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Extra: Walking Away From A Mortgage

May 9, 2010 4:53 PM

Chris Deaner of Sun City, Arizona tells Morley Safer of "60 Minutes" why he walked away from his home mortgage.

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by gmm362 June 25, 2011 12:42 AM EDT
DO NOT WALK AWAY FROM YOUR HOME. MANY MORTGAGE SERVICERS HAVE NOT MAINTAINED YOUR MORTGAGE/NOTE CORRECTLY. YOUR NOTE WAS BUNDLED INTO MORTGAGE BACKED SECURITIES WITH OUT ASSIGNMENTS AT YOUR LOCAL LAND RECORDERS OFFICE. MOST NOTES WERE DESTROYED WHEN THEY WERE PROCESSED THROUGH MERS AND THE SERVICERS CAN NOT PROVE THEY OWN THE HOME NOW. THIS MAKES IT IMPOSSIBLE FOR THE SERVICER TO FORECLOSE PROPERLY.
READ MY EXPLANATION BELOW:
MORTGAGE CRISIS

Years back the banks began to turn a mortgage into a commodity, with good paying mortgages, then they saw they were running out of this commodity, so the big banks, including Fannie & Freddie started approving loans to almost anyone and everyone, not so much to just give that person a home to have, but they were more concerned about creating more of the commodity. More securities to sell to investors. They even knew some home owners would not last several years or several months, as long as they could say to investors, "Hey, we have more mortgage backed securities to sell".

Now, to sell all these securities, they would have to create a mortgage assignment which is normally recorded with the county land recorders office for a fee. Physically, that would take up too much time and money, so the big banks invented and created MERS,(Mortgage Electronic Registration System). This electronic service was only created to track mortgages sold and bought in the secondary securities market. MERS legally has no invested interest in the mortgage, so they truly are not able to transfer or assign the mortgage acting as a nominee of the loan. But they are! Wrong. The chain of title of the mortgage is broken right here at this very early stage. The mortgage/note has to be assigned from one owning entity to the next owning entity. MERS never owns the loan, but they are creating and are listed on assignments at the local land recorders office. Now that the mortgage was bundled, sold and bought back and forth with investors, no continuing assignments are recorded with the county recorders office. By not recording these documents, Fannie & Freddie & and all your Big Mortgage Servicing banks are saving millions-billions on recording fees, and possible taxes, etc.

What I have found was that the Servicer of the mortgage is listed with the county recorders office as if they own the mortgage, while Fannie & Freddie or other Big Banks are selling the bundled mortgages as securities. Kind of like a Pizza shop cooking pizza legitimately up front, and a mobster selling off investments in the back. (Racketeering). The Servicer up front really is not the owner of the loan, and they tell you this. They also admit that your loan is owned by Freddy or Fannie, or the Investors. So when the Servicer now tries to foreclose on a homeowner, they are not truly the owner of the loan, and you have to own the loan to foreclose!!! Many never even question the Servicer and walk away from their home. Now to foreclose as quick as they can, that's where the robosigners come in. These people do not review anything in the foreclosure paperwork about the loan, but only sign a name on the affidavit page on thousands of mortgages to get the foreclosure going before any homeowners begin to catch on.

You see, its a matter of a quick process the Servicing banks want to achieve in order to get the property in their possession, only to sell it. The crazy thing is, when the originating bank gives the loan, then sells it to the 2nd bank which mostly ends up being the servicer, they again sell it to the 2 major players (Freddie & Fannie) and they sell the mortgage back securities to investors. So the servicing bank gets paid for the mortgage and still collects payments toward the mortgage and a percentage goes to the Servicer, Fannie & Freddie and the Investor. So they are all making money. Then the Servicing bank comes to foreclose and if they are allowed to foreclose they get the home without true ownership, even though the loan is actually sold off into bits and pieces to investors. I can go on further, but to conclude, if this were a murder case, I would call this act of the banks premeditated, not an accident. This was all planned out in order to reach the highest profit they could using the mortgage backed securities as a commodity, and have total disregard, deliberately, intentionally ruining the lives of millions of homeowners.
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by gmm362 June 25, 2011 12:40 AM EDT
DO NOT WALK AWAY FROM YOUR HOME. MANY MORTGAGE SERVICERS HAVE NOT MAINTAINED YOUR MORTGAGE/NOTE CORRECTLY. YOUR NOTE WAS BUNDLED INTO MORTGAGE BACKED SECURITIES WITH OUT ASSIGNMENTS AT YOUR LOCAL LAND RECORDERS OFFICE. MOST NOTES WERE DESTROYED WHEN THEY WERE PROCESSED THROUGH MERS AND THE SERVICERS CAN NOT PROVE THEY OWN THE HOME NOW. THIS MAKES IT IMPOSSIBLE FOR THE SERVICER TO FORECLOSE PROPERLY.
READ MY EXPLANATION BELOW:
MORTGAGE CRISIS

Years back the banks began to turn a mortgage into a commodity, with good paying mortgages, then they saw they were running out of this commodity, so the big banks, including Fannie & Freddie started approving loans to almost anyone and everyone, not so much to just give that person a home to have, but they were more concerned about creating more of the commodity. More securities to sell to investors. They even knew some home owners would not last several years or several months, as long as they could say to investors, "Hey, we have more mortgage backed securities to sell".

