In Foreclosure Loophole: Itâ€™s A Paper Shuffle and You Can Beat It we opined that if you are currently going through the foreclosure process you should consider retaining an attorney to check the mortgage records listed in the electronic systems used by banks to transfer notes from one firm to another. Because there were so many institutions involved in the mortgage scams, from brokers to banks to securities firms, it is possible that your mortgage note is no longer owned by a single company. In some cases, notes may have gotten lost in the system, and though you may have been paying your monthly payment to a particular company, they may very well have no rights to those payments.
Today we learn that one of the larger mortgage brokers has suspended all foreclosure action in 23 states:
Ally Financial Inc.â€™s GMAC Mortgage unit told brokers and agents to halt foreclosures on homeowners in 23 states including Florida, Connecticut and New York.
GMAC Mortgage may â€œneed to take corrective action in connection with some foreclosuresâ€ in the affected states, according to a two-page memo dated Sept. 17 and obtained by Bloomberg News. Ally Financial spokesman James Olecki confirmed the contents of the memo. Brokers were told to stop evictions, cash-for-key transactions and lockouts, regardless of occupant type, with immediate effect, according to the document, addressed to GMAC preferred agents.
The company will also suspend sales of properties on which it has already foreclosed. The letter tells brokers to notify buyers that the company will extend the closing date on all sales by 30 days. Buyers will be able to cancel their agreement to purchase and get their deposit back, according to the letter.
It looks like somebody, somewhere in the mortgage business has realized that the entire system is corrupt. Not only will GMAC not evict people from their homes, they will not sell any homes on which they’ve already foreclosed.
This is clear admission of that they have no clue who owns the mortgage notes, and that they have likely foreclosed on homes to which they have no legal right.
Homeowners in foreclosure, or even those who think they may be making payments to a company that doesn’t own the note: Get an attorney, ASAP.
Nobody has a clue as to what is actually going on. Those that do turn the blind eye in order that their lifestyle can continue without interruption. When the shtf its going to be of Biblical proportion.
Maybe I am missing something here, but isn’t the next logical conclusion to draw from this is:
Why even pay your mortgage at all? Assuming nobody knows who owns the note that is. After all, the original note is akin to a contract, and if there is no contract, then there is no longer an agreement to pay.
Shouldn’t everyone be contacting their mortgage companies and demanding them to fax them a copy of the original note?
Someone tell me why we shouldn’t be doing this.
Chris, I believe this is exactly what we should be doing. Why the heck not?!
Perhaps a new “Show Me the Note” movement?
I think GMAC knows what’s up, as does Wells Fargo…
I wonder what percentage of mortgages do not have a traceable mortgage note… hmmm….
Hey Mac, can you provide some links to the Wells Fargo information – maybe I’ve missed the news somewhere. I have a mortgage with them (or maybe I don’t!).
Corruption at its finest. We are just like the Roman Empire was in the late 400’s A.D. Right before they collapsed.Â It might get to the point you guys are talking about where everyone stops paying their mortgage because they know it wont matter.
Tony, you may be right. After all, if people who haven’t been paying on their mortgage for 6, 12, even 18 months in some cases, and are still living in these homes, then why should those would haven’t missed a payment at all? Why should the responsible ones be punished? This is why the country is circling the drain.
Chris, check out this post over at Naked Capitalism: http://www.nakedcapitalism.com/2010/09/latest-real-estate-time-bomb-title-of-foreclosed-properties-clouded-wells-fargo-dumping-risk-on-hapless-buyers.html
It highlights the fact that WF is attaching an addendum to all foreclosure home sales, suggesting that they are well aware of the issues surrounding these notes.
If you end up getting a free house, let me know! (lol!)
Comments….. Seems to me that the country Recorder’s office would have the records.Â I can look mine up on the internet through our county on any house, and see who holds the title.Â I think there’s so many foreclosures, that they don’t have the “bodies” to track them all down.Â I’m screwed because I did the right thing and paid my mortgage off.Â What do I get?Â The peace of mind that I know who owns it.
Yes you have the same peace of mind the rest of us living in the united states of Amerika have the government owns you and every single posesion you have including your house … dont believe this stop paying your taxes….you own nothing.
What is recorded ( at least in TN ) are two things:
1. The Warranty deed…..that is the actual “title” to the property, with the legal description of the property ( survey ), shows the former owner selling it to you.
2. The Deed of Trust.Â This is what you sign to the bank as security for the note and mortgage.Â It gives the bank the right to foreclose and under what terms. This is recorded right along with the warranty deed, assuming there IS a mortgage ( not an outright cash buy )
The “note” itself is never recorded.Â That is a promissary document that you give to the bank, with the property as collateral.
The note is a negotiable security…..the holder of the note can sell it off to anyone willing to buy it.Â That change in ownership would not show up on any county records, since it was never there in the first place.
