I Am Shocked! Shocked to Find Gambling Here
By Barry Ritholtz - October 18th, 2010, 10:45AM
Hat tip Jim B
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Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data, ability to repeat discredited memes, and lack of respect for scientific knowledge. Also, be sure to create straw men and argue against things I have neither said nor even implied. Any irrelevancies you can mention will also be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.
October 18th, 2010 at 11:22 am
That’s good, but about ten years late. Foreclosure mills have been around a lot longer than just the last couple of years. And Shockingly (!) no one ever complained. Judges full well knew nobody attesting to the accuracy of the documents filed had done much checking. They didn’t care that some notarizations appearing in their courts could not have been properly done. Why? Because they knew that the essence of the underlying contract–”if you don’t pay, you don’t stay”–was not in question. If it were, borrowers would have occasionally showed up for their foreclosure hearings. They let it all slide right by because it met the expectations of both parties (borrowers and lenders) when times were good. When things turned ugly, and market expectations were abruptly altered (housing prices, it turned out, did not grow to the sky), there was very little remaining benefit to having a smoothly-functioning mortgage market, an important component of which is the process of foreclosing. So the courts got religion, and disingenuously started enforcing the rules.
I said it on a dead-thread a minute ago, but I hope that you whackos that wish to throw people in jail for attesting to things of which they weren’t certain (borrowers never did that, did they?) or for notarizations outside the presence of the signer, etc., have their desires realized in such a way that no foreclosure could ever be considered settled. It will destroy the residential real estate market for decades to come, and sink the economy for years. But in the long run, it may be the only hope for sustainably decent economic performance.
October 18th, 2010 at 11:48 am
This is kinda insulting to McDonalds. Maybe you are missing a pickle or two on that stale BigMac, but not gonna get shortchanged due process of law.
October 18th, 2010 at 12:21 pm
I found this article from Bloomberg Businessweek to give a great picture of what the legal issues accompanied MERS acting as mortgagee for 60% of new home loans. It is a great compliment to the other articles on foreclosure fraud.
http://www.businessweek.com/magazine/content/10_43/b4200009860564.htm
October 18th, 2010 at 12:57 pm
Barry , I’m honored..
Sechel Says:
October 16th, 2010 at 3:22 pm
Considering the behavior the banks these last several years, Captain Renault is
called for…
“I’m shocked, shocked to find that gambling is going on in here! ”
So who plays Captain Renault
October 18th, 2010 at 1:01 pm
@The Curmudgeon
Thanks! I will use your post in the logical fallacies lecture of my freshman philosophy course next year.
Btw, why do I get the impression that you were sweating like a rapist as you typed your comment?
October 18th, 2010 at 1:32 pm
@The Curmudgeon,
Jail is too good for these con jobs. Keep pushing the status quo until the new status quo, by then you’ll be wishing you were in a jail cell to protect you from all the howling mobs…
October 18th, 2010 at 2:07 pm
@Curmudgeon
It is not about those who signed. It is about those that gave the orders to break the law and commit fraud in order to get financial benefit.
The laws should be obeyed.
October 18th, 2010 at 2:23 pm
From The Onion: http://www.theonion.com/articles/microlender-forecloses-on-goat,18278/
Microlender Forecloses On Goat
October 18, 2010 | ISSUE 46•42
SAN FRANCISCO—Representatives from One World Finance, a U.S.-based microcredit provider, confirmed Monday that they had initiated foreclosure proceedings on a goat in southern India following a borrower’s repeated failure to make her $2.20 monthly loan payments. “I tried to work with Ms. [Subha] Thangam on this, but once she fell a full $6.10 behind, I had to repossess the goat,” said loan officer Michael Conrad, who stated that he was just doing his job and that it was “not [his] fault” if certain subsistence farmers were living beyond their means. “I’d love to recoup the entire $22 loan at auction, but given the glut of foreclosed and abandoned goats in the area, I’d be lucky to get even half that.” Conrad also acknowledged that the owner had left the goat in “pretty bad shape” and had even stripped it of its hair for potential resale on the paintbrush market.
October 18th, 2010 at 2:25 pm
This little story warms my precious little heart.
http://www.zerohedge.com/article/gonzalo-lira-what-brian-and-ilsa-said-their-bank-%E2%80%9Cshow-me-note%E2%80%9D
October 18th, 2010 at 2:29 pm
I wonder if the words “show me the note” ends up being the official battle cry?
October 18th, 2010 at 2:44 pm
@Transor: Here’s one for you:
http://www.theonion.com/articles/american-public-actually-kind-of-endearing-in-some,18277/?utm_source=recentnews
October 18th, 2010 at 4:24 pm
@Manny: Ha! I’m more in a UMass study results mood today!
October 18th, 2010 at 4:39 pm
“Vere are your papers”?
October 18th, 2010 at 5:39 pm
@The Curmudgeon
Thanks! I will use your post in the logical fallacies lecture of my freshman philosophy course next year.
Btw, why do I get the impression that you were sweating like a rapist as you typed your comment?
~Pray do tell. Please point out my logical fallacies?
