians?
Regarding getting dressed: well congratulations! me too (only because i wanted to go to the bookstore and i was out of food).
I had to because I wanted to ski in shorts and t-shirt.
Regarding the topic: If you really had been making your payments, and that was your defense against FC, you would bring in cancelled checks to show that the servicer was cashing your checks!
Sadly, I don't get cancelled checks returned anymore. I held out as long as I could, but those days are now over. I also don't mail checks now, I send an electronic payment from the bank with my checking account. Then I verify that the next month's statement matches my spreadsheet. It works because I'm one of those "you can escrow taxes/insurance over my dead body" people. If my extra payments were at risk of being applied to escrow before principal I'd have to mail in that silly thing attached to the bottom of my statement.
Which doesn't change what I assume is the point...I could prove payment history if I had to, by bringing in relevant material. The nature of the material may differ.
Where I sympathize with Rob in this discussion is with reports of lenders claiming, as a routine matter of business, that they lost documents that they not only didn't lose, but which they apparently treat as the equivalent of post-dated checks, endorsing over the (lost?) original whenever they sell the loan.
Re: "Im just warnin' you civilians."
alse of heart, light of ear, bloody of hand; hog in sloth, fox
in stealth, wolf in greediness, dog in madness, lion in prey.
Let not the creaking of shoes nor the rustling of silks betray
thy poor heart to woman. Keep thy foot out of brothel, thy hand
out of placket, thy pen from lender's book, and defy the foul
fiend. Still through the hawthorn blows the cold wind; says
suum, mun, hey, no, nonny. Dolphin my boy, my boy, sessa! let
him trot by.
baron samedi -
'Virginia statute provides for filming and imaging of the records....'
Ah yes, the days of microfilming in the early 1990s at a Virginia university's library - where the microfilming generally destroyed the original book, and the microfilm was often unusable in following years.
Things have undoubtedly changed over the years, but I'm pretty sure that the change in regulations was, ahem, acquired by the several companies involved in the microfilming business in the DC area. Microfilming was a surprisingly huge business in the shadows - and nobody seemed to care much about the output, just the signing of the contract and removal of all the paper taking up space. Space which then could be put to much more gainful use - like a teleconference facility, for example.
All 1980s to early 1990s memories - I'm sure that things are different, if not necessarily better, now.
Oh, as a side note - a lot of deeds in Virginia have historical value, much like documents where 'Washington surveyed this' is the big draw. It is likely that a lot of the older ones were seen as historically noteworthy, but since the 1950s/1960s, when the rapid growth of the suburbs replaced small farm plots in Northern Virginia, that attitude has likely disappeared completely.
But then, in front of the old Fairfax County courthouse in Fairfax City, there was the claim on a plaque that the Civil War's first shots (or casualty, or something 'first'), happened there. On Main Street, which is also Little River Turnpike, which was the first tollroad in the U.S. as we learned in school. At times, it felt like you could not turn around without noting something 'historically significant.'
However, it has all been pretty much bulldozered and paved at this point, so smudged or fuzzy microfilmed copies in an office where the last microfilm reader has a burnt out bulb, sounds about right.
Whatever - for every day Martin Owe Money delays foreclosure on these shmucks buying $400,000 townhouses on $50,000 a year salaries, I will delay my purchase of a house by several days to week. I am not buying into this BS, and they can just keep dragging out the pain; I won't bite and buy myself an overpriced POS like they want me to. That's my only real way of fighting back against this nonsense.
