14 ms·

Stop Payment: A homeowner’s revolt against the banks (2012)

145 points by wglb 8y ago

redleggedfrog 8y ago
I have personal experience with this back before the 2008 crash. I owned a house along with someone else, an okay house, bought it for $115,000, held onto it for 5 years, until it appreciated to $350,000 in those hurly-burly days. At some point, and I forgot why it came up, we needed to figure out who owned the loan. And we never did. It the morass of paper work and nearly fraudulent claims by various people who claimed to own the loan, we stopped paying on the loan. We literally had more than one company claim to own it at one point. What was weird is it was kind of a slow burn, even after we stopped paying. No one really seemed to care as much as you'd think $900 a month would make you care. In the end, we sold the house, never paid off the remaining debt, and split the cash. I told my lawyer I'd hold onto savings to cover the debt if they ever came back and could legally claim it.. It's been 11 years. Nothing yet.
- user5994461 8y ago
  I don't understand how is that possible to not know about a home loan. Didn't you have to open the loan when you bought the home? Don't you know what banked you dealt with?
  - setr 8y ago
    the loan was presumably sold off, and then again, and again, and again... and suddenly there was divergence, and it was sold off yet some more
  - dorfsmay 8y ago
    Loans and mortgages were sold by the banks to other companies: https://en.wikipedia.org/wiki/Mortgage-backed_security https://en.wikipedia.org/wiki/Mortgage-backed_security A lot of mortgages changed hands several times, the original bank who setup the mortgage would have no longer been involved at that point. That doesn't explain how OP was able to get the lien on the land title removed when they sold the house.
    - user5994461 8y ago
      It's weird to me. You need to know who to pay the mortgage to. The bank would have to notify you immediately when and whom they sell the mortgage to if they ever sell. Unless they don't notify you on purpose to continue to receive the monthly payment, while cashing out on the resale, in which case that's fraud. I can also imagine that the next buyer would try to pull the same trick. That obviously causes a problem. It seems to be what happened in the US, in which case everyone should check their mortgage to make sure who owns it.
      - blacksqr 8y ago
        You don't make payments to the lender. You make payments to a payment servicer hired by the lender. Until midway through the Obama administration, nobody had any obligation to notify you if your mortgage was bought or sold. Payment servicers had no obligation to tell you who they were forwarding your checks to. Your mortgage could be bought and sold multiple times, but as long as the same servicer was used, you'd never know (there were/are only a few big servicers). If the mortgage buyer used a different servicer, you'd get a letter from your current servicer about the new servicer you should send your checks to, but no info about who now owned your mortgage.
        user5994461 8y ago
        Thank you very much for the explanation.
        tgb 8y ago
        I see how that could mean that the borrower might not know who owns the loan, but surely the payment servicer knows? Would they simply not tell you, even if you asked?
        blacksqr 8y ago
        Exactly. The servicers existed to serve as a smoke screen for mortgage securitization shenanigans. The servicers sent the payments to trusts that had dubious possession of the mortgages. Trusts and banks passed ownership of mortgages amongst themselves, though tax law was supposed to prevent them from doing so. Ultimately the servicers had no more idea of who actually owned the mortgages than the homeowners.
- hermitdev 8y ago
  Doesn't really surprise me. Bank debt trading is messed up. Everything is mostly done by fax. Things don't happen quickly. Time is measured in months. Source: I was IT support (among other hats I wore) for the band debt team at a hedge fund for 7 years at a previous job. We held about $20B in notional debt running up to the 2008 crash. Was not a fun time to be in the industry.
  - gehwartzen 8y ago
    Can confirm; my wife has worked the past five years in the foreclosure department at Suntrust Mortgage and every case she told me about took months to resolve. Finding the “true” owner of the loan routinely involved tracing the sale through 7+ other investors, each time faxing back and forth tons of documents, resulting in reams of paperwork for lawyers and courts to sift through. It’s quite a mess :/
- bertjk 8y ago
  That is interesting, but isn't there a point in the house selling process where they look for every party that might have an interest in the house and such? I mean I think that is part of the chunk of paperwork that realtors / title search companies or whatever do, right? What happened then?
  - jcoffland 8y ago
    The paperwork that realtors and title companies do is a joke. When we bought our house I signed close to a hundred documents. Many of which were the same. Some documents were repeated 3 or 4 times. It's all a game where they try to convince you how grand and thorough and official the whole processes is. It made me realize how incompetent the banks really are.
    - oihoaihsfoiahsf 8y ago
      Well, you buy title insurance so that even if the process wasn't thorough enough you don't lose a whole bunch of money. https://en.wikipedia.org/wiki/Title_insurance https://en.wikipedia.org/wiki/Title_insurance
      - DubiousPusher 8y ago
        That's the idea but it's a lot more complicated than, I buy a title search, I buy title insurance. I'm covered 100%.
      - fredophile 8y ago
        The insurance companies aren't stupid. It's not quite as easy as just paying some money for the insurance and being done. Normally title insurance is something you pay once and it's valid as long as you continue to own the property. When I bought my current place my real estate lawyer had to do a bunch of digging because there was some ambiguity in some documents 3-4 owners back. The title insurance company would only offer insurance for 1 year if this ambiguity wasn't resolved.
    - WalterBright 8y ago
