I think Florida has a law against the government taking your home in a tax lien situation too. So this guy is basically squatting in a home he used to pay for that no one really knows, and is unlikely paying property taxes either.
That is a pretty good deal for him at the moment, but if it happens a lot, not only the banks will be screwed for not filing properly the deed to a 1.5 million dollar home, but the public schools will also be having massive revenue shortfalls because they still have to educate everyone's kids even when less people have the money to them.
This problem effects the public infrastructure and government services in a profound way that hasn't been adequately explained by the corporate media.
Karma.
Well the payments he was at sometime making go somewhere so that where is the mortgage clue.
Google could probably write their way to an answer in a few weeks.
Some of these stories have the feel of urban legend. Just sayin'.
I will look into the details of how the bearer mortgages {that is what they are, I look at them in the registry all the time, but I am not in the US, but under Federal controls} go missing.
Something about these stories sets off my BS bell.
Have heard that a very large percentage of this paper is actually lost, not traceable. Given how banks pass notes back and forth as I pass green money, am not surprised.
Yes, it's a huge percentage of the notes. Huge. They are scared shitless this will be headline news.
like rc, i think this sounds a bit far-fetched.
banks not holding onto papers that prove they own assets? maybe in a larry the cable guy movie...
but if it's true, more power to the free home-squatter.
One note, Joe Lents is a con man, and his "speech recognition company" was taken down by the SEC for being a Ponsi scheme.
skippy, its completely true.
you have to understand how much they sliced and diced these mortages to shave more money off the them.
some of these notes have been passed through 50-100 different organizations....
I personally dont know about mortgages industry in any other countries but the mortgages industry in the U.S. is enormous. At the end of 2005, there was in excess of $11.9 trillion worth of outstanding mortgage debt, of which residential home mortgage debt comprised the largest segment with over $9.1 trillion in outstanding debt.
NYT had a story a few weeks back on a real estate atty stopping 14 foreclosures at once for the same reason. The bank could not meet the judge's order to prove they actually own the note. Most poeple simply walk away and don't contest foreclosures.
I was just telling a friend about this yesterday.
It's kind of a cool deal if you can get it, but it sounds like it could also be a pain in the ass. Wouldn't this preclude you from selling your home or passing it on to your kids when you die?
You'd think they could just subpoena a borrowers bank statements and maybe work back from there.
It's funny to imagine bank traders buying and selling these things willy-nilly as their back office staff rifle thru the drawers to find the actual paperwork to conclude the transaction. And then the company that bought the mortgages accepting shipments of documents for 1000 houses built all over the place. Does anyone think people actually go thru the papers once they're received? It seems perfectly plausible to me that paper would inevitably get lost in such a system.
Hubris is precisely on point. Pay attention.
These slices, called "tranches" are packaged, often disguised, and sold in packages world-wide. The Asian and European markets are being clobbered. Thank you, United States.
Because they are hidden so well, the banks lose track. If the bank can't prove you own it, you're golden. If you get in trouble, make them prove it. Don't take anyone's word. Make them prove it.
Odds are probably 70/30 they can, but hell, that's 3 chances out of 10 you keep your house.
Changing the subject just slightly, those of you who have worked for U.S. companies...
Have money in your 401K in a nice stable-value money-market fund? I don't mean short-term treasuries, but long-term 3-4 year notes backed by an insurance company.
VERY good odds an entire PILE of those "secure" notes are actually disguised CDO's, that's Collateralized debt obligation, sold as "tranches", some of which are senior, some of which are not. (Read the above link for much greater detail.)
To get a sense of the detail of the crisis, I highly recommend the part of the above linked page called Subprime mortgage crisis.
Bottom line, your 401K money-market account, could very well be based on such CDOs. Only actual short-term money-market instruments, are insured by the U.S. government. Your typical stable-value money-market fund at your 401K, the one you fled to in order to escape the crashing stock market?
From the frying pan to the fire, my friends. You're now sitting on top of a PILE of CDOs, just waiting for them to eat your oh-so-safe money. Depending on who they are with, and how much of your money is exposed, it could be as much as 10, 20, 30-50% of your money... whoosh.
