[Caveats: 1. The following information is solely based upon Oregon law. Residents from other states should not assume their laws will result in the same outcome. 2. This post is for informational purposes only and should not be relied upon as “legal advice” for your particular situation. In all cases, you should consult with your own attorney. There are many facts and circumstances that can change results. You need to speak with an expert who is familiar with the terms of your specific loan. – PCQ] As we enter 2012, four to five years following the real estate and credit debacles – depending on your location – we’re still in the doldrums. Drifting, and not moving in any specific direction. So, are there any words of wisdom, any encouragement, any sense that this static economic situation will improve? To those looking for predictions, this post is not for you. I have insights, but suspect they are no better than the next person’s. However, having said that, for those readers interested in a discussion about some of the Portland housing statistics, go to this link. Beyond that, for the present, I will refrain from the temptation to say what I think the future holds for Oregon’s housing inventory or its Realtor® industry. I’m saving that for another time. Rather, the purpose of this post is to provide some degree of encouragement. This is not to suggest that things will necessarily turn around this year – or at least not materially so – but that things could always be worse; that life, by definition, is a series of highs and lows, and events are rarely as good, or as bad, as they may first appear. So what do we make of this housing recession, foreclosure mess, and tight credit, all coupled with lagging employment numbers? What about those – now estimated to be nearly 30% of American homeowners – who are struggling with negative equity, meaning that their total mortgage indebtedness exceeds their home’s value? Continue reading “Distressed Housing: This Too Shall Pass”
As we move into the New Year, our friends in the banking, servicing, and title industries have hastily convened a conference call to deal with the latest MERS setback in court. It seems that when Fannie Mae sought permission to evict some folks from the home it had recently foreclosed, the local Jackson County Circuit Court Judge said “Fannie May Not.” As usual, Belial Bank’s devilish President and CEO, B.L. Zebub, moderates. He is joined by his trusted cronies to consider what to make of this decision coming out of sleepy Southern Oregon. In attendance with B.L. is his honest but naïve legal intern, Les Guile, who, of late, has developed a tendency to speak more freely. Could it be that a conscience stirs within this young novitiate, and that he is tiring of the Machiavellian personalities on these calls? Also in attendance is title industry hand-wringer Liz Pendens and her nemesis, Dee Faulting, of the default servicing industry. Damian Faust, Belial’s lead counsel and hatchet man is present, as is the Bank’s chief schemer and PR man, Kenneth Y. Slick III (aka “KY”). B.L.’s loyal secretary, Lucy Furr, has dutifully transcribed this conversation, although she apparently forgot to “scrub” it, as instructed by B.L. As before, I am unable to disclose the source of this purloined post. – PCQ
B.L. Zebub: “I just read the decision in Federal National Mortgage Association vs. Goodrich. Well, the timing couldn’t be more prophetic; December 7, 2011 and we find out we just got bombed in court. Folks, I want to know what happened here! This was a little garden variety eviction. It can’t get much simpler than that. All the bank has to prove is their superior right of possession. We have our high-powered bank attorney flown all the way down to……..where is it “Jackson County” Orygon? Where the hell is that? Quick, someone, see if you can locate it on an AAA Trip Tik! I doubt it. Do they even have an airport there? Did we have to pay to have our attorneys chauffeured to court again?! That’s the problem – all those backwater bleeding heart liberal judges feeling sorry for the little guy! I had a bad feeling about this case the minute I found out it wasn’t going to be tried in Portland. It seems the farther away from the city you get, the more risk there is that some wild-eyed lib is gonna take issue with MERS. Remember what happened in the Flynn case? Where was that, Columbia County – wherever that is? Damien, enlighten us. What went wrong? I assume our lawyers take off their Rolex watches and Tiffany jewelry before they go to court. We don’t want these hayseeds thinking that we actually make a pretty good living foreclosing Oregonians out of their homes.” Continue reading “Belial Bank Conference Call Discussing The Goodrich Decision & MERS”
Hypocrisy: [c.1200, ipocrisie, from O.Fr. ypocrisie, from L.L. hypocrisis, from Gk. hypokrisis “acting on the stage, pretense,” from hypokrinesthai “play a part, pretend….” Online Etymology Dictionary]
Example: When banks lend money today, they demand absolute transparency of their borrowers. Every “T” must be crossed and “I” dotted. Signatures, income, credit, employment, all must be verified and re-verified to the nth degree. But when banks foreclose their borrowers today, they throw transparency to the wind. Everything becomes opaque. The banks move into the shadows, transferring obligations behind the scenes, employing lackeys to sign their most important foreclosure documents, and using servicers to do their dirty work, all the while whispering “We Care” to beleaguered homeowners, when that is the farthest thing from their mind. – PCQ
