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The Massachusetts ruling represents a major blow to the securitization industry, and likely will...

The Massachusetts ruling represents a major blow to the securitization industry, and likely will fuel more court challenges to bank servicers and trustees for wrongful foreclosures. It's sure to get ugly: "Many people might look at this and say 'I can get my house free and clear if I just contest the foreclosure and get a favorable judge... on my side."
Comments (12)
  • wyostocks
    , contributor
    Comments (7619) | Send Message
     
    Think it was hard to get a mortgage this week? Just wait till next week.
    The laws of unintended consequences have not yet kicked in, but, just like mother nature, they will.
    7 Jan 2011, 05:43 PM Reply Like
  • 7footMoose
    , contributor
    Comments (2266) | Send Message
     
    You have that correct. The mortgage industry and thus the residential home values in this country may never return to normal, whatever that was.
    7 Jan 2011, 05:48 PM Reply Like
  • kmi
    , contributor
    Comments (3979) | Send Message
     
    Anecdotally, appraisals on property I am bidding on are still driving prices/deals south.

     

    Marginal deals - marginal being a far far broader category these days, and meaning all of location, high vacancy/reposition, rehabilitation, or low cap in moderate neighborhood - are virtually unclosable with financing.
    8 Jan 2011, 08:13 AM Reply Like
  • User 344761
    , contributor
    Comments (2) | Send Message
     
    Normal is far below the current price level. And we're heading there pretty quickly.
    9 Jan 2011, 03:56 PM Reply Like
  • lower98th
    , contributor
    Comments (1420) | Send Message
     
    Oh baloney. The ruling said, Hey Banks! Get the mortgage paperwork transferred from the original lender to the final holder before you foreclose, not after. NBD.
    7 Jan 2011, 05:49 PM Reply Like
  • mcdonaldfive
    , contributor
    Comments (32) | Send Message
     
    Agree with lower98th. All they said is don't come to court with a shoddy trail of ownership. The banks should have been doing this from the start and if they haven't been they surely will now.

     

    By the way, I'm of the opinion that there has much made of nothing here. The servicers attempted to transfer ownership in a way that the courts are now saying was improper. So, they have to go back and do it the old fashioned way. Is it that big a deal? Takes more time, and maybe some of the documents have been lost, but there are procedures for that too. No one will get a free house because some paperwork was mis-filed.
    7 Jan 2011, 05:55 PM Reply Like
  • D_Virginia
    , contributor
    Comments (2280) | Send Message
     
    As soon as it starts costing them serious money, I bet the banks will get their paperwork in order REALLY quickly.

     

    In fact, I bet you'll see them miraculously "finding" three or four original contracts per mortgage!
    7 Jan 2011, 05:56 PM Reply Like
  • buyitcheap
    , contributor
    Comments (1848) | Send Message
     
    Somewhere there is a software developer in his/her garage licking his/her lips and writing software code for mortgage doc management & securitization until his/her fingers bleed...
    7 Jan 2011, 06:00 PM Reply Like
  • Stoploss
    , contributor
    Comments (1727) | Send Message
     
    Those 2 cases happened in 2006, and are not recent foreclosures. Lots and lots of grave digging from 04 on is likely to occur. I would expect some sort of cutoff to be announced, as soon as yesterday.
    7 Jan 2011, 06:04 PM Reply Like
  • bdarken
    , contributor
    Comments (417) | Send Message
     
    Most reports have these litigations as the exception...not the rule. But it serves as a good headline/distraction that keeps us from thinking about the mountain of mortgages at freddie/fannie and who knows where else.
    7 Jan 2011, 11:45 PM Reply Like
  • Michael Shulman
    , contributor
    Comments (161) | Send Message
     
    The ruling could have very serious consequences if it becomes a precedent for others states and is eventually validated at the federal level and these would be far more manageable in a healthy economy. That being said, the ruling is quite logical, and proper. How many transactions involving hundreds of thousands of dollars should be conducted in any economy by relatively untrained people with incentives to push transactions, not to insure the transaction is honest. There is one industry that has figured this out -- the stock brokerage business. Brokers are licensed; wayward brokers are put out of business by lack of demand regulatory strictures or other means. Do the same for mortgage brokers, back it up with a real clearing house and state laws to support the securitization of mortgages, and the problem gos away, Of course, in this climate, and from this experience, it will take a generation to do so.
    10 Jan 2011, 11:00 AM Reply Like
  • bdarken
    , contributor
    Comments (417) | Send Message
     
    Michael...I keep wondering where the justice dept. is in prosecuting those who wrote the liar loans. Though these things happened from coast to coast, I have heard nothing of this....
    As an aside...once you've passed your brokerage test...you get to be fingerprinted ---before you go to work!
    I keep thinking that there may, quietly on the side, be pools of individuals (perhaps families?) who are pooling their private resources and buying distressed properties with a 5-15 year time horizon---completely circumventing the banking industry. I always look for opportunity in crisis...in the middle of a war, gas, plasma and ambulances are highly valued!
    14 Jan 2011, 01:17 AM Reply Like
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