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Wall Street Hipocracy

Discussion in 'Alley of Lingering Sighs' started by Chandos the Red, Oct 14, 2010.

  1. Chandos the Red

    Chandos the Red This Wheel's on Fire

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    Remove all ads!
    There is a bit of a tempest in the news about how lenders have been robo-signing foreclosure documents. Much like any other legal document one would think that the information on it would be accurate. However, that may have not been the case on thousands of foreclosures. OH, and sorry, for the typo on Hipocrisy in the title. I had them confused with Aristocracy.

    Yes, despite their own mistakes, they still won't own up. It seems nothing is ever their fault, and instead they blame homeowners:

    What makes it even funnier is this:

    Which led to this. Enjoy!

    http://www.thedailyshow.com/watch/thu-october-7-2010/mortgage-bankers-association-strategic-default


    http://news.firedoglake.com/2010/08...ation-strategically-defaults-on-office-space/
    http://www.msnbc.msn.com/id/39674290/ns/business-real_estate/
    http://www.msnbc.msn.com/id/39641329/ns/business-real_estate
     
    Chandos the Red, Oct 14, 2010
    #1
  2. NOG (No Other Gods)

    NOG (No Other Gods) Going to church doesn't make you a Christian

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    I'm confused about one thing. Are they generalizing the actions of a few (albeit major) financial institutions to all of "Wall Street"? "Wall Street" is typically a term I see used to refer to either the people significantly invested in the stock exchange or all major corporations (who are usually significantly invested in the stock exchange). Wouldn't it be more accurate to say "banks" or "lenders"? I mean, I thought real estate and such was just one section of "Wall Street".
     
    NOG (No Other Gods), Oct 14, 2010
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  3. The Great Snook Gems: 31/31
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    I admit to not completely understanding what all the outrage is about (maybe I'm just a wall street fat cat). Did anyone lose a home that they were current on their mortgage with? If so, that would be an outrage and I'm assuming the subsequent lawsuit will settle everyones damages.

    If on the other hand if the majority of these cases involve people who should have been properly foreclosed on and the issue is the dotting of i's and crossing of t's then I'm firmly in the camp of "Who cares".
     
    The Great Snook, Oct 15, 2010
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  4. Chandos the Red

    Chandos the Red This Wheel's on Fire

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    NOG - Wall Street is sort all one ball of wax now - Banking, mortgages, insurance and investments, which is what it was mostly known for in the past. Many of the independent mortgage companies are gone now, like Countrywide. Now the big business is mortage services. Because the home loans have been so sliced-up, that no one even knows who owns half of them, without doing the research. So if there is a settlement, the money may never leave the service company and get to the investor, since it might not have even bothered to figure out who should get the settlement. Also, the amounts may not even be right. So, if a house is auctioned or in a settlement with the service company, the original investors may not even get the right amount, if he gets anything at all, since the documents are not correct. The service company can screw both ends, the home owner and the original investor.

    When there is no regulation, fraud is rampant.

    Snook - If you are an accountant, do you want the amounts to be correct on the dotted lines? Also, remember these are legal documents, part of a process of law. Yes, having the documents correct and in proper order would be important.
     
    Chandos the Red, Oct 15, 2010
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    I agree, and doing things on the cheap is never a good idea. However, I'm still not sure if they have shown that there was any harm done to anyone.

    This reminds me of when I recently refinanced Snook Mansion. One of the things I had to agree to was that if there were any clerical mistakes in the documents, I had to agree to let them fix them. If the correct people were foreclosed on and the end result is the same I just don't see what the fuss is about. Because of shoddy paperwork should these people have not had their homes foreclosed on? If that was the case I should stop paying my mortgage and then pay a clerk a couple of bucks to screw up the paperwork.
     
    The Great Snook, Oct 15, 2010
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  6. Chandos the Red

    Chandos the Red This Wheel's on Fire

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    Chandos the Red, Oct 15, 2010
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    While mildly amusing he didn't say anything of substance. He tells the story about one person that had a locksmith come to the wrong house (don't we have an entire thread about the police doing this?)

    I still don't see anyone who really got screwed. I'm sure they will eventually find someone, but it doesn't seem like the epidemic that it is being made out to be.

    I'm going to put on my conspiracy hat now, but I'm really starting to think that this entire issue is a campaign tactic by the Dems as they think if they villify "Wall Street" people will associate it with the GOP.
     
    The Great Snook, Oct 15, 2010
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  8. NOG (No Other Gods)

    NOG (No Other Gods) Going to church doesn't make you a Christian

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    Chandos, thanks for the breakdown on Wall Street. I had thought there was a lot more variety. Maybe there once was, I don't know.

    Snook, between the fact that this is legal paperwork and the mere possibility that peopel who shouldn't be are being foreclosed on, I understand what the fuss is about.
     
    NOG (No Other Gods), Oct 15, 2010
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  9. Aldeth the Foppish Idiot

    Aldeth the Foppish Idiot Armed with My Mallet O' Thinking Veteran

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    I'm of two minds here. On the one hand, you shouldn't hire unqualified people to rubber stamp foreclosures. You should also make sure you're foreclosing on the right people, and that you are following all the propoer legal procedures that go along with a foreclosure. From the article, it seemed like the banks were just interested in foreclosing on as many deliquent loans as possible:

    That's not good. OTOH, it does seem like these people actually WERE deliquent on their mortgages. Perhaps they shouldn't have been rushed through the system, but if we're talking about whether they should have been thrown out now or three months from now, it seems more semantic than substantive.