- jpmattia 8y ago
  > In the end, we sold the house, How did the bank lien from the mortgage get handled in the sale?
  - kevmo 8y ago
    I am also interested in hearing about this. I guess they guaranteed good title, but kept money (earning enough interest?) in case the bank comes knocking?
    - iteriteratedone 8y ago
      Hes a rich fuck ... sold it to a relative. California is a shithole
    - redleggedfrog 8y ago
      Yes, I just talked to the person who I owned it with, and this is their recollection. We could transfer the title, but we were on the hook for the the mortgage. I'm pretty sure there wasn't a lien on the property. Pretty funny you mentioned the interest. In the 11 years it's been like $50.00, since I keep it in just a regular account (instead of CDs or whatever).
      - MertsA 8y ago
        >I'm pretty sure there wasn't a lien on the property Which country was this in? Banks don't typically hand people hundreds of thousands of dollars without making sure that they'll get their pound of flesh when things go south. Not having any kind of collateral is a pretty big mistake on the bank's side.
      - kevmo 8y ago
        If a bank sues you, they will be making claims for various damages. One of those damages will probably be projected interest they would have made from re-lending the money that wasn't being paid. The debt could also be subject to a state of limitations, and you could potentially be clear. If its been 11 years, I would ask a lawyer about it. You may be able to safely use the money you've left set aside.
scarface74 8y ago
When you signed the loan for the mortgage, you made a business transaction with the bank. You knew full well the terms of the mortgage and the consequences of not paying it. You also should have known that the bank could sell the mortgage. They explained it clearly on all six mortgages I’ve signed for over the years. But, I also have no moral qualms with “strategic defaults”. The bank also knew what they were signing.
- noxToken 8y ago
  I think another user put it best[0]: > Some people might scoff at the ideas in the article. You took out a loan, only a deadbeat leech would default on that loan and expect to keep their house. Sounds about right, but that assumes we live in the world we all imagine. The "right" world, where business still resembles interpersonal relationships. It doesn't, and we don't live there. We know that at the end of the day, a loan, insurance, utilities, etc. are all business contracts. Each party signs something, and each party expects what they signed for. The problem is that contracts (especially when buying a home) can be absurdly long full of unintelligible language. So we as ordinary people want to believe that we aren't going to get screwed over. We know that these major companies have the manpower and funds to ruin us, but we hope it doesn't come to that. From that same user[0]: > You've paid your insurance bill diligently for years, but as soon as they are needed, they start looking for ways to get out of paying the claim. They will happily screw you over the tiniest technicality. The insurance industry certainly isn't the only offender in that regard. It's a business transaction. Some of the time, we don't even have a choice with who we do business. But as an ordinary person, I don't want to get fucked over by these forced contracts. [0]: https://news.ycombinator.com/item?id=17810765 https://news.ycombinator.com/item?id=17810765
  - scarface74 8y ago
    The problem is that contracts (especially when buying a home) can be absurdly long full of unintelligible language. So we as ordinary people want to believe that we aren't going to get screwed over. We know that these major companies have the manpower and funds to ruin us, but we hope it doesn't come to that. From that same user[0]: I know about all of the non conforming and other crazy loans taken out back during the real estate bubble pre-2008. I took advantage of most of them as a real estate investor and did many of the shady things myself that help cause the real estate bust and did a few “strategic defaults”. While there is a lot of paperwork, for the traditional fixed rate mortgage that most people should be doing, it’s not that complicated- you pay your mortgage every month, the escrow amount may fluctuate but besides that it’s fixed, to whoever owns your loan this month, you keep your house. Most people had no business doing the adjustable rate/ negative equity/no doc type of loans. I agree that mortgage lenders, especially those working with builders, pushed people into them.
jason_s 8y ago
looks like Trotter lost... https://law.justia.com/cases/idaho/supreme-court-civil/2012/38022.html https://law.justia.com/cases/idaho/supreme-court-civil/2012/... https://www.housingwire.com/articles/idaho-supreme-court-decision-gives-mers-court-win https://www.housingwire.com/articles/idaho-supreme-court-dec...
- ChuckMcM 8y ago
  "The million dollar brownstone that nobody owned" story that came through recently had its title "restored" in Idaho which suggests to me that Idaho is a favorable jurisdiction for people to do this sort of thing.
- javajosh 8y ago
  Man, that's crazy. If the law says you have to have the deed and the note to foreclose, how can the court ignore this? Honestly, it sounds like Trotter was trying to game the system, but shit, isn't that what they do to us all the time? We forgot to check a box, or filled in something wrong, and they hurt us. We should hurt them for the same reason.
  - pdonis 8y ago
    > If the law says you have to have the deed and the note to foreclose, how can the court ignore this? Simple: that's not what the law says. At least not in Idaho. According to the court's opinion, what the law says is that a trustee who forecloses must meet four specific requirements. None of those requirements equate to proving that you have "standing" (which was what Trotter alleged was required) to foreclose. However, the first of the four requirements (p. 5 of the court's opinion) is: "The trust deed, any assignments of the trust deed by the trustee or the beneficiary and any appointment of a successor trustee are recorded in mortgage records in the counties in which the property described in the deed is situated". Since the main concern given in the article is that MERS and similar arrangements are circumventing the recording of who owns or has claims on real property in the local jurisdictions, it would appear that in the Trotter case, that concern was not present, since the relevant claim information was recorded in the local jurisdiction; the trustee who forecloses has to be the one whose trust deed is filed with the county for that property.
