MISSED PAYMENTS PROBABLY ARE NOT DUE — THEY ARE ALREADY PAID

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EDITOR’S NOTE: The one thing that the media hasn’t quite grasped is that the issue is not nearly so much as that people can’t pay their monthly mortgage payments but rather that the monthly payment may not be due. In fact, nothing might be due. $16 trillion in insurance, bailouts, proceeds from credit default swaps and other “credit enhancements” have reduced the amount due to the creditor for reasons wholly apart from the original deal relating to the loan. $13 trillion in mortgages were funded in the mortgage mess. $125 Trillion in credit derivatives and hedge products were issued.

So the amount received by the world of finance exceeds the total amount loaned, let alone the “defaults” on only $2.6 trillion of those mortgages. Where did the rest of the money go and why? Taxpayers and Borrowers have a right to know the true and complete accounting for all money received or disbursed in connection with their loan. Investors have that right too. Those are the only two real parties in interest to the original transaction — investors who loaned the money and borrowers who used it. Everyone else was an intermediary. To allow the Banks to treat the excess as trading profits instead of crediting the investors and borrowers is absurd. And to further allow them to take homes they have no loss on is a tragedy.

If the creditor(s) or its agents have received payment and they don’t owe the money back, then that creditor is not owed the money. The servicers are required under the provisions of most pooling and servicing agreements to keep making the payments. If they are doing that, there is no default. There might be an obligation due to the servicer, but it isn’t secured by the mortgage because it is a different debt — not covered by the mortgage. It’s unsecured which means there can’t be a foreclosure.

Sorry Banks, I didn’t make this stuff up, you did. To ask the people to pay even more money from the bottom of the ladder you used to make multiple sales of the same loan is neither fair nor, as it turns out, legal. In order to foreclose you need the right creditor with the right mortgage suing to collect on a debt that is due — not one that was merely created. If you have no loss, you have no right to be collecting on the debt.

If the debt is not due or has moved to another party then you don’t have a valid foreclosure action and you never will. If the debt has been paid and the original borrower gets the collateral benefit of a reduction in the principal amount due under the note, it is only because the banks set it up that way but are now trying to avoid that result by getting even more money out of the borrowers.

The bottom line is that whether you are paying or not paying, you don’t know the true balance due to any creditor and you don’t know who the creditor is — and quite probably neither do the Banks. There has been a lot of talk about personal responsibility to pay a debt which is being used to divert attention from the fact that the debt has already paid down or paid off. What about the moral responsibility to tell the borrower what money you received that reduced the damages or money due?

Written by

Patrick Peterson | FLORIDA TODAY

The homes haunt neighborhoods with their dark windows, overgrown lawns and science-experiment swimming pools.

Sometimes a family remains inside, waiting for the phone call or knock on the door that signals their eviction.

That could’ve been the case with Mike and Janet Doty. The Port St. John couple avoided foreclosure by having their mortgage modified in bankruptcy, which became necessary after Mike Doty, 58, became ill with diabetes. In the legal action, their house note was reduced by nearly a fourth and they got a better interest rate on the balance of about $100,000 they still owe.

“I’m not one of those horror stories,” Mike Doty said.

But there are plenty out there.

Several years into a nationwide foreclosure crisis, about a fourth of all mortgages in Florida, and about 18 percent in Brevard County, are either delinquent or in foreclosure, according to the Federal Reserve Bank in Atlanta.

Though foreclosures and related filings have slowed since the avalanche of 2009, statistics show that they still loom for many Brevard homeowners who are missing mortgage payments for reasons of illness, unemployment or, with greater frequency, an unwillingness to pay for a home that has lost its value.

Doty assumed his sister’s home loan in 2007, after she died. He paid off her debts, which contributed to his financial trouble. Though he’d developed diabetes, he worked in the service department of a car dealership and in a call center until 2009. Eventually he was unable to work and couldn’t pay his health insurance premiums or his house note, though he made partial mortgage payments to the bank. His wife worked and he received disability payments, but the couple fell further behind.

Doty felt desperate and trapped by creditors. He mostly feared he would break a promise to his late sister, who asked him to take care of her home.

“I swore to her I wouldn’t do anything to lose this house,” he said.

But foreclosure seemed likely, as doctors, the mortgage company and even the IRS wanted money he didn’t have.

Tags: bankruptcy, borrower, countrywide, disclosure, foreclosure, foreclosure defense, foreclosure offense, foreclosures, fraud, LOAN MODIFICATION, modification, quiet title, rescission, RESPA, securitization, TILA audit, trustee, WEISBAND
Posted in bubble, Corruption, Eviction, securities fraud |