Things are getting interesting and there are some really scary stats:
Foreclosure-gate is heating up and the mad scramble for what's left of $45 trillion in real estate is guaranteed to leave homeowners homeless, pension funds unable to pay their pensions and even some of the biggest banks insolvent. A great housing goat rodeo was created when some of the 65 million mortgages on U.S. homes didn't follow proper legal procedures;
* Fraud by homeowners who lied on their loan applications
* Fraud by banks who didn't follow proper legal procedures around the notarization and processing of mortgage documents
* Fraud by investment banks who packaged this junk and resold it to unsuspecting pension funds
* Pension funds promised returns to their pensioners they could never achieve
There's another very important wrinkle to this story. When the banks resold the mortgages, they didn't just send the paper work to the next bank after George Bailey signed it over to the Cleveland Teacher's Pension Fund. It went into REMICs (the Real Estate Mortgage Investment Conduit).
Somewhere between the REMICs and MERS, the chain of title was broken.
if the chain of title of the note is broken, then the borrower no longer owes any money on the loan.
Foreclosures can only be done by the note-holder, who has the legal standing to show up in court and ask the judge to foreclose and evict. In about half the states, they have to bring the ORIGINAL (not a photocopy or electronic version) document with "wet signature", so the judge can see the actual ink on paper. They have to prove the chain of title and that they own the note they intend to foreclose on.
BECAUSE IF THE CHAIN OF TITLE OF THE NOTE IS BROKEN, THEY WON'T BE ABLE TO FORECLOSE.
Once the people going into foreclosure figure this out, they will stop paying and hire lawyers. Some will keep their homes for free.
Once the people who have been paying their mortgages figure out they might not need to pay, they will stop paying.
Once the lawyers figure this out, they are going to be busy for the next five years helping people sue the banks.
Once the shareholders of the bank stocks figure this out, they will sell the shares.
Once the pension funds figure this out, they will also sue the banks and return their now junk MBS.
Once real estate buyers figure this out, they will stop buying anything with the potential for a tainted chain of title. The foreclosures will stop selling (many already have).
[ame=http://www.youtube.com/watch?v=9yhZBgi5NOg&feature=player_embedded]YouTube - DYLAN RATIGAN: FORECLOSURE FRAUD & $45 TRILLION DOLLARS[/ame]
The money quote (at about 8:50 in the video)...
> "Nobody in this country knows for sure who owns any real estate, residential or commercial."
Goes to show how rotten the process is.
The foreclosure sh*tstorm in the US is only getting started.
This could be the final straw for the financial institutions, the collapse will be epic.