Background. On July 23, 2004, Mr. and Mrs. Sharpe borrowed $194,750.00 from their lender, Washington Mutual Bank (“WaMu”). They signed a Promissory Note and Trust Deed. Here’s what these documents said:
- The Note informed them that their lender could transfer it to a third party, which would entitle the new entity to receive the Sharpes’ payments;
- The Trust Deed stated that the Note could be sold without prior notice to them;
- The Trust Deed stated that the “Loan Servicer” [i.e. the entity to whom they were to make all Note payments – PCQ] could change;
- The Servicing Disclosure Statement [a separate lender-created document – PCQ] informed them that WaMu was to initially act as servicer of their loan – but that could change in the future;
On September 16, 2004, WaMu sold the loan to Fannie Mae, although it [WaMu] retained all servicing rights. This means that while Fannie Mae owned the Trust Deed and was the holder of the Note, WaMu acted as the collection agent and was thus earning servicing fees on the Sharpes’ loan even after they had sold it to Fannie Mae. Continue reading “Sharpe vs. Wells Fargo Home Mortgage – A Critical Analysis”
[This is Part Two of my post regarding the recent ruling by Magistrate Judge Stewart in the case of James v. ReconTrust, Bank of America, et. al. here. Part One can be found here. – PCQ]
Do All Assignments of the Deed of Trust Need to be Recorded? Mr. and Mrs. James argued that their Trust Deed had been assigned multiple times, i.e. from NWMG [the original lender that funded the loan] to Countrywide [which became BAC Home Loan Servicing, and through merger, became Bank of America] and then, through securitization acquired by Fannie Mae. Thus, due to the failure to record the successive assignments as required by ORS 86.735(1), the James contended that their foreclosure was invalid. [It was the failure to comply with this mandatory recording statute that resulted in Judge Alley, in McCoy, and Judge Panner in Hooker, ruling the foreclosures invalid. – PCQ]
In rejecting this argument, Judge Stewart explained her rationale below [which includes my “dissenting opinion” in bold italics – PCQ]. Continue reading “MERS Musings – James v. ReconTrust, Bank of America, et. al. Analyzed [Part Two]”
Having counseled approximately two hundred Oregon homeowners drowning in negative equity, I have discovered that many, if not most, believe that somehow their lenders can literally swoop down and take not only their home, but all of their bank accounts, savings, retirement funds, and/or daily wages. In truth, the only real power most banks have over a borrower, is the ability to negatively impact their credit, and by extension, their future ability to borrow. On the other hand, one’s credit is a composite of many different data points, not simply a single “black mark” from one distressed property event. To that extent, a credit rating can be strengthened over time, and like a muscle, it builds up through consistent and prudent use over time. In today’s rental marketplace (which is populated by many former homeowners coming out of a distressed property transaction), a credit score impacted by a single distressed housing event has little or no bearing on whether a landlord will rent a home or apartment to them. In an effort to provide some peace of mind, listed below are certain “rights” that all home owners have under Oregon law. These rights cannot be taken away – they can only be voluntarily given away.
The following Bill of Rights assumes the following facts: (a) The home was used and occupied as a principal residence. A “principal residence” or “primary residence” in my vernacular, is the residence you occupy most of the time, and hold out to the city, state and federal governments (e.g. the post office, DMV, utility companies, etc.) as your “home.” A second home is not, by definition, a “primary residence.” (b) There is only one loan on the property and all of the borrowed funds were used to acquire the home. Second trust deeds can sometimes be problematic. If you have a second trust deed as well as a first, all is not lost – it just requires a little more planning, and some smart negotiations with the bank.
Caveat: This summary is not meant to be legal advice, as each person’s factual situation is different. No attorney-client relationship is sought or created by this post.– PCQ
After several years of toil as a low paid toady for a high-powered foreclosure mill law firm, our intrepid young associate has finally won a case! [Note to the easily convinced: This post is pure satire. The case is real, the ruling is real, MERS is real, but the characters and law firm in the post are purely fictional. If the husband and wife sound like friends of yours, the resemblance is purely coincidental. And why are you hanging around with them, anyway? – PCQ]
Her: “Honey, is that you? I didn’t hear you come in. Usually the door slams, you stomp in, and are cursing under your breath.”
Him: “Come on now, I’m not that bad. Let’s go out to dinner and celebrate!”
