What's up with this mortage fraud business?

[GO-NAD!]

Four years later, banks still haven’t answered for foreclosure mess | Economy | News | Financial Post

This one case stood out for me:

In one, Wells Fargo is battling to foreclose on the Bronx home of Tindala Mims, a single mother who works as an ambulance driver. In September 2010, Wells Fargo filed a promissory note bearing a signed stamp showing that the note belonged to defunct Washington Mutual Bank, not Wells Fargo. The judge threw out the case. In a second attempt, the court was given a different version of the note. But inspection showed physical alterations. A variety of marks on the original were missing or seemed obviously altered on the second. And the second version had a stamped endorsement, missing on the first, that appeared to give Wells Fargo the right to foreclose. The judge threw out the second attempt too. Wells Fargo is trying a third time. It declined to comment on the case.

I don't really understand what Wells Fargo is trying to pull. Without more detail, it looks to me like they saw Washington Mutual go belly-up and with no bank to pay back, this lady looks like she's in the clear. Now, Wells Fargo look like they are trying to steal her house out from under her by claiming to own the mortgage.

Hope that sh*t doesn't start happening up here! That said, I'm personally safe, as my house is mortgage-free.

 

[Adam]

There's plenty of room for doing the wrong thing on both sides. Banks were in such a rush to provide mortgages during the house-buying boom that they were forging signatures. Now, they are having a lot of trouble getting the proper paperwork in order to show who actually owns the houses.

So, the banks pulled some illegal activity to facilitate selling homes, and now they are in hot water and likely pulling (at minimum) unethical things to try and salvage some of their investments.

On the other side of it, some people are taking advantage of this and trying to get their houses for pennies on the dollar. That's not right, either. They agreed to pay a certain amount for that house, and now they want to get something for nothing. Some people either can't comprehend or don't care that their house didn't just materialize out of thin air and that no one gets ripped off it they steal it. "Oh, it's just a bank." Yeah, a bank that has investors...real people who's retirement and savings are on the line.

The whole thing makes me mad if I think about it.

 

[BoredSysAdmin]

That said, I'm personally safe, as my house is mortgage-free.

Sadly , Not always true... This sad story had happy end, but at what mental cost??
Bank Of America To Pay Florida Couple In Mistaken Foreclosure Case | Fox News
Florida couple threatens Bank of America branch with foreclosure after they were falsely foreclosed - New York Daily News
Bank of America pays debt instead of losing furniture | The News-Press | news-press.com

 

[highfigh]

When I bought my house, the appraisal came in at the same figure as the offer. I was amazed and at the time, I was naiive enough to think that I was doing OK with it WRT fair market value vs loan value, etc. What a schmuck! I would go in with paperwork and every time, the bimbo would say that she had forgotten to give me one form, or another, and they needed to be filled out ASAP. At one point, I said, "You do this for a living, right? Why do you keep forgetting all of these forms?". Now, I find that they were writing loans for whatever value was offered and they didn't care, as long as the loan was insured (I put down 20% to avoid paying PMI and because I don't like owing a lot of money).

They're all whores. The other bank I have been using announced a cruise for their executives almost immediately after receiving $565M in TARP funds. They canceled it soon after because, apparently, they didn't anticipate the shyte storm. The next time I went in, I made a comment to the head teller and she had nothing to say- she just looked down.

The father of a customer was President and CEO of one of the largest mortgage insurance companies and when I saw him before Thanksgiving he told me that when he was still working, he started a group called 'At War With Fannie Mae & Freddie Mac'. He was trying to get the whole thing reversed and fixed before the wheels fell off, but Congress didn't want to stop what they were doing.

Barney Franks, Chris Dodd and Franklin Raines should be prosecuted, without wasting any time. They, and their cronies should never have gotten away with it and I hope they find themselves in court very soon.

 

[Adam]

When I bought my house, the appraisal came in at the same figure as the offer.

Yep - something is worth what someone is willing to pay for it.

 

[BMXTRIX]

That one case stands out to me as well as to the stupidity of people and our legal system. If someone gets a loan and promises to pay it back then they should be paying it back. If they can't afford it, or never could afford it, then they are dumb schmucks who need to be kicked out.

Now, Wells Fargo is likely trying to figure out what to do with a loan they bought from a bank which went belly up and has no employees to sign paperwork or help to ensure that things are properly taken care of.

Seems like Wells Fargo is the ONLY one getting screwed in this entire transaction.

 

[Rickster71]

That said, I'm personally safe, as my house is mortgage-free.

True, but your furnace filter is in really bad shape.
Just sayin.

 

[Adam]

Rick's mad skills at thread cross-referencing will not be denied. Not today. Not ever.

 

[Rickster71]

Rick's mad skills at thread cross-referencing will not be denied. Not today. Not ever.

I'm even better at wasting a day off posting on AH

 

[lsiberian]

Wife wants a loan I don't. I think the practice should be outlawed personally. It's inflated the housing market and driven prices through the roof.

 

[GO-NAD!]

True, but your furnace filter is in really bad shape.
Just sayin.

I just changed it last week.

 

[GO-NAD!]

That one case stands out to me as well as to the stupidity of people and our legal system. If someone gets a loan and promises to pay it back then they should be paying it back. If they can't afford it, or never could afford it, then they are dumb schmucks who need to be kicked out.

Now, Wells Fargo is likely trying to figure out what to do with a loan they bought from a bank which went belly up and has no employees to sign paperwork or help to ensure that things are properly taken care of.

Seems like Wells Fargo is the ONLY one getting screwed in this entire transaction.

