Amvona

Houston, we've got a problem - Bevilacqua

Wednesday, 19 October 2011 20:14
KranzConsoleOn Oct. 18th, 2011 the Massachusetts Supreme Judicial Court handed down their decision in the FRANCIS J. BEVILACQUA, THIRD vs. PABLO RODRIGUEZ – and in a moment, essentially made foreclosure sales in the commonwealth over the last five years wholly void. However, some of the more polite headlines, undoubtedly in the interest of not causing wide spread panic simply put it "SJC puts foreclosure sales in doubt" or "Buyer Can't Sue After Bad Foreclosure Sale"

 

In essence, the ruling upheld that those who had purchased foreclosure properties that had been illegally foreclosed upon (which is virtually all foreclosure sales in the last five years), did not in fact have title to those properties.

 

Given the fact that more than two-thirds of all real estate transactions in the last five years have also been foreclosed properties, this creates a small problem.

Published in Economic Analysis
fallacey_image
Background: A post Ibanez world

 

In January the Massachusetts supreme judicial court held in US Bank National Association vs. Antonio Ibanez that a note holder may not foreclose on a property in order to redeem a debt, if they are not also the holder of a valid mortgage (that is to say also with a valid assignment). We outlined the details of this case and its implications in our article "Ibanez – Denying the Antecedent, Suppressing the Evidence and one big fat Red Herring" on January 11th, 2011.

Published in Economic Analysis

On the ethics of mortgage loan default

Friday, 03 June 2011 21:21

ethics_signIs it ethical for the American homeowner whose mortgage has been securitized to default, even If they are not financially distressed?  

 

First, consider it is unlikely that marketable, fee simple, insurable title can be obtained as a result of fulfilling the obligations of the related promissory note.  On the contrary the titles to some 60 million homes in America are badly clouded.  Secondly, encouraging investment in an asset class that has been artificially inflated, then deliberately destroying the price of the asset, as part of a separate profit making scheme is unethical, and any agreement based on this type of fraud is grounds to consider the original debt instrument used in the agreement null and void.  Fortunately these grounds are unnecessary, as increasingly US courts are ruling that these mortgages are already invalid for numerous other reasons.

Published in Economic Analysis

market_lossOur modern marketplace for investment in the formation and growth of public enterprises is imperfect, but it still works.  It is a mechanism to transfer the wealth of the public to the companies we formulate to produce things; they are a reflection of our country and our people as a whole.  The market can go mildly wrong or it can go terribly wrong.  When it is mildly wrong, it present buying opportunities to shrewd investors, when it goes terribly wrong, it can become a machine of economic injustice.

Published in Orthodoxy

red_herring_1The recent decision by the Massachusetts Supreme Judicial court helped focus a few important questions on the foreclosure crisis in America, but it is also being used as a Red Herring, amongst other things, by the American Securitization Forum and their Bank owners.   The Massachusetts land court decision, which was affirmed by the Supreme Judicial Court were correct, but only addressed a narrow specter of the foreclosure crisis in our country and the underlying violations of long standing property law.   The case does point however to much more fundamental issues.  

Published in Economic Analysis

Tattoos, Pyramid Schemes and Social Justice

Friday, 12 November 2010 14:02
pyramid_scheme We had planned to write a blog post on systemic fraud in the US financial infrastructure, particularly as it relates to the mortgage industry, mortgage origination and servicing fraud.  However, today a very good article was published by Matt Taibbi of Rolling Stone which includes colorful first-hand accounts that vividly illustrates the problem on both a macro and micro scale. 
 
 
The plan was to outline these same points regarding the device of “securitization” of mortgage lending through derivatives that allow the formation of a traditional “pyramid” scheme, or what we prefer to call in the US a “Ponzi” scheme – perhaps, within a few years we may just opt to drop the name “Ponzi” altogether in favor of something like “business model for US banks in the early 21st century”.  However, rather than reproduce what Rolling Stone has already done, we thought it would be a better to simply promote the existing article, with a few additional and brief thoughts on what we feel is likely the only solution.
 
Published in Economic Analysis

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