metalliqaz 8y ago
Not quite sure what the relevance is today of this article from 2012. It's core message is a good one, though. Americans are used to getting pushed around by "the machine". Bills come from various places (utilities, hospitals, banks, the government) and we pay them without thinking. Why think that much about it? You have to pay or your precious credit rating will suffer. But the mistakes are so common it's likely that everyone has a personal example from some point in their lives. Credit card fraud, billing errors, mistaken identity, hidden charges on a phone bill, and on and on, and on again. The companies are faceless, emotionless, and completely without loyalty to their customers. It's rather insane that we grant them fidelity in return. You've paid your insurance bill diligently for years, but as soon as they are needed, they start looking for ways to get out of paying the claim. They will happily screw you over the tiniest technicality. The insurance industry certainly isn't the only offender in that regard. Some people might scoff at the ideas in the article. You took out a loan, only a deadbeat leech would default on that loan and expect to keep their house. Sounds about right, but that assumes we live in the world we all imagine. The "right" world, where business still resembles interpersonal relationships. It doesn't, and we don't live there. It shouldn't just be about fighting Wall Street greed, or getting out of an eviction. Everyone should be on top of any business from which they have purchased a service. Be informed. Force them to deliver the service they promised. Force them to make you whole when you've been screwed. Force them to prove that they have accurately managed your account and they they truly do own your debt. Above all, make them actually compete again. It would be nice if everyone did that, but I don't actually believe that they will. Oh well...
- onemoresoop 8y ago
  > Be informed. Force them to deliver the service they promised. Force them to make you whole when you've been screwed. Force them to prove that they have accurately managed your account and they they truly do own your debt. Above all, make them actually compete again. Yes this could be done but it's a never ending battle and it drains all your productivity when fighting. And when you have your small victory after hours of being on hold, they might give you back what they owe you, but they do this en-masse and some people don't have the energy to fight back, people tire. That's why we should ALL fight back this systematic scamming so that it doesn't happen in the first place. Individual fighting back doesn't beat a machine set on a bad behavior.
mikestew 8y ago
An interesting article, but the whole thing had a whiff of "paying income tax is unconstitutional", complete with the protagonist coming off as just a tad unhinged. IANAL, and even as an amateur one I wouldn't begin to claim to argue the merits of the law. But none of the folks mentioned in the article garner any sympathy from me. Banks weren't screwing anyone, AFAICT. Folks just couldn't make the payment, and found a loophole. Hell, one person had mortgages on eleven houses in San Diego. Hmm, could it be that they were just a bit over-extended, and not victims of the evil banking system? Now, I'm not hatin' on anyone mentioned in the article. Overall, I'm about as neutral as I would be watching two people I have no interest in have a fist fight, because I have no great love for banks, either. And if they succeed, good for them. But the state of ID, as pointed out by another commentor, seems to put this in the "don't pay income tax" bucket as well.
- thanatropism 8y ago
  I think you're getting downvoted for typin' "hatin' on" rather than something that's grammatically appropriate for written discussion and more specific, such as "Not that I condemn...".
  - mikestew 8y ago
    I appreciate your feedback. Though if I were to guess, it's more the "I have no sympathy..." than my street grammar. :-) I've got 10K points of imaginary Internet cred, I don't worry about a downvote or two except as a sanity check for the rare times I get out of line.
- Afforess 8y ago
  Paying income tax _was_ unconstitutional. The 16th amendment had to be passed to make it constitutional. Only Federal Income taxes after 1913 were constitutional: https://en.wikipedia.org/wiki/Sixteenth_Amendment_to_the_United_States_Constitution https://en.wikipedia.org/wiki/Sixteenth_Amendment_to_the_Uni...
  - mikestew 8y ago
toss1 8y ago
Looks like this is his LinkedIn Page https://www.linkedin.com/in/poppakoppa/ https://www.linkedin.com/in/poppakoppa/ still refers to www.TitleTrail.com but that's up for sale Looks like he might have some connection to this group still doing some of the work http://certifiedforensicloanauditors.com/ http://certifiedforensicloanauditors.com/ There are benefits to the ancient system of physically recording everything in the locale, and potentially good reasons to move to a more modern system. While I don't have enough info to form a final opinion, I do know that if they are going to centralize it, they should certainly be held to a standard of doing it right.
deleted 8y ago
[deleted]
mnm1 8y ago
Instead of bailing out the banks after the crisis, the government could have decided to do something like this and sever the loans. Let people keep one home (the cheapest if they had more than one) and let the banks take the fall for what was completely their own fault. They didn't. They decided that these banks should continue to fuck people over in the same way, passed a few laws to prevent it for a few years and that's about it. They claimed these banks were "too big to fail," a moniker no one understands because it's absurd and doesn't make any sense. If anyone deserves to be fucked over it's these banks who fucked the rest of us over royally.
