Would You Pay?
So this is a pretty fascinating situation here:
In a nutshell, the guy stopped paying his mortgage due to litigation against him for securities fraud. The owners of the mortgage couldn't produce the promissory note (they lost it). So the courts ruled that they couldn't foreclose. He has dragged it on and on and almost 8 years later he is still in the house and hasn't paid a penny while these idiots try to figure it all out. There are so many takeways from this and I don't lean entirely one way or another here. But take this for instance:
"Eight years after defaulting, Lents still hasn't made a payment or been forced out of his house. DLJ, whose parent, Credit Suisse, declined to comment for this story, still hasn't proved its ownership to the satisfaction of the court. Lents' debt has grown to about $2.5 million, including unpaid taxes, interest, and penalties. As the stalemate grinds on, Lents has the comfort of knowing he's no longer alone."
So CS cannot prove ownership. Bad on them, period. I have zero sympathy for that. However this guy got in the house initially right? So he was making payments, was he not? That does not appear to be in question here though. And he knows it. So now he has rung up a debt of $2.5 million which ultimately is going to be paid for by the American taxpayer in some capacity because some idiot judge doesn't have the stones to use a "common sense" clause to make a ruling to at least produce a result from this mess?
Here is the best part:
"The Boca Raton homeowner hasn't made a mortgage payment since 2002, but he perceives himself as a victim. "I want to expose these guys for what they're doing," Lents says. "It's personal now.""
He is now the victim. Hey, had he not been nailed for securities fraud then he probably would have never had the problem in the first place, right?
But don't think I just blame this guy. The banks are the ones who facilitated this from the get-go:
"Even if the documentation problems turn out to be manageable—as Bank of America (BAC) and others insist they will be—the economy will still suffer long-term consequences from the loose underwriting that caused the subprime housing bubble. According to an Oct. 15 report by J.P. Morgan (JPM) Securities, some $2 trillion of the $6 trillion in U.S. mortgages and home-equity loans that were securitized during the height of the bubble, from 2005 through 2007, are likely to go into default. The report says the housing bust will ultimately cause losses of $1.1 trillion on those bonds."
That $2 to $6 trillion figure is absurd. The banks deserve to go broke, and this guy deserves to be booted out of that house.
"Wall Street's unspoken strategy has been to kick mortgage losses down the road until an economic recovery reinflates the housing market. The faulty-foreclosure crisis has forced the issue back into the present tense, triggering a fight over who will bear the brunt of those losses."
This hits the nail on the head, wouldn't you say?