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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