Foreclosure and bankruptcy are two of the most traumatic events you may face in life. This unfortunate situation can change your life...

It will be interesting to see how this plays out. DON'T DO THIS AT HOME.

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I agree with you.  And welcome to AR.

Sam,

Yes, I will be watching.  Thanks for your comment!

WOW--I just read the article and it blows my mind that this process ( "originator of a loan selling these loans and then the process of "bundling" and "slicing" then selling again) ever came into being---who came up with this idea? Probably a greedy individual sitting in a seat of power at some big financial institution..sounds like the 80's all over again(when they "did it with mirrors").

I can only liken this to: someone buying produce, say an apple, then another apple and then another one, and another and then one that is rotten; then putting them all into a bushel basket and then slicing them all up including the rotten one and selling them as as prime applesauce, never letting anyone know that there is a rotten apple in the bunch. Now that bad apple has contaminated the whole bushel and the only one who knows it is the guy who bought it in the first place! My guess is that that was the thinking behind the whole scheme (or scam) and that someone forgot that houses are not apples and you can not "slice" them up and still have a house in the end. DUH!

 How in the world could something like this happen? All of us need to ask this question---again and again until we get an answer.

Thanks for bringing this article to my attention.

Paula

By the way---how did you get your realestate show on your blog, may I ask? I have created several and they are very effective on my listings but I don't know where to put my staging shows. Can you give me some guidelines?

 Thanks,

Paula

This is disturbing on so many levels.  But the saddest thing is that this irresponsible homeowner is being allowed to avoid responsibility because the courts aren't satisfied with who holds the lien.

Mike, I don't know all the particulars of this case but I think the judge was right. Somebody will need to "consolidate" all these "slices" to perfect "ownership." They will do it. Maybe derivatives aren't feasible for Mortgage Backed Securities. We'll see.

Bill Roberts

Interesting.  I've been noticing alot of the properties I have sold this year were owned by mortgage backed funds.  Many of the BPOs completed this year have been for these types of funds as well.  I bet those will slow down for a while? 

Not really a bad thing.  Perhaps the banks will begin to actually work with the troubled lender to resolve the problem.  Short sales may become easier.  The buyer was irresponsible for over buying, but the lender has fault as well for extending the loans in the first place.  Very few bought their home hoping to get forclosed on. 

When the mortgage is bundled up and made into a mutual fund and sold, the Banks then only answer to the investor buying the fund.  So as a homeowner in trouble, I call the bank, and the only responce is pay the mortgage, or get forclosed on.  The bank is looking at the ROI for the investors, not individuals and circumstances. 

I deal with alot of foreclosures and short sales.  Contrary to popular belief, most people who face foreclosure and are in trouble are basically good people on hard times, to proud to or to late to reach out and ask for help; they are not bad people.  There is always the exceptions to the rule though, I relize. 

Paula,

1.  It is about spreading risk.  Maybe it got spread too thin.

2.  I can't remember the exact steps I used to put the RES in my sidebar.  for shame.  And I bookmarked the post that told me how to do it. And I can't find that either, yet.  Jeff Turner may well be able to clue you in.  He's a wizard.

3.  Thanks for reading and commenting.

Leigh,

I have similar thoughts, but I also think the legal point is probably worth addressing.

Actually, I was hoping someone who has a real grip on the issue would chime in.

Bill,

Yep.  I want to see how it unfolds.  I am assuming there will be an appeal.

Chad,

Thanks for commenting.  Again, I'm going to watch this one.  I think it is fascinating.  I got into real estate largely because I find this stuff interesting.