- DubiousPusher 8y ago
  I agree with the sentiment but considering the bailout we got barely passed because of conservative outrage, anything with even a wiff more of "socialism" would've been doomed. Reading about the crisis still pisses me off but I also am grateful there still is a system. Conservatives flirted with stupid in a big way in 2008 & 2009 and it could've been a lot worse.
justboxing 8y ago
> A lender called Rose Mortgage had originated the loan, then sold it to Option One Bank, which sold it to Lehman Brothers, which sold it to Lehman’s fully owned subsidiary Structured Asset Securities Corporation, which pooled the loan into Structured Asset Securities Corporation Mortgage Pass-Through Certificates, Series 2006-Z, whose investors were now alleged to be the owner of Ibanez’s note. U.S. Bank was appointed trustee of the securitized trust, to enforce the payment of the notes, and, if necessary, to foreclose on defaulting homeowners such as Antonio Ibanez. This statement is truly mind-boggling. Took me a minute or two to understand what was going on (or what I think was going on)...
AceJohnny2 8y ago
Referred to in yesterday's article "The million-dollar brownstone that no one owned" [1] with HN comments [2], about a particular building in NY with an ugly financial history through the mortgage crisis. [1] https://theoutline.com/post/5807/the-million-dollar-brownstone-that-no-one-owned?zd=1&zi=rwqu3xgo https://theoutline.com/post/5807/the-million-dollar-brownsto... [2] https://news.ycombinator.com/item?id=17804023 https://news.ycombinator.com/item?id=17804023
modells 8y ago
More banks need to be foreclosed on: http://business.time.com/2011/06/06/homeowner-forecloses-on-bank-of-america-yes-you-heard-that-right/ http://business.time.com/2011/06/06/homeowner-forecloses-on-...
phobosdeimos 8y ago
Not just not paying off your debts but being proud of it. You want Greece? Thats how you end up Greek. But the evil banks! Try buying a house without them then. But the evil system! You are living in it and you were enjoying the boom times. This article reads like a Marxist manifesto. Which is fine if these people vote Communist next election.
rossdavidh 8y ago
So, I was not surprised to discover that this did not exactly revolutionize the mortgage industry, and on some level I'm not all that disappointed. There is a problem, but getting "mad as hell" is probably not the solution. However...it does remind me of my chief disappointment with the Obama administration's approach to rebuilding after the Fiscal Crisis, and that is that we did not really change the financial system very much. I have the very strong impression that it will all happen again.
- rhizome 8y ago
  In a lot of ways, the government are employees of the finance industry.
pnathan 8y ago
As near as I can tell, this complaint sounds like an offshoot of SovCit approach. Very similar approach. In any case, I strongly favor discarding deeds, title search fussery, in favor of a national title registry - the decentralized approach seems, today, to be pointless. Maybe MERS should be nationalized and turned into the Standard Property Registry. It should be as simple as checking the database view to see the title, liens, claims, etc. edit: I read each and every single document I signed for the 30 year conventional mortgage, both in the run-up and in the grand finale. Law is like code, but executed by courts and lawyers with a "virtual machine" of the great Anglo-American legal tradition governing it. Anyone competent to write code and read manuals should be able to read their mortgage documents.
- rspeer 8y ago
  Many of these homeowners, unlike "sovereign citizens", actually appear to have the law on their side. They aren't just making up their own insane interpretation of the legal system. It even sounds like it's more like MERS who made up an interpretation of title that disagrees with state laws. You seem to be saying that MERS's interpretation should be correct, that MERS's database should be the law of the land and investors should be able to buy and sell the title to mortgages without states and counties being involved. The current system has homeowners getting windfalls because MERS screwed up, and I suspect that screw-ups in your version would have the opposite effect, where homeowners get robbed by computers and nobody can be held accountable. So that seems bad. And what would the benefit be? Sure, it would make mortgage-backed securities more efficient, but -- why is that good?
  - pnathan 8y ago
    Crap happens. That's the point of the courts; to enforce remedy. If you've ever dealt a little bit with funky titles, you'd know that having a central authority managing all claims to title would be a big deal and massively improve life for property buyers. Title searches are not exhaustive. That is why title insurance exists. If MERS is a title registry and it also manages bundling of debts, I genuinely don't care. The issue isn't debt bundling, it was granting high risk mortgages and other high risk behavior.
kchoudhu 8y ago
If anyone wants to know how Vermont Trotter's case panned out, here's the last appeal he exhausted in 2015: https://www.carltonfields.com/files/uploads/Documents/realprop/trotter-v-bayview-loan-services.pdf https://www.carltonfields.com/files/uploads/Documents/realpr... TLDR: he lost.
gehwartzen 8y ago
For those curious to see who the current Servicer (ie place that takes your monthly mortgage check) and Investor (ie the actual owner of the debt) of your mortgage is, the following site at MERS seems to work: https://www.mers-servicerid.org/sis/ https://www.mers-servicerid.org/sis/ I’m actually somewhat surprised that my 6 yo mortgage is still owned by the same local credit union that originated it.
yrro 8y ago
> Adam Levitin, a professor of law at Georgetown University, told me that if the lawsuits are successful, the banks will be on the hook “for hundreds of billions of dollars” and will likely go bankrupt. I'm guessing that these lawsuits were not, ultimately successful? Trotter's case ultimately failed: https://law.justia.com/cases/idaho/supreme-court-civil/2012/38022-0.html https://law.justia.com/cases/idaho/supreme-court-civil/2012/...

