Re: Banks Lose to Deadbeat Homeowners as Loans Sold in Bonds Vanish

[David Farber <dave () farber net>]

________________________________________
From: Tom Yates [madhatter () teaparty net]
Sent: Tuesday, February 26, 2008 8:48 AM
To: David Farber
Subject: Re: [IP] Banks Lose to Deadbeat Homeowners as Loans Sold in Bonds Vanish

Prof. Farber:

Poss. for IP?


On Tue, 26 Feb 2008, dewayne () warpspeed com (Dewayne Hendricks) wrote:

> Feb. 22 (Bloomberg) -- 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.


It's not often that I start mumbling "Good for the US", but compare that
legal attitude with the following story from The Guardian earlier this
month:

"
Walton turned detective after being told by RBS that the amount he owed
on his personal loan was much greater than he thought. He asked for a copy
of his original loan agreement, but when he received it he knew at once
that it wasn't the genuine article. He eventually found his original
carbon copy, which confirmed his suspicions.

Surely one of Britain's biggest banks isn't forging documents? Of course
not - but it is controversially "recreating" them.

[...]

Recreating documents is not against the law; banks are allowed to supply
replacements if the original paperwork has gone missing, provided they are
"correct in all particulars". But some might say that when bank staff are
"under pressure," to quote from that memo, mistakes creep in. In Walton's
case, it was a string of errors.
"

Leaving, as in this case, the customer to prove that the bank was in
error, instead of requiring the bank to prove that it's not.  Got to love
it, eh?  The full story's at
http://www.guardian.co.uk/money/2008/feb/02/banks.consumeraffairs .


--

   Tom Yates  -  http://www.teaparty.net

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