Good video. Gillies really explained the securitization of recent mortgages in layman’s terms, as well as the elements of a contract.
I understand that these banks knew borrowers couldn’t pay when they loaned them the money. But I am failing to understand, in the absence of PMI, how they thought they could fare better by foreclosing, so made these marginal loans. In hindsight, the banks had no way of knowing back in 2003 (when rampant “loose lending” began) that they would be “bailed out” by the Feds.
What I have seen is that these “distressed” borrowers’ closing costs, fees and subsequent mortgage payments were SO HIGH (after a brief “teaser period”) that they probably ended up making 4+ years of *true* (prime 30-yr fixed) payments in the 12-18 months that they struggled to make payments after last refinancing (before they stopped making pymts). We’re all claiming they’re currently “squatting,” which is technically true. But they gave up so much of their equity in lender points and fees and exhorbitant interest payments in their *new* monthly payments. Not all these “squatters” took out cash for themselves. In several cases I am familiar with, they were forced to buy out a tenant-in-common if they wanted to retain their longtime home. Of course, all these longtime (non-residential) tenants-in-common came out of the woodwork for appraisals when the local market values were sky high, preying on the single-mom (residential) TIC with kids enrolled in school. This is just another reason NOT to take title in this manner.
I don’t advocate hanging out on the courthouse steps and trying to ask the trustee’s rep questions like Gillies suggests doing. It won’t do any good. If the law should evolve in CA to where the lenders have to prove the ownership of a trust deed upon foreclosure, they will just go thru MERS and get all their ducks lined up in a row, file one or more assignments from the originating lender to the current TD holder(s) and then file the NOD and NOT. On the steps, the talented fast-talking trustee’s reps might then read off the chain on title on the steps before returning the property to the rightful beneficiarie(s).
I don’t see MERS going away because TD’s are still being recorded today in the name of MERS.
I don’t see CA ever adopting a judicial foreclosure process where lenders have to prove all the owners of a mortgage in succession. The CA court system is swamped and doesn’t have the resources to deal with this.
