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Housing Crisis: Do You Know the Difference Between a Lien State and a Title State?
"On February 9, 2012, Attorney General Kamala D. Harris announced an historic $18 billion settlement with banks to bring relief to hundreds of thousands of home owners... "
Below is a link to an excerpt from the AEI event last week, "Bubble Trouble: Beginning of the End?" My presentation starts about 0:52 into program.
One of the reasons that the US housing crisis is not nearly at an end is that in the Northeast, where states require judicial action for a lender to foreclose, there is a backlog of years in processing foreclsores.
CA AG Kamala Harris wants to change CA into a LIEN state (I reversed the two in the AEI discussion) and make it like NY, NJ, PA. The safer way to refer to the difference is JUDICIAL vs NON-JUDICIAL states because there are subtle nuances in each jurisdiction. See nice map of the US c/o the Grabois law firm: http://title.grabois.com/
If Harris is successful in making CA a judicial state, the CA real estate market will be irreparably damaged and the CA and US economies will tank. Watch this closely.
I will be writing more about this in The IRA this week.
Chris
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Eliminate property tax and make property 100% taxable upon death of the owner and non-transferrable other than via sale.
But they'll never do that. Property tax serves several purposes:
1. it forces people to work their entire lives, increasing overall economic activity
2. it reduces transfer of wealth over multiple generations, partially preventing the creation of a permanent neo-feudal aristocracy
Although it is failing on point #2 in recent years.
Fewer and fewer are paying their mortgages, credit cards, rent, doctor bills, and so on. Whether they are a "title" or "lien" stae may be a moot point since more people each day follow the leader (Wall Street) and simply don't pay their debts. It's the new American life style...don't pay for anything....shift the cossts and nay losses to the "other guy."
"Title" state or "lien" state....it's a "Sad" State of affairs.
Once again, Cali leading in the downfall
Whdn my zo6 got towed/ I learned real fast! No Front Plate!
Is your state constitution dejour or defacto eyes wide open never say never this country will be free from defacto United States Corporation-------------- coming to a theatre near you---soon.
China CPI was ( FLAT) Ok we look @ RBA Tuesday Night!
This discussion is " MOOT"
Lost me at AEI.
Ditto. Allowing this disingenuous, intellectually dishonest joker to post his crap sullies the site and is disrespectful to zerohedge readers. His arguments are to be made fun of, not promoted. He might as well have said, "Capitalism, as practiced in America, is entirely dependant on fraud. Fraud has become our national pastime. Any attempts to make the perpetration of that fraud more difficult or, God forbid, illegal, will kill the economy."
Wait...that is what he said. And he's right. He just doesn't think that's a problem.
Law of Physics wrote:
Fuck the paper pushers, restore the rule of law. It's either that or more capital flows to the black markets and possession will simply be the law. gee, what a wonderful world that would be, Think India or Pakhistan everywhere.
Well said "Law of Physics" You can't have both, it is one or the other - either the rule of law or the law of possession. In India and Pakistan (they do not have the rule of the law - I have first hand knowledge of this fact, so hence it leaves only the law of possession - that is what they have there)
I do hope that the good old USA does not go to the law of possession, because it is bad - way bad, but we are certanily moving closer to it.
Doesn't matter.
Once upon a time, assuming one had the paperwork, residential forclosures were entry-level paralegal checklist work, and generally proceeded efficiently.
These hot shots found it to their economic benefit not not follow the paperwork rules (which have been around since the Magna Carta) and they are now hoist on their own petards.
Fuckem.
The real question is why ?
The robo signing crimes are just to cover up earlier frauds.
Fraud on the borrowers by inflating home values.In 2005 a petition
signed by 7000+ appraiser was sent to Congress about the
pressure banks were putting on them to inflate prices.
The fraud on RMBS investors.Toxic mortgages sold multiple times
to multiple trusts.Fraud on the CDS counterparties.
Fraud on the taxpayers(TARP) and the AIG bailout.
Move along ,because no crimes were committed.
Only the biggest financial crime in all history.,swept under the rug !
ThisISBob...your are DEAD on.
Once upon a time, you were told who the lender was, received a proper appraisal, were fully aware of all the fees and what was your proper recourse should the agreement (deed of trust, mortgage) become troubled.
