Lenders and CDO owners may find it hard to present proof of ownership, which is a legal requirement prior to foreclosure.
NYT: Foreclosures Hit a Snag for Lenders
As a friend of mine just put it in a conversation, this throws a whole new shovel full of manure on top of the mess that CDO owners are already armpit deep in.
It's a rare day that a news story is both Tragic and yet Hilarious. I can guarantee that WC Varones and The Epicurean Dealmaker are going to have a field day with this story.
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NYT: Foreclosures Hit a Snag for Lenders
The pooling of home loans into securities has been practiced for decades and helped propel real estate prices in recent years as investors sought the higher yields that such mortgage trusts could provide. Some $6.5 trillion of securitized mortgage debt was outstanding at the end of 2006. But as foreclosures have surged, the complex structure and disparate ownership of mortgage securities have made it harder for borrowers to work out troubled loans, in part because they cannot identify who holds the mortgage notes, consumer advocates say.
Now, the Ohio ruling indicates that the intricacies of the mortgage pools are starting to create problems for lenders as well. Lawyers for troubled homeowners are expected to seize upon the district judge’s opinion as a way to impede foreclosures across the country or force investors to settle with homeowners. And it may encourage judges in other courts to demand more documentation of ownership from lenders trying to foreclose.
As a friend of mine just put it in a conversation, this throws a whole new shovel full of manure on top of the mess that CDO owners are already armpit deep in.
It's a rare day that a news story is both Tragic and yet Hilarious. I can guarantee that WC Varones and The Epicurean Dealmaker are going to have a field day with this story.
4 comments:
This could be good for everyone on the sidelines watching.
Let's say this court decision becomes a precedent that is upheld. Then there will be an entire cottage industry of blood sucking lawyers seeking "redress" for those folks who have already had their homes repossessed and technically ownership wasn't properly established.
The lawyers taking on the bankers.
Nero never had entertainment so good.
Sorry, Lee, Tanta over at Calculated Risk already beat me to the punch. Furthermore, it can be reasonably argued that she knows what the heck she is talking about, in contrast to Yours Truly, who simply wallows in cheap shots and Schadenfreude.
I do like Charles' comment, though. Forget Nero: lawyers versus bankers is even better than "Alien versus Predator."
I agree -- can't beat what Tanta said. I also like how she mocks Gretchen Morgenson.
TED, thanks for bringing Calculated Risk to my attention.
WC, Gretchen Morgensen is pretty easy to mock, but still fun to see it done.
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