Their point:  some people may own their home free and clear, because the bank messed up.

First, some clarification: Greg Abbott does have the authority to halt foreclosures, even though Texas is a non-judicial foreclosure state — that is, banks do not have to go to court in Texas to foreclose on a property. Non-judicial is irrelevant, says Jacob A. Decker and Daniel Herrin, attorneys with Allmand & Lee. The Texas AG has authority because these violations may have occurred under Texas Deceptive Trade, Texas Debt Collection Act, Texas Penal Code, Texas Property Code, Texas Government Code (article 16, section 50) and rule 736 (1) of the Texas Rules of Civil Procedure. If a foreclosure in Texas violates any one of these laws, it could be invalid. So I asked Decker and Herrin, could this mean that if I bought a foreclosed property the sellers (who were foreclosed on) could come back and evict me out of my home?

No, they said. What it means is that the wrongfully foreclosed could have a cause of action against the bank/mortgage company. The banks would have to make them whole, which usually means forking over some bucks.

More bank stocks flushing. They could well end up eating some of these messes.

But now for the second part. What if, as the gentlemen propose,  the internal procedures at these banks spilled over not to just the foreclosure but the actual modifications and re-financing that swept the country? 10,000 foreclosures processed per month? Some mortgage officers were once processing a hec of a lot of refi’s. This could mushroom into finding other errors and if there are enough, there could be major class actions and even wilder money damages down the road. COULD be.

“The banks talk on the phone to homeowners in arrears and some are being deceptive,” says Herrin.

Like they tell people, you cannot qualify for an Obama mortgage modification until you are three months’ behind on your mortgage. Then after the homeowner is three months behind on their mortgage, the banks come in and foreclose. Basically, they are jacking around with some borrowers who end up in foreclosure because of advice that the mortgage companies refuse to put in writing. One department’s giving advice while in another, the attorneys hired by the same company foreclose.

Decker and Herrin know because they are seasoned bankruptcy attorneys, and bankruptcy weeds out creditors.

“Bankruptcy puts into action an automatic stay that stops all foreclosure efforts,” says Decker. “It puts the power in your hands and affords you an opportunity to place the burden on creditors to basically say, OK, prove that I owe you money.”

And if the bank has been sloppy on paperwork, they  may not be able to prove that you owe them that mortgage.

Neither Decker nor Herrin advise filing a Chapter 13 just to see if your mortgage company has dotted i’s and crossed t’s, unless, of course, you are behind on your mortgage. Bankruptcy is a serious endeavor that affords good people a second chance to recover from what they see as deceptive practices of big and powerful mortgage companies.

Paul Jackson at HousingWire, who is rapidly becoming my favorite expert on the mortgage/banking industry, is also growing weary of the games. He warns the procedures designed to protect our nation’s property rights are now being used as a weapon against us:

“…a host of well-intentioned but ill-fated policies have done nothing except prolong pain — not only for banks, who are still playing hide-and-seek with bad assets on their balance sheets, but also for borrowers, who are being lied to by our government and by the very consumer advocates who claim to wish to help them.”

It ain’t getting that much better out there: Federal Reserve data shows that as of Sept. 22, U.S. commercial banks held $592.1 billion in revolving home equity loans — essentially unchanged from August of 2009, when banks held $605.2 billion. And these loans are not worth what they are booked at. Fasten your seatbelts, folks: this bumpy ride is not over yet.

Dear Candy:

Why have appraisers have not adapted to the massive movement towards energy efficiency. Indeed, they ignore it.
While the federal government has funded major initiatives to modify existing homes and to provide information on energy efficiency, the MLS and the appraisal industry ignores the significant value added to homes by implementing energy efficiency measures.
Our electric bills in the summer are less than half those of our neighbors as a result of a magnitude of modifications that we have installed.
When one seeks to take advantage of the lowest ever current interest rates to refinance and lock in these rates, the less-than-impressive appraisal types fail to see value in these improvements and they make the statement: “the banks don’t care about that stuff”.
I suggest that of the tsunami of repos that the banks find on their hands, the most unsalable will be those with no trees and no energy efficiency modifications.

Thank you.

Good question, now how do we answer it?

What bugs me the most about this story: the homeowner, a Dr. Alan Schroit, was unable to come to an agreement with B of A and has filed suit for damages. B of A calls him “Mr. Schroit”. Let me please educate the bankers: Dr. Schroit holds a degree in medicine that resulted from at least eight extra years of education (and expense) that many Wall Street bankers lack. And of course the banker’s annual bonuses alone are often more than what many physicians such as Dr. Schroit (who is retired) earn in a single year. So B of A: you get bailed out by the taxpayers, you foreclosed on the wrong house, can you at least call him “Doctor”?