Circa 2003-2007, you had inflated appraisals - based on lending to anyone who could fog a mirror (thanks!, Wall Street) which artificially drove up those appraisals, often the actual or true provider of funds was concealed and lied about and ALL fees (YSP's, points, etc.) were fully disclosed so that a borrower/homeowner could make a rational and reasoned decision to borrow.
Wall St. and their executives knew the unsophistication of the average home/property owner and set upon them to deceive them...and rape them...FLAT OUT.
Now I'm no K. Harris fan, and I do occasionally see the reason of Whalen's dicta and thought, but RCW, you are WAY off here. Judicial foreclosure (NY, FL, et al.) has been the biggest exposer of the malfeasance, misfeasance and dereliction so far. Non Judicial states are now finally coming around to the arguments in front of them.
I am cool with non-judicial foreclosure at the end of the day, but with new and strong statutes that hold the sceevy fraudsters that would prey upon, inflate and otherwise destroy property owners to account and with much more severe penalties. How many frauds upon the courts have there been with documentation? What have the banks paid for that? Zipppo. Hence, they continue. It's good business, minus the 3-5% losses in court cases....but at what moral, social and true legal cost?
No, fuck them raw with an HIV infested cock.
Awww... bankers won't get paid 3 times over for kiting a check.... hold on let me squeeze out a tear....
Massachusetts may be a title theory state, but its foreclosure process in non-judicial. Some lien theory states are judicial (maybe Florida). With 50 states, there are as many different requirements for foreclosing. Colorado (from where I write) is lien theory and non-judicial. I just don't know that we can say going from lien theory to title theory makes much difference at all. Mr. Whalen better take more than two minutes next time.
Here is another Massachusetts SJC case. I do not believe it has been ruled on yet.
Massachusetts Home Seizures Threatened in Loan Case: Mortgageshttp://www.businessweek.com/news/2012-02-21/massachusetts-home-seizures-threatened-in-loan-case-mortgages.html
[snip]
The highest court in Massachusetts is poised to rule as soon as this month on a foreclosure case that could lead to a surge in claims from home owners seeking to overturn seizures.
The justices are deciding whether to uphold a lower court ruling that gave a Boston home back to Henrietta Eaton after Sam Levine, a 25-year-old Harvard Law School student, argued in front of the nation’s oldest appellate court that the loan servicer made mistakes when it foreclosed because it didn’t hold the note proving she was obliged to pay the mortgage.
“If the Massachusetts court says this defense works, that would have a huge ripple effect across the country,” said Kurt Eggert, a professor at Chapman University School of Law in Orange, California.
Something very important was filed Friday in re: Eaton.
PACER access is restricted to counsel of record at the moment, but I will get it eventually.
Interesting that no one will even bunt at who the Pierre family should be paying.
In particular, Mr. Whalen, who started this debate with a paste and run.
Thanks for the update chunga! Looking forward to more. Please keep me posted...
You bet.
Those who rummage through PACER are familiar with this warning.
In the meantime, Hernandez v. MERS, et al might interest you.
R.I. Superior Court C.A. NO.:PC10-1212
It is very good but I haven't uploaded to scribd yet. Maybe tomorrow. It's Saturday night and I am throwing replies on here as I pass by the fridge...lol.
I lost count but am doing the same...(grin). Pacing (pun intended) by the fridge has its advantages.
You really need to come up with some new propoganda.
Fewer people are now buying into your divisive BS -
Democrat party is the party of big government and programs? Bullshit!!! Both parties are big spenders that is why we are in an enormous amount of debt. Politicians by any name are like hookers with a credit card in my name.
Creditors have rights. Absolutely they do. But part of the responsibility of being a creditor is conforming to regulations and procedure - ala not creating MERS / robosigning so that creditors can try to squeeze out some cost savings.
Your basic point is valid. All you needed to say was -
The market is starting to clear. Very slowly, but it is starting to clear.
So stop trying to fucking change the rules of the game at this point - let the market clear. The last thing we need to do with all of this mess is to change the rules of the game just when are beginning to clean up this existing mess.
That is all you need to say. You did not need to buffer it with a bunch of divisive bullshit that people are getting tired of hearing about.
