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An opening for D.C. foreclosure challenges

D.C. Attorney General Peter Nickles this week created an opening for potentially tens of thousands of homeowners to challenge their foreclosures. He issued an enforcement statement emphasizing that District law requires that the assignment of a mortgage from one party to another be recorded within 30 days of the transfer.

This is a problem because many of the country's biggest mortgage companies list MERS, or the Mortgage Electronic Registration System, as the mortgage holder -- rather than the actual owner of the mortgage -- in local deed offices.

MERS is a computer tracking system for mortgages set up by Wall Street to help speed the process of transferring mortgages as they were bundled and sold and then resold in the securitization process. That allowed the companies to track their ownership of loans electronically rather than having to go through the labor-intensive and expensive process of filing paperwork each time a mortgage was resold.

There have been numerous legal challenges regarding the role of MERS in the mortgage assignment and foreclosure process across the country, but the issue remains unresolved. Some courts have upheld the right of MERS to conduct certain transactions while others have ruled that it has no standing.

Nickles explicitly stated that, in the District, the requirement for recording every transfer of mortgage "is not satisfied by private tracking of mortgage interests through the Mortgage Electronic Registration Systems."

"A homeowner should not be misled into believing that a threatened foreclosure is supported by the District's public records when it is not," Nickles said in a statement, explaining that such practices are a violation of the jurisdiction's consumer protection law.

Nickles said such violations may provide a "good basis for challenging the foreclosure in court" and encouraged homeowners and advocates to contact the attorney general's office so that it "may consider bringing enforcement actions to stop foreclosure proceedings and seek restitution for consumers."

By Ariana Cha  | October 30, 2010; 10:55 AM ET
Categories:  Housing  
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Comments

This is a silly waste of time and resources.

It might buy the current owner some extra "free" time in the house, but it's clear that the person who isn't paying their mortgage doesn't have a legal right to keep the house.

Prolonging the problem isn't fixing the problem.

Posted by: postfan1 | October 30, 2010 12:00 PM | Report abuse

Let's just all of us become deadbeats and not pay for anything.

Posted by: Anonymous | October 30, 2010 12:29 PM | Report abuse

Looks like somebody is trying to keep his job.............

Posted by: Jsuf | October 30, 2010 2:37 PM | Report abuse

common thugs and gangs pay cash.public housing is not a problem.slum lords kick back to dc govt.leaves us with whitey moving back and buying crapholes as fixer uppers,and try to flip them.

Posted by: pofinpa | October 30, 2010 3:57 PM | Report abuse

This is not a silly waste of time. Its pulling back the curtain and disclosing that the banks that are taking our neighbors homes don't hold the paper upon which they are foreclosing. Those that do hold the paper, bifurcated it from the mortgage by naming MERS as mortgagee and it is now unsecured debt that can be discharged in bankruptcy. What the lender fraudster servicers don't want America to know, is that the foreclosures they have been conducting all accross the nation are for the most part illegal.

Posted by: its1 | October 30, 2010 4:36 PM | Report abuse

Simple, file a Rico action against the servicer and the note holder. Then watch all h__ll break loose.

Posted by: wesatch | October 30, 2010 8:44 PM | Report abuse

I agree that this is not a "waste of time." Only the lender holding the current paper will report the foreclosure to the credit bureaus, often leading to misrepresentations on the mortgagee's reports. To default on a mortgage is hard enough on a homeowner, but to suffer the effects of a foreclosure longer than is required (often up to a year and a half longer) is unacceptable. By requiring the land records to be current prior to foreclosure, Nickles is ensuring that the foreclosing servicer or lienholder is bound to comply with other diclosure requirements, as well.


Brian V. Lee, Esq.
Foreclosure lawyer in DC
http://www.lee-legal.com

Posted by: brianvlee | October 30, 2010 8:44 PM | Report abuse

great to see brave D.C. homeowners fighting the banker-felons who are blithely seizing tens of thousands of homes per week, year after year. Some six million properties will be stolen over the bust, Goldman Sachs estimates (and they should know!!)
Stand strong against the banker-felons. Hire a lawyer if you have to and question what is done, in what order and by whom.
Say "thanks but no thanks" to a banker-felon who asserts "well, you owe someone some money" and be SURE not to take the gateway drug, a temp modification.
Stop paying if you have to, I have. Wait for proof of who is owed what, pay your taxes and insurance and maintain and secure your home.
It will be a bumpy ride. But hold the line.
Fight back and speak truth to power.

Posted by: Anonymous | October 30, 2010 8:56 PM | Report abuse

Interest rates are simply incredible on mortgages right now. It's not uncommon to see 30 year rates down in low fours and 15 year rates in the threes. Week after week, the rates keep dropping If you are looking for rates in three then search online for "123 Mortgage Refinance"

Posted by: Anonymous | October 31, 2010 12:58 AM | Report abuse

Ayone familiar with fraud investigaions knows that the paper irregularities of these banks and financial services outfits raises all sorts of flags. Some of them, at the very least, are likely guilty of criminal acts and should be prosecuted and made to buy back those mortgages and the executives and staff prosecuted. White collar crime and predatory corporate acts is something this country has not paid enough attention to.

