Blighted Title: Banks Selling Homes They Don’t Own
The tax cut issue is crucial from the standpoint of politics, but in the real world, the biggest threat to the economy remains the lawlessness of the American real estate industry, and how this has dealt a body blow to the most important market for economic renewal in the country.
Via Yves, we have the latest example of the crisis; lenders foreclosing on properties and selling them without taking ownership.
A funny thing happened to DeBary resident Russ Vas Dais as he was about to buy a foreclosed home: He learned the bank selling him the house didn’t actually own it.
Fannie Mae had foreclosed on the property but, in an apparent paperwork problem, never took ownership.
“It was quite shocking to learn the bank didn’t have title to it,” said Vas Dais, who had worked in the real-estate sales and appraisal business for 18 years. “I just felt that there are a lot of incompetent professionals who aren’t paying much attention.”
If you didn’t have an industry professional stuck with this, I doubt it would have made it into a newspaper. For every story we hear about we can assume dozens more happening without the same scrutiny.
If foreclosure defense attorneys keep winning cases and reversing foreclosures, this chaos will become a more regular occurrence. New purchasers will find the foreclosed family at their doorstep, with the legal right to return to the home. But most foreclosure sales are final, and the new purchaser has a claim to stay in the home as well. Lenders will have to make up restitution to the borrower they evicted fraudulently. The whole thing is a huge mess.
Like this:
Real estate investor Marjorie Oster was pleased when she snagged what looked like a good deal through a Miami-Dade County foreclosure court auction: a four-bedroom house in Cutler Bay, with a swimming pool, for about $95,000.
But when her husband drove by the next day to check on the property, he saw “someone cleaning the pool, a lawn service cutting the grass and a note it was being tented for termites,” said Oster, a Miami resident who has been in real estate for 15 years.
It turns out the house she thought she had purchased had been sold in a short sale the week before to someone else — Osberto Jimenez, a 40-year-old Cuban-born truck driver. The law firm handling the foreclosure for the lender mishandled the paperwork and never canceled the auction sale.
This just sounds like amateur hour, but it’s almost fated when you have a culture in the real estate business where documentation is made to be forged. The “sloppiness” is a feature, not a bug. It allows the lenders to get rid of borrowers even when they don’t have the legal right to foreclose.
The punch line of this double sale: the law firm responsible was the notorious David J. Stern.
Blighted Title: Banks Selling Homes They Don’t Own
The tax cut issue is crucial from the standpoint of politics, but in the real world, the biggest threat to the economy remains the lawlessness of the American real estate industry, and how this has dealt a body blow to the most important market for economic renewal in the country.
Via Yves, we have the latest example of the crisis; lenders foreclosing on properties and selling them without taking ownership.
A funny thing happened to DeBary resident Russ Vas Dais as he was about to buy a foreclosed home: He learned the bank selling him the house didn’t actually own it.
Fannie Mae had foreclosed on the property but, in an apparent paperwork problem, never took ownership.
“It was quite shocking to learn the bank didn’t have title to it,” said Vas Dais, who had worked in the real-estate sales and appraisal business for 18 years. “I just felt that there are a lot of incompetent professionals who aren’t paying much attention.”
If you didn’t have an industry professional stuck with this, I doubt it would have made it into a newspaper. For every story we hear about we can assume dozens more happening without the same scrutiny.
If foreclosure defense attorneys keep winning cases and reversing foreclosures, this chaos will become a more regular occurrence. New purchasers will find the foreclosed family at their doorstep, with the legal right to return to the home. But most foreclosure sales are final, and the new purchaser has a claim to stay in the home as well. Lenders will have to make up restitution to the borrower they evicted fraudulently. The whole thing is a huge mess.
Like this:
Real estate investor Marjorie Oster was pleased when she snagged what looked like a good deal through a Miami-Dade County foreclosure court auction: a four-bedroom house in Cutler Bay, with a swimming pool, for about $95,000.
But when her husband drove by the next day to check on the property, he saw “someone cleaning the pool, a lawn service cutting the grass and a note it was being tented for termites,” said Oster, a Miami resident who has been in real estate for 15 years.
It turns out the house she thought she had purchased had been sold in a short sale the week before to someone else — Osberto Jimenez, a 40-year-old Cuban-born truck driver. The law firm handling the foreclosure for the lender mishandled the paperwork and never canceled the auction sale.
This just sounds like amateur hour, but it’s almost fated when you have a culture in the real estate business where documentation is made to be forged. The “sloppiness” is a feature, not a bug. It allows the lenders to get rid of borrowers even when they don’t have the legal right to foreclose.
The punch line of this double sale: the law firm responsible was the notorious David J. Stern.
