Short Sale, Foreclosure and Strategic Default

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Sunday, October 17, 2010

Foreclosure halt subprime debacle part two.

This is why you may wish to have a lawyer helping you leverage these facts during your short sale negotiations. 

1. A Mortgage is a Lien - a Note is promise to pay, the IOU.

2. In order to collect the money from the Note  there must be a chain of title saying that the entity collecting has a right to collect.  Otherwise the home owner could be paying one person and someone else forecloses.

3. Syndication split the revenue from Notes out to different investors.
Ownership of the note should have stayed with REMICs - but they could not keep ownership for bond rating reasons
MERS was set up to keep track of where money should go and to avoid paying local govt filing fees.
(Those filings would have notified borrowers who had a right to collect their payments - County attorneys are now suing the lenders for millions or billions of unpaid filing fees.)

4. Between MERS and the REMICs no one seems to have kept track of the legal chain of title of the ownership of the note.
Without proof of ownership (chain of title)  the servicer or the group who represents the "owners" probably has no right to collect on the note.  The theory is the real owner of the note might step up and collect later.  

5. Because of the sloppy and lying work being done by foreclosure mills, title insurers were no longer willing to provide the buyers of foreclosure with the title insurance they desired.

6. Even if they do, there will be some owners going back and challenging the foreclosure. 

7.  Finally the investors (like China) may want to give their investments back to the banks who had them invest in there money with a product which contained the MERS shams. 




2 comments:

Short Sale Laws said...

You have presented undoubted logic as to why you need professional help in dealing with short sale. Good post.

Daniel said...

Borrowers who seek foreclosure help early are much more likely to work out a solution, no matter how dire their situation. Based on your situation, your lender may be able to provide the foreclosure help that you need.

New Port Richey Foreclosure Attorney