A question from a reader on Foreclosure properties:
- a loan i have disputed over and over and finally entered a consented foreclosure agreement to settle with the bank and allow them to foreclose with no deficiency to avoid prolonged litigation.
- The home was worth $425,000 via multiple appraisals.
- The “too big to fail national bank” outbid everyone and paid $582,430
- The “too big to fail national bank” claimed we owed $582,430
MY POST REQUEST IS to please explain why and what mechanics cause the bank to bid/buy the property for the amount claimed to be owed, even though the properties appraised value is $160,000 lower…this makes no sense to us. They paid cash…why do they do this. There is no way in the next ten years the property will be worth any more than the appraised value. NUTTY.
Well dear reader…..you are touching on some of the darkest and most corrupt aspects of the allegedly public, judicial foreclosure process and the collusion between government entities and private corporations…the banks, investment companies, and other parasites that collude to take money from the general public, from the state and federal governments, rob local governments and all the while screw the individual consumer.
The judicial foreclosure process is supposed to be open, transparent and public. It is supposed to be overseen by an independent and neutral judicial branch. The end product of a foreclosure case is supposed to be an auction on the public steps where the market determines what is the true (wholesale) value of that distressed asset, the home that was in foreclosure.
But wake up toto, you’re not in Kansas and you’re not in any universe where transparency, integrity and the truth matter. You’re not in a place where our courts or the judicial process are given the dignity that they deserve. This is the completely out of control and corrupted world of too big to fail banks, who manipulate everything. “Our” courts have been and continue to be grossly manipulated. “Our” elected judges and the entirety of the civil justice system have been coerced and pressured by corrupt legislative and executive branches who accept their instructions from the banking cabals and the federal institutions that are in fact the governing bodies that rule this nation.
Nothing about the “public” foreclosure auctions are public anymore. In fact, the entirety of the allegedly public judicial foreclosure process is a facade that works to accomplish the final and ultimate goal….
TO RETURN PROPERTIES TO THE ACTUAL OWNERS….AND THE ACTUAL OWNERS ARE NEVER DISCLOSED THROUGHOUT THE FORECLOSURE PROCESS
In the vast majority of cases, “The Banks” do not own the mortgages and have nothing to do with them. “The Banks” are merely debt collectors, straw parties, stand in plaintiffs who are placed in lawsuits as plaintiffs to conceal the identity of the true party in interest. In most foreclosures the real party in interest is Fannie Mae, Freddie Mac and Mortgage Backed Trusts. These are ancillary operations of the federal government, who nominally own the underlying notes and mortgages, but even they are only straw parties for the real owners and the real parties in interest….the actual investors that own the tranches, the shares and the rights to collect the mortgage payments or the proceeds from the foreclosed properties.
The Great Lie perpetuated over and over throughout the foreclosure process is that, “THE BANK” is filing the foreclosure and “THE BANK” won’t give me a modification or short sale approval. Now one particularly interesting issue….”Why is it that Fannie/Freddie won’t issue deficiency waivers but others will?” Part of the answer is they are lying to Congress about the amount of liability they hold, telling Congress that they are X dollars in the red when the reality is they would be many times more in the red if they disclosed the true diminished value of all the destroyed properties or how much of their alleged assets are really deficiency balances that will never be collected.
But that’s way far afield. Here’s more of the detail. In my review of foreclosure auctions, THE BANKS take the property back in something like 80% of the cases at foreclosure auction….many times for amounts that far exceed what the property is worth. Let’s say a knowledgeable investor knows the maximum amount you could pay for the home at auction is $100,000 and still make a profit…why then does THE BANK bid the auction price up to $200,000? Well, part of the reason is insurance that underlies many of the transactions. (GSE insurance, private mortgage insurance, and government owned). But that only explains part of the story. There is clearly more to the extraordinary circumstance that 80% of foreclosed properties go back to THE BANKS who then sit on them or let them be destroyed or let a homeowner stay in them or just abandon them completely. Why is this? Why would THE BANKS just sit on tens of thousands of judgments and properties without putting them into useful use?
I have many ideas about this…one explaination is holding onto them to see if the value of the asset increases…but a vacant home particularly in humid Florida becomes a mold-infested tear down in just a few months. Now clearly in many cases they make a decision to let the homeowner stay just so the home remains occupied, cared for with lights and air conditioning on. There is a very significant issue regarding how THE BANKS are able to maintain property insurance on one of these homes if they take title and it is unoccupied, but that’s just another ancillary issue.