145 points by wglb 8y ago

I have personal experience with this back before the 2008 crash. I owned a house along with someone else, an okay house, bought it for $115,000, held onto it for 5 years, until it appreciated to $350,000 in those hurly-burly days. At some point, and I forgot why it came up, we needed to figure out who owned the loan. And we never did. It the morass of paper work and nearly fraudulent claims by various people who claimed to own the loan, we stopped paying on the loan. We literally had more than one company claim to own it at one point. What was weird is it was kind of a slow burn, even after we stopped paying. No one really seemed to care as much as you'd think $900 a month would make you care. In the end, we sold the house, never paid off the remaining debt, and split the cash. I told my lawyer I'd hold onto savings to cover the debt if they ever came back and could legally claim it.. It's been 11 years. Nothing yet.

user5994461 8y ago
I don't understand how is that possible to not know about a home loan. Didn't you have to open the loan when you bought the home? Don't you know what banked you dealt with?
- setr 8y ago
  the loan was presumably sold off, and then again, and again, and again... and suddenly there was divergence, and it was sold off yet some more
- dorfsmay 8y ago
  Loans and mortgages were sold by the banks to other companies: https://en.wikipedia.org/wiki/Mortgage-backed_security https://en.wikipedia.org/wiki/Mortgage-backed_security A lot of mortgages changed hands several times, the original bank who setup the mortgage would have no longer been involved at that point. That doesn't explain how OP was able to get the lien on the land title removed when they sold the house.
  - user5994461 8y ago
    It's weird to me. You need to know who to pay the mortgage to. The bank would have to notify you immediately when and whom they sell the mortgage to if they ever sell. Unless they don't notify you on purpose to continue to receive the monthly payment, while cashing out on the resale, in which case that's fraud. I can also imagine that the next buyer would try to pull the same trick. That obviously causes a problem. It seems to be what happened in the US, in which case everyone should check their mortgage to make sure who owns it.
    - blacksqr 8y ago
      You don't make payments to the lender. You make payments to a payment servicer hired by the lender. Until midway through the Obama administration, nobody had any obligation to notify you if your mortgage was bought or sold. Payment servicers had no obligation to tell you who they were forwarding your checks to. Your mortgage could be bought and sold multiple times, but as long as the same servicer was used, you'd never know (there were/are only a few big servicers). If the mortgage buyer used a different servicer, you'd get a letter from your current servicer about the new servicer you should send your checks to, but no info about who now owned your mortgage.
      - user5994461 8y ago
        Thank you very much for the explanation.
      - tgb 8y ago
        I see how that could mean that the borrower might not know who owns the loan, but surely the payment servicer knows? Would they simply not tell you, even if you asked?
        blacksqr 8y ago
        Exactly. The servicers existed to serve as a smoke screen for mortgage securitization shenanigans. The servicers sent the payments to trusts that had dubious possession of the mortgages. Trusts and banks passed ownership of mortgages amongst themselves, though tax law was supposed to prevent them from doing so. Ultimately the servicers had no more idea of who actually owned the mortgages than the homeowners.
hermitdev 8y ago
Doesn't really surprise me. Bank debt trading is messed up. Everything is mostly done by fax. Things don't happen quickly. Time is measured in months. Source: I was IT support (among other hats I wore) for the band debt team at a hedge fund for 7 years at a previous job. We held about $20B in notional debt running up to the 2008 crash. Was not a fun time to be in the industry.
- gehwartzen 8y ago
  Can confirm; my wife has worked the past five years in the foreclosure department at Suntrust Mortgage and every case she told me about took months to resolve. Finding the “true” owner of the loan routinely involved tracing the sale through 7+ other investors, each time faxing back and forth tons of documents, resulting in reams of paperwork for lawyers and courts to sift through. It’s quite a mess :/
bertjk 8y ago
That is interesting, but isn't there a point in the house selling process where they look for every party that might have an interest in the house and such? I mean I think that is part of the chunk of paperwork that realtors / title search companies or whatever do, right? What happened then?
- jcoffland 8y ago
  The paperwork that realtors and title companies do is a joke. When we bought our house I signed close to a hundred documents. Many of which were the same. Some documents were repeated 3 or 4 times. It's all a game where they try to convince you how grand and thorough and official the whole processes is. It made me realize how incompetent the banks really are.
  - oihoaihsfoiahsf 8y ago
    Well, you buy title insurance so that even if the process wasn't thorough enough you don't lose a whole bunch of money. https://en.wikipedia.org/wiki/Title_insurance https://en.wikipedia.org/wiki/Title_insurance
    - DubiousPusher 8y ago
      That's the idea but it's a lot more complicated than, I buy a title search, I buy title insurance. I'm covered 100%.
    - fredophile 8y ago
      The insurance companies aren't stupid. It's not quite as easy as just paying some money for the insurance and being done. Normally title insurance is something you pay once and it's valid as long as you continue to own the property. When I bought my current place my real estate lawyer had to do a bunch of digging because there was some ambiguity in some documents 3-4 owners back. The title insurance company would only offer insurance for 1 year if this ambiguity wasn't resolved.
  - WalterBright 8y ago
jpmattia 8y ago
> In the end, we sold the house, How did the bank lien from the mortgage get handled in the sale?
- kevmo 8y ago
  I am also interested in hearing about this. I guess they guaranteed good title, but kept money (earning enough interest?) in case the bank comes knocking?
  - iteriteratedone 8y ago
    Hes a rich fuck ... sold it to a relative. California is a shithole
  - redleggedfrog 8y ago
    Yes, I just talked to the person who I owned it with, and this is their recollection. We could transfer the title, but we were on the hook for the the mortgage. I'm pretty sure there wasn't a lien on the property. Pretty funny you mentioned the interest. In the 11 years it's been like $50.00, since I keep it in just a regular account (instead of CDs or whatever).
    - MertsA 8y ago
      >I'm pretty sure there wasn't a lien on the property Which country was this in? Banks don't typically hand people hundreds of thousands of dollars without making sure that they'll get their pound of flesh when things go south. Not having any kind of collateral is a pretty big mistake on the bank's side.
    - kevmo 8y ago
      If a bank sues you, they will be making claims for various damages. One of those damages will probably be projected interest they would have made from re-lending the money that wasn't being paid. The debt could also be subject to a state of limitations, and you could potentially be clear. If its been 11 years, I would ask a lawyer about it. You may be able to safely use the money you've left set aside.

