Massachusetts Supreme Court Blows Whistle on How the Banks Broke the Housing Market | |
By: David Dayen Wednesday October 19, 2011 11:03 am |
I should have given the Bevilacqua case a bit more attention yesterday rather than sticking it in the Roundup. It represents the nightmare scenario we all expected to come to pass.
This is the securitization fail we’ve all been dreading. The banks have broken the housing market utterly.
So, as Charlie Pierce puts it, Mitt Romney’s quick fix for the housing market, to foreclose everywhere and let investors buy up the homes and rent them back out to the dispossessed, couldn’t possibly work. The investors or really anyone who buys a foreclosed property cannot be certain that they have a legitimate right to them. It also has implications for the plodding foreclosure fraud settlement; Massachusetts Attorney General Martha Coakley, among others, has distanced herself from that.
The government can keep moving along with inadequate settlements that will “get the market moving again” (they won’t, and Adam Levitin has the definitive piece telling you why). GOP candidates can speak a lot of gobbledygook signifying almost nothing. But the truth that precious few want to admit is that the banks stole a bunch of homes. And they’re trying to pass them off to other people with phony documents. “This is a guy selling you a lemon of a used car, or inadequate aluminum siding,” as Pierce says. It’s pure fraud of the largest market in the world, the US residential housing market. And the Massachusetts Supreme Court is blowing the whistle.
Think about that. Banks that failed to convey title during foreclosure have clouded the title of any property for the foreseeable future, meaning that whoever buys up the foreclosed property may not be the legal owner. And extrapolating that out, all the homes across the country where the banks failed to convey title properly through securitization have clouded the titles there. That means tens of millions of homes pretty much have no legal ownership chain.The highest court in Massachusetts ruled that a homeowner who bought a foreclosure that hadn’t been properly conducted by the foreclosing bank in 2006 didn’t have legal ownership of the property.
The decision by the Supreme Judicial Court casts a cloud over the legal ownership of any properties in Massachusetts where banks didn’t properly convey title when foreclosing. The problem has gained attention nationwide because of banks’ use of “robo-signing” and other dubious practices that may have broken chains of title on foreclosures.
This is the securitization fail we’ve all been dreading. The banks have broken the housing market utterly.
So, as Charlie Pierce puts it, Mitt Romney’s quick fix for the housing market, to foreclose everywhere and let investors buy up the homes and rent them back out to the dispossessed, couldn’t possibly work. The investors or really anyone who buys a foreclosed property cannot be certain that they have a legitimate right to them. It also has implications for the plodding foreclosure fraud settlement; Massachusetts Attorney General Martha Coakley, among others, has distanced herself from that.
This also gives ammunition to the various community groups who are challenging foreclosures all across the country, fighting evictions with a “Sword and the Shield” strategy.And now, the Supreme Judicial Court in Massachusetts has given Coakley, at least, some real ammunition. The decision says that, despite what “turmoil” may result in the housing market, the Court is demanding an explanation for the various gorilla accounting practices and whimsical record-keeping that resulted in the banks’ essentially stealing homes and selling them off, as though they were guys peddling Rolexes that “fell off the truck” on card tables along Fifth Avenue in New York. Coakley’s pretty fed up, too. “This is yet another clear demonstration that the only way we are going to restore a healthy economy is to address the foreclosure crisis and hold the banks accountable for their actions,” she said in a statement released yesterday. The Court’s decision clears the field for her to do that.
If the ownership cannot be proven on the home, it bolsters this strategy significantly.“The Sword”. Encouraging residents to stay in their homes, and to make their stories public, we organize blockades, vigils and other public actions to exert public pressure on the banks. The sword works together with:
“The Shield”: We inform bank tenants of their rights and work with legal services & progressive lawyers, to use aggressive post-foreclosure eviction defense to get eviction cases dismissed, win large move-out settlements (if it makes sense for that family/person), and force the banks to reconsider foreclosure evictions.
