Selling Mortage Deeds

Discussion in 'Off-Topic' started by Thevenin's Planet, Nov 22, 2011.

  1. Thevenin's Planet

    Thread Starter Active Member

    Nov 14, 2008
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    Hi fellows

    There is this big commotion in USA about the Finanacial Institutions (Wall Street trading and Banks,ect..) are selling Mortage Deeds in some kind of bundle to others, I assume to other Financial institution.Several cases about foreclosure emerged and these institutions evicted or try to evict these people but did not have the Deeds to prove they owed the building.Some was evicted but it was claimed that they was evicted illegal because they could not have the deed.I guess the trading was done thru the computers somehow.The question that bothers me is how can money be made if the mortages are fixed to a certain amount per month plus interest rates? It seems to me someone is going to lose out on profits.
     
    Last edited: Nov 22, 2011
  2. Wendy

    Moderator

    Mar 24, 2008
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    This whole thing is a mess. I was listening to a story on PBS where a woman and her eight kids were kicked out on a house that was mostly paid for. The bank (Bank of America) admits they should have renegotiated.

    The house sat empty for more than a year, then the bank offered to renegotiate. Meanwhile they ignored the property, did not winterize or maintain anything. The cellar is now full of water and sewage from burst pipes and other problems.

    The bank now says it will pay for all the damage, and try to get the woman and her kids back into their home, well over a year later.

    The problem is arrogance IMO, the banks will not renegotiate where appropriate. They will not admit when they are screwing up, nor will they follow their own procedures in many cases. There have been cases where they foreclosed on the wrong property, emptying a home owners house who was on extended leave and selling property that was not theirs. They paid, but how do you replace pictures and other items of sentimental value? Someone needed to go to jail over that one.

    I don't argue that if you don't pay you should loose the property, but the lack of common sense is extreme. Some where big companies and banks will go out of their way to screw people for no good reason, in the name of profit, and wind up loosing even more in the process, hurting people needlessly meanwhile. If they could turn the property over in a timely manner it would be one thing, but that is not what is happening. The stories of banks allowing property to be destroyed through neglect are accumulating.

    The total lack of accountability is very troubling. If you are rich and lawyered up you are not accountable.
     
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  3. strantor

    AAC Fanatic!

    Oct 3, 2010
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    There are not many people who really understand how it works. I am one of the majority who does not understand it. but it wouldn't be happening if someone wasn't making money on it. As I understand it, a lot of the morgtages that were sold, were sold to people in china, furthering our debt to them.
     
  4. Wendy

    Moderator

    Mar 24, 2008
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    One big difference though, that is private debt.

    I agree on another point, I don't understand either.
     
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  5. JoeJester

    AAC Fanatic!

    Apr 26, 2005
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    Fanny Mae and Freddy Mac guranteed over 50% of the housing loans leading up to the "housing bust". With the government guarantee, the Mortgage companies kept packaging those who wouldn't get a normal loan with those who could ... distributing the loans to "even out" the risk of foreclosure. Unfortunately the more risky loans overwhelmed the industry.

    In the early part of 2000, there were warning signs that Freddy and Fanny were doing this, but, the leadership of the government oversight committees, who receive lots of fanny/freddy PAC money, kept saying everything was OK. Fanny and Freddy are governent corporations.

    Remember when you could get a 15 year 7500 First Time Homeowners loan on your taxes? That morphed to a 8000 non-repayable credit. The only rule was to live in your new house for three years. There were so many that "foreclosed", the government "changed the rules ... again" so that if you were foreclosed, you didn't have to pay that $8000 back. Billions to bale them out ... and Fannie and Freddy need more cash ... Billions to absorb the "free" money that was never recouped because of the rule change.

    The question is will the U.S. go down quicker than a hooker in a naval port. Alexia de Tocqueville did mention in his travels across "America" in the 1800s about once the country will fail to exist when the people figure out they can vote themselves money from the general treasury.
     
    Last edited: Nov 22, 2011
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  6. GetDeviceInfo

    Senior Member

    Jun 7, 2009
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    If I extend a loan for say 8% over ten years, I could resell that contract, for say the principal plus a calculated 2% of the ten years. What I get is my principal back plus the interest today. The buyer gets an investment returning 6% over the ten years. They may resell it again skimming another portion of the interest over the period.
     
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  7. strantor

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    Oct 3, 2010
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    Ah, I see, so thats why they were so eager to sign subprime loans; they would just sell it right away before the borrower defaulted, and make a little profit on it. the loan would then go from place to place like hot potato, becoming a less and less ideal investment until someone got stuck with it. and then the borrower would default. is that right?
     
  8. Markd77

    Senior Member

    Sep 7, 2009
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    Back in the good 'ol days when house prices always went up, it didn't really matter when people defaulted, because you could then sell the house for more than the initial loan. It may have been a little unrealistic to think that house prices would never drop.
     
  9. GetDeviceInfo

    Senior Member

    Jun 7, 2009
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    Just like that. The big trouble starts when you bulk trade contracts and discover that you've aquired a stacked lot. Fearing a compromise, you perform an internal audit, only to confirm your fears, that your entire realestate portfolio is polluted with unqaulified loans.
     
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  10. strantor

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    Oct 3, 2010
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    Thanks for that explanation. seems rather simple the way you word it; I'm not sure why I never understood it the when I listened to it being explained on TV.

    ...Now please don't anybody come in here and add some new detail to the scenario and ruin my new found understanding.
     
  11. Thevenin's Planet

    Thread Starter Active Member

    Nov 14, 2008
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    So this is going on without the borrower knowlege ? Or after default or foreclousure?
     
  12. GetDeviceInfo

    Senior Member

    Jun 7, 2009
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    without the borrow's knowledge, however, most contracts stipulate that the lender has the right, so it's typically there for the borrower to discover. I believe some of the legal hassling right now is on that particular point, as to who is legally entiteled to the collateral. It's kind of pointless after default/foreclosure because you now have a liability. It can be a good market for speculators, but many institutes are wary about exposing thier liabilities. Here in Canada, lenders rarely release foreclosures directly, but rather market them through the standard channels. Keeps the ball from rolling in the wrong direction.
     
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  13. loosewire

    AAC Fanatic!

    Apr 25, 2008
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    Come to think of it Canada has not been in the news as broke country.
     
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