“I again want to sincerely apologize for the inappropriate costumes worn by some of our employees at our Halloween Party in 2010. It was in extremely poor taste and I take full responsibility. I know people were extremely offended and people have every right to be upset with me and my firm.”
–Stephen Baum, whose New York foreclosure firm’s callous Halloween costumes from last year got the media and the blogosphere all fired up this week.
Over the weekend, the New York Times published pictures from a Buffalo, NY, foreclosure law firm’s Halloween party. Unfortunately—but perhaps predictably—the theme seemed to be “stereotypes of people we toss out on the street.” So lots of dirty, drunk homeless caricatures.
MERS, the Mortgage Electronic Registry System, is a legal fiction that—on paper—owns about half the mortgages in the United States. It was created in 1995 as a solution to the problem of slow-moving county property records offices. Banks and investors needed mortgages to move faster, so they registered once with the county in the name of MERS . . . and then basically lost track of the paperwork.
The New York Times explains why, but here’s the gist of it.
The foreclosure mess got messier over a month ago, when GMAC, Bank of America, and others were caught faking (essentially) affidavits supporting their foreclosure lawsuits. The irony of banks acting irresponsibly with their finances was not lost on the media. Of course, robo-signing, as it was soon termed, was already commonplace in another kind of business: debt buyers.
GMAC, a large mortgage lender, has been foreclosing like mad, apparently without bothering to check its facts. Here is an excerpt from a deposition of GMAC employee Jeffrey Stephen:
Q. So other than the due date and the balances due, is it correct that you do not know whether any other part of the affidavit that you sign is true?
A. That could be correct.
In short, the affidavits might as well be faked. Caught in the act, GMAC has stopped evicting homeowners and foreclosing mortgages in 23 states. Or mostly stopped, anyway.
Believe it or not, there are laws against this sort of thing. It’s just that nobody has bothered to enforce them.
“February saw an unexpected jump in foreclosure filings as the weak economy puts more pressure on borrowers.” Rise in foreclosures ‘a shock’ | CNN
Buried in an article about the “rocket docket” in Fort Myers, Florida is this quote:
Sixty percent of the cases handled here involve homeowners who were speculators and out-of-towners. They don’t bother showing up for the court hearing, so the process is quick, and many are handled in seconds.
I assume that figure is higher, in part, because Fort Myers is a popular place to buy a second (or third or fourth) home for vacationing. I don’t think many people are buying vacation homes in North Minneapolis.
Still, that figure does show just how inflated the housing bubble was before it popped.
“By the time the Senate returns next Monday from its July 4 recess, some 55,000 more homes will have entered foreclosure. And that’s hardly the full picture of the growing calamity. More than three million homeowners are currently at risk of default and millions more are expected to join them in the coming year as home prices drop, the economy falters and delinquencies rise. Yet the Senate went ahead with its vacation last Friday without passing a foreclosure prevention measure.” As Foreclosures Escalate | New York Times (via Consumer Law & Policy)
Surprise Surprise . . . mortgage rescue scams on the rise!!! Beware of anyone offering to rescue your home from foreclosure. If you are tempted, find a consumer lawyer to review the deal prior to closing.
Looks like YouWalkAway.com was one of those “right place, right time” startups. Bloomberg reports that foreclosures are skyrocketing as more and more homeowners just give up. Mortgages are secured loans, after all. Banks just never counted on having to accept the collateral instead of the payback. (via Consumerist)