Did anybody see 60 Minutes about underwater neighborhoods ?

[Frank Jameson]

I propose a solution.

Now that the banks have been bailed out -- the government should move in to bailout the underwater mortgage holder. I'd suggest the underwater" loss amount be split three ways. 1/3 by the homeowner, 1/3 by the bank and 1/3 by the government.

Let's say in 2007 a bank approved a $100,000 loan on a house valued at $110,000. (which was valued at $80,000 the previous year).

The house is now valued at $70,000. For a $30,000 underwater loss. Force the bank to re-write the mortgage for $80,000. The owner loses $10K. The government will give the bank $10K. Making the banks total loss $10K.

That way, instead of the bank, the owner and the neighborhood losing BIG -- everybody will lose a little. But all will be much better off. Including us taxpayers -- and neighbors.

I read that there are eleven million underwater mortgages. At an average of $30,000 loss per mortgage, this bailout would cost the taxpayer about $330 billion. Less than was given to the banks. At least no bonuses will be paid out of this bailout.

[me b zola]

1. I have a different proposal

All mortgage lenders have 30 days to present physical mortgage of all homes they say they have claim over. All homes that the lender cannot prove they own with physical document will be signed free and clear over to the home owners.

Banks have been crying that illegally taking people's homes is costing them money, so they should be glad that we are unburdening them of these homes. Homeowners can now breathe and nearly all will be able to pay their taxes which will stimulate the economy.

Problem solved. You're welcome.

[ellenfl]

3. the banks need to produce the original promissory note,

not the mortgage. the mortgage is not the negotiable instrument. it is the recording of the mortgage that has value, not the document itself. the promissory note is the obligation to pay. the mortgage just secures that obligation.

many people don't realize this and capitulate before the bank comes up with the original promissory note, which apparently many of them cannot produce.

ellen fl (real estate paralegal)

[me b zola]

7. Thank you for the clarity

I did mean promissory note, but I had posted after being up all night so my post suffered a bit for it. I do, though, stand behind the basic proposal that I posted: banks have 30 days to present the original promissory note or the home is signed free and clear over to the homeowners.

[ellenfl]

14. it frustrates me that the msm continually gets this wrong.

many reports specify that the mortgage document cannot be produced but the mortgage document is not important once it has been recorded. it's the promissory note that establishes the debt and the recording of the mortgage that establishes the lien. most people think the inability to produce the mortgage document is what is at issue and that is not correct. anyone who ever financed the purchase of property can produce an original mortgage document but that does not mean the lien has not been released or that the debt has not been extinguished. i think the promissory note is much harder for the banks to produce. i think if more people knew this they would be more inclined to ask the bank to 'show me the note'.

the banks have had it too easy. but what do i know? when i worked in lending i always told delinquent clients that the bank didn't want to foreclose because they weren't in the real estate business! now we're seeing bank-owned houses being bulldozed.

just a clarification, not a criticism of the op.

ellen fl

[SixthSense]

2. that's just another bank bailout

"homeowner" help programs don't exist to help homeowners, they exist to bail the banks out of their bad bets. The banks have gotten too much of our money already, they need to eat their losses and be shut down if those losses render them insolvent.

The only real resolution is to let prices come back down to historical levels (and lending standards back up to those levels) - this makes housing affordable, which is supposed to be the mission of Fannie, Freddie, etc. Throwing more money into the abyss doesn't help - a lot of people bought a lot more house than they really could afford, encouraging more of the same just extends the pain.

This is to say nothing of the ethics of taxing non-homeowners so that homeowners can increase their own private equity.

[Frank Jameson]

6. Normally I would gree with you....

when you say .... "of taxing non-homeowners so that homeowners can increase their own private equity."

But these are not normal times. That 60 Minutes segment showed how the city of Cleveland O. was having to destroy over 1,000 houses at a cost of $10,000 each. Taxpayers are having to pay for that.

It would benefit everybody in town if the mortgages were "adjusted".

