A demand to banks to provide proof of mortgage ownership
A union, tapping into discontent and anxiety about financial institutions' record-keeping on mortgage matters, has launched a webpage helping borrowers "demand to see the original note" that shows who owns their loan.
In two weeks, about 100,000 people have made requests through the site, according to the Service Employees International Union.
The site, wheresthenote.com, sums up the situation this way:
"Mortgages contain lots of paperwork – but only the original mortgage note with your signature is proof that you owe the debt. That’s why banks need the note to prove that they own the loan and can collect payments from you. The problem is, banks now buy and sell mortgages up and down Wall Street – slicing them up and repackaging them to sell to other banks. The bank you bought your mortgage from two years ago may not be the bank that owns it today. But, in all the shuffle, the mortgage notes often don’t get transferred along with your debt."
Stephen Lerner, director of SEIU's bank and finance campaign, says homeowners across the country "are wondering who owns their mortgage, can the bank prove they own the mortgage, are there original notes or not?" Financial institutions' responses to borrowers' requests have begun coming in, and they vary from "here's the documentation" to "we have to research this," he said.
"Legally, they have to respond," he added.
SEIU isn't a disinterested bystander. It's trying to unionize big banks, and it has been highly critical of the industry in the wake of the financial crisis.
Lerner said the "Where's The Note?" campaign has a larger point beyond connecting borrowers with information about their mortgages.
"Banks need to start massively modifying mortgages, and that's the way to stabilize the economy," he said. "There is, all over the country, sort of a growing movement of homeowners, not just people being foreclosed on but people who are underwater, people whose communities are in desperate economic shape, who are joining together and saying, 'The banks got us in this mess and now they have to help fix it.'"
Some might be interested in seeing the documentation on their mortgages without favoring massive modifications, and vice versa. So I'm curious to hear what you think of the "show me the mortgage note" campaign and its larger goal.
As people argue over foreclosure procedures and what's best for the economy, Bloomberg Businessweek is offering up an interesting -- and distressing -- piece of commentary about how clear proof of ownership is a bedrock part of what makes Western capitalism work. "That's why the burgeoning foreclosure mess in the U.S. strikes at the nation's economic heart," writes economics editor Peter Coy.
He's suggesting, in essence, that sorting this out properly is of critical importance for all Americans, or at least those who think capitalism is a good idea. Do you agree?
Categories: The foreclosure mess
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Comments
Yet another example of why big business needs to be reined in via regulation, not catered to.
Posted by: Enzo | October 25, 2010 9:53 AM
Why the foreclosure mess will only get worse, and why the banks won't be held accountable for any of it!
http://www.dailyfinance.com/story/investing/joseph-stiglitz-corporate-crooks-to-jail/19684353/
Posted by: Wallace | October 25, 2010 10:38 AM
This doesn't fix anything, and paper exercises are apart of a regulatory process and by definition, not free enterprise.
If you can't afford the mortgage then how does this paper finding exercise for a "mortgage note" really do anything except keep people in homes they can't afford for a few more months.
This extends the devaluation of homes and only continues to depress the home market, new home development, and severely affects blue collar jobs.
A friend of mine has lived in his home payment free for 2 years and loves this type of abuse. On top of that he hasn't looked for a job for the past 18 months because he is living off of unemployment benefits. It's called socialism and corruption.
Posted by: Jason | October 26, 2010 9:31 PM
I'm not saying the banks shouldn't have records of the sale of the mortgages, but so should the person who "owns" the house. Companies are required to send notices when accounts are sold, I just received one in the mail the other, and my account was sold within the company, just to another division. Most people don't pay attention to the paperwork they receive in the mail and just throw things out. So don't blame all the issues on the banks either, they are the ones who don't check their mail.
FYI I used to do Foreclosures and the probablity of the bank trying to FCL on an account they don't own is slim to none. I've kept my finger in Foreclosures and I've only seen it happen once and it wasn't with the firm I was at. It was caught and quickly fixed.
Posted by: Pigtown | November 5, 2010 1:26 PM