I should have given the Bevilacqua case a bit more attention yesterday rather than sticking it in the Roundup. It represents the nightmare housing scenario we all expected to come to pass.
The highest court in Massachusetts ruled that a homeowner who bought a foreclosure that hadn’t been properly conducted by the foreclosing bank in 2006 didn’t have legal ownership of the property.
The decision by the Supreme Judicial Court casts a cloud over the legal ownership of any properties in Massachusetts where banks didn’t properly convey title when foreclosing. The problem has gained attention nationwide because of banks’ use of “robo-signing” and other dubious practices that may have broken chains of title on foreclosures.
Think about that. Banks that failed to convey title during foreclosure have clouded the title of any property for the foreseeable future, meaning that whoever buys up the foreclosed property may not be the legal owner. And extrapolating that out, all the homes across the country where the banks failed to convey title properly through securitization have clouded the titles there. That means tens of millions of homes pretty much have no legal ownership chain.
This is the securitization fail we’ve all been dreading. The banks have broken the housing market utterly.
So, as Charlie Pierce puts it, Mitt Romney’s quick fix for the housing market, to foreclose everywhere and let investors buy up the homes and rent them back out to the dispossessed, couldn’t possibly work. [cont’d] The investors or really anyone who buys a foreclosed property cannot be certain that they have a legitimate right to them. It also has implications for the plodding foreclosure fraud settlement; Massachusetts Attorney General Martha Coakley, among others, has distanced herself from that.
And now, the Supreme Judicial Court in Massachusetts has given Coakley, at least, some real ammunition. The decision says that, despite what “turmoil” may result in the housing market, the Court is demanding an explanation for the various gorilla accounting practices and whimsical record-keeping that resulted in the banks’ essentially stealing homes and selling them off, as though they were guys peddling Rolexes that “fell off the truck” on card tables along Fifth Avenue in New York. Coakley’s pretty fed up, too. “This is yet another clear demonstration that the only way we are going to restore a healthy economy is to address the foreclosure crisis and hold the banks accountable for their actions,” she said in a statement released yesterday. The Court’s decision clears the field for her to do that.
This also gives ammunition to the various community groups who are challenging foreclosures all across the country, fighting evictions with a “Sword and the Shield” strategy.
“The Sword”. Encouraging residents to stay in their homes, and to make their stories public, we organize blockades, vigils and other public actions to exert public pressure on the banks. The sword works together with:
“The Shield”: We inform bank tenants of their rights and work with legal services & progressive lawyers, to use aggressive post-foreclosure eviction defense to get eviction cases dismissed, win large move-out settlements (if it makes sense for that family/person), and force the banks to reconsider foreclosure evictions.
If the ownership cannot be proven on the home, it bolsters this strategy significantly.
The government can keep moving along with inadequate settlements that will “get the market moving again” (they won’t, and Adam Levitin has the definitive piece telling you why). GOP candidates can speak a lot of gobbledygook signifying almost nothing. But the truth that precious few want to admit is that the banks stole a bunch of homes. And they’re trying to pass them off to other people with phony documents. “This is a guy selling you a lemon of a used car, or inadequate aluminum siding,” as Pierce says. It’s pure fraud of the largest market in the world, the US residential housing market. And the Massachusetts Supreme Court is blowing the whistle.