Don't expect the government to jump in and save you, either. These funds are not government backed. Only actual certificates of deposit are government backed. Of course, withdrawing your savings from your 401K is not allowed, and would cost you an enormous tax penalty.
Damned if you do, damned if you don't. 'Cause the stock market ain't very hot right now.
You could consider a true money market fund, one with genuine short term financial instruments. Interest is for shit, but at least you're holding actual cash.
As always, ACT AT YOUR OWN RISK. I am not a financial or stock or bond adviser or licensed in any way, it's your money and future, I don't know your tax situation, and I disclaim any results of any action you take.
Good luck.
I have read previously that fixed income funds in particular occasionally and quietly buy more risky products to goose their returns. However, I think 401k funds spell out in the prospectus how much money is devoted to, say, fixed income instruments, the (often useless) ratings of said instruments, etc.. Aren't they also required by law to limit their exposure (
Billy Joe, for how many notes will they try and track it down?
1,000?
100,000?
they fucked up big time...
Billy Joe you still own your house, and you are the one that the tax man will come to see..that info is in the title that the county holds....the mortage docs the banks hold and if they lsoe them..well tough shit...if I lose my ticket ot a ball game, or winning lottery ticket i am SOL...same is true for the banks...if they can't prove that you owe them money you don't owe them money.
Not surprised. Long time ago I worked for one of those companies that insures municipal bonds, lets call that company Cabma. Anyway, Cabma was buying out a much smaller business and about a dozen of us were to go through the bond records of that company.
Each bond had a folder and we were to see whether they were complete and conformed to Cabma standards. We were to note what was missing and enter the data in a database. I think we were using DBIII on the pc. About half the time they were not complete. For example, I remember looking through a folder which were to contain the insurance details of a 7 million dollar bond of a playground for a city in Colorado. Most of the required documents were missing. Weeks later, I come across those missing documents in a folder which had the details for completely different bond.
The folders were in one room and the people in charge were college students hired for the summer. I remember seeing papers falling out of folders and then being put back into a folder, any folder.
HS, skippy - it's not just the notes on real estate, there are similar issues with vehicle loans too.
A friend recently declared bankruptcy, and was waiting for the day someone would come to reclaim his car. After 4 months or so of trying to find out through his attorney who actually helpd the note, and from whom he could expect to be notified that it was being repossessed, he was told "we don't know." The 800 number on the bills he stopped paying was inactive (we're sorry, your call cannot be completed as dialed, etc.).
I'm told that he's finally been told who has the note, but it took more than 6 months for that information to surface. And during that time, both he and his attorney had been independently and actively trying to find that information.
"It's a fact that through the relentless re-packaging and re-selling of thousands of these loans many banks have lost the paperwork on the houses they own."
Guess they never heard of these newfangled things called "databases" and records storage facilities. Sure, the notes eventually got sliced and diced in the scumbags' scheme, but we're talking about the original deeds held by the banks. For the smaller operations, a clunky Access database, a dedicated junior staffer and machine, a scanner/printer, and a contract with a document storage outfit eight years ago would have saved them 10s of millions now. But of course, that kind of expense looks bad on the quarterly. lol
These bank executives were incompetent in so many ways. Notice, though, how the most senior ones are either kept on, or traded back and forth between companies (sort of like bad loans).
As for Joe Lents, he hit the jackpot. Not because he got himself a free house, but because he gets to brag about putting one over on his big fat mark in the national press. That's worth even more than the house to the kind of guy who runs Ponzi schemes.
I have worked both in the pharmacutical industry (hard core FDA regulations, fallow the SOP to the letter or you go to jail type stuff) and the finacials industry (first banking, now insurance). the folks in the finacials allways drop the line "you have to understand, we are a regulated industry" when I mention how ass backwards some of htere practices are....they don't understand why I laugh so hard and so long after i hear taht line.
I have never seen a usefull SOP once in the finacials, more over there is no true QA, there is no complicance validation...no one checks to see if you falloed the sop and you dont' actualy have to sign anything.
records managment is basicly a joke, at least banking has a good DR infurstructure, insurance dson't even have that.
I have seen the state of the finacials IT, i can beleive that they lsoe docs all teh time.