I am no fan of O'Malley. But, this is a good thing. My friend had a salary of approximately $120,000 a year when she purchased a home for $220,000. She made a downpayment of $50,000 and invested another $30,000 in home improvements. Her mortgage payments more than doubled in four years and her salary, due to loss of one source of income, was cut to about $65,000 a year. The mortgage company also engaged in a strange/huge excrow policy that cost even more in monthly installments. She had more than $150,000 worth of equity in the home. When she fell behind in payments, she communicated with the lender and attempted to work out a loan modification. She contacted project lifeline/hope for help,but they ultimately did not help. After sending a payment that would have placed her at one month behind in her mortgage, she went to North Carolina from Jan 12 to Feb 9, because her mother was dying and she needed to look after her affairs since her father was already deceased and her only other subling would not take the time. When she returned home, she found that her check had been returned by her mortgage lender, a foreclosure action had been docketed and her home had been auctioned. This all took place between Jan 14 and Feb.2. She had not received a prior letter of intent to foreclose from the mortgage lender or it lawyers. She had placed a dozen calls to the mortgage lender in her absence from home to make sure she was on track for a modification. She got passed around form person to person and department to department. Mostly, she left messages that were never returned. At no time did anyone at the mortgage lender mention that she was in foreclosure, they just told her they would get back to her. She, then, had to pay to hire a lawyer and filed exceptions to the foreclosure based on lack of proper notice to her. The court agreed thgat she had not received notice of the foreclosure and that her lender acted improperly. Nonetheless, the sale was ratified because actual notice was not required in Maryland before passage of O'Malley's new law. By March, she was forced out of her home of almost five years. She could not rent because her credit was destroyed in the foreclosure. She is now temporarily living with me in my smal, one bedroom apartment (my wife and two daughters got the family home in the divorce) Her life has been unfairly turned upside down. Bad mortgage foreclosures happen to good, responsible people that could afford their mortgages if the lenders acted fairly. Maryland's foreclosure laws badly needed this reform. If these new foreclosure laws had been in place just two months earlier, my new roommate would not have lost her home, her equity, her confidence, her stability, or her joy.
Thanks for sharing your friend's position, Charlie, and I hope it all works out for the better in the near future. Many thanks also to Tanta for providing her "descriptive" analysis of MD's new Foreclosure Law that took place in April, 2008. Everyone's comments have also helped me out tremendously in my situation.
I'd like to share with everyone what I have been going through over the past several weeks--specifically about the section where servicers "simply don't file Foreclosure papers in 15 days." Although my situation currently involves a Chapter 7 Bankruptcy in MD, I believe what I am going through with my 1st Mortgage holder is very relevant to this topic. I know this narrative is a bit long in the tooth but please grab a cup of coffee and have a "laugh" at what I've been going through:
I filed for Chapter 7 bankruptcy protection in MD at the end of April, 2008. At that time, both of my mortgages were current. From early May thru June 10 I kept calling Citimortgage (1st Mortgage holder) to let them know I had the funds for the May and, eventually, June payments in my account ready to be paid. All I needed to have answered before making the payments, was whether or not there were any good programs (such as Hardship Payment Plans, Refinancing, or other Loss-Mitigation Programs) for people like me in my situation to consider. Even after filing for Bankruptcy protection, we were going to be tight in making our mortgage payments; however, I refused to lose our home.
Well, during all of those calls from mid-May to early-June to Citimortgage, I spent anywhere from a total of six to eight hours being transferred from one customer service person to another explaining what I needed. None of those individuals were able to help me because my mortgage was under Bankruptcy protection. Therefore, I asked who could help me. They simply routed me back to the original customer service department! Quite frankly, all I needed was a "yes" or "no" answer about my question.
On June 4, someone at Citimortgage finally let me know that my account was being handled by a "Bankruptcy Counselor" based in India. Therefore, I called her and left three messages. That person did not--and has not to date--returned my calls. On June 10, my wife and I were served with papers from Citimortgage's attorney stating that a hearing was to be held July 10 in the Bankruptcy Court for a Motion of Relief of Stay. In other words, even though my Bankruptcy discharge takes place at the end of July, Citimortgage had its attorney file the Motion for Relief of Stay so they can start the Foreclosure proceedings immediately. Now also bear in mind that my mortgage was officially "late" by 10 days since I was current on April 30. In Citimortgage's system, I had missed the May 1 payment date at the end of May 31st with the Motion filed 10 days later!
