My greatest triumph this year was saving a man named Bill Baldwin from foreclosure in Houston. A mortgage lender was attempting to foreclose over a $93,000 loan. Sadly Bill had lived in the house 45 years. For once it was good luck to live in Texas. Foreclosures go through court. I showed Bill how to raise the issue that the lender could not prove that it owned the loan with some excellent Ohio case law. The judge liked the argument and told the lender that they could not foreclose. Bill no longer had to make payments. This week Bill got the news that his lender was no longer paying his property taxes. I told him that it was a good sign that they had written off his loan. He now has a suit for title in court.
Sadly one cannot raise this legal argument in California yet. But what is more important is that we figuratively have "an out of control freight train" roaring down the track. When it crashes, the whole system is going to lock up under the weight of the massive number of "underwater homes." US District Courts, Bankruptcy Courts, and Superior Courts will not be able to handle the case loads. Counties will stop doing foreclosures. Lenders will face massive write downs and insolvency. This time the mega banks will not get a sympathetic ear from Washington, even if the Republicans win back congress. (Even the most politically conservative American has had enough of bail outs of Wall Street.)
Some mega banks will be gobbled up by real survivors like JP Morgan Chase. Some will go to foreign owners at bargain basement prices. Homeowners will be left with big and worthless mortgages on their homes and no foreclosure or other credible deterrent to force them to pay.
Please file this in your mind somewhere and watch what happens.
No comments:
Post a Comment