Massachusetts Supreme Court: Previous 5 years of foreclosure sales VOID

[mooncliff]

Whoa, this could get interesting.

So the banks make a huge mortgage fraud.

Then, they cannot show they actually have title. So, they print documents and sign them Linda Green.

Then that comes to a halt.

No one will want to touch a foreclosure now.
I guess the banks will stop foreclosing.

This should poison real estate for decades.

http://dailybail.com/home/bombshell-...st-forecl.html

By the way, condo prices in the greater Tokyo area just dropped 15% from a year ago. As the world economy deteriorates, I expect the real estate prices to drop even more. There has already been 20 years of about 5% annual decline, punctuated by a steep drop of 20% after Lehman blew up, and now another 15% drop after the euro blow up. A standard condo 20 minutes by train from downtown has dropped to about 3 years' average household income, the lowest in the G7. A drop of 15% in a condo similar to the one I live in is equivalent to about 3 years' rent, so this is an example of a time when it could be better to rent than to own, or at least it is a toss up.

Declines in real estate can go on and on far longer than seems possible.

[walenk]

Re: Massachusetts Supreme Court: Previous 5 years of foreclosure sales VOID

This Forbes story seems to see a more limted impact. From the Banksta lawyers:
"The case has limited national implications because Massachusetts has an unusual, non-judicial mechanism for processing foreclosures, said Edward Rainen, a lawyer specializing in property law who also argued for the bank attorneys.


http://finance.yahoo.com/news/Massac...928002481.html

[mooncliff]

Re: Massachusetts Supreme Court: Previous 5 years of foreclosure sales VOID

Yes, I suppose there are the legal arguments.
But a lot of what people do is emotional. I don't think many people see real estate as a great investment now.

It might wind up being a flash in the pan, but whereas I previously thought buying a foreclosure would be a good opportunity, now I just would not bother. Too much risk of something weird happening later, no matter how cheap it might be.

[SeanO]

Re: Massachusetts Supreme Court: Previous 5 years of foreclosure sales VOID

We haven't seen investment in foreclosures drop at all in the states we cover (AZ, CA, NV, OR, WA) as a result of this case. In fact CA courts have been pretty clear that they aren't going to let homeowners go on wild goose hunts to look for title problems around foreclosures. Generally there are two principals that keep what happened in Mass from happening: 1) Unjust enrichment - regardless of the typos or rush to sign documents the homeowner still borrowed the money and the lender still lent it, the law generally says it is unfair to unwind something of that magnitude over how title was transfered between banks. Sure there have been a handful of cases where activist judges (probably underwater themselves) haven gotten pissed at bank lawyers and ruled differently... but few have made it to supreme court levels (state or federal) to become settled law, and I expect most state courts won't follow Mass. (part of the reason is the way the laws are written, Mass law is more specific about title transfers then other states from my reading). 2) Bonafide purchaser for value - this is where this case REALLY surprised me. Generally someone who buys a property is protected from claims like this. The theory is that as a real purchaser they shouldn't be harmed because of the mistake of someone else. So in this case the original homeowner who was per the court decisions wrongly foreclosed on would still be able to seek damages against the lender, but not get their house back. Obviously the fact that they can't get their house back should weigh on the damages calculation, but this avoids harming the innocent buyer of the home (and causing ridiculous ramifications for every future home purchase, which some believe this case has done).

Now keep in mind the new buyer now has been damaged and almost certainly has a case against the lender that sold them the home at foreclosure. So while the original homeowner, and the buyer certainly will have had significant life disruptions, I'd bet they both end up fully compensated... so this case does a lot more damage to lenders (who will likely now have to pay $100's of millions in settlements to clean this up), then potential buyers.

Finally... let me say that I think this case is bullshit. No question in my mind that lenders should be held accountable for paperwork errors (even if they seem downright fraudulent like the Linda Green signatures 60 Minutes made famous 3 years after the fact), but the idea that someone should have their mortgage wiped out, or be able to not pay their mortgage without risk of foreclosure takes it way too far. People now feel entitled to keep their homes without paying anything - how is that fair to those who do pay? And how is that ultimately good for society?

Our current representatives in Washington our avoiding dealing with the housing crisis like the plague - caught between their bank benefactors and angry constituents its a no win game for them. But the entire economy will continue to suffer until someone steps up and makes some hard decisions with a carefully crafted solution where all parties bear some of the loss for the risks they took.

[Starving Steve]

Re: Massachusetts Supreme Court: Previous 5 years of foreclosure sales VOID

Being an official moron, I know almost nothing about the law. But, I shall relate here how the law of title worked in my coin shoppe: If a someone came in with something uniquely identifiable like a necklace or a set or earings, a ring, or something like that--- not a rare coin but an uniquely identifiable jewelry item--- then the item was open to conveyance of a provisional title by signing a police report that they owned the property that they sold.

Then, I had to sit with the property in a bottle or in an envelope for the amount of time the police required me to sit with it. This was called the hold period. Then, if the cops didn't come in to pick-up my bottle/envelope, I had a provisional title to sell the item.

If the item was stolen and the cops picked-up the item, I lost my $. Whatever I paid for the item was down-the-drain. Not only that outrage, I had to go to court to testify as to what happened in the transaction. This would usually take a day of time, so I had to close my coin shop. For some reason, my testimony was extremely important to the court. ( Once my car wouldn't start in Edmonton, so the RCMP came to pick me up and deliver me to the court. That is how important it was to the court. )

Whoever sold me the item was arrested and charged with criminal possession of stolen property. Usually the item came out of a B&E ( a break & enter ) of a home. The homeowner also had to testify in court as to what had happened in their house or apartment, etc.

But the point to the court and the point of law was: that possession, even possession with a provisional filled-out, is not possession with TITLE. The title has to be kosher (clean, clear, & honest) to be conveyed, otherwise the title does not pass.

So, I think the B. case is going to be upheld in the U.S. Supreme Court. Any court worth its salt would uphold the B. case, because it is based upon the basic of law of conveyance of property in every jurisdiction in America, Canada, and the United Kingdom. Other interpretations of conveyance law are laughable. My lawyer always told me, no-one can make something kosher (clean and clear and legal) when it isn't kosher to begin with, no matter how much they try. Or in other words, you can't have rotten meat and make it clean and safe to eat by any so-called "legal" mumbo-jumbo nor any "religious blessing" whatsoever.

In the coin business, I could have (in theory) sued the seller for my losses in the purchase, but that would have cost more time and money than it would have been worth. So, I never did it.

With these homes, this is going to be a real nightmare, so home prices have no-where to go but down.

In Saskatchewan, you get a physical title to your property. You can actually hang your title onto the wall inside your house. It is a REAL and PHYSICAL document..... Thus, if Jack sells Jill the property, and Jill sells to John, then John to Jim, and Jim to Janet, the question is: who has the real title? So, if you plunk the title down onto the counter at the Land Titles Office, the title has been transfered. DONE. D-O-N-E.

[thriftyandboringinohio]

Re: Massachusetts Supreme Court: Previous 5 years of foreclosure sales VOID

Seems like these title issues are not just limited to foreclosures.

With MERS and MBS both under reasonable suspicion, if either are involved clean title to any real estate is now questionable.