Mortgage Servicing Fraud
occurs post loan origination when mortgage servicers use false statements and book-keeping entries, fabricated assignments, forged signatures and utter counterfeit intangible Notes to take a homeowner's property and equity.
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The Equitable One
I was thinking this morning over coffee about numbers. Depressing and terrifying numbers.

Earlier this year it was reported that foreclosures in the first quarter totaled 850,000, and that the March number alone accounted for 42% of those. Obviously a train gaining momentum.

If the rate of 350,000 per month stays the same we're on track for 4,000,000 foreclosures this year.

Average household - 4 people.

Number of days courts are open and ruling assuming 1 holiday a month - 248.

Maybe I've missed something but my calculation comes to 64516 people per business day that are put out on the street.

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O -

13 every minute. I heard that on the news.

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   In Hillsborough County, Fl., county is looking to lay off 900 people, about
1/3 of workforce due to a precipitous drop in tax revenue.
   At the tax certificate sale, they only sold about 85% of the certificates
meaning the County came up short by about $7 million dollars. Next year,
due to the drop in real estate prices, tax revenues are set to fall off a cliff.
    If this is the trend across the country, there should be lots of opportunities for the homeless to obtain a residence by "adverse possession".
Research empty foreclosures where the taxes are not being paid. Turn on the
utilities, transfer your ID, buy the delinquent tax certificate and move in.
Be sure to join the neighborhood Crime Watch organization and improve the
property. Pay taxes for seven years and the property should be yours, if
you live there the entire time. Of course, study the State's laws on adverse
possession before you do anything. Do it legally!
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The Equitable One
Yes tax revenues are poised to fall of a cliff. I'm sure all jurisdictions are already working on revisions to the codes to make up for the shortfalls.

I had a conversation with an attorney last summer. He considered representing me but as I really had no money to pay him at the time he declined saying he couldn't afford to do pro bono work.

My response to him was that he was going to loose more money in the next year or two than it would cost him to represent me pro bono.

Declining property values have likely claimed 20-25% of his home value, and likely all of his equity.
Declining values in his stock portfolio, IRA, various other investments (hasn't the DOW and NYSE lost 40% or so)
Increased property taxes that will be around for years. As a home owner he'll have to pay.
Increased fees across the board for licenses and permits.

The list goes on and on.

He still blew me off. I've thought many times of contacting him again and reminding him of our previous conversation.

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Yes and one of Orlando, FL's most respected and seasoned attorneys can't understand why the mortgage companies and servicers don't/won't work with homeowners! 

So, are county governments going to start making these companies pay the taxes on the properties they now own? 

And if the county governments make homeowners maintain the property, don't you think they should include these *new* homeowners?

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The Equitable One

I haven't followed it closely but my understanding is that many foreclosed properties are not transferred into the new owners name (the alleged lender and plaintiff in the suit as so many are "bought" by them) after the sheriffs sale, and seemingly so that the homeowner is the party the counties will seek out for payment of such.

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tired and tattered

My nephew lost his home to Countrywide and the title to the home is still in my nephews name. Even though this is suppossed to be illegal they are doing it. I was told that this way that they do not have to pay the property tax. It makes you wounder why the individual states are putting up with this. We live in Illinois and they are getting ready to increase the taxes here by a large amount. This is really going to help all the people losing their homes here. NOT. I don't understand why they will not make them transfer the properties to their name. My nephew said his lawyer told him that the house would propably be in his name until it sold. I don't understand how they can do this. By all rights this home is still in my nephews name and yet he can not live in it??? How can they get by doing this illegally. Maybe if all these servicers were forced to get these properties in their name and they would have to pay taxes on all this property they wouldn't be so quick to take these homes would they?

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Ok, tired and tattered brought up his nephew's home situations.

So if John's home is foreclosed on but it is still in John's name, why can't John live in it?  After all, it still is in John's name.

Or should John take a couple of hours off to go to the courthouse and do the new homeowner (LOL) a special favor, by seeing to it that it is changed to reflect the new homeowner's name?  Then the new homeowner will have to pay taxes and upkeep on the property!

One more thing, can a group go and help these people who were forclosed on and aren't living in the home by going to the courthouse for them and seeing that the new homeowner is now going to be on the books?

After all, these banks take the time and effort to show up at the auctions to bid their $100 or $200 for a home.  Maybe they should be forced into paying their fair share of taxes!

Like the old saying goes:  Gas, Grass or Ass: Know One Rides For Free!!!!  Ha! Ha!  Just a blast from the past for a laugh!