Her: “Celebrate what? Did the Firm finally make you a partner? Does this mean you’ll get to boss the newbie associates around, like the partners did to you? Maybe you’ll start making some real money so I can afford to shop at Nordstrom’s instead of Filene’s Basement.” Continue reading “A Good Day At The Foreclosure Mill”
Introduction. Federal District Court Judge Michael W. Mosman ruled in favor of Bank of America and others in the recent foreclosure case of Jon Charles Beyer and Shelley Renee Beyer, Plaintiffs v Bank of America, et al., Defendants.It appears that he has bought into the argument that MERS can legally act as a beneficiary under the banks’ trust deeds.[1]
What does this all mean? Well, first, it means that federal judges can disagree among themselves, which isn’t exactly late-breaking news. As pointed out here, here, and here, there have been other recent foreclosure and bankruptcy cases that have come out squarely against the Big Banks on similar issues.
This judicial disagreement may ultimately be resolved once an Oregon appellate court rules on the matter.[2] But for the present time, the Mosman decision implies – in my opinion[3] – that there is continuing confusion about the role of MERS in Oregon’s non-judicial foreclosure process. Continue reading “The Beyer Decision – Judicial Sorcery”
“Oh what a tangled web we weave,
When first we practice to deceive!”
Sir Walter Scott, Marmion, Canto vi. Stanza 17.
Scottish author & novelist (1771 – 1832)
There are two new interesting developments on the foreclosure front in Oregon. But first, here’s a recap of where we’ve been and where we are now:
Background.
- The Big Banks tried and failed to conduct illegal non-judicial foreclosures in Oregon. As pointed out in several earlier posts, here, here, and here, they have been routinely ignoring the mandatory recording requirement of ORS 86.735(1).
- They got their wrists slapped by Federal Judges, Panner, Alley, and others.
- They realized that even when they completed an illegal foreclosure, they likely couldn’t get title and couldn’t evict the homeowner.
- As discussed here and here, their lobbyists went to the Oregon legislature, and tried to convince the politicians that real estate commerce would come to a halt, if they weren’t permitted to continue violating the law. [Note to Big Banks: Commerce did come to a halt, but it was back in 2007+ after you’d gone on your securitization binge, lent money to borrowers you knew couldn’t qualify [or didn’t care if they couldn’t], immediately got paid by selling liar loans as securities to pension funds and others who relied upon the agencies you paid for bogus investment grade ratings, and then went through four years of “extend and pretend” modifications that accomplished absolutely nothing to resolve the foreclosure crisis. – PCQ]
- The Big Banks next threatened that if they weren’t permitted to violate Oregon’s non-judicial foreclosure law any more, then By Golly, they would just start suing their delinquent borrowers in court, since the mandatory recording requirement only applied to non-judicial foreclosures. Continue reading “Oregon Foreclosures – What Are The Big Banks Up to Now!?”
In common parlance today, a “default” denotes either nonperformance – or inadequate performance – that falls short of a written rule, guideline, or criterion. It is not something that, by itself, can be judged or evaluated absent the presence of a measuring stick. While a breach of contract is an objective characterization of someone’s failure to perform according to the terms of a legally binding agreement, a breach of ethics, is a subjective characterization of someone’s failure to perform according to the terms of the holder’s belief system.
However, what the lending industry has successfully done is to mix the objective nature of “default,” say under the terms of one’s mortgage, with the subjective inference that the breach is equivalent to a moral failing. Hence, the term “strategic default,” used by Big Banks to stigmatize the folks who don’t perform in accordance with the terms of the note and mortgage or trust deed they signed. [Admittedly, there are those who have no affiliation with the lending industry who are also guilty of this pejorative characterization. Yet, I can forgive most of them, since they’ve never “walked a mile in the other persons’ shoes.” Accordingly, their opinion is the result of unconscious ignorance – not conscious conflation. – PCQ]
So, the purpose of this post is to put the term “default” back where it belongs. In other words, to remove the judgmental conclusion that defaulting under one’s mortgage or trust deed is a morally reprehensible act. Continue reading “In Defense of Borrower Default”
In a recent post on mortgage insurance (“MI”), I addressed what I saw as a problem, but didn’t yet fully understand the depth of it, so just issued a cautionary warning to Realtors® and sellers that they should find out, in advance, if MI was obtained on the underlying loan. The reason for this warning was due to reports I was receiving that MI companies were requiring the payment of money or a promissory note from sellers, in order to give consent to a short sale. Why consent was even necessary from the MI company has mystified me.
After reading some MI master policies for these carriers, and doing a little research on the Web, together with a well-placed threat to one MI carrier, I think I’m getting closer to understanding what’s going on. Here’s a summary of what I know so far: Continue reading “Short Sale Trap: Mortgage Insurance [Part Two]”
