Comments on: Wow, judges now nixing lenders’ foreclosure claims entirely in court

By: Diegon

Diegon — Tue, 05 Jan 2010 02:42:24 +0000

It has nothing to do with neighbour B. Is neighbour B's house in forclousure? If Neighbour B is having the same problems then he should seek to have his problems resolved by the courts too who should then render the same verdict as it did for neighbour A. Now, if neighbour B is happy paying his mortgage and not having any problems at all why should Neighbour A getting his mortgage dismissed unfair to Neighbour B?

By: Edward Harrison

Edward Harrison — Mon, 26 Oct 2009 22:48:24 +0000

This is the question no one has an answer to. We are hitting new legal ground here.

By: fuguez

fuguez — Mon, 26 Oct 2009 19:57:15 +0000

What happens if that mortgage has been synthesised into multiple MBS's?

By: Edward Harrison

Edward Harrison — Mon, 26 Oct 2009 16:48:24 +0000

This is the question no one has an answer to. We are hitting new legal ground here.

By: fuguez

fuguez — Mon, 26 Oct 2009 13:57:15 +0000

What happens if that mortgage has been synthesised into multiple MBS's?

By: Edward Harrison

Edward Harrison — Sun, 25 Oct 2009 16:07:23 +0000

Mark and Lavrenti, while I applaud the opportunity for a leveling of the playing field for the David v. Goliath battle that foreclosure generally is, I have to question whether a whole cloth abrogation of a claim to a mortgage is the right legal decision. I have yet to get a look at the fine details or see the actual opinion. But, what I know, the NY judgment seems dubious to me.

The Kansas judgment looks more interesting and likely to get a hearing more quickly since it has moved through the state courts already.

And the point Mark makes about how to apply the NY case to neighbour A and b in a fair unbiased way is a good one. This is a huge can of worms that will get a legislative "fix" as you suggest, Lavrenti.

Personally, I imagine the Supreme Court could overturn Kansas on appeal and that all hell would break loose when people see this as a politicized judgment. This is what I am waiting to see.

I will look to post something on the debtor revolts in Iowa and elsewhere that took place in the Great Depression because the comparison could be revealing.

Anything like that in Britain, Mark?

By: LavrentiBeria

LavrentiBeria — Sun, 25 Oct 2009 15:00:00 +0000

I wouldn't get too excited, Ed. While the legal precedents set here are truly the first positive development coming out of this whole affair, the judges involved must have forgotten that they live in a dictatorship. By the time that the legal system has gotten through with these rulings we’ll have statutes nullifying their effect. The Congress hasn’t exactly proven itself unresponsive to the interests of lenders, now, has it? It may take a few weeks but someone will be introducing new legislation that will “fix” the whole issue of nominees, agents and the like so that the status quo of plaintiffs simply making an assertion about documentation will be tantamount to there being an affirmative finding. Don’t think, so? I see.

By: MarkWadsworth

MarkWadsworth — Sun, 25 Oct 2009 14:06:41 +0000

It's different in England. I had a guest post by Carmen Butler who attempted the same thing in England and the case appears to have been dismissed, in English land law, the courts always prefer the big guy to the little guy.

But if this catches on, then does it not cause moral hazard? Sure the banks and people who buy securitised mortgages will be more careful in future, but it seems a tad generous to just retrospectively waive massive debts like this, notwithstanding the borrowers did not understand what they were getting into.

And it seems a tad unfair that Neighbour A who has a mortgage of $100,000 and never misses an instalment has to keep paying but Neighbour B who owes $400,000 gets off scot free.