News | Features
15 Aug 2022 4:39
NZCity News
NZCity CalculatorReturn to NZCity

  • Start Page
  • Personalise
  • Sport
  • Weather
  • Finance
  • Shopping
  • Jobs
  • Horoscopes
  • Lotto Results
  • Photo Gallery
  • Site Gallery
  • TVNow
  • Dating
  • SearchNZ
  • NZSearch
  • Crime.co.nz
  • RugbyLeague
  • Make Home
  • About NZCity
  • Contact NZCity
  • Your Privacy
  • Advertising
  • Login
  • Join for Free

  •   Home > News > Business > Features

    A New Financial Disaster?

    The US mortgage market and related foreclosure activity may be about to grind to a halt. The outcome could be a new financial disaster.


    Investment Research Group
    Investment Research Group
    That’s what some commentators are saying about problems that have arisen with America’s arcane mortgage processes.

    In the US, homeowners can only be foreclosed and evicted from their homes by the person or institution that actually holds the loan documentation.

    However, when the financial whiz kids on Wall Street came up with bundles of securitised mortgages and sold them all over the world, the ‘chain of title’ was broken.

    Legally, therefore, most mortgage documentation may no longer be valid.

    To put it another way: If the chain of title is broken, the borrower no longer owes any money on the loan.

    Further complicating matters has been that the banks have tended to outsource foreclosure notices to specialist law firms.

    Some of these firms have not filed the documentation properly and others are thought to have actually filed forged or fraudulent documents with the courts.

    Now huge lenders like JP Morgan Chase and Bank of America have suspended all foreclosures. It is hard to imagine they have done this out of concern for the financially distressed home owners.

    The banks have admitted that staff breached regulations by signing tens of thousands of legal applications without review the client’s folder, as they are required to do.

    Attorneys general from all 50 US states have announced they are jointly investigating home foreclosure practices.

    In one county, an initial look at paperwork found only 17 out of 350 foreclosures had complete paperwork.

    “I can’t possibly be expected to evict people from their homes when the banks themselves can’t say for sure everything was done properly,’ said one legal official.
    If the banks have foreclosing on people illegally, then people probably have the right to get their houses back. That means the people who bought those foreclosed houses might not actually own the houses they paid for.

    This raises the spectre that all foreclosures – and maybe all mortgages in recent times - will come into question.

    Fortunately, the system is different in New Zealand and local processes are a lot more electronic. However, that won’t stop our economies and markets taking a whack if America grinds to a halt, which they could well do if people can’t buy and sell houses while legal issues are sorted out.

    © 2022 David McEwen, NZCity

     Other Features News
     10 Sep: Spring clean your finances
     13 Aug: Plan ahead to give yourself a debt-free Christmas!
     10 Jul: Wise up to clear credit card debt
     07 May: Ways to prepare for the unexpected
     30 Mar: Time for a financial progress check
     10 Feb: Studying up on NZ Super
     10 Jan: Managing the back-to-school bills
     Top Stories

    RUGBY RUGBY
    New Zealand Rugby boss Mark Robinson is refusing to shed any light on the future of coach Ian Foster More...


    BUSINESS BUSINESS
    New Zealand Rugby boss Mark Robinson is refusing to shed any light on the future of coach Ian Foster More...



     Today's News

    Law and Order:
    Search teams in Rotorua are reviewing their next steps after still finding no sign of missing kayaker Gregory Flavell 21:49

    Accident and Emergency:
    One person has died in a crash on Kopu-Hikaui Road, near the Tairua River Bridge on Coromandel Peninsulaar 21:29

    International:
    Three lion cubs born in Nama zoo are a rare, joyous sight in war-scarred Gaza 21:09

    Politics:
    A political commentator thinks Sam Uffindell hasn't had any consequences for his past actions 18:59

    Politics:
    A New Zealand psychologist says we need smart solutions to tackle youth crime 18:39

    Environment:
    French climate activists fill golf course holes with cement, protesting against water ban exemption amid drought 18:09

    Business:
    New Zealand Rugby boss Mark Robinson is refusing to shed any light on the future of coach Ian Foster 18:09

    Rugby:
    North Harbour lead Manawatu in the second half of their NPC outing in Auckland 17:29

    Cricket:
    The Black Caps look unshakeable heading into their final dead rubber twenty20 against the West Indies tomorrow morning 17:09

    Law and Order:
    Auckland have survived against a valiant Southland outfit for a 24-23 NPC victory in Invercargill 16:49


     News Search






    Power Search


    © 2022 New Zealand City Ltd