I heard if you have a mortgage and the place where you bought it sold it to another bank, that the new owner can not forclose according to recent court cases.

you own a bank?

I heard if you have a mortgage and the place where you bought it sold it to another bank, that the new owner can not forclose according to recent court cases.

yes it can.

I'm sure it can, almost no mortgage these days remains with the original bank, and people are getting foreclosed all over the place.

I'm sure it can, almost no mortgage these days remains with the original bank, and people are getting foreclosed all over the place.

I've read that in cases where the home buyer, paying the mortgage, takes the foreclosure bank to court the rulings have been that only the originator of the loan can foreclose and they have not been willing to do so since they've already been paid for the loan.

That's interesting. I think that if your home is getting foreclosed, you wouldn't have the money to pay for a lawyer.

The bank can forclose on the loan but sometimes finds a way to help the mortgage holder to keep the loan by reducing the interest or reducing the principal they pay each month. The bank could also sell the loan to another financial institution.

There was a story in the New York Times late last year about foreclosures being dismissed (without prejuduce) when the current holder of the mortgages (a securitization trustee) submitted the original mortgages (showing the originating lenders as mortgagors) but did not properly demonstrate the chain of transfer that got them from the originator to the trustee.

According to the story, the court (in California, I believe) suggested that if they came back and refiled with a mortgage assignment in hand, though, that then there would be no problem.

Edit: It was Ohio. NYT Article (http://www.nytimes.com/2007/11/17/business/17lend.html?ei=5088&emc=rss&en=adcef7e509609475&ex=1352955600&partner=rssnyt)

WTF - I'm assuming these people missed a payment?

WTF - I'm assuming these people missed a payment?

Probably. You can't foreclose on a mortgage unless the mortgagee violated the terms of the mortgage or the underlying loan. Usually that means a missed payment(s), but it can be any breach of a covenant (like failing financial ratio tests contained in the documents, failing to keep the property insured, using the property for some purpose that risks diminishing its value, etc.)

There was a story in the New York Times late last year about foreclosures being dismissed (without prejuduce) when the current holder of the mortgages (a securitization trustee) submitted the original mortgages (showing the originating lenders as mortgagors) but did not properly demonstrate the chain of transfer that got them from the originator to the trustee. According to the story, the court suggested that if they came back and refiled with a mortgage assignment in hand, though, that then there would be no problem.Okay, you finally got this thread straightened out. Mortgage contracts are written up by lawyers and you can be sure they fulfill all the legal requirements for being transferable to a new holder. The banking system wouldn't work if individual banks didn't have the ability to buy and sell their investments, that's the basic definition of liquidity.

Under limited circumstances it's even transferable at the other end, specifically, if the mortgagee dies. If your parents die and bequeath their house to you (at least in America), their bank has to allow you to assume the mortgage. Even if you have no job and can't possibly make the payments. They have to let you try and after two months, or whatever the contract specifies, then they can initiate foreclosure proceedings.

In this case obviously the bank sold the mortgage to one of these new companies that are springing up, and their staff didn't know what they were doing. These are the same companies, BTW, that bear a great deal of responsibility for the subprime mortgage crisis.

The generation of kids who said they were going to be investment bankers when they grew up, even though they couldn't make change for a dollar without a calculator, actually grew up and became investment bankers.

Only in America.