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The Equitable One
The past? Pfft. I still ride.
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tired and tattered

From what my nephews lawyer told him, the house will remain in his name UNTIL it is sold. This is only to keep Countrywide from paying the property tax. Why are they allowed to cheat and not pay taxes? It is suppossed to be illegal. The house could sit there for years and not sell and it will still have my nephews name on the title. What would they do to us if we didn't pay our property tax on our home? Do we not realize that anyone who is paying there property tax is going to again pay for these homes that are in foreclosure and the taxes are not being paid? Also, when and if any of these homes sell, the person buying the home is paying the back taxes on them. I wounder how many people are aware of this? Also who is responsible for the property? My nephew is in BK so he has no financial liability. Yet if someone is hurt on the property who pays?

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Knows About Deeds
Here is the simple fact about deeds and concealed ownership.  When the property is sold at foreclosure, whether by court order or by private sale, the selling entity -- sometimes a commissioner, sometimes the sheriff, sometimes a trustee, etc. -- gives a deed to the purchaser, usually the mortgagee, the servicer on behalf of the mortgagee or some shill working with the mortgagee.

In most states, the recording acts make recording desirable, but recording of a deed, mortgage or assignment is NOT required.  The deed remains perfectly valid, but the grantee of the deed hasn't perfected its interest through recording.

Tax assessing entities and taxing authorities have NO WAY OF LEARNING OR OR KNOWING ABOUT TRANSFERS WHEN THE DEED IS NOT RECORDED.

There ARE some perils to the foreclosing entity in failing to record the deed and in failing to pay the lawful taxes.  First, in the absence of the recording of the deed, some scoundrel COULD convey an apparently good title, which in fact is based upon a forged instrument or conveyance by someone who lacks any ownership.  This peril is usually NOT particularly great, because even IF the purchaser thought that ownership remained vested in the foreclosed borrower, the purchaser checking the record would also think that the propertywas still subject to a mortgage.

The title searcher and/or title examiner would almost surely find the record of the foreclosure and would realize that the defaulted borrower had no remaining interest to convey.

On the other hand, some scoundrel could FORGE a deed purporting to convey the subject property.  If this deed seemed to arise in consequence of the foreclosure, some innocent purchaser might not readily realize that the bank sold the property to A not B and that B doesn't really own it.  Even a title company might be fooled in this instance.

But the peril to the foreclosing lender is somewhat thin.  A forged deed is always void and conveys no interest whatsoever.  While a deed executed by the former owner might be reasonably relied upon by the purchaser checking the record, not so when the record reveals the foreclosure. 

A third peril to the foreclosing lender is LOSS OF THE PROPERTY TO A TAX SALE.  When the taxes are NOT paid, the property is typically (a) subject to sustantial late fees, and (b) subject to be sold for tax liens.  What SHOULD happen is when taxes remain UNPAID for any lengthy period is that the property should be listed and posted for tax sale.  The property COULD BE LOST to the taxing authorities, just as the homeowner lost the property to the lender.

However, in most jurisdictions, a property will not typically be scheduled for tax sale for several years.  So most of the institutional lenders are not in any immediate danger of losing the property to a tax sale.

But in failing to record the deed and identify the new lawful owner, they are in essence waiving their right to notice of the tax sale.  Usually, taxing authorities will have to serve the record owner of the property, may have to post a notice at the property and/or also post a notice in a newspaper of general circulation.  When the ownership is concealed, the taxing authority has NO WAY to serve the new owner and will proceed based upon posted and published notice.

Local taxing authorities should consider enacting legislation or ordinances differentiating between: (a) occupied and vacant properties, (b) disclaimed properties where ownership is unknown or indoubt, and/or (c) properties owner by entities owning multiple tax delinquent properties. 

That is it maybe reasonable public policy to post tax delinquent properties for tax sale after only ONE YEAR when the prior owner disclaims the property and no one else files a deed and accepts taxing responsibility, while waiting two to five years when the owners is readily identifiable.  Similarly, perhaps it is reasonable to delay an auction for two or three years when a property is owner occupied and the owner has only one tax delinquent property, but to be more aggressive where a single entity owns more than one vacant property.

Bear in mind that almost any properly executed and authenticated instrument can be recorded.  While it is UNLIKELY that a taxing authority will ever seek payment from the prior owner, a person concerned about this could probably file some affidavit disclaiming any remaining ownership in the property.  Of course, this is something one wouldn't want to do if one had remaining appeals, etc.  Think this through and talk to a lawyer.

