Bank can't foreclose do to paper work error.

[keith ouellette]

It seems a guy in florida by the name of Joe Lents took out a 1.5mil mortgage on his Bocca Ratton home and hasn't made a payment since 2002. Every time a bank has tried he tells them to prove they are the mortgage owner and they have not been able to produce the proper paper work so h keeps winning in court. It seems there are a number of lenders who, after buying and sell loans in and out of mortgage trusts in a mad effort to make money in the real estate boom, didn't keep very good records. Not a big surprise when you look at the sub prime mess they got themselves into.

I don't know how to do a link but if you want to read about it go to Bloomberg.com and do a news search about banks lose to deadbeat.

[Ken Fitzgerald]

What do you expect from the same "financial wizards" who gave huge loans to so many people who couldn't afford them? You are surprised?

[Mitchell Andrus]

..."due to"...

[Ken Garlock]

No wonder the mortgage market is fubar. I don't feel the least bit sorry for the sleazy wheeler-dealers that set this up to happen. While I don't condone government intervention, I think some Federal body need to step in, bang some heads together and set up rules on how to make, and manage a mortgage.

What is wrong with 10% down, and monthly payments not exceeding 40% of net monthly income?

Revive the rule of thumb that the house you can afford should not exceed 2.5 times your annual income.

No second mortgages until 50% of the original mortgage is payed.

Owning a home is not a birthright, it is a mark of success that is earned through work.

No the government doesn't bail you out. One of our freedoms is the freedom to fail.

[John Shuk]

The Gov't did step some time ago and tell the lenders to lighten up a little so more low income folks could buy homes.
Anytime they touch something it comes out bad.

[keith ouellette]

No wonder the mortgage market is fubar. I don't feel the least bit sorry for the sleazy wheeler-dealers that set this up to happen. While I don't condone government intervention, I think some Federal body need to step in, bang some heads together and set up rules on how to make, and manage a mortgage.

What is wrong with 10% down, and monthly payments not exceeding 40% of net monthly income?

Revive the rule of thumb that the house you can afford should not exceed 2.5 times your annual income.

No second mortgages until 50% of the original mortgage is payed.

Owning a home is not a birthright, it is a mark of success that is earned through work.

No the government doesn't bail you out. One of our freedoms is the freedom to fail.


I can agree with most of the things you said but the last thing I want is a law that sets up limits on what banks can loan out on. That is just as bad as the government leaning on lenders to make more mortgages available to low income families.
Most of the problem is with speculators. The majority of sub prime borrowers that were not speculators are making their payments.
Let things run there course. No government bailouts. No government programs.

There was nothing wrong with the sub prime market until banks lent 100% land 120% loans to speculators but I would never agree to a law that would end speculation investments. Sometimes you have to let the fools go by the way side. It makes for a stronger smarter people.

[Ken Garlock]

Keith, I can see where I was not clear regarding govt. intervention. Maybe all we need is an addendum to the accounting standards and practices. I don't want the govt. to run the business as some have recommended, but rather some type of over-site with the authority to enforce the standards.

If it is indeed what the name implies, the sub prime lending is basically a bad thing. If you have to have an interest rate lower than normal in order to afford the monthly payments, you can't afford the mortgage, IMO. IF the Fed says the very best customers are to be charged x%, it is hard, if not impossible, to justify lending to some one with a greater risk at a lower rate. You say that the speculators were the problem in the sub prime market. Then, I must ask, are they in jail? If not, why not? Are the lenders in jail? Why not? These investment geniuses are ruining the marketplace for the family trying to honestly get ahead.

I have had my say, and you probably don't agree. But I respect that, and support your right to your opinion.

Happy saw dust....

[keith ouellette]

Ken;
I'm not sure if I read your last post correctly but it should be noted that sub prime borrowers pay a higher interest rate because of their higher risk factor. Thats why lending institutions were so hot to lone in the sub prime market. It made a lot of money for banks. They were expecting the houses to be of a higher value to make up for the defaults.

You are right. Lending standards do need to be watched carefully. I just realized as I was typing this... The banks are loaning our savings out. The depositors do need some protection so I guess I agree with you even more now.

[John Shuk]

I'm pretty sure the banking laws do dictate how much a bank can lend out relative to cash reserves. By giving money away with little concern they have little they can put out there on low risk debt now. A friend in the business tells me that this is one of the reasons that things could grind to a halt. I think the pigs are getting slaughtered at this point.