[femrap]

4. I'd rather the banks go

underwater. They made the loans, let them take the loss.

And to ask taxpayers to pay for people who used their homes as ATMs isn't right.

I remember when those were 'invented,' and thought people who do that will lose their homes....but they wanted to consume.

[Frank Jameson]

9. What I can't understand is ..

why the banks are walking off and leaving these houses in Ohio. In normal times, they would end up owning them and later selling or renting them. Not any more.

Which forces the city to destroy them.

[femrap]

11. I think they want entire neighborhoods

to do under so the Rich can develop the land into whatever....condos, entertainment facilities.

Not renting them keeps people homeless, poor, and living w/ family members or friends...it creates Serfdom! And we are the serfs. Remember how W pushed housing for everyone? The rich want to destroy everyone who is NOT rich.

They don't it the Former Middle Class for nothing. Sad.

[ms.smiler]

13. Frank Jameson, you are at the point where I started, just over 3

years ago. As a business person I know darn well no one leaves money on the table, especially in the financial industry.

I remember being puzzled about how these companies could leave some properties to deteriorate to the point they were uninhabitable. If the money wasn’t in the bricks, where was the money? That’s when I learned about securitized mortgages.

The banks never funded mortgage loans, never owned the Notes and were never owed any money. People associate mortgages with banks and since most homeowners lack an understanding of securitized mortgages they persist in associating mortgages as money owed to banks.

Homeowners never realized it, but their Notes were sold off to Wall Street and converted into mortgage backed securities. Investors in some Trust actually funded and owned the loans.

Remember the financial crisis in 2008, when the failed MBS market crashed the economy? That’s when trillions of dollars of failed MBS was sold off to the U.S. government and the Federal Reserve.

That MBS contained both performing and nonperforming mortgage loans. Everything that happened to the loans was by design tracked privately and secretly within the MERS database. Only the original mortgage lien was filed in our public land records.

By concealing the owner of the loan, and what eventually happened to the loan, the banks can then use the lien to defraud homeowners.

When I viewed the homes in the 60 Minutes report, I realized that some mortgage servicing company filed a fraudulent Assignment of Mortgage and falsely claimed to own the mortgage loan. They filed a foreclosure action and may have evicted the homeowners.

The mortgage servicers may collect PMI insurance. They may obtain a Deficiency Judgment against the homeowner. They may also Title the property over to Fannie and be compensated for the Title.

The Title has the value while the actual property is a liability.

When you watched homes being destroyed on 60 Minutes, you were actually looking at the loose change in the multi-trillion dollar mortgage backed securities scam.


I've been researching mortgage/foreclosure/securities fraud for just over 3 years. I filed suit against my mortgage servicer in May of 2011. The trial is presently scheduled for May of 2012.

[Frank Jameson]

16. Thanks for throwing light on what has been a mystery to me n/t

[Frank Jameson]

10. Here is the url for that 60 Minutes story

http://www.cbsnews.com/8301-18560_162-57344513/there-goes-the-neighborhood/?tag=contentMain;cbsCarousel

[femrap]

12. Damn heartbreaking.....

and I'll bet Jamie Dimon, and the other Banksters laugh at this crap. If I were the city of Cleveland, I'd take those banksters to court and sue them silly.

And if we look at the books of the Banksters, those homes that have been demolished are still listed at the purchase price. And in reality the Banksters are INSOLVENT!!! And yet the taxpayers are called upon to give them $$$.

F*cking Banksters.

[ms.smiler]

5. Frank Jameson, it appears you may only have an understanding

of traditional mortgages and not present day securitized mortgages.

For a better understanding of this situation, please see my recent OP: http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=439x2412603

The banks have committed massive fraud and our government has enabled that fraud.

If you like, you can view documents from my lawsuit here: http://www.scribd.com/mssmiler

[Frank Jameson]

8. Thanks for an intersting post n/t

[Kurovski]

15. Kick. (nt)