LePage vetoes bill aimed at protecting homeowners during foreclosureshttp://bangordailynews.com/2012/03/30/politics/lepage-vetoes-bill-aimed-...
[snip]
AUGUSTA, Maine — Gov. Paul LePage on Friday vetoed a Democratic-backed bill that sought to give homeowners more protection in foreclosure proceedings.
The bill received bipartisan support in both the Maine House (90-54) and Senate (32-2), but the governor said the title of the bill — “An Act to Clarify and Streamline Foreclosure Proceedings” — doesn’t match its substance.
“This law would not do anything to shorten the foreclosure process in the state of Maine,” he wrote in his veto letter to the Legislature. “Instead, it would add a new burden on our lenders to produce original copies of documents or swear under penalty of perjury why they are not able to.
“This will simply create more paperwork in the foreclosure process with little benefit for Maine people,” he added...
...South Portland attorney Thomas Cox, who worked for the banking industry for 30 years, said the governor’s reasoning was flawed.
“It doesn’t delay foreclosures at all. That’s just wrong and misleading,” said Cox.
Cox was at the center of a landmark legal that uncovered a rash of mishandled foreclosures by some of the country’s biggest lenders. In several cases, flawed paperwork led to a pattern in which thousands of foreclosures were approved by bank employees who didn’t fully read the documents.
The attorney also said he and Rep. Beavers requested a meeting with the governor a couple weeks ago after the bill passed through the Legislature but were denied.
“It’s clear that he doesn’t even understand what he’s talking about, but he didn’t give us a chance to talk him,” Cox said.
Lawmakers could overturn the veto with a two-thirds vote, but that hasn’t happened once since LePage took office.
Highly intelligent! Great posts!
I’m supposed to take seriously anything that comes out of the American Enterprise Institute? NO WAY!
Propaganda 101: If you cannot attack the arguments, attack the speaker!
AEI shills ought to know.
It is safe to conclude that all of the AGs were yanked into submission by their political parties who answer to...guess who.
It's not as easy to yank the judges, but it is doable one way or another.
I never thought I would see the day that the title transfer system in the US is a bigger shambles than what was initially found in Central Europe after the demise of the Soviet Union.
Several, or actually most commentators here are totally off base.
Christopher Whalen is one of the best informed guys out there, but he is one who doesn't use his knowledge to propose or promote systemically stupid laws, for the personal gain of himself or his buddies.
Kamela Harris however agreed to the robosigning settlement in her position as Attorney General.
Questions?
Bank Shill? How many laws it is okay to ignore? Is there a specific set of laws you want to ignore to allow parties to foreclose without standing? Because taken together, they would prevent about 98%. But would that bother you?
If you bought too much house;
if you didnt read the mortgage (or couldnt understand it);
if hardship befell you;
or if you cant make the payment for any goddamned reason,
that is your fucking problem.
so stop whining, get the fuck out and let the market clear.
thank you very much
We can use big words to talk around bankruptcy all day.
In the end, justice and fair play are remarkably simple:
If you have paid what you committed to pay, you keep the item.
If not, you are in default.
Defending borrowers as "stupid" and "trusting" and "vulnerable" and "seduced" are akin to
Spitzer claiming he didn't read the contracts with his "friends."
The exchange may have happened on a dark alley, but the alley was a two-way street.
You just HAVE to be a banker, and an ignorant one at that. If you think that the market will just miraculously clear if fraud is ignored then you are just plain stupid.EVERYONE is entitled to proper procedure and justice-isn't that what this FREE?????? nation promises
Your extreme indifference to following the law is disturbing.
If he believes in the rule of law, then he would have no problem with maintaining title ownership.
Unless you know how much speculative and investment real estate is on Chis' books, then you may not understand why Chris would hate to see the true cost for capital come home to roost in california. Seems pretty clear to me, everyone talks their book, period. I mean what else would you expect him to do/say. Sort of like a manufacturer telling people not to buy their product. Won't be good for business. When your business is pushing paper, you certainly would hate to see that stop now wouldn't you? Fuck the paper pushers, restore the rule of law. It's either that or more capital flows to the black markets and possession will simply be the law. gee, what a wonderful world that would be, Think India or Pakhistan everywhere.