[keith ouellette]

I'm pretty sure the banking laws do dictate how much a bank can lend out relative to cash reserves. By giving money away with little concern they have little they can put out there on low risk debt now. A friend in the business tells me that this is one of the reasons that things could grind to a halt. I think the pigs are getting slaughtered at this point.

Lets hope the pigs aren't getting slaughtered. They may deserve it a little but if it happens we are all going to get pretty bloody.

[Mike Henderson]

I just realized as I was typing this... The banks are loaning our savings out. The depositors do need some protection so I guess I agree with you even more now.
To a large degree, the banks are not lending the depositors' money out for residential mortgages. What happens is that the mortgages are put into a pool (essentially a trust) and the trust is sold to investors as securities. These investors get their money back plus the interest paid on the loans. Residential loans were viewed as very secure investments so the shares were purchased by things like pension funds. The securities paid better interest rates than things like treasuries or corporate bonds.

The bank (but more likely a mortgage broker) made its money on the fees on the origination of the loan. The underwriters make their money on fees on the securities. The underwriters generally agree to take back loans that fail within a certain amount of time. The underwriter then would push the failing loan back on the originator but many small mortgage brokers went out of business so the underwriter is stuck with those loans. That's why many of the underwriters have had to take big writedowns recently as many of the loans have gone into default. Additionally, the securities often are covered by insurance to protect the investors so some of those insurance companies are in trouble.

This is not to say that the banks don't keep some of the loans in their own portfolio, but they try to select the best (most secure) loans to keep.

At least, that's how I think it works.

Mike

[This process meant that banks were not lending their own money out. If they were, they'd be limited by the banking laws as to how much they can loan compared to their deposits. Other people were supplying the money for those mortgages but they were not assuming the full risks - there was insurance to protect them. But when the loans default, someone suffers the loss.]

[Bryan Giles]

The Gov't did step some time ago and tell the lenders to lighten up a little so more low income folks could buy homes.
Anytime they touch something it comes out bad.

Hate to play devils advocate, but civil rights wasnt a bad thing.

But I do agree anytime the Gvmnt touches anything FINANCIAL it turns out to be wreck....

Too many politicians scrapping over who gets their cut and how much. LOL.

[Brian Elfert]

It seems a guy in florida by the name of Joe Lents took out a 1.5mil mortgage on his Bocca Ratton home and hasn't made a payment since 2002. Every time a bank has tried he tells them to prove they are the mortgage owner and they have not been able to produce the proper paper work so h keeps winning in court. It seems there are a number of lenders who, after buying and sell loans in and out of mortgage trusts in a mad effort to make money in the real estate boom, didn't keep very good records. Not a big surprise when you look at the sub prime mess they got themselves into.


Wouldn't it be better for the guy to just to pay his mortgage than to keep paying lawyers to sue the bank? I wonder if he pays the property taxes?

If the bank loses my loan paperwork does that mean I don't have to pay off that loan? I have to believe somebody is sending this guy a monthly bill that is going unpaid or they wouldn't be trying to foreclose.

I can't believe somebody who has the finances to take out a $1.5 million mortage would risk a foreclosure on his credit report unless the loan was a fraud to start with.

[Brian Elfert]

There are or were a lot of housing market where 2.5 times income isn't going to buy any sort of liveable house. Of course, liberal lending was part of the reasons those markets got so overheated in the first place.

My current house is my first house and I had about 35% equity when I built it in 2001. Even so, the mortgage was more than 2.5 times my income. There is little chance of a foreclosure unless the economy really gets bad.

[Jason Roehl]

Wouldn't it be better for the guy to just to pay his mortgage than to keep paying lawyers to sue the bank? I wonder if he pays the property taxes?

If the bank loses my loan paperwork does that mean I don't have to pay off that loan? I have to believe somebody is sending this guy a monthly bill that is going unpaid or they wouldn't be trying to foreclose.

I can't believe somebody who has the finances to take out a $1.5 million mortage would risk a foreclosure on his credit report unless the loan was a fraud to start with.

Brian, if you read the article, you'll see that the guy bought the house, but then his business went in the toilet. He's in Florida, which perhaps doesn't have property taxes. (It's either that or income taxes, I don't recall which). Perhaps he has enough income now to pay property taxes and his lawyer--he's not doing the suing, the current mortgage holder is, but they can't prove they hold the primary lien to the satisfaction of the courts.