The government can keep moving along with inadequate settlements that will “get the market moving again” (they won’t, and Adam Levitin has the definitive piece telling you why). GOP candidates can speak a lot of gobbledygook signifying almost nothing. But the truth that precious few want to admit is that the banks stole a bunch of homes. And they’re trying to pass them off to other people with phony documents. “This is a guy selling you a lemon of a used car, or inadequate aluminum siding,” as Pierce says. It’s pure fraud of the largest market in the world, the US residential housing market. And the Massachusetts Supreme Court is blowing the whistle.
The banks are going to end up eating this.
I just can’t see anything else.
That’s a lot of fraud that both parties are trying to ignore.
The title insurers will go bankrupt and the poor schlubs will still wind up without a house of the money they paid for it.
Bottom line, the erstwhile new homeowner has a tort against the seller, and the title company. Since fraud is involved there are additional damages that can be claimed by the ENHO because they were told that the home was indeed available to be sold when it wasn’t. This would be in addition to the DA deciding to prosecute for grand theft or wire fraud or RICO, or any number of other state and federal laws. “St” Ronnie sent the S&Lers to jail for destroying that market, by the hundreds. Time for more of the same.
It’s all the fault of the poor black people!
It’s all Fannie & Freddie fault!
Add to my scapegoat list. I’m sure I missed some faves.
I don’t suppose that the vultures will get caught in this. Oh no no no no no. They flipped the houses too quickly. They, as usual, get off scott free.
That’s good for the resident, but it sure does F Up the housing market. For years, until every one of these properties gets sorted out. Not to mention puts a lot of liability right back where it belongs, on the crooks who bundled all these mortgages together and never did what their prospectuses said they would (actually transfer the mortgage).
it will be a good lesson in the true corruption of the American system – how this all gets made OK so nobody who made money off this scam has to take any losses. It will make a Cirque d Soleil contortionist look like an iron beam.
For starters.
The solution to the eurozone crisis is for Europeans to work harder and for longer, rather than being cushioned by the welfare system, said Jin Liqun, chairman of China Investment Corp, China’s sovereign wealth fund. He warned on Wednesday that Europe’s fundamental problem was that its workers were simply not productive enough.
“The root cause is the overburdened welfare system built up since the second world war in Europe: sloth-inducing, indolence-inducing labour laws,” Jin told Channel 4 News. The average Chinese working week is nearly 48 hours, the maximum allowed under European law. “We work like crazy,” said Jin. Graeme Wearden
Jaango
“Title Companies got bailed out!
We got sold out!”
I doubt it will be homeowners — previous or current — that will receive any sort of help.
And, as soon as Title Co’s start to feel the heat, that will depress the housing market even more, because who wants to buy insurance from a company that might go belly up any second? Thank god for the state AG’s who didn’t go along with the settlement ideas, so there’s still a prayer that a few banks will pay up a very small fraction of what they need to.
Guess you weren’t paying attention 3 years ago.
I wonder what the “savvy businessmen” are going to say about that.
Think how many scoundrels in congress will have to go for the banks
to be held accountable.
A few years down the road, if a true owner is identified, the taxes due will be enormous! And, what about inheritance laws and succession? What the banks did just totally gums up the works!!
I’m surprised our resident trolls haven’t swanned to this post to adjure us on how it’s always & only the fault of the lousy lazy 99%. Banks are blameless… yadda yadda…
Apparently, Germany has done extremely well with national banks.
http://www.alternet.org/economy/152736/what_we_can_learn_from_germany%3A_how_countries_with_publicly_owned_banks_do_better_than_america/?page=4
“The example of Germany shows that even success is no guarantee in the face of a relentless onslaught of propaganda by large privately owned banks interested only in making money for their CEOs, wealthiest clients and shareholders. But peering behind the propaganda, the public banking model that helped underwrite Germany’s economic success might be the fast track to a US banking system that serves Main Street rather than Wall Street.”
Thanks.