Ahhh, thanks for that. It wasn't clear to me from reading the article, as to who was screwing who (whom?). It never stated that Wells Fargo had bought the "assets" of the other bank. It just looked like they were trying to pull a fast one. It seems to me that a lot of financial institutions bought big piles of steaming poo (AKA dodgy mortgages), onto which the previous owners had just poured bottles of Chanel. They didn't do their due diligence and have now compounded all the wrongdoings by creating more shady documents to dig their way out of the outhouse.

 

[GO-NAD!]

I'm even better at wasting a day off posting on AH

But, I'm pretty sure nobody can touch Adam in that category.

 

[GO-NAD!]

Wife wants a loan I don't. I think the practice should be outlawed personally. It's inflated the housing market and driven prices through the roof.

You mean no borrowing allowed - period?

I certainly believe that mortgage requirements should be tightened up. Although the requirements up here never got as relaxed as in the US, they had been getting slacker. Then when the mess blew up south of the border, our government realized how ludicrous it was to keep loosening the rules. Now they've started to tighten things up again, such as raising downpayment requirements. We still have a bit of a real estate bubble going on though.

 

[Adam]

Wife wants a loan I don't.

You mean no borrowing allowed - period?

I was wondering the same thing. If you can buy a house with cash, kudos. And I mean kudos! That's not an option for most folks, though. It's not a bad financial decision if you do it right - with tax incentives, it can be a much better investment than renting. Sure, if you buy high and sell low on property, then renting makes more sense, but you can run into that whether you get a loan or not.

 

[Rickster71]

There's plenty of room for doing the wrong thing on both sides. Banks were in such a rush to provide mortgages during the house-buying boom that they were forging signatures. Now, they are having a lot of trouble getting the proper paperwork in order to show who actually owns the houses.

So, the banks pulled some illegal activity to facilitate selling homes, and now they are in hot water and likely pulling (at minimum) unethical things to try and salvage some of their investments.

On the other side of it, some people are taking advantage of this and trying to get their houses for pennies on the dollar. That's not right, either. They agreed to pay a certain amount for that house, and now they want to get something for nothing. Some people either can't comprehend or don't care that their house didn't just materialize out of thin air and that no one gets ripped off it they steal it. "Oh, it's just a bank." Yeah, a bank that has investors...real people who's retirement and savings are on the line.

The whole thing makes me mad if I think about it.

Great post Adam!

If I may, I'd like to add the third missing component.

Both parties repealed the Glass Steagall Act of 1933...an agreement between the Clinton administration and congressional Republicans in 1999.
That set the stage for passage of the most sweeping banking deregulation bill in American history, lifting virtually all restraints on the operation of the financial system.
Part of this new bill contained the "Community Reinvestment Act," an anti-redlining law which requires that banks make a certain proportion of their loans in minority and poor neighborhoods.
Even though all involved knew there was no hope or ability to repay these loans.

 

[lsiberian]

I was wondering the same thing. If you can buy a house with cash, kudos. And I mean kudos! That's not an option for most folks, though. It's not a bad financial decision if you do it right - with tax incentives, it can be a much better investment than renting. Sure, if you buy high and sell low on property, then renting makes more sense, but you can run into that whether you get a loan or not.

The problem is that loans have artificially raised the price of houses beyond what most people could afford to save for. It wasn't that long ago that the average person could buy land and a house with cash. You see the banks figured out they could get a nice little interest rate off people by financing the masses. In turn prices went up and the cycle spiraled out of control. Of course we can all get a slice of the profits by investing in banks. Kind of like we can get a slice of the oil profits too.

At the very least a 20 percent down-payment should be required IMO. It would be impossible to eliminate loans completely, but hopefully with education we can steer people away from debt.

You can see the same artificial raise student loans and car loans. Student loans in the US are basically a hidden tax.

 

[Adam]

It wasn't that long ago that the average person could buy land and a house with cash.

When are you thinking? Not being sarcastic, just curious.

I wouldn't consider my family poor when I was growing up (certainly not rich, but we always had food and shelter), but there was no way my parents could have bought our house with cash back in the early 70s. When I bought my house in 2000, I figured out that my house and my parents' house cost darn near the same after accounting for inflation. Also, my salary was just about what my dad's was (again, accounting for inflation). The absolute values changed, but the relative values stayed the same after 30 years.

 

[Rickster71]

The problem is that loans have artificially raised the price of houses beyond what most people could afford to save for.

Housing prices were artificially raised by giving unqualified people mortgages solely for political gain. This created unprecedented demand for housing and drove the price up.
The beginnings of a mortgage system have been found, as early as 1190.
We haven't experienced high housing prices for centuries.

You see the banks figured out they could get a nice little interest rate off people by financing the masses.

They are in the business to lend money for a fee. That's how it works.
Coke and Pepsi figured they can get money buy making and selling soda.

You can see the same artificial raise student loans and car loans. Student loans in the US are basically a hidden tax.

You are correct that it's also artificial.
The artificial demand for college, hence student loans were raised by convincing the masses that they are all are entitled to higher education.
Even intellectually unqualified people with low IQ's. School isn't for everyone; nor is the square peg for the round hole.

 

[Adam]

They are in the business to lend money for a fee. That's how it works.

I sometimes get a kick when I hear people saying how banks are screwing people because most of a mortgage payment (or any long-term payment) is interest in the beginning, and that you only start really paying off your principal later on. "Yeah, man, they're just trying to make it so that you can't pay your house off very fast and they keep getting more money! " After I explain the concept of interest and an annuity to them, though, they all have that "aha" moment. That, and I mention that they can pay as much principal off each month as they want/have the resources to do, which then modifies have much interest is due each month.

I don't expect everyone to be great at math, but some of these people have been engineers. They just get so bought into the public perception that they don't think.