Umm, everyone should probably check out this post over at Calculated Risk which is where I first saw this story a couple of days ago. It puts the newspaper story into context and tells you why what this douchebag is doing isn't quite as "teh awesome" as you might think:
http://tinyurl.com/25dgnc
Here is the full url, but I wasn't sure if it would display properly:
http://calculatedrisk.blogspot.c...eletons-
in.html
Aluvius,
Thank you so much for the follow-up link--VERY NECESSARY context there.
And fuck me sideways with a rusty kerosene can if one of the dotbombs that I once worked for got major backing from...yeah...you guessed it...Investco.
Funny how turds of all types all wind up stuck together at the bottom of the bowl...
whoops make that read "...if one of the dotbombs that I once worked for DIDN'T get major backing...."
heh.
Moonglum,
As someone who now works at a huge pharmco and used to be on Wall Street, I hear you. You want to see unsecured boxes of files and other crap piled to the ceiling with no rhyme or reason other than sticky notes made by a "lifer" at the firm, go to any small white-shoe brokerage boutique firm.
OTOH in pharmcos, not only is our SOP training mandatory and automated, but we have to sign loads of shit attesting to our methods and what we are trained in.
Quarterly.
As in failure to comply with training is automatic grounds for termination after one warning. As in "oh fuck I forgot to take the online training for CP-XXX, sorry boss," Boss says OK you have 30 days to get that shit clear in the system and print out your confirms in case of any discrepancy between the system's records and our records or we HAVE TO FIRE YOU because the FDA says you MUST have this training in your job function, PERIOD.
Jus' saying.
Thanks for the article, Aluvius. Well worth reading. It confirms what I thought:
1. Washington Mutual (the original note holder) was lazy, cheap, and cut corners when it came to documenting their property. One of several reasons all those (fool's) gold bars turned into doodys.
2. Donaldson Lufkin Jenrette (who ended up holding the bag of turds at some point after WaMu sold them) failed massively in their due diligence when it came to this ultra-risky "investment".
3. A sleazy character with money to spend on lawyers and experience in "creative finance" stumbled upon facts 1 and 2 when he tried to re-finance, did a quick cost-benefit analysis (90% discount on my house! Woo-hoo!) and took advantage of the situation.
At this point, we probably have DLJ playing the role of the Norwegian Village Pension Fund and WaMu as RSG Investment Bank at the end of the slideshow I linked to above: "Fuck You" ... "Fuck You!"
Meanwhile, Lents will probably dash off a quick pamphlet called "Break the Bank: How I Got a Free House, and How You Can Too!" and sell it to greedy suckers at the Boca Raton Holiday Inn. A few seminars and his attorney fees are covered. The American economy, on the other hand...
"I think we were using DBIII on the pc." [crosses self, spits, turns around 3 times]
It was not just Washington Mutual. Thats what people in NY are telling me.
Jen I was with Abbott...man the struckture was tight...very thight...installing windows on a box had 32 steps, you ahd to initial every step , and a tech reviewer had to initial every step to show that it was compleated correctly. Made sure everything got done right.
to give you an idea of the banking world...ATM transactions whent as clear text across the wire, some eve ntravled via the interent fro matm to bank...anyone hooked into the banks network could snoop traffic and scoop up card numbers and pin numbers...it was realy realy bad...major project for high end clinets, we knew it wasn't ready to go out..they told us to release it anyway and firefight as you go...its very bad.
No finance wizard here, but Wash. Mutual who purchased my mortgage from Dime S.B. could not come up with my co-op apartment papers when I went to sell. After many promises to deliver the sale proceeded with a Lost Certificate Affidavit. Seems they worry more about the Benjamins than the paperwork.
I get a delicious feeling of schandenfreude every time I hear about a financial institution getting screwed by their own greed and incompetence. Lents may be a grade-A schmuck and a con-man, but he won this one fair and square.
Jen, really interesting stuff you've got there!
I personally think that the current s##t capitalism with the repackaging of mortgages etc. is like a snake eating its tail.
I'd like to hear though more about the early dotcom stuff, how it was funded.
as a not, smart money is bettign that wamu is the first bank to fold in this mess...
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