A Thought On The Foreclosure Crisis
Apparently "robo-signers" have falsely verified hundreds of thousands of foreclosure documents in recent years. This has happened so often that several of banking's big-boys have now halted foreclosure sales and closing proceedings in order to review banking procedures and make sure everything was on the up-and-up.
As you might expect, its the same old banking names that have been heard so many times before in matters involving the real estate mortgage problems faced in this country -- PNC Financial Group, Ally Financial's GMAC Mortgage Unit, Bank of America, and JPMorgan Chase & Co. Let's hope that no other institutions are involved.
Let's also hope that these financial giants are able to resolve these matters without hurting anyone along the way. I hope they can.
But suppose they can't.
Suppose, hypothetically speaking of course, that we find out that bankers did indeed improperly foreclose on the homes of bazillions of people. Suppose those bazillions of people file lawsuits designed to get their homes back. Suppose the courts agree with, say, half-a-bazillion of those original homeowners and rule that the banks foreclosed improperly. Now, further suppose that a quarter-of-a-bazillion of those homes now have new owners. The lawsuit certainly creates a question of who properly holds title to that property, does it not? Will this kind of circumstance not create a major financial problem for the title insurance industry who will have to make some kind of settlements on the title for a quarter-of-a-bazillion insured property titles?
Hey, I'm not trying to borrow trouble here and I hope this scenario does not happen, but give it a few minutes thought yourself. How much money will the title companies have to come up with? Do they have that much money laying around in the old savings account? Is the title insurance industry "too big to fail"? If it is deemed to be too big to fail, are we looking at some new government-funded bailout? Ultimately, will this be more taxpayer money used to bail out the title insurance industry because bankers made thoughtless mistakes? Or, will the title insurance companies file lawsuits against the bankers in order to recoup their losses which were caused by the bankers charged with filing the foreclosures? (Gee, that sounds like a lot of nice work for the lawyers on both sides, doesn't it?)
Hey, I'm just asking a question. I don't necessarily have any answers. Am I borrowing trouble? I sure hope not. I'm hoping all this gets resolved and turns out to be nothing but a tempest in a teapot. But when a lot of money is involved and lawyers get active, well, you never know what will happen.
I think it is an issue worth watching for the next few weeks.
-30-
As you might expect, its the same old banking names that have been heard so many times before in matters involving the real estate mortgage problems faced in this country -- PNC Financial Group, Ally Financial's GMAC Mortgage Unit, Bank of America, and JPMorgan Chase & Co. Let's hope that no other institutions are involved.
Let's also hope that these financial giants are able to resolve these matters without hurting anyone along the way. I hope they can.
But suppose they can't.
Suppose, hypothetically speaking of course, that we find out that bankers did indeed improperly foreclose on the homes of bazillions of people. Suppose those bazillions of people file lawsuits designed to get their homes back. Suppose the courts agree with, say, half-a-bazillion of those original homeowners and rule that the banks foreclosed improperly. Now, further suppose that a quarter-of-a-bazillion of those homes now have new owners. The lawsuit certainly creates a question of who properly holds title to that property, does it not? Will this kind of circumstance not create a major financial problem for the title insurance industry who will have to make some kind of settlements on the title for a quarter-of-a-bazillion insured property titles?
Hey, I'm not trying to borrow trouble here and I hope this scenario does not happen, but give it a few minutes thought yourself. How much money will the title companies have to come up with? Do they have that much money laying around in the old savings account? Is the title insurance industry "too big to fail"? If it is deemed to be too big to fail, are we looking at some new government-funded bailout? Ultimately, will this be more taxpayer money used to bail out the title insurance industry because bankers made thoughtless mistakes? Or, will the title insurance companies file lawsuits against the bankers in order to recoup their losses which were caused by the bankers charged with filing the foreclosures? (Gee, that sounds like a lot of nice work for the lawyers on both sides, doesn't it?)
Hey, I'm just asking a question. I don't necessarily have any answers. Am I borrowing trouble? I sure hope not. I'm hoping all this gets resolved and turns out to be nothing but a tempest in a teapot. But when a lot of money is involved and lawyers get active, well, you never know what will happen.
I think it is an issue worth watching for the next few weeks.
-30-
posted by Terry Ward at 5:20 AM
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