Deadbeat Homeowners and Sloppy Banks
Bloomberg has an interesting article “Banks Lose to Deadbeat Homeowners as Loans Sold in Bonds Vanish.” The crux of the article is that banks and other mortgage institutions have bought and sold individual mortgages so many times that they often lose the note – the proof that they need to show the courts that they actually own a given property. And when they do, the courts usually don’t support their attempts to foreclose on the property.
U.S. District Judge David D. Dowd Jr. in Ohio’s northern district chastised Deutsche Bank National Trust Co. and Argent Mortgage Securities Inc. in October for what he called their ``cavalier approach’’ and ``take my word for it’’ attitude toward proving ownership of the mortgage note in a foreclosure case.
Producing the actual mortgage note is a``It’s a gigantic waste of time,’’ (Jeffrey Naimon, a partner in the Washington office of Buckley Kolar LLP) said. ``The mortgage may have transferred five, six, eight times. It’s possible that you don’t have all the pieces of paper, but it was enough to convince the next guy in the chain. There’s no true controversy over whether the owner owns the loan.’’
Uhm. Well I suppose it’s not controversial if your a bank and you hire Mr. Naimon. However I’d bet that if you were a homeowner fighting foreclosure and you hired Mr. Naimon to defend you he’d think otherwise.
I’m no fan of the banks. At heart I believe that corporations are not synonymous with Capitalism, and that all in all, capitalism would be much better without them (or at least by having the death penalty for corporations – the threat of dissolution). But I know where my mortgage note is, and when I sell my home I expect to produce that note. Ditto with my car titles. Nuisance or not, mortgage notes are legal documents that should expect to be produced when an owner attempts legal action. After all, the owner is seeking redress from the state in the form of authorized force to remove a person from his/her home.
On the other hand, the example the article gives for a deadbeat homeowner, is perfect…
Joe Lents hasn’t made a payment on his $1.5 million mortgage since 2002.
So Joe has been living for free in a $1.5 million house for over 5 years. During that time I have paid tens of thousands of dollars for my family to live in my little home. Lents has gotten lucky off the system, but he still strikes me as a scumbag. He’s stealing – we may not know from who – but he is doing it just the same. I hope that the current owner of his mortgage finds his note and kicks his butt out on the street.
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