scarface74 8y ago

When you signed the loan for the mortgage, you made a business transaction with the bank. You knew full well the terms of the mortgage and the consequences of not paying it. You also should have known that the bank could sell the mortgage. They explained it clearly on all six mortgages I’ve signed for over the years. But, I also have no moral qualms with “strategic defaults”. The bank also knew what they were signing.

noxToken 8y ago
I think another user put it best[0]: > Some people might scoff at the ideas in the article. You took out a loan, only a deadbeat leech would default on that loan and expect to keep their house. Sounds about right, but that assumes we live in the world we all imagine. The "right" world, where business still resembles interpersonal relationships. It doesn't, and we don't live there. We know that at the end of the day, a loan, insurance, utilities, etc. are all business contracts. Each party signs something, and each party expects what they signed for. The problem is that contracts (especially when buying a home) can be absurdly long full of unintelligible language. So we as ordinary people want to believe that we aren't going to get screwed over. We know that these major companies have the manpower and funds to ruin us, but we hope it doesn't come to that. From that same user[0]: > You've paid your insurance bill diligently for years, but as soon as they are needed, they start looking for ways to get out of paying the claim. They will happily screw you over the tiniest technicality. The insurance industry certainly isn't the only offender in that regard. It's a business transaction. Some of the time, we don't even have a choice with who we do business. But as an ordinary person, I don't want to get fucked over by these forced contracts. [0]: https://news.ycombinator.com/item?id=17810765 https://news.ycombinator.com/item?id=17810765
- scarface74 8y ago
  The problem is that contracts (especially when buying a home) can be absurdly long full of unintelligible language. So we as ordinary people want to believe that we aren't going to get screwed over. We know that these major companies have the manpower and funds to ruin us, but we hope it doesn't come to that. From that same user[0]: I know about all of the non conforming and other crazy loans taken out back during the real estate bubble pre-2008. I took advantage of most of them as a real estate investor and did many of the shady things myself that help cause the real estate bust and did a few “strategic defaults”. While there is a lot of paperwork, for the traditional fixed rate mortgage that most people should be doing, it’s not that complicated- you pay your mortgage every month, the escrow amount may fluctuate but besides that it’s fixed, to whoever owns your loan this month, you keep your house. Most people had no business doing the adjustable rate/ negative equity/no doc type of loans. I agree that mortgage lenders, especially those working with builders, pushed people into them.

jason_s 8y ago

looks like Trotter lost... https://law.justia.com/cases/idaho/supreme-court-civil/2012/38022.html https://law.justia.com/cases/idaho/supreme-court-civil/2012/... https://www.housingwire.com/articles/idaho-supreme-court-decision-gives-mers-court-win https://www.housingwire.com/articles/idaho-supreme-court-dec...

ChuckMcM 8y ago
"The million dollar brownstone that nobody owned" story that came through recently had its title "restored" in Idaho which suggests to me that Idaho is a favorable jurisdiction for people to do this sort of thing.
javajosh 8y ago
Man, that's crazy. If the law says you have to have the deed and the note to foreclose, how can the court ignore this? Honestly, it sounds like Trotter was trying to game the system, but shit, isn't that what they do to us all the time? We forgot to check a box, or filled in something wrong, and they hurt us. We should hurt them for the same reason.
- pdonis 8y ago
  > If the law says you have to have the deed and the note to foreclose, how can the court ignore this? Simple: that's not what the law says. At least not in Idaho. According to the court's opinion, what the law says is that a trustee who forecloses must meet four specific requirements. None of those requirements equate to proving that you have "standing" (which was what Trotter alleged was required) to foreclose. However, the first of the four requirements (p. 5 of the court's opinion) is: "The trust deed, any assignments of the trust deed by the trustee or the beneficiary and any appointment of a successor trustee are recorded in mortgage records in the counties in which the property described in the deed is situated". Since the main concern given in the article is that MERS and similar arrangements are circumventing the recording of who owns or has claims on real property in the local jurisdictions, it would appear that in the Trotter case, that concern was not present, since the relevant claim information was recorded in the local jurisdiction; the trustee who forecloses has to be the one whose trust deed is filed with the county for that property.

