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The tax cut issue is crucial from the standpoint of politics, but in the real world, the biggest threat to the economy remains the lawlessness of the American real estate industry, and how this has dealt a body blow to the most important market for economic renewal in the country.
Via Yves, we have the latest example of the crisis; lenders foreclosing on properties and selling them without taking ownership.
A funny thing happened to DeBary resident Russ Vas Dais as he was about to buy a foreclosed home: He learned the bank selling him the house didn’t actually own it.
Fannie Mae had foreclosed on the property but, in an apparent paperwork problem, never took ownership.
“It was quite shocking to learn the bank didn’t have title to it,” said Vas Dais, who had worked in the real-estate sales and appraisal business for 18 years. “I just felt that there are a lot of incompetent professionals who aren’t paying much attention.”
If you didn’t have an industry professional stuck with this, I doubt it would have made it into a newspaper. For every story we hear about we can assume dozens more happening without the same scrutiny.
If foreclosure defense attorneys keep winning cases and reversing foreclosures, this chaos will become a more regular occurrence. New purchasers will find the foreclosed family at their doorstep, with the legal right to return to the home. But most foreclosure sales are final, and the new purchaser has a claim to stay in the home as well. Lenders will have to make up restitution to the borrower they evicted fraudulently. The whole thing is a huge mess.
Like this:
Real estate investor Marjorie Oster was pleased when she snagged what looked like a good deal through a Miami-Dade County foreclosure court auction: a four-bedroom house in Cutler Bay, with a swimming pool, for about $95,000.
But when her husband drove by the next day to check on the property, he saw “someone cleaning the pool, a lawn service cutting the grass and a note it was being tented for termites,” said Oster, a Miami resident who has been in real estate for 15 years.
It turns out the house she thought she had purchased had been sold in a short sale the week before to someone else — Osberto Jimenez, a 40-year-old Cuban-born truck driver. The law firm handling the foreclosure for the lender mishandled the paperwork and never canceled the auction sale.
This just sounds like amateur hour, but it’s almost fated when you have a culture in the real estate business where documentation is made to be forged. The “sloppiness” is a feature, not a bug. It allows the lenders to get rid of borrowers even when they don’t have the legal right to foreclose.
The punch line of this double sale: the law firm responsible was the notorious David J. Stern.
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About FDL News Desk
What is the DOJ doing about this outrage?
Perhaps they’ve been too busy with their financial fraud investigations:
Pulling Back the Curtain on Fraud Inquiries
” . . . in the two years since the peak of the financial crisis, the government has not brought one criminal case against a big-time corporate official of any sort.
“Instead, inexplicably, prosecutors are busy chasing small-timers: penny-stock frauds, a husband-and-wife team charged in an insider trading case and mini-Ponzi schemes.”
LINK.
Punch line indeed. Lol-ing through tears of despair.
I tried to explain the likelihood of this happening to a young man who was chortling about what a great time to buy a house this is…Don’t think I got through at all.
Many people will find out the hard way.
Thanks so much for posts like this! It’s really important to get the word out about how much of a mess this whole housing system is anymore. A lot of people are all dreamy about buying a house now that the costs are so much lower, but who the heck really knows what they’re getting.
Let the buyer beware, indeed!
Imagine what those numbers will look like with 2 more years of 10% unemployment, over 20% real unemployment Imagine what those numbers will look like as Time lets more people besides us get educated on these issues and Pols start wining races running on this issue.
Imagine what those numbers will look like when the MSM decides they can’t ignore the issue anymore.
I just refinanced through BoA. Turned 25 more years of a 6% loan into 15 years at 4.5% for a slightly lower payment. It’s not all bad news. : – )
Criminal behavior like this will never be stopped until those knowing the truth speak out.
Background?
Simply amazing. BUT, given the way banks have been operating over the last few years, totally foreseeable, no?
Without clear title to these homes just what would the banks list of assets and debts look like? Would banks be in recievership without those funny assets? Even with the bank bailout how many home loans did the banks give the Fed in return for T bills but the banks had no clear title for these homes?
Bush and Obama realize that we will say take backs with interest on the bank bailout if we find out how much of the bailout was for homeloans with no title, for gambling on Credit Default Swaps, etc. Thats where all the real profit was lending to small business not so much profit.
Lending at $36 for every $1 of collateral leverage to hedge funds to buy business that they did.
Yeah, imagine idiots who get into too much debt having to give up their precious homes! The inhumanity of it all.
I think it would be much safer to rent rather than “owning” a home at this point in time. This Wild Wild West show is not going to end anytime soon.
More appropriately what is the Prez doing about it.
Just yesterday he cited foreclosure on homeowners who have been unemployed as the reason he had to give tax breaks to the wealthy.
Well we know that’s a lie…he doesn’t care about families in foreclosure,just look at his HAMP program.In addition he has no problem with banks fraudulently foreclosing on homeowners.
And it’s all about you, right?
Are you donating those extra $$$ you scored to a food bank, free clinic or other help for those less fortunate?
Just curious, but what does a refi have to do with the problem of blighted titles?
An antidotal story about banks selling homes they don’t own concludes “For every story we hear about we can assume dozens more happening without the same scrutiny.”
I just thought I’d present the other side of the coin, and conclude that we can assume thousands more are happening without incident.
Not the same as buying a foreclosed house with a blighted title.
Nice straw man.
You’ve done this before. You should stop it.
Just check, right side of screen, for FDL’s coverage of foreclosure. Stern’s law firm comes up again and again as a major fraudster of foreclosure documents, first revealed (here) in the excerpts from a depo one of his signers gave.
add to #18 – this one, for example.
Your petty [coats] are showing.
you should also look up “antidote” and “anecdote.”
: – )
My spell checker thanks you.
Other side of the coin? Since when do you have to worry about chain of title on a refi?
Your story is nice in it’s own anecdotal way but I don’t see the connection with the topic of blighted titles.
He got caught with his pants down…..there are always many ready to discredit or marginalize what ordinary Americans are going through.
Won’t surprise me if BoA is now paying trolls to post on these blogs how wonderful a company BoA is.
Better check the math, it doesn’t work.
The payment per 10000 at 6 percent for 30 years (I assume you started with a 30 year mortgage) is about $60, the payment per 10000 on a 15 year note at 4.5% is about $76. It’s a pretty big difference in the other direction.