Banks Lose to Deadbeat Homeowners as Loans Sold in Bonds Vanish

[undergroundpanther]

Hahaha.. Banks get screwed by thier own greed...



Joe Lents hasn't made a payment on his $1.5 million mortgage since 2002.

That's when Washington Mutual Inc. first tried to foreclose on his home in Boca Raton, Florida. The Seattle-based lender failed to prove that it owned Lents's mortgage note and dropped attempts to take his house. Subsequent efforts to foreclose have stalled because no one has produced the paperwork.

``If you're going to take my house away from me, you better own the note,'' said Lents, 63, the former chief executive officer of a now-defunct voice recognition software company.

Judges in at least five states have stopped foreclosure proceedings because the banks that pool mortgages into securities and the companies that collect monthly payments haven't been able to prove they own the mortgages. The confusion is another headache for U.S. Treasury Secretary Henry Paulson as he revises rules for packaging mortgages into securities.
http://www.bloomberg.com/apps/news?pid=20601109&sid=aejJZdqodTCM&refer=news
http://www.unknownnews.org/080301-sd25-MrC.html

[lapfog_1]

1. By the same token, he won't be able to produce a clear title

when and if he should want to sell.

But the free rent while he is there is pretty nice. I wonder if he has to pay property taxes?

[Divernan]

2. Yes he'll still have to pay property taxes.

Local governments & school districts can pursue him and put liens against property if taxes are in arrears.

[JackRiddler]

3. This is propaganda to spin what the banks did...

They decided that they would group mortgages and sell them as bonds (with a triple-a ratings!) so that they could extend loans to people they would have never given credit to until this decade. And they made hundreds of billions before the predictable bust.