Posted by: mibrooks27 | October 31, 2010 1:08 AM | Report abuse

It is disappointing to keep seeing people post comments blaming homeowners for their irresponsibility, but not considering the blame that can be placed on irresponsible lending, supported by irresponsible government who bailed them out along with the irresponsible "securitizers" on Wall Street.

Posted by: webadmin | October 31, 2010 1:50 AM | Report abuse

THE LOST ART OF ETHICS, DISCIPLINE AND TRUE JUSTICE

I notice a very interesting phenomenon in our Society. It is showing up in every blog, article, interview and comment section I read regarding the foreclosure situation in America. But it is pervasive in other areas of our Society.

I invite your attention to a new way to look at this situation. Step back for a moment and consider this:

I am 51 years young. When I was a kid, if I walked into a record store and stole a 45RPM single everytime I visited that store. Sooner, than later, I'd be caught and I'd be in trouble.

Fast forward to 1999. Napster, which used computer technology to make it easy to steal music, created such an impact (started by a single college student in his dorm)that within 11 months of its emergence on the Internet, 600 (Six Hundred) Record Stores around the U.S. closed their doors. Six Hundred.

See any Towers Record Stores in your neighborhood anymore?

Now here is the exact point I'm going to make:

Ask many kids if they illegaly download music today and they will say yes. And now the clincher - as them why. Many times you will get an answer such as: The Record Companies rip artists and the public off so why shouldn't I be able to download music for free?

It's a very dangerous "EYE FOR AN EYE" and "TOOTH FOR A TOOTH" criminal mentality. People who don't pay their mortgages are getting something for nothing. That's the definition of criminal behavior. Banks which get interest and penalty payments and hidden double-dipping commissions and houses and MONEY for free are getting something for nothing. That's the definition of criminal behavior.

If the Banks are acting Criminally - then file a lawsuit in Federal Court (I am doing so myself) and get the criminals put behind bars.

Don't become criminal yourself and stop using the justification that the banks did it so you can too. That's total B.S. and the only reason you are able to get away with talking that way is that the internet, as powerful as it is, is prone to very low moral and ethical levels of activity and communication without a balance of discipline and moral teachings.

Until we get the money system straightened out, keep your own hands clean and make enough money yourself to not only pay your mortgage, but a good attorney who can help you bring down the criminals (there are only a few - the Corporations are not criminal - only a few who seek to destroy anything and everything they come into contact with - such as Andrew Mozilo and friends. And look what happened to him - slapped on the wrist and made to pay $65,000,000 in fines - chump change for him. But NO REAL JUSTICE - He has no remorse and is not making up the damage.

Don't become an Andrew Mozilo yourself.

If you use the justifications that the Banks are doing so you will too - then you are lower than a Bankster.

Make ethical behavior popular again.

WAKE UP PEOPLE.

Posted by: Anonymous | October 31, 2010 5:01 AM | Report abuse

Wow, looks like some of the teabagger contingent in the early comments here. Yep, cheerlead for the Wall Street class in their ongoing efforts to rob the middle class blind. You folks are being led around by the nose by billionaires and are clueless to that fact.

Posted by: kbman | October 31, 2010 11:14 AM | Report abuse

It seems to me that by breaking the security interest, the banks have created room for bankruptcy judges to cramdown what they were prohibited from statute to do.

Posted by: Anonymous | October 31, 2010 12:33 PM | Report abuse

This is good, banks lend money to people who want to buy homes and want to use the home as security for repayment of the loan. The bank is willing to lend money because house prices usually increase over time due to inflation and because the financial system ensures bank will be able to transfer mortgage packaged in large bundles to investors and spread risk, and, in case of default, bank will likely get its most of its money back through foreclosures and deficiency judgments.

The financial system invents MERS so that each time a bundle of mortgages gets transferred between investors someone doesn’t have to run to each courthouse for every mortgage in the bundle (hundreds and even thousands of mortgages per bundle) and record a transfer and pay the recording fee, usually about $30.00.

Now banks are not going to be permitted to foreclose on deadbeat borrowers who have failed to pay their loans for months while continuing to live in the premises, or who have trashed the places long ago and moved on to reside elsewhere, until they get the full chain of mortgage transfers recorded.

With a little luck, under this policy, no lender will be willing to lend to anyone in DC unless they first receive a fee of several hundred dollars or even thousands of dollars to cover the expenses of all future reasonably anticipated transfers of their mortgage.

This is can’t be greeted as “good” news buy those who make payments on their loan and may wish to have new mortgages or refinances in the future, but it should be music to the ears of all those who presently have mortgages and don’t intend to pay. Meanwhile all those who have money on deposit in banks where they are receiving interest of less than 1% on their savings need look no further than this story to see how we are engaged in redistributing wealth from those who have it to those who don’t, and from those who have been responsible to those who haven’t been responsible.

Posted by: droberts57 | November 1, 2010 10:12 PM | Report abuse

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