Banks may not be able to foreclose

[BabylonHoruv]

http://www.alternet.org/economy/147901/could_a_legal_technicality_prevent_banks_from_having_the_right_to_foreclose_on_62_million_homes/

Personally I think this is really good news.  I'll be surprised if they don't end up changing this, but this squarely puts the losses for the housing bubble on the backs of the banks, who, through foreclosures, have been largely responsible for destroying multiple neighborhoods and nearly the whole city of Cleveland.

[Requia ☣]

Not actually owning the rights to a mortgage is hardly a technicality.  This isn't new though, and while it's helped a few people, how many people who are at risk of foreclosure can afford a lawyer to take this to court?

[BabylonHoruv]

Not actually owning the rights to a mortgage is hardly a technicality.  This isn't new though, and while it's helped a few people, how many people who are at risk of foreclosure can afford a lawyer to take this to court?

You don't need a lawyer to take it to court.  The more people that challenge foreclosures, with or without a lawyer, the more reluctant the banks are going to be to foreclose.  There are quite a few judges that are on the people's side, as opposed to the banks.

[East Coast Hustle]

Not really topical, but regarding the OP: the city of Cleveland has been destroyed for as long as I can remember, and it has little to do with foreclosures and everything to do with being a post-industrial slagheap.

[Disco Pickle]

"produce the note"

I told my sister to use this a year ago when they became upside down on their property.  It's a perfectly valid defense to stave off the bank forclosure.  If they cant determine who owns it, they have no claim in court.

Ultimately they ended up short selling the house, but it gave them the time to find a new place. 

[Adios]

That means hordes of victims of predatory lending could end up owning their homes free and clear -- while the financial industry could end up skewered on its own sword.


Justice?

[Requia ☣]

They would change the law if it became widespread enough to threaten the banks.

[tyrannosaurus vex]

If the banks can't prove they own your house, all you have to do is file a Quiet Title Action, which basically is a way to claim you own your house outright unless somebody else can prove otherwise.

So, why don't people whose mortgages are held by MERS do this proactively, without waiting for a foreclosure?

[Requia ☣]

because regardless of what the law says, it's a judges opinion that matters, and a judge will have a better opinion if you can't pay then if it seems like you just don't want to.

[Adios]

because regardless of what the law says, it's a judges opinion that matters, and a judge will have a better opinion if you can't pay then if it seems like you just don't want to.

A judge would also look at point of law.