[Mitchell Andrus]

The real downside is that he'll never get a clear title. Who'll sign the quit-claim deed?

He's living for free, but soomer or later, somebody's going to win, and it won't be him.

[John Shuk]

Hate to play devils advocate, but civil rights wasnt a bad thing.

But I do agree anytime the Gvmnt touches anything FINANCIAL it turns out to be wreck....

Too many politicians scrapping over who gets their cut and how much. LOL.

Civil Rights of course is a good thing. I just never saw in the constitution where home loans are mentioned.
I don't believe in pure capitalism however when a segment of the population becomes more viable then the banks will naturally move to them for investment as they look for new ways to make money. The gov't just seems to think that bureucrats can make things move better.

[John Shuk]

There are or were a lot of housing market where 2.5 times income isn't going to buy any sort of liveable house. Of course, liberal lending was part of the reasons those markets got so overheated in the first place.

My current house is my first house and I had about 35% equity when I built it in 2001. Even so, the mortgage was more than 2.5 times my income. There is little chance of a foreclosure unless the economy really gets bad.

If these junk loans weren't being made the market would have stabilized at prices people could afford.
I could think of a choice way of saying what was done to folks but it is a family forum.

[keith ouellette]

Wouldn't it be better for the guy to just to pay his mortgage than to keep paying lawyers to sue the bank? I wonder if he pays the property taxes?

If the bank loses my loan paperwork does that mean I don't have to pay off that loan? I have to believe somebody is sending this guy a monthly bill that is going unpaid or they wouldn't be trying to foreclose.

I can't believe somebody who has the finances to take out a $1.5 million mortage would risk a foreclosure on his credit report unless the loan was a fraud to start with.

I don't know what the guy is thinking. I think he is a crook most of all. I don't like banks either But I also don't like thieves. Maybe he figures if he can get a multi million dollar house without using his own money he won't need credit any more. Read the story on bloomberg. It sounds like he has won a number of times and there is no mention of him having a layer. The banks go to court and make a claim and are denied right off because they can't prove they hold the mortgage and the original mortgage holder no longer exist. The guy knows he owes the money to someone.

[Mitchell Andrus]

The letter of the law - and what's right - are often not the same.

[Chris Padilla]

Blame Wall Street for pushing these things in the first place. Greed is good says Gordon Gecko but not in this case.

Any of you read Peter Schiff's "Crash Proof: How to Profit from the Coming Economic Collapse" ?? Scary book that was written in 2006 or 2005...so far, he is pretty much right. He is known as "Dr. Doom".

[John Shuk]

I have a book I bought in 93 called the coming crash in the housing market. Pretty on target as well.

[Jeffrey Makiel]

Before the 1980s, housing always increased in value but at a slow and reasonable rate commensurate with individual earnings.

The housing market in my area became cyclic beginning in the late 1980s when housing rose at an incredible rate then went down in the early 1990s. In the late 1990s and early 2000s, it went up at an incredible rate. Now it's falling again. This has to be a symptom of a deeper illness in our economy in the last 20 years.

Too many non-sensical things dictate the cost of a house these days beyond the value of the materials and labor to make a home. And I fear that these things are emotionally hyped and/or corrupted.

As with the owner of the Florida home, and so with the folks within financial institutions, they are of the same cloth. Unfortunately, as Ken pointed out, nobody holds either of them financially, civil or criminally liable anymore. I believe this absentyeesm of enforcement and oversight also fuels many of our other growing social problems in our country.

-Jeff :)

[keith ouellette]

Blame Wall Street for pushing these things in the first place. Greed is good says Gordon Gecko but not in this case.

Any of you read Peter Schiff's "Crash Proof: How to Profit from the Coming Economic Collapse" ?? Scary book that was written in 2006 or 2005...so far, he is pretty much right. He is known as "Dr. Doom".

My neighbor has told me about the book. My response was the next big economic collapse is going to have grave consequences for everyone.

Cash won't be king when its worthless. Gold and silver are always worth something to someone but they won't buy order. To this day people find chests of roman gold and silver that were buried by people who thought they would get to come back for their treasure after the Gauls and Vandels were done making a mess of things. They never came back for the treasure.

