Friday, March 16, 2012

Robosigning

Much is being made of the sloppy documentation banks engaged in on mortgages, and how they are unable to foreclose on defaulted mortgages as a result. The woman who, apparently, opened up this whole can of worms was just awarded $18 million for discovering it. She was fighting to prevent the bank from foreclosing on her home, on which she had not been making payments, and discovered that their documentation was bogus. They were unable to foreclose, she got to keep the home she wasn't paying for and got an $18 million bonus to boot.

Paperwork. People owe money that they are not paying, and they get to keep that which they are not paying for because the paperwork on the debt is not proper. Does anyone dispute that they owe the money and are not paying it? No. Does anyone dispute that the company foreclosing is actually owed the money? Well, no, not really. But the mortgage holder does not have the proper paperwork so they get screwed out of their money, lawyers get large fees, and the deadbeat homeowner gets to keep his house without paying for it. Because a piece of paper was lost.

Is this a great fucking country, or what?

3 comments:

Bartender Cabbie said...

good oone. I will add however that it it is quite possible some of the financial institutions were engaging in unscrupulous practice.

Jayhawk said...

Undoubtedly some unscrupulous lending was going on. How does that justify a person having a house worth hundreds of thousands of dollars that he did not pay for?

In many cases the deficient paperwork occurred when the mortgage was sold to a secondary lender. The primary lender screwed up the paperwork, but the secondary lender loses his financial stake. The crooked primary makes out, the deadbeat homeowner makes out, the secondary who did nothing wrong gets screwed. Awesome.

bruce said...

I think they'll stay in it until the proper paperwork is found and filed. The banks (or paperholders) might have been playing the odds that some of those robos will go through.

Is that the right thing to do? No, they were wrong. Is staying in the home that you clearly owe on and are not paying the right thing to do? No. Is writing morgages and reselling ad nauseum a prudent financial deal? No. Is expecting endless appreciation a sound fiscal policy? No.

There is a lot of blame to go around.

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