Everyone, including William K. Black and Ron Paul, for example?
If you believe this is the case you may stop reading news, as you will never be able to untagle the deliberate obfuscations from all sides. Trying to get into influential ("gaming") circles is then the only option, plus you will have to start to partake in the obfuscation efforts.
I hope you are right. However, people can change when large amounts of $$ are involved.
But again, hope you are correct.
I don't think Whalen realizes what he said in this clip. He says that "title" states were the Union states that derived their property law from England's common law, whereas the "lien" states were the defeated Southern states that were forced to abandon common title law to give creditors more rights. He comes right out and says that the North's banks demanded that the Southern states enact strict foreclosure laws to attract bank lending for reconstruction after the Civil War.
As a Californian, I don't think I need to worry about attracting the housing mortgage industry. IMHO, our recent history suggests that the less of it we have the better. And I certainly don't need Mr. Whalen telling me not to change our mortgage laws in response to a mortgage collapse of historic proportions because his Northeast banks "won't like it". I'm a cash buyer and will do just fine without the Squid's money.
You talk about more or less rights for creditors, but sidestep the question of balance.
It's great you are a cash buyer, but maybe you can also waste a thought on the vast majority of people who will never in their life be able to buy a house cash.
Sure you can buy a "cash" house.
It may not be in California.
It may not be pretty.
But it WILL provide shelter, and likely room for a garden.
The prevailing assumptions of what we're "entitled" to are frightening.
Whalen is the face for the legalization of fraud and property crime. He wants to revoke 400 years of law. He talks about secured creditors foreclosing as if it were a fact that does not need to be proven as the law requires. He can't explain why no secured lender has come forward and proven their case yet when trying to foreclose. He is morbidly obese from dining on the dreams of human beings.
Arse end backwards.
The property market will never improve until property
rights are restored ,and bankers jailed.
Anybody buying property now is a fool ,soon parted from their money.
Valueless title insurance ,and no clear title, until this mess is sorted
out.
Caveat emptor.
You are making a really good point about property rights. I don't want anyone to go to jail, I just want to fix things. Who on this earth hasn't tried to cover his butt after he did something wrong?
There are several properties advertised on homepath.com (which I think are mostly Fannie Mae Owned?) that I would like to invest in, fix up and rent out. I am sure the man in the video would call that clearing the market. I would also be a cash buyer. I would also donate some free rent in one or two homes for the use of the people trying to get back on their feet from this mess.
My question and fear is...Could some investor in a MBS or some prior owner come along later and say he has a lien on the property after I fix it up? I don't know if I am correct about these fears or not?
Comments appreciated.
Damn right they could and will.
I have THREE banks or trusts claiming ownership of my Note.
Plus an earlier satified mortgage I am now unsure is really paid
off.
You could buy,then anything could come out of the woodwork.
End up with un sellable property at a min,or a previous owner
taking it back ,at worst.Either way you just lost your money.
Title insurance now has so many exclusions its not worth the
price of a single FRN's paper..
Do not do it unless you understand the whole legal situation,or
its free.Then ask why its free.
Reference 2005 KELO decision by Supine Court, the municipality can steal your "property" simply to increase tax revenues. Good luck getting fair value.
And this is the case EVEN IF you have a clear title.
With that in mind...
Who is issuing "title insurance" these days, and is it worth the paper it's printed on?
Or the money paid?
Alas, the rule of law comes into play.
Your concern is very valid.
Bevilaqua v. Rodriguez
This fella scooped up a great deal on an REO, only to learn (the hard way) he "bought" it from an entity that did not own it.
If you can't get an unimpeachable title insurance policy as the sole named insured watch out.
The Bevilaqua court cited Common Law in it's decision. It is applicable in both Title and Lien Theory states.
If law is followed, there is a chance the ownership never left the party they foreclosed upon. This may be commonplace for Fannie and Freddie property. No one else would legally touch it for the very concerns you bring up.
Can you be sure you have clear title? no way in hell.
Would this hold true if Fannie/Freddie had NOT ever touched the paperwork?
It's almost like if they're touched it, it's toxic.
Or is it just that the entirety of American contract and title law has now de-volved?
Exactly.