December 15, 2008

Subprime rant part II

Wait!  Don't go away again!  This one will be shorter, I swear.

Now that I've slammed on the borrowers, let me slam on the lenders for a bit.  No, not for making the loans in the first place.  Well, not entirely.  Long, hard looks need to be given to the various access to lending programs to see if these programs turned from "goals" into "requirements".  I know what I think happened.  No, this is about something else.

Yes, I'll put it in the extended entry to spare y'all.
It should be obvious that before a party sues to enforce a contract that the party bringing suit should be a signatory or an assignee of the contract.  The lenders?  Aren't necessarily worrying their pretty little heads about that.  It turns out that these notes have been bundled and rebundled and bundled about and bundled some more.  The end result is that lenders don't actually know what they own.  This is becoming an issue because the first question asked when being sued on a note is okay, show me the note.  And the lenders are bitching about being required to do that.

No, it's not a legal technicality to make a party prove it has the right to bring suit.  It's pretty much the most fundamental question to be answered.  If you don't own the mortgage, you don't have the right to bring suit.  The fact that the lenders aren't even capable of finding the mortgage speaks volumes about the care and attention given to the entire loan process.  Lenders are attempting to substitute statements regarding batches of mortgages with actually presenting the mortgage at issue.  One should not subtitute for another.

There are practical reasons for this requirement.  If a deal is to be made, it better be made with an entity who is entitled to make that deal.  Right now it's possible for a borrower to presume they've refi'd, make the payments and then bam get sued by some other company they've never heard of.  That's a tiny little problem.

Look, I'm totally willing to defend the Evil Corporation but the Evil Corporation has to at least pretend to play by the rules.  If a lender can't even identify the loans it owns?  Then I feel no freaking sympathy when the lender gets heaved out of court.

Seriously.  I'm not asking for the moon here.  Just show me the damn note.




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