One interesting phenomena right now is I believe judges are punishing banks by forcing them to go to foreclosure sales and refusing to cancel those sales even when the banks and the homeowner want them to. I know our courts are tired of being pushed around, tired of being lied about and tired of being blamed for the foreclosure crisis that they did not cause. And so part of their reaction is….
I DON’T CARE ABOUT YOUR NATIONAL MORTGAGE SETTLEMENT, TAKE THIS HOME BACK AND YOU FIGURE IT OUT!
In some ways I get that. But now dear reader, let me share with you one benefit to your question…..when the bank bid up that property, they clearly did you a great favor….they likely prevented the IRS from coming after you for the mortgage deficiency…..that is the biggest issue that’s going to come home and haunt consumers for decades to come…..but when they bid it up, you’re off the hook
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The only reason I can think of is that the “bank” needs the foreclosure to avoid restating the loan to the investors in the certificates … perhaps they have the loan/note in more than one trust ,, a foreclosure with a deficit wipes out the actual investors interest in the cash flow… hides a theft by deception quite nicely. Just remember the old movie “The Producers” …
I will mail you a copy of the WF CTS-Link database from the middle of 2011 … it’s “archived” so you’ll need a program to open it … but there’s great stuff there … I’m sure you’re fighting a few “WF as TRUSTEE” suits … how would you like the trustees own report showing the note as performing a year or two after the alleged default?
1) This is irrelevant as it is inadmissible in any court. You would have to show how you got this information to use it- have a witness to form the basis to admit it at any hearing or trial. If you cannot admit it into evidence it’s really useless.
2) Florida appellate courts have already held the the homeowner has no standing to challenge the trust. The only parties to this contract are the trustee and trust, and only parties to a contract can challenge that contract. The homeowner does not fall into the “intended beneficiary of the contract” exception and thus cannot challenge any of this. Until this case law changes, what the trustee or trust did to each other cannot be challenged.
Common misconception that still floats around even to today.
But the ‘homeowner’ (who is nothing but a HINO a Homeowner In Name Only) because the mortgage and note simply called the so-called ‘owner’ the borrower/mortgagor and the Warranty Deed states the grantee is the TENANT, there is no ownership involved! Everything in written form states the ‘owner’ is not the owner. We are only verbally told we are the owner. The Florida Appellate courts as well as every State/Circuit court in Florida, are Also Traded as JUDICIARY COURTS OF THE STATE OF FLORIDA, showing in its comprehensive financial statements that it paid over half a million in federal INCOME taxes. What does that tell you? You are simply walking into a privately owned TRADING company that calls itself a court when it is anything BUT a court! These are for profit FOREIGN businesses, with investors profiting on every home stolen. Horace v. LaSalle holding states that the ‘borrower’ IS the 3rd party undisclosed beneficiary to the Pooling and the Servicing agreements. They are two (2) separate agreements, not one (1) as they like people to believe. And the 900 lb gorilla in the room, amongst many, is this: IF the ‘bank’ really was the owner of the property…why would it have to buy it at the auction? Think about that one very carefully. If you win a case and something is declared yours, why would you need to buy it? These foreclosures are In Rem proceedings which are nothing but forfeiture/salvage operations.
My thinking the reason is some accounting gimmick. Most likely its intrisicly linked to credit creation.
Certainly they are off the hook when the bank bids it up to the judgment value. That is one consolation in all this. It still makes me wonder how the bank can justify taking the property back when there are appraisals at lower than the bid amount. They will take this property and then place it for sale, sometimes at amounts less than the amounts bid at auction. I can get a few examples of this. How can that be justified? Is it to delay the reporting of the actual value? Is it to manipulate the numbers for PMI claims? I’d suggest that to refuse a decent short sale offer or an auction bid and then to sell later for less is a mismanagement in the least and who knows what at the worst.
It’s “their property” (at least in the eyes of the court and judgment) to do with as the bank wants. That is like criticizing a mother how she disciplines her kid. It’s her kid why does it matter??
There is nothing I am aware of- law, statute, case law, or national mortgage settlement, that says the bank MUST accept lower bids or short sales.
A lot of it has to do with PMI/insurance issues as well. Remember that a good chunk of loans are not insured and thus taking a low ball bid/short sale isn’t in the bank’s best interest.
There are also issues with PMI/insurance, as I have found out that deficiency waivers are not given where there is insurance involved. It may be something similar towards a low bid/short sale that for insurance reasons the bank simply is obligated not to do so by their insurance contracts.
Neidermeyer, I’d love to get a copy of that report and access to one for another lender. I could find plenty of work for Matt in that . Any chance I can get a copy?