[Terre Hooks]

..."due to"...



Plus one.



Ten characters added.

[Jon Lanier]

All I can say is that we don't have any right to be happy. But we do have the right to pursue happiness.

(if that makes any sense in this thread... there you go.) :confused:

[Phil Thien]

If this guy set out to defraud the lender(s), then I hope he gets his.

OTOH, if he simply hit hard times and is forcing the bank to provide all the documentation, then I say that is fair.

After all, it IS entirely possible that a foreclosure could occur where the WRONG note holder does the foreclosing. Once the mistake is noticed, the TRUE note holder would still want their money. And I guarantee you, they (TRUE note holder) would come after the homeowner AGAIN. There is no doubt in my mind.

So I say insisting that they provide some sort of provenance of the loan is, in fact, in order.

I realize this increases all our costs. But unless it is done, any bank can walk into a court of law and take your house by signing an affidavit saying they are the mortgage holder. And I bet your real note holder wouldn't even lift a finger to help until your several thousand dollars into legal fees.

[keith ouellette]

If this guy set out to defraud the lender(s), then I hope he gets his.

OTOH, if he simply hit hard times and is forcing the bank to provide all the documentation, then I say that is fair.

After all, it IS entirely possible that a foreclosure could occur where the WRONG note holder does the foreclosing. Once the mistake is noticed, the TRUE note holder would still want their money. And I guarantee you, they (TRUE note holder) would come after the homeowner AGAIN. There is no doubt in my mind.

So I say insisting that they provide some sort of provenance of the loan is, in fact, in order.

I realize this increases all our costs. But unless it is done, any bank can walk into a court of law and take your house by signing an affidavit saying they are the mortgage holder. And I bet your real note holder wouldn't even lift a finger to help until your several thousand dollars into legal fees.

Very good point.

[Chad Voller]

Revive the rule of thumb that the house you can afford should not exceed 2.5 times your annual income.


So someone that makes 40K should be buying a $100,000 house? You can't find one of those around here unless it's from 1910 and the house is in need of extensive repairs. Should they then be living in an apartment that charges $750 a month (lowest price you'll find around here without living in the ghetto), which is more than the mortgage payment on a $100,000 home, and prevents them from saving enough to actually buy a home?

Doesn't make it any easier when new home owners get tricked into loans that aren't fixed, and their payments increase $400 a month out of no where, forcing them to sell or claim bankruptcy if they can't get it refinanced.

[Jeffrey Makiel]

I believe Ken's point is that the market will re-adjust with lower housing costs when following this rule instead of folks being scammed into an overpriced home with a volatile variable rate mortgage.

I also believe that we've been denied a corrective recession to fix housing and many other issues. Instead, we've over-extended our worth on a 'sugar high' that is destined to crash. Now, a huge corrective recession seems eminent and our lack of real tangible equity in manufacturing and housing to help buffer this situation is gone.

But, what do I know.

-Jeff

[Greg Muller]

How did a thread that started with a semi-humorous story end up as a free-for-all battle regarding mortgage loans, gov't intervention and recessionist spending???

Jeez, guys. I'm a forensic accountant and I have less serious (and more fact-based, thankfully) discussions than this at work.

Lighten up...:cool:

Greg:cool:

[John Shuk]

I believe Ken's point is that the market will re-adjust with lower housing costs when following this rule instead of folks being scammed into an overpriced home with a volatile variable rate mortgage.

I also believe that we've been denied a corrective recession to fix housing and many other issues. Instead, we've over-extended our worth on a 'sugar high' that is destined to crash. Now, a huge corrective recession seems eminent and our lack of real tangible equity in manufacturing and housing to help buffer this situation is gone.

But, what do I know.

-Jeff

Pegged it Jeff.

[Jason Roehl]

Lighten up...:cool:

Greg:cool:

I don't see any fists flying here... :D

[Rich Engelhardt]

Hello,
Wow!
What a mess! With enough "blame" to go around to everyone involved.
Joe Lents is a real "sweetheart". He lost his home, because he lost his job - as CEO of a corp "busted" by the SEC for defrauding investors.

OTOH - the note holders are a pretty low life themselves.
One filed a "lost note" voucher, and when the woman that signed it was asked if she even bothered to search for it said "No. I just signed a stack of them (vouchers) on my desk".

I googled Joe Lents Florida - and found quite a bit about it.