Do I Smell A RAT???

As anybody that has listened to the news or read the newspaper lately, I'm sure you have heard about the major banks stopping foreclosures.  Well, let me clarify......the banks didn't stop themselves, they were stopped by judges.  In other words, they weren't playing by the rules, and some judges slapped their hands.

Now, I'm not sure I understand it all, but I'll try to explain it in plain english.  Several banks formed an "organization" known as MERS (not sure what the letters stand for) that assists these banks in transfering blocks of loans between each other.  To this day, I don't understand why they keep buying and selling these blocks back and forth.  Why not keep the loans you did?

Anyway, when these blocks get transferred from 1 bank to another, the title has to be transferred to the new bank.  Now, this is true for some states, but not all (more lawyers just got a new job).  When the title is transferred, it has to be recorded at the courthouse, and a fee paid.  Well, MERS was set up to get around the new title and title fees, thus saving alot of time and $$$$$$ for the big banks!

Well, somebody got one of these transfers in front of a judge, and the ruling was that the new bank doesn't own the loan, without transferring title.  Does that mean that the new bank doesn't have the right to collect the loan payments?  As you can see, this goes deeper than most of us knew.

Now, I am not against foreclosure.  If a person fails to make the payments, the bank has the right to foreclose.  But, with everything else going on today, the banks also need to back off some and use some "common sense", which I think, is in short supply today.

And then, you have the homes that were bought in 2005-2007 at market value.  And now in 2010, the value of the home has dropped from 5-35% (depending on where you live), and the homeowner hasn't missed a payment.  Now the owner wants to sell to buy a larger home, or has a better job offer and needs to move, BUT owes more than the home can be sold for!  What do they do?

That brings us to short sales, a different subject entirely, and will be discussed more at a later time.

If you have any questions about MERS or the banks stopping foreclosures, don't hesitate to email or call me at 804.712.8801