Now, to sell all these securities, they would have to create a mortgage assignment which is normally recorded with the county land recorders office for a fee. Physically, that would take up too much time and money, so the big banks invented and created MERS,(Mortgage Electronic Registration System). This electronic service was only created to track mortgages sold and bought in the secondary securities market. MERS legally has no invested interest in the mortgage, so they truly are not able to transfer or assign the mortgage acting as a nominee of the loan. But they are! Wrong. The chain of title of the mortgage is broken right here at this very early stage. The mortgage/note has to be assigned from one owning entity to the next owning entity. MERS never owns the loan, but they are creating and are listed on assignments at the local land recorders office. Now that the mortgage was bundled, sold and bought back and forth with investors, no continuing assignments are recorded with the county recorders office. By not recording these documents, Fannie & Freddie & and all your Big Mortgage Servicing banks are saving millions-billions on recording fees, and possible taxes, etc.

What I have found was that the Servicer of the mortgage is listed with the county recorders office as if they own the mortgage, while Fannie & Freddie or other Big Banks are selling the bundled mortgages as securities. Kind of like a Pizza shop cooking pizza legitimately up front, and a mobster selling off investments in the back. (Racketeering). The Servicer up front really is not the owner of the loan, and they tell you this. They also admit that your loan is owned by Freddy or Fannie, or the Investors. So when the Servicer now tries to foreclose on a homeowner, they are not truly the owner of the loan, and you have to own the loan to foreclose!!! Many never even question the Servicer and walk away from their home. Now to foreclose as quick as they can, that's where the robosigners come in. These people do not review anything in the foreclosure paperwork about the loan, but only sign a name on the affidavit page on thousands of mortgages to get the foreclosure going before any homeowners begin to catch on.

You see, its a matter of a quick process the Servicing banks want to achieve in order to get the property in their possession, only to sell it. The crazy thing is, when the originating bank gives the loan, then sells it to the 2nd bank which mostly ends up being the servicer, they again sell it to the 2 major players (Freddie & Fannie) and they sell the mortgage back securities to investors. So the servicing bank gets paid for the mortgage and still collects payments toward the mortgage and a percentage goes to the Servicer, Fannie & Freddie and the Investor. So they are all making money. Then the Servicing bank comes to foreclose and if they are allowed to foreclose they get the home without true ownership, even though the loan is actually sold off into bits and pieces to investors. I can go on further, but to conclude, if this were a murder case, I would call this act of the banks premeditated, not an accident. This was all planned out in order to reach the highest profit they could using the mortgage backed securities as a commodity, and have total disregard, deliberately, intentionally ruining the lives of millions of homeowners.
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by jeryc1 June 15, 2010 6:03 PM EDT
While I think morality has it place, I can not blame the couple for walking away. I realize those neighbors that have been in their homes so long they can not walk away and are stuck. However, if you are more than 25% under water and time is on your side, then RUN,don't walk, as fast as you can. Oh yeah! stay there as long as you can for free and BANK your money.
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by htrends May 20, 2010 2:12 AM EDT
Pretty harsh comment from mmmmmitchel. I think when the clowns in Washington who thought more people should own homes take some responsibility so will more homeowners. When the banks that made bad loans in inflated markets takes some responsibility for their actions maybe more homeowners will. Get a clue this whole mess started because of actions taken in congress and the greed of bankers. All most homeowners were looking for is a place to call home, most were not driven by greed. The people that bought homes with liar loans and ARMs they were never going to be able to afford are more responsible for the housing bust than the couple featured in this story. We have all been screwed by this massive Ponzi scheme. You should at least focus your anger in the proper direction.
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by mnmnmitchell May 19, 2010 4:17 PM EDT
To everyone who decides to walk away when they can afford their home, don't complain when the national and world economies collapse. Shame on you! You can afford it and the value of your home will return in time. Like so many in this generation, quit thinking of just yourself. We're in this mess together, but you just keep taking care of yourself, selfish bastard. If everyone before us in war and tough times just walked away rather than fight, sacrifice, and think longterm, our country alone would be a different place, but they didn't. They fought, they endured, they didn't quit! So, be a quitter and look out for #1. Unfortunately, the rest of us get dragged down with you and pick up the tab once again. What's wrong with this "me" generation? Grow up and be accountable.
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by aisake50 May 18, 2010 3:31 PM EDT
I have been trying to modify my home with Chase Bank. It used to be with Washington Mutual Bank. I have paid for a forensic auditing of my loan. Still with all the violations that were found Chase refused to modify my loan. I have been out of work for 3yrs to be exact. I have used all my retirement benefit to hold on to the home. My wife works and makes just enough for the affordable payment we begged for so to speak. I'm not asking for any hand outs. I'm a veteran who served my beloved country in the Military. I have made payment to the bank for 23yrs. No late payment until my income was reduced due to being out of work. All I ask for was an affordable payment. Well guess what? They can come take there home on June 7 2010 the Foreclosure date. Screw the Bank and this whole financial mess they have created.
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by DannyKFL May 17, 2010 8:39 AM EDT
kjmike: You didn't buy a car under the impression that it was going to appreciate. It's apples and oranges. Compare it to selling a stock at a loss. That is the better analogy. Everyone walking away is losing money big time.
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by DannyKFL May 17, 2010 8:35 AM EDT
taranagelhout: Just because it's your opinion that it's not the same doesn't make it true. "...doing to your neighbors..." is nonsense. The neighbors who got the liar loans and the banks that gave them those loans already "did it" to you. Walking away from a bad deal is the result of that activity. It's not the result of a bad decision by those that can afford to pay but walk away. What was the bad decision? Buying an overvalued house? Who overvalued it? The banks, developers, real estate agents and mortgage companies are the cause of this problem. The financial companies who knew the mortgage backed securities they were packaging up and selling were crap are the cause of this problem. People walking away are just the result not the cause of or the problem itself. Staying in your house isn't going to help your neighbors. Even if every one of the 10 or so houses in my development were still occupied it would not change the value of my house. We make sure the empty houses in my neighborhood are kept up, but it hasn't stopped the downward spiral in prices. For the past 4 years real estate agents were spouting that "it's time to buy" even as prices were dropping and are STILL spouting nonsense. People need to stop listening to those who make money off of real estate and start listening to the real experts who don't have any skin in the game. People were sold houses on the premise that it was a good investment. The moment it stopped being a good investment it became time to get out.
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by cmb1314 May 14, 2010 11:31 AM EDT
Apparently you people are not in the same situation.

