Krugman Versus Reality (Ongoing...)

Paul Krugman, the Princeton Populist, takes up the cause of the Little Guy beleagured by the Big Banks in the latest plot twist of the "Mortgage Morass":

The story so far: An epic housing bust and sustained high unemployment have led to an epidemic of default, with millions of homeowners falling behind on mortgage payments. So servicers — the companies that collect payments on behalf of mortgage owners — have been foreclosing on many mortgages, seizing many homes.

There is no question that banks have done a miserable job of documenting the title trail as mortgages were sold and securitized.  But do you expect a Nobel Laureate to provide economic analysis or hyperventilating hyperbole? 

But do they actually have the right to seize these homes? Horror stories have been proliferating, like the case of the Florida man whose home was taken even though he had no mortgage.

Hmm, I guess it depends on the meaning of "taken".  Also of "horror".  The man in question, Jason Grodensky, paid cash for a house after the bank had begun foreclosing against the previous owner.  However, in all the excitment of the mortgage meltdown (and the acquisition of the original lender by Bank of America), news of the transfer was not properly disseminated and the forclosing proceeded apace. 

Mr. Grodensy was never served with eviction papers or put out on the street - his home was "taken" in the sense that he received a notice that a FNMA had taken over the title.  He squawked and eventually everything was straightened out, with BofA agreeing to pick up his legal tab.

As to Krugman's assertion that "Horror stories have been proliferating", let's turn to the Times:

“It’s inexcusable that the banks didn’t staff up to meet the surge in foreclosures,” said Christopher Kotowski, an analyst with Oppenheimer. “On the other hand, we need to look at whether they are filing foreclosures on a massive basis against people who are not delinquent. So far, I haven’t seen any evidence that they are.”

Well, that is the Wall Street defense:

Those on Wall Street, however, are largely unsympathetic, insisting that possible errors in the foreclosure process are beside the point, that the process begins only when a borrower starts missing mortgage payments.

"If you didn't pay your mortgage, you shouldn't be in your house. Period. People are getting upset about something that's just procedural," said Walter Todd, portfolio manager at Greenwood Capital Associates.

Obviously, it doesn't follow that the courts should tolerate random foreclosures by non-mortgage holders.  But Krugman concludes with a feel-good non sequiteur:

What should be happening? The excesses of the bubble years have created a legal morass, in which property