Mitch Goldstein | Coach Mitch | January 20th, 2011Massachusetts Foreclosure Case Likely to Set the Tone Against Banks’ Foreclosure Decisions
The Bryan Ellis Real Estate Letter January 7th 2011
…the Massachusetts Supreme Judicial Court upheld a lower court’s decision that two foreclosures were invalid because the banks did not adequately prove that they owned the mortgages in question…The decision likely will set the tone throughout the state and the country for other decisions on foreclosure reversals stemming from poor documentation and other “validity issues” …creating “Foreclosure Gate.”
…the plaintiffs argued that…Wells Fargo and Bancorp, failed to prove that they were the true owners of the mortgages when they enacted the foreclosure…the ruling has the potential to “void thousands of foreclosures,” reported the Washington Post.
A lower court judge, Keith C. Long, believed that…the notes in these cases had “not been properly transferred when the banks auctioned off houses.” The notes were sold in a bundle without the buyer being specifically named, a common practice called “endorsements in blank” that banks used to quickly sell and resell mortgages. However, Long ruled – and the Massachusetts Supreme Court upheld – that “these blank mortgage assignments were never recorded and they were not legally recordable.”
Adam Levitin, a Georgetown University professor, points out that the case “is enough to put a serious cloud on title through the whole system.” With the robo-signer debacle casting a dark cloud over the foreclosure processes…this decision could have a dramatic impact on every aspect of the lending system as we know it.
Read the entire article: Foreclosure case likely to set tone against bank foreclosure cases around county
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Coach Mitch’s REFLECTIONS™
What a mess!
The answer is to hold people accountable for their actions.
I know that all parties involved in the mortgage process point the finger of blame at others. That is just a smoke screen. Anyone familiar with the lending process knows that the banking rules are created with lots of flexibility, i.e. many ways to circumvent any rule. Even so, there is plenty of rational to sustain a charge of fraud on bank officials at many levels.
Bankers are at fault
Example: Aside from a gift, the requirement is to PROVE that the down payment exists and was saved by the applicants. This is the statement that bank officials repeat in congressional hearings as proof that they were careful. Rubbish!
Reality: One time a bank rep told me that sufficient proof of the DP would be to get one hundred dollar bills and provide a copy of the bills. I’m sure you can see how this would allow for fraudulent action and still provide the patina of saying that “proof” had been shown; when in reality a cover had been provided. The bank made its fees, the mortgage broker (me) got paid, the homeowner got his home, the Realtor is happy, the government homeowner statistics are up; and also higher are the foreclosures, putting our entire way of life in jeopardy.
Reality: Providing two months of bank deposits showing the down payment in your bank account is considered proof of the down payment. However, there is no scrutiny for how that down payment came into being. “That would be too much work and an invasion of privacy.” is what the banker says. If a mortgage applicant does not show sufficient income to establish how the down payment was saved, and the banker does not question the suspicious down payment, then proper checking does not happen and the mortgage crises results.
Reality: Not a single loan closes without that loans underwriting requirements being approved by some higher lever bank official. Many fewer loans would be approved if the real lending policy was to thoroughly examine if the underwriting requirements had actually been met. Rather, Wall Street wanted to sell loan packages and banks wanted to create loan packages to be sold. Therefore, everyone winked at the rules; underwriting “work-arounds” were created and heartily approved of AT THE HIGHEST LEVELS. If the Mafia were involved, it would be called racketeering.
CONCLUSION:
All cars today would be very safe – without government regulations, if Lee Iacocca had been found guilty of conspiracy to murder and sent to jail when it was shown that, to improve profits, he knowingly allowed more people to die when he did NOT approve putting in that five cent item that would have protected the Pinto’s gas tank from blowing up in a collision. The Law of Self Preservation would have required that automobile managers, at all levels, would increase quality, and make sure that they were not going to be held accountable for missteps.
In the same exact way, if ONE big bank CEO and Chairman were jailed for fraud and conspiracy, along with his senior and mid-level management, then banking would be changed forever. If ONE Board of Directors were to be successfully sued far beyond their insurance limits, and each member of that Board were bankrupted, then BOD members would no longer just collect fat checks and rubber stamp bad policies. They would do their job, to protect shareholders by ensuring management was doing its job well.
The Right Answer
Tort law, the law of Accountability, is the answer. That is how this nation was to be moved forward.
Along with many other social ills, corporate malfeasance is just another negative off shoot of the liberal mindset. Moral relativism, e.g. “If it feels good, do it.” does not work. There is right, there is wrong. A proper standard, robustly enforced, is the answer.
The Wrong Answer
I know that many liberals will reflexively say that Capitalism is to blame. Wrong. Capitalism requires competition. We have none. A few banks, too large to fail, control the market. This is sometimes called Monopoly Capitalism or Corporatism. These are also wrong. The correct term for the economic system we have is properly labeled, Fascism, a variant of Socialism, similar to Communism in its most important aspects.
Under Fascism, we, puppets, retain the ownership to property while the State puppet-masters make the rules as to how we can utilize our own property. Under Communism, the State owns the property and makes the rules for its use, doling out a pittance to loyalists, and worse to complainers. Under both regimes; control flows from the top down and corruption rules. Personal Power is the desire, not money. Money flows to Power. As Kissinger said, “Power is the ultimate aphrodisiac.”
Personal power is the goal, and money flows to power
Many will dispute the assertion that we live in a fascist state, but, if it quacks like a duck – then it is a duck. BTW, nothing in the definition of Fascism requires torture. Nothing in the Communist Manifesto requires torture either. However, when you call for “the dictatorship of the people,” how else can you realistically intend to enforce your rule? I know – it can’t happen here. Many believe in government benevolence. They also probably think that the IRS is your friend.
Thank Goodness
Coach Mitch’s “Ridiculously Simple System…” ™ emphasizes investing in free and clear properties, at prices so low that you need not be part of the regular mortgage system.
See Coach Mitch’s “Ridiculously Simple System…” ™ for details.
GBA (G-d Bless America)
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