You grow up dreaming of a better life, saving to buy your home and when you have worked, saved and scrimped enough money for a down payment your lender tells you have a 400,000 dollar mortgage to work with, you get a real estate agent, look at a hundred (literally) houses find one that you are in love with, make an offer go home elated at the thought of having that security of your own home, something you have dreamed about for a long time, then the bomb shell hits, you figure out what your payments will be even with the down payment.
You decide lender be damned your not going to get roped into an adjustable mortgage because it didn't feel right. You cancel the contract for the house scale back what you are looking for realize the price range you know are looking at, the neighborhoods are less to be desired or the property is so dilapidated it would cost more to get the property livable that you have almost given up hope at finding something you can afford. Then it happens, you find your home the excitement raises finally this is it.
You go thru with the sale everything is going good then the bottom drops out, your neighbors are leaving in droves, houses sit empty becoming just as dilapidated as the houses you looked at when you were trying to purchase a house, your children standing at their bus stop minding their own business get guns pulled on them, a neighbor down the street gets attacked in front of his own home and shot in the head, drug dealers move in, you wake up in the middle of the night to someone trying to steal your vehicle, a once peaceful neighborhood is becoming a shambles, you start to fear for everything you work for on top of that your homes value has dropped to the point all the money you put down, the money you have invested the blood sweat and tears you have given to your dream, hoping one day you could pass that on to your children, is not worth trying to save. You realize to recoup what you have lost or can loose because the quality of you life has dropped drastically is NOT WORTH IT! To some people this is NOT an easy solution, but it is the solution you choose because it is the better of the 2 evils. We can afford to keep our home but why; to be moral, ethical and responsible? It?s not worth my security or my families, so to all you people who judge or get mad remember the proverb ?walk a mile in my shoes.?
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by nikepablo May 13, 2010 11:00 AM EDT
The Banks were bailed-out. They were given a lot of money. They were told there were special incentives (more money for them) if they gave the home-owners in trouble a 'modification'. When they did only a tiny fraction of the quantity of modifications that they were told they SHOULD do: They were given a slap on the hand. That was first done by Bush. Then, many more hand-slaps by Obama. Normally when you want someone to act on anything with a huge reward attached: You don't give them the reward first with no consequences (besides harsh words) attached. For the Presidents not to attach strict guidelines as to how many mortgages MUST be modified with the 'gift' money they got..........is INSANE. Anybody that has gone through the 'modification' process (I'm on my 3rd application), knows it's a joke to the banks. They know that the banks have special phone no's. where they send customers who are asking difficult questions: They are dead-end phone no's. I recently asked for a status update on my Chase application: I have three phone no's. for Chase and got two completely different answers (and one dead-end hold of 30 min.); depending on which no. you call. They are playing with us. Why? They were never forced to be accountable. (See above).
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