Here’s the deal..the Banksters created a monster called “MERS” Mortgage Electronic Registry System.Â I think they did it to try and streamline (and potential obfuscate) property transfers.Â Anyway, if title on a property has passed through MERS there should be a cloud on the title, meaning there is a question as to who actually owns the property.
The Banksters have recently been transfering ownership to the servicer from MERS prior to initiating foreclosure.Â So if you can prove it transfered into straw man MERS, potentially then the title and note have been separated and there’s your case.
I’m not a lawyer and don’t play one on TV, but that’s all I know.Â I hope the Banksters get their asses kicked and the middle class is joyous.Â We need a “Jubilee” right now, and anyone who says it’s the homebuyer’s fault it full of shit, hasn’t been through it, and should just shut the f up!
Goldenfoxx….do not kid yourself. Even though your house is “paid off” you really do not own it…you never will. As soon as you stopÂ paying taxes, the county/city will slap a lien….then they will own it.Â Your just allowed to live in it for a while.
Taxed to DEATH!!!Â Â
A great reason for keeping all monthlyÂ statement transactions, checking the balance, interest paid, and principal…which I have done for many years.
Comments…..We have not made a payment on a house we (own)? for 24 months. The (lender) started the foreclosure process 18 months ago and my Atty. answered it and we haven’t heard a word. We have it rented and the cash flow is great. We can’t figure out why they haven’t taken it back by now.
We have been reading a lot lately about the MERS database. of which many mortgages have been lumped into and are now imposable to prove ownership and the courts are agreeing.
I have been wondering if some one where to buy one of those uncontested foreclosed properties and it is then found out they were not able to sell for lack of true ownership, what would the new current lender do with the new mortgage that is not valid?
We would have a title insurance night mare.
Be careful for those out there buying up those good deals????????
I would be interested in anyone who would have advise of what I’m facing or have gone though something like this.
We were in the process of purchasing a forclosed home. The closing was to be last Monday Sept. 13th. We were told at the last minute we were not going to be closing due to some litigation involving the title and who owns it. We were told the servicer was GMAC and Freddie Mac was handeling it. So here we are involved in this mess. We had a conference call with one of the main law offices here in Fla. that is being investigated for filing imoproper forclosure proceedings yesterday. They told us that it was not their doing and that GMAC is the culprit. So here we are. They also told us GMAC said they would etend out contract 30-60 days and that the house would still be ours once all of this is cleared up…So we are in the waiting game. So many families are affected by this mortgage crisis…Any input from anyone would be appreciated.
Comments…..Most loans were titled in “MERS” for the last few years before the downturn. We had 2 loans, both adjustables expiring in a few years. We refinanced both into fixed loans. They were quick to do this for us. Now we find our original loans were indeed MERSÂ loans. Of course, not the new ones. I believe this is just one reason they are all trying to “help” homeowners get their loans re-adjusted. P.S. All you have to do is look at your original loan papers. If it is a “MERS” loan it will start off with MERS #………
The only way this really works is if you got your original from a big bank that bundled and sold the note out into ‘the wild’ no one may be able to find it.Â The only other way it might work is if your bank was closed by the FDIC, taken over and sold off.
My mortgage was from a smaller local bank and was just recently sold to FannieMae but the payments still go to the bank.
The wave first described by Ellen H. Brown is starting to break.Â She outlined the MERS tangle six months ago, and the articles she wrote on this atrocity make great reading.Â Google her name.
The outcome of all of this is bound to be interesting, and it seems that the mega banks will be in the crosshairs of not only millions of home owners but thousands of irate investors.Â By my calculation the dollar amount of property involved is around 15 Trillion.Â Yikes!
My wife closed on our home in 05 when I was still in Afghanistan then my local bank sold the loan to Countrywide. I returned and began battling a new enemy. We tried twice to refinance,with all the paperwork, and they dropped the offer to do said deal.
In a fit of frustration after my wife lost her jobÂ I found an email address andÂ name of a VP in customer service,Â Barbara Desoer. I sent her my hardship letter and within three days I had a fedex letter from her office.
That was ten months ago and a lot of phone calls and faxes from a single contact person we thought we had a modification to the loan. We haven’t paid the mortgage in ten months now and the phone calls have all but ceased. I have called back and when I finally reached out negociator she said everything is still a “GO” yet the docs to sign keep getting put off.
So strange. Since were in the mod program we never got any hate mail or foreclosure stuff from anyone yet I’m starting to feel a little uneasy.Â Are they so inundated they can’t keep up? In the mean time we’ve paid off all our debt and saved some money, what are they waiting on?
Its great advice to get a Lawyer ASAP but unfortunately most of them are clueless about how to go about in this new arena.Â Does anyone have a good ref for western mass?