    The case where the bank sent a locksmith to the wrong house is obviously a major screw-up, but that's one case of what, 800,000+ foreclosures this year alone? I recently read that the total number of home foreclosures in 2010 is expected to exceed 1 million by year's end. The article said that there have been thousands of improper foreclosures, but we're talking about hundreds of thousands of total foreclosures. That doesn't excuse the ones that were done improperly, but I think there's some cherry-picking going on here.

    I'm not trying to minimize the hardship placed on people who lose their homes. I imagine most people do all in their power to avoid this, and that they agreed to the loan with the full intention of eventually being able to pay it back. But despite their good intentions, they defaulted. It's not like this is happening to people who are you know... actually paying their loan back.
     
    Aldeth the Foppish Idiot, Oct 15, 2010
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  10. dmc

    dmc Speak softly and carry a big briefcase Staff Member Distinguished Member ★ SPS Account Holder Resourceful Adored Veteran New Server Contributor [2012] (for helping Sorcerer's Place lease a new, more powerful server!)

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    Sorry folks but I have to say that the "no harm no foul" concept is way off here. The banks that want to foreclose have options. I'm going to use California law (because that's what I know :p) to explain. When a person gets a loan, they sign a note and deed of trust. The note is the contract promising to pay back the bank, on whatever terms are agreed, etc. In and of itself, the note provides no rights to the security/collateral (i.e., the house and real estate). The deed of trust is the document that allows the bank to foreclose on its collateral. It is recorded with the county recorder's office so it is a matter of public record and anyone who is interested can see how your house is encumbered. There are comprehensive laws that provide exactly what the bank must do to avail itself of these rights, because, after all, it's taking your friggin' house, not just some money.

    In older times, the bank would need to file an action for judicial foreclosure, meaning that it would have to complete a lawsuit before it could take your house. As courts got gummed up with tons of cases and things slowed down, the banks weren't all too fond of this option. Thus arose the concept of non-judicial foreclosure. What that means, simply, is the bank doesn't have to go through the whole rigamarole of a lawsuit for foreclosure to grab your house. Instead of an action taking years, the process takes less than half a year if done right.

    The bank needs to send you a notice of default and record it. When you don't pay, it needs to send and record a notice of trustee's sale. Then it needs to have the sale. These things must be done exactly according to a comprehensive set of statutes, because, after all, the bank is taking your friggin' house, not just some money, and, this way, completely without court supervision.

    When the non-judicial foreclosure laws were put in place, they recognized that the banks were getting a massive advantage -- they didn't have to go through lawsuits any more. What's worse, they could basically take your house without the need to go through a judge or any real person with authority and, for the lion's share of unsophisticated borrowers, this meant essentially that the bank could do what it wanted, because they didn't know enough to hire an attorney to stop the process in cases of irregularity -- so, in essence, it's a virtual blank check for the banks.

    Massive benefits like that cost something. Here, they cost the banks a couple of things.

    (1) on purchase money mortgages (i.e., a mortgage you take out when you buy your house), a non-judicial foreclosure means that the bank can't seek a deficiency from the borrower. (If the person owes $500,000, but the non-judicial foreclosure only nets the bank $200,000, it loses out on the other $300,000. This doesn't apply in cases where there was a refi, or on second mortgages, etc., so, in this day and age, it's not that huge of a deal.)

    (2) the bank has to absolutely dot all "i's" and cross all "t's". This means that if it screws up the paperwork, it doesn't get your house. It has to do it right (it will eventually). Remember that the banks want this method so that they can quickly grab your house without spending legal fees. Why should they get this benefit, without most of the legal protections formerly provided to homeowners, if they can't even do the paperwork correctly? The codes for this one type of transaction take literally dozens of pages of my Civil Code. The banks have to get it right, or they have to go back to judicial foreclosures so that the guys and gals in the black polyester dresses can keep a close watch on them to make sure they are doing it right.

    The "harm" here happened decades ago when homeowners lost the right to have a court supervise the banks' grabbing their homes. The banks understood that if they wanted the speedier, unsupervised, remedy, they needed to get it exactly right.
     
    dmc, Oct 15, 2010
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  11. Aldeth the Foppish Idiot

    Aldeth the Foppish Idiot Armed with My Mallet O' Thinking Veteran

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    That's kind of what I was thinking though - if they didn't file it correctly, couldn't they just resubmit the paperwork correctly, and still take your house? I cannot imagine that it's a one-shot deal; that if you screw up the paper work once, they can still foreclose on your house, provided they correct the error, right?
     
    Aldeth the Foppish Idiot, Oct 15, 2010
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  12. dmc

    dmc Speak softly and carry a big briefcase Staff Member Distinguished Member ★ SPS Account Holder Resourceful Adored Veteran New Server Contributor [2012] (for helping Sorcerer's Place lease a new, more powerful server!)

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    Oh, it's not a one-shot deal by any means. If you aren't paying your mortgage, you will eventually get foreclosed if the bank wants to do that. But if they want to take advantage of the easy and quick way, then they damned well better get it right.
     
    dmc, Oct 15, 2010
    #12
  13. Chandos the Red

    Chandos the Red This Wheel's on Fire

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    They changed it in 1999, so that it became legal for them to overlap each other. Here is a timeline of events:

    http://www.pbs.org/wgbh/pages/frontline/shows/wallstreet/weill/demise.html

    To be fair, the impact of repealing Glass-Seagall has remained controversial. Both sides have an interesting story to tell, regading the Act's repeal and the current meltdown in the economy.
     
    Chandos the Red, Oct 15, 2010
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  14. Chandos the Red

    Chandos the Red This Wheel's on Fire

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    Why does it take a lawsuit to fix anything on Wall Street these days?

    http://www.msnbc.msn.com/id/41043127/ns/business-real_estate/
     
    Chandos the Red, Jan 17, 2011
    #14
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