Bottom line is I wouldn't let this concern me greatly!
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   In my humble opinion, we are only just beginning to see the number of banks that are going to go bust in the near future. When these banks go
bust, all the foreclosures they own will sit idle for years with no one paying
the real estate taxes on them. This is what happened during the Saving & Loan crisis of the early 90's, only this time it will be nationwide instead of
limited to Texas, Florida, and California.
   Local governments will be selling tax certificates on these delinquent properties and there will be fewer and fewer buyers. If banks are not recording the certificates of title, and just leaving the old owners name
on the deed, then adverse possession under color of title would be a possibility if one can find the previous owner. True, the deed would be worthless if the true owner were to evict the squatter, but perhaps the
entity no longer exists. In any case, if one were to buy the tax certificate
one could be reimbursed later if the lawful owner showed up and evicted
the squatter. In the meantime, the homeless person would have a place
to live while weathering the storm and possibly rebuild credit for the almost
inevitable government auction of the property. I helped a homeless buddy do
exactly this during the Saving and Loan fiasco. He lived there rent free for
two years until the RTC auction. Then he bought it at the auction for $500
down and financed it through BOA with me as the cosigner. He eventually
paid it off. I believe we will see many opportunities like this in the near future.
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tired and tattered wrote:
From what my nephews lawyer told him, the house will remain in his name UNTIL it is sold. 
 Also who is responsible for the property? My nephew is in BK so he has no financial liability. Yet if someone is hurt on the property who pays?

I too wondered who would be responsible if someone were to get hurt on the property if the owner (who lost the home to foreclosure) wasn't in bankruptcy? 

I don't remember exactly where I read it but someone had said that after the foreclosure and eviction, take your paperwork to the courthouse and get the deed transfered to show the rightful, new owner of the property.

Now, if you live a state where the tax sale has no right of redemption or a very short right of redemption (such as NC has a 10 day right of redemption on the tax sales), not putting the deed in the new owner's name could work to your benefit.  You might just be able to get the property back through the tax sale.  Hey it's an idea!

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Interestingly enough...Home is given up thru a banko...Not actually foreclosed...Not resold..Their right about it possibly going up for back taxes..Shoot these lenders are stupid sometimes...they will let them go for back taxes then not redeem the money...As a matter of fact the person did a chp 7...Yep just like if city gives a citation for cutting the lawn as far as I know its in his name til they decide to do whatever the F their going to... Yes banko discharges his debt but its not outta his they could technically come after him for this as well...wonder if at this stage their still trading the mortgage note.

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I wondered too.  But after the bank sends "Dumb Danny" to bid at the Sheriff's auction and take back the house, I really don't think they can play the assignment game.  Afterall, they had to pay cash for the winning bid, therefore there is no new mortgage. 

So, then it comes time for the taxes due.  Of course, the bank doesn't get the notice because their name isn't in the Property Assessors address book.  So, it goes up for tax auction and the bank could be out if they don't reclaim the property by paying the taxes in the set amount of time.  So, it ends up being another loss. 

Now there is another twist.  In states like FL, they have some weird type of bond thing.  It's where you can buy the tax note and get 5% interest on your money.  I am not sure how it is done but, I read where people thought this was unfair because guess who is buying the tax notes?  You got it...the banks!!!  And it was taxes due on foreclosed homes!!!  Oh yes, homes where the owner or former owner isn't going to pay them.

So, it's another scam on the long list of many!  Are you starting to get the feeling that all these little loopholes were made just for the financial industry to take advantage of?  Afterall, you don't have to be a rocket scientist to figure this out.

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I seriously doubt any bank is paying cash to itself after the auction. Think about it. Igotyourhouse Bank wins foreclosure. The sheriff holds a sale for the benefit of Igotyourhouse Bank. I gotyourhouse Bank is the only, or highest bidder. Do you think the sheriff is going to make Igotyourhouse Bank write a check or tender cash to itself?

It didn't cost them a dime and in actuality they never even loaned the money in the first place. It really is a scam.

Also, the tax bonds are called tax lien certificates. Usually any investor can buy them. The amount is not bid on, the interest is what is bid on. It is a way to make money from people not paying their taxes. It is also a way for the local government to receive their taxes due to continue to provide services to the communnity.

Yes, banks can lose the property to tax sales but what are they losing if they don't have any money invested?
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Tom: thanks so much for explaining all this to me and others. 

You are soooo right!  It is such a scam and the American public is the victims.  Most are just too happy watching "Family Guy" to realize they may soon be participating in their own version of "Survivor"!!!

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tired and tattered

We have been living in our house for over a year without making payments. We are in chp13 BK and we surrendered our home last June. We have not been served anything yet. No papers at all. We are just buying time to save up some money to move. It is really hard when no one wants to rent to you because of your credit and the fact that we are in BK. Any of these rent to own places charge an outrageous amount. We are not sure where to go. We live in Illinois and it is one of the worst when it comes to politics. There is absolutely no help at all in Illinois. And because so many of these empty properties are not paying their taxes, our state tax is getting ready to go sky high. Once again we are going to pay while the bad guys win again.

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