metalliqaz 8y ago

Not quite sure what the relevance is today of this article from 2012. It's core message is a good one, though. Americans are used to getting pushed around by "the machine". Bills come from various places (utilities, hospitals, banks, the government) and we pay them without thinking. Why think that much about it? You have to pay or your precious credit rating will suffer. But the mistakes are so common it's likely that everyone has a personal example from some point in their lives. Credit card fraud, billing errors, mistaken identity, hidden charges on a phone bill, and on and on, and on again. The companies are faceless, emotionless, and completely without loyalty to their customers. It's rather insane that we grant them fidelity in return. You've paid your insurance bill diligently for years, but as soon as they are needed, they start looking for ways to get out of paying the claim. They will happily screw you over the tiniest technicality. The insurance industry certainly isn't the only offender in that regard. Some people might scoff at the ideas in the article. You took out a loan, only a deadbeat leech would default on that loan and expect to keep their house. Sounds about right, but that assumes we live in the world we all imagine. The "right" world, where business still resembles interpersonal relationships. It doesn't, and we don't live there. It shouldn't just be about fighting Wall Street greed, or getting out of an eviction. Everyone should be on top of any business from which they have purchased a service. Be informed. Force them to deliver the service they promised. Force them to make you whole when you've been screwed. Force them to prove that they have accurately managed your account and they they truly do own your debt. Above all, make them actually compete again. It would be nice if everyone did that, but I don't actually believe that they will. Oh well...

onemoresoop 8y ago
> Be informed. Force them to deliver the service they promised. Force them to make you whole when you've been screwed. Force them to prove that they have accurately managed your account and they they truly do own your debt. Above all, make them actually compete again. Yes this could be done but it's a never ending battle and it drains all your productivity when fighting. And when you have your small victory after hours of being on hold, they might give you back what they owe you, but they do this en-masse and some people don't have the energy to fight back, people tire. That's why we should ALL fight back this systematic scamming so that it doesn't happen in the first place. Individual fighting back doesn't beat a machine set on a bad behavior.

mikestew 8y ago

An interesting article, but the whole thing had a whiff of "paying income tax is unconstitutional", complete with the protagonist coming off as just a tad unhinged. IANAL, and even as an amateur one I wouldn't begin to claim to argue the merits of the law. But none of the folks mentioned in the article garner any sympathy from me. Banks weren't screwing anyone, AFAICT. Folks just couldn't make the payment, and found a loophole. Hell, one person had mortgages on eleven houses in San Diego. Hmm, could it be that they were just a bit over-extended, and not victims of the evil banking system? Now, I'm not hatin' on anyone mentioned in the article. Overall, I'm about as neutral as I would be watching two people I have no interest in have a fist fight, because I have no great love for banks, either. And if they succeed, good for them. But the state of ID, as pointed out by another commentor, seems to put this in the "don't pay income tax" bucket as well.

thanatropism 8y ago
I think you're getting downvoted for typin' "hatin' on" rather than something that's grammatically appropriate for written discussion and more specific, such as "Not that I condemn...".
- mikestew 8y ago
  I appreciate your feedback. Though if I were to guess, it's more the "I have no sympathy..." than my street grammar. :-) I've got 10K points of imaginary Internet cred, I don't worry about a downvote or two except as a sanity check for the rare times I get out of line.
Afforess 8y ago
Paying income tax _was_ unconstitutional. The 16th amendment had to be passed to make it constitutional. Only Federal Income taxes after 1913 were constitutional: https://en.wikipedia.org/wiki/Sixteenth_Amendment_to_the_United_States_Constitution https://en.wikipedia.org/wiki/Sixteenth_Amendment_to_the_Uni...
- mikestew 8y ago

toss1 8y ago

Looks like this is his LinkedIn Page https://www.linkedin.com/in/poppakoppa/ https://www.linkedin.com/in/poppakoppa/ still refers to www.TitleTrail.com but that's up for sale Looks like he might have some connection to this group still doing some of the work http://certifiedforensicloanauditors.com/ http://certifiedforensicloanauditors.com/ There are benefits to the ancient system of physically recording everything in the locale, and potentially good reasons to move to a more modern system. While I don't have enough info to form a final opinion, I do know that if they are going to centralize it, they should certainly be held to a standard of doing it right.

deleted 8y ago

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mnm1 8y ago

Instead of bailing out the banks after the crisis, the government could have decided to do something like this and sever the loans. Let people keep one home (the cheapest if they had more than one) and let the banks take the fall for what was completely their own fault. They didn't. They decided that these banks should continue to fuck people over in the same way, passed a few laws to prevent it for a few years and that's about it. They claimed these banks were "too big to fail," a moniker no one understands because it's absurd and doesn't make any sense. If anyone deserves to be fucked over it's these banks who fucked the rest of us over royally.