You and all the idiots on this board that think they’ve uncovered the holy grail of fraud such that everyone can now have a house (and a pony too!), free of charge, compliments of the financial system, are the ones that should be the ones sweating like rapists (btw, why would a rapist sweat as he typed a comment about mortgage foreclosures?). If this populist outrage succeeds, you will have done nothing but succeeded in cutting off your nose to spite your face.
October 18th, 2010 at 6:05 pm
@Manny:
Re ZH link: That dude is selling a fantasy. Or, if he isn’t, and everyone just nullifies their mortgages by the failure of banks to produce the notes, well, now you’ve got true financial armageddon. Is that what people really want? To destroy everything to fix just this one thing? Like the customers said, they did borrow the money. Now they shouldn’t be awarded a house on a legal technicality? Really? That’s justice? If so, it hearkens the end of the republic. The silence from the Administration is deafening.
Oh well. It ought to be interesting. I’m glad I bought some farm land a few years back. And glad I got out of the business a little over a year ago. This is utter insanity.
October 18th, 2010 at 6:05 pm
“shouldn’t” s/b “should”
October 18th, 2010 at 7:06 pm
dan10400 Says: October 18th, 2010 at 11:48 am
This is kinda insulting to McDonalds. Maybe you are missing a pickle or two on that stale BigMac, but not gonna get shortchanged due process of law.
~~
dan,
you may care to wonder.. if bothering, See:
http://search.yippy.com/search?input-form=clusty-simple&v%3Asources=webplus&v%3Aproject=clusty&query=McDonald%27s+Amazon+Rainforest
http://search.yippy.com/search?input-form=clusty-simple&v%3Asources=webplus&v%3Aproject=clusty&query=McDonald%27s+Obesity+epidemic
http://search.yippy.com/search?input-form=clusty-simple&v%3Asources=webplus&v%3Aproject=clusty&query=McDonald%27s+Targets+children+in+Advertising
http://findarticles.com/p/articles/mi_m1316/is_n7-8_v23/ai_11009291/
October 18th, 2010 at 9:30 pm
@Curmudgeon wrote:
“[If] everyone just nullifies their mortgages by the failure of banks to produce the notes, well, now you’ve got true financial armageddon. Is that what people really want? To destroy everything to fix just this one thing? Like the customers said, they did borrow the money. Now they shouldn’t be awarded a house on a legal technicality? Really? That’s justice? If so, it hearkens the end of the republic.”
Wait a minute. This is getting out of hand. It is true that if a lender cannot produce the note and is not the holder of the mortgage or deed of trust, then that person cannot foreclose. That has been the law for over a century. However, how likely is that? Is BofA going to simply write off that $300k or is BofA simply going to find the documentation? If BofA doesn’t have the documentation then they are going to go to their note seller and get it. An assignment of promissory note and mortgage is just as valid if it is signed today as a year ago. If the seller of the note is bankrupt, there is nearly always a successor entity that can sign, or even the bankruptcy trustee or judge.
This talk of “end of the republic” is just nonsense. Yes, the banks will have to expend more effort actually coming up with the documents than merely claiming that they think perhaps maybe they are the current owner of the note. That is the price the banks pay for not doing the legally-required documentation in the first place. These lenders took the risks of cutting corners, so now they have to pay for that additional effort. I say to the banks: man up and quit sniveling.
October 18th, 2010 at 9:41 pm
BTW, for anyone wondering how difficult it is to fix missing paperwork in the transfer of a promissory note and mortgage/deed of trust, here’s what it takes. An assignment of the promissory note is a one-page document that can be prepared in an instant by simply pressing a button on a computer. The computer fills in the standard bank template. It simply must be signed and sent the buyer of the loan. An assignment of the mortgage or deed of trust is similar. It is a one-page form created by the computer on the bank’s template. It is signed, notarized, and then sent to the county recording office. There is a small fee which averages about $30 here in America. That’s it.
There are pundits today who are saying: “what if the banks don’t know who owns the loan”? Gimme a break. My suggestion to that brain trust would be to look first to the bank that has been collecting the payments. Duh. If that bank doesn’t know who sold them out to them, then they can simply check with the county recording office (usually online) and see who was the last holder of the mortgage/deed of trust. Start there and ask who they sold it to. If all else fails then use the foreclosure court to request that the homeowner disclose where the checks have been going over the years.
These same rules apply whether a bank bought the loan, or a REMIC, or anything else. The MBS securitizers sold slices of the REMIC trusts, not slices of the loans themselves. There is always a last owner with the right to foreclose.
October 19th, 2010 at 12:31 am
[...] via The Big Picture [...]
October 19th, 2010 at 10:56 am
So, with this yet another screw up, the banking sector is well on track to giving back everything they made since the last debacle and then some as Taleb and many others, even on this blog (see Abelson’s) repeatedly told us…sans of course the many bonuses, inflated salaries of the bright, mainly young ivy school minted managers. What country! I wonder if this malaise is spread world wide or it is specific to the US or to the developed countries only?
October 19th, 2010 at 11:31 am
To Marc P:
“That is the price the banks pay for not doing the legally-required documentation in the first place. These lenders took the risks of cutting corners, so now they have to pay for that additional effort.”
Except of course the banks won’t pay – the consumer will in increased fees, margins etc. If the market were “efficient” then presumably the banks who didn’t cut corners would have an advantage but that is unlikely.