Blighted Title: Banks Selling Homes They Don’t Own - FDL

[WillyT]

Blighted Title: Banks Selling Homes They Don’t Own
By: David Dayen Tuesday December 7, 2010 6:28 am

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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:

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More: http://news.firedoglake.com/2010/12/07/blighted-title-banks-selling-homes-they-dont-own/

:kick:

[Waiting For Everyman]

1. K&R This is a huge issue. And it will get bigger.

Foreclosured homes are time-bombs of legal liability. It's there in the paperwork, it stays active, all it needs is somebody to file a complaint on it sometime. Times millions of potential cases.

[KansDem]

2. Hey, maybe I could sell my neighbor's house!

I don't own it either and I need the dough.

I wonder if he'll mind me putting a "For Sale" sign in his yard tomorrow...

[prairierose]

3. What many people do not realize is that because....

the Obama administration did nothing about this mess when they came into office, the banks and Wall street have destroyed private property rights in this country. I do not know when we will be able to trust that any property we buy will legally and rightfully be ours again.

Something must be done about all of the fraud involved in this system at all levels. And I do not see that happening any time soon.

[Chimichurri]

4. Don't worry. Obama will propose changing the rules so it benefits

the RE industry and the corrupt banks he loves so much. You poor schmucks who paid off your mortgage and have had your house taken from you, too bad. Stop being so sanctimonious!