I was completely dumbfounded by this Motion and asked my attorney how this could be--especially after my numerous conversations with Citimortgage about having the funds in my account and only needing one simple question answered. My attorney's office, I eventually found out, really only cares about getting paid before doing anything substantial. They did, however, advise that I should make the payments immediately with the "hopes" of having the Motion withdrawn.
Therefore, I went to the Citibank branch location on June 16 with both my May and June payments in hand. (Citibank is obviously a corporate family member with Citimortgage) However, my payments could not be accepted in the bank's system--but no one knew why. The branch manager also spent two to three hours on the phone with Citimortgage customer service representatives with the same round and round results I had experienced. Finally, we were told the payments could not be accepted in the system because a legal proceeding had begun. The bank manager, who was now fuming with anger, contacted the Manager of Citimortgage's Executive Complaints Department. That manager apologized to both me and the bank manager and stated that he would have the matter resolved. The manager also verified that I had never missed a payment and that Citimortgage's records did indeed show that I had called numerous times before the Motion was filed with all of my information included in the notes.
The next day, I received a call from Citimortgage's Bankruptcy Department stating that my payments needed to be mailed to Columbus, OH. The very next day, I mailed the payments via certified mail with the envelope signed for on June 20.
I let everyone know I had sent the payments and that the payments were in Citimortgage's hands. Well, days and days passed but the checks were not cashed--even though I had well over $3334 in my account to cover the payments! I then called Citimortgage's Bankruptcy department and they advised they were awaiting word from their attorney on whether or not to process the payments.
Now here I am, I'm trying with all my might to make the May and June payments but nothing was/is happening. At the same time, I had to respond to the Clerk of the Bankruptcy Court with my official Response by June 30 (otherwise, it would not be considered in the judge's file).
I hand-delivered a detailed three page letter to the Clerk and mailed copies to everyone involved. I also sent a copy to Citimortgage's Manager of Executive Complaints (that was mentioned above) and he had the following reply:
"My goodness, I don't know what to say. I have already got this in the hands of the top bankruptcy managers and should have something solid to tell you on Monday. Again, I would like to apologize and assure you that this is not intentional. Your concerns are a priority to me and I am going to get this resolved. Please look forward to a call from me on Monday to follow up and advise you what has been done to rectify this situation." Unfortunately, I have not heard back from this Manager since his reply was sent on June 27.
I finally received an email from my attorney's office on July 3 (which is not representing me at the July 10 Motion hearing because I do not have the hundreds of dollars available immediately). To paraphrase, Citimortgage's attorney would Withdraw the Motion if I paid the July payment AND his $700 attorney's fees immediately! I let everyone know that I would have the July payment when I got paid again on July 16 but could not make the July payment on July 3rd. I have not heard back from anyone to date.
Now does this make sense? Again, I've been trying to make my May and June payments since June 16 and Citimortgage has had those payments in hand since June 20! Because of one delay after another by Citimortgage, I'm now forced to jump through hoops even more and come up with the July payment AND their attorney's fee of $700..."immediately!" Quite frankly, I feel I am being financially blackmailed/extorted without any fault of my own. I have also wasted many hours of my own time dealing with this matter as well as having to take off a couple of days of work just so I could make all the calls/visits and prepare and personally deliver the paperwork to the Clerk! All of this has also taken a toll on my personal relationship with my wife as neither of us can rest knowing that Citimortgage wants to Foreclose on our home only TEN days after being considered late (again, my mortgage was current at the end of April with only 40 days having passed since the the May 1st payment was due and the Motion being filed on June 10).
Today is July 7 and I have to appear before the Bankruptcy Judge in a couple of days. I honestly do not know what will happen at the Hearing but I will be honest and state everything that has happened to date.
Well, there you have it folks. I hope you didn't spill your coffee all over yourselves during this narrative. If anyone has any advise, I sure would/could appreciate it (please keep it polite, however). Thanks to all!