DubiousPusher 8y ago
I agree with the sentiment but considering the bailout we got barely passed because of conservative outrage, anything with even a wiff more of "socialism" would've been doomed. Reading about the crisis still pisses me off but I also am grateful there still is a system. Conservatives flirted with stupid in a big way in 2008 & 2009 and it could've been a lot worse.

justboxing 8y ago

> A lender called Rose Mortgage had originated the loan, then sold it to Option One Bank, which sold it to Lehman Brothers, which sold it to Lehman’s fully owned subsidiary Structured Asset Securities Corporation, which pooled the loan into Structured Asset Securities Corporation Mortgage Pass-Through Certificates, Series 2006-Z, whose investors were now alleged to be the owner of Ibanez’s note. U.S. Bank was appointed trustee of the securitized trust, to enforce the payment of the notes, and, if necessary, to foreclose on defaulting homeowners such as Antonio Ibanez. This statement is truly mind-boggling. Took me a minute or two to understand what was going on (or what I think was going on)...

AceJohnny2 8y ago

Referred to in yesterday's article "The million-dollar brownstone that no one owned" [1] with HN comments [2], about a particular building in NY with an ugly financial history through the mortgage crisis. [1] https://theoutline.com/post/5807/the-million-dollar-brownstone-that-no-one-owned?zd=1&zi=rwqu3xgo https://theoutline.com/post/5807/the-million-dollar-brownsto... [2] https://news.ycombinator.com/item?id=17804023 https://news.ycombinator.com/item?id=17804023

modells 8y ago

More banks need to be foreclosed on: http://business.time.com/2011/06/06/homeowner-forecloses-on-bank-of-america-yes-you-heard-that-right/ http://business.time.com/2011/06/06/homeowner-forecloses-on-...

phobosdeimos 8y ago

Not just not paying off your debts but being proud of it. You want Greece? Thats how you end up Greek. But the evil banks! Try buying a house without them then. But the evil system! You are living in it and you were enjoying the boom times. This article reads like a Marxist manifesto. Which is fine if these people vote Communist next election.

rossdavidh 8y ago

So, I was not surprised to discover that this did not exactly revolutionize the mortgage industry, and on some level I'm not all that disappointed. There is a problem, but getting "mad as hell" is probably not the solution. However...it does remind me of my chief disappointment with the Obama administration's approach to rebuilding after the Fiscal Crisis, and that is that we did not really change the financial system very much. I have the very strong impression that it will all happen again.

rhizome 8y ago
In a lot of ways, the government are employees of the finance industry.

pnathan 8y ago

As near as I can tell, this complaint sounds like an offshoot of SovCit approach. Very similar approach. In any case, I strongly favor discarding deeds, title search fussery, in favor of a national title registry - the decentralized approach seems, today, to be pointless. Maybe MERS should be nationalized and turned into the Standard Property Registry. It should be as simple as checking the database view to see the title, liens, claims, etc. edit: I read each and every single document I signed for the 30 year conventional mortgage, both in the run-up and in the grand finale. Law is like code, but executed by courts and lawyers with a "virtual machine" of the great Anglo-American legal tradition governing it. Anyone competent to write code and read manuals should be able to read their mortgage documents.

rspeer 8y ago
Many of these homeowners, unlike "sovereign citizens", actually appear to have the law on their side. They aren't just making up their own insane interpretation of the legal system. It even sounds like it's more like MERS who made up an interpretation of title that disagrees with state laws. You seem to be saying that MERS's interpretation should be correct, that MERS's database should be the law of the land and investors should be able to buy and sell the title to mortgages without states and counties being involved. The current system has homeowners getting windfalls because MERS screwed up, and I suspect that screw-ups in your version would have the opposite effect, where homeowners get robbed by computers and nobody can be held accountable. So that seems bad. And what would the benefit be? Sure, it would make mortgage-backed securities more efficient, but -- why is that good?
- pnathan 8y ago
  Crap happens. That's the point of the courts; to enforce remedy. If you've ever dealt a little bit with funky titles, you'd know that having a central authority managing all claims to title would be a big deal and massively improve life for property buyers. Title searches are not exhaustive. That is why title insurance exists. If MERS is a title registry and it also manages bundling of debts, I genuinely don't care. The issue isn't debt bundling, it was granting high risk mortgages and other high risk behavior.

kchoudhu 8y ago

If anyone wants to know how Vermont Trotter's case panned out, here's the last appeal he exhausted in 2015: https://www.carltonfields.com/files/uploads/Documents/realprop/trotter-v-bayview-loan-services.pdf https://www.carltonfields.com/files/uploads/Documents/realpr... TLDR: he lost.

gehwartzen 8y ago

For those curious to see who the current Servicer (ie place that takes your monthly mortgage check) and Investor (ie the actual owner of the debt) of your mortgage is, the following site at MERS seems to work: https://www.mers-servicerid.org/sis/ https://www.mers-servicerid.org/sis/ I’m actually somewhat surprised that my 6 yo mortgage is still owned by the same local credit union that originated it.

yrro 8y ago

> Adam Levitin, a professor of law at Georgetown University, told me that if the lawsuits are successful, the banks will be on the hook “for hundreds of billions of dollars” and will likely go bankrupt. I'm guessing that these lawsuits were not, ultimately successful? Trotter's case ultimately failed: https://law.justia.com/cases/idaho/supreme-court-civil/2012/38022-0.html https://law.justia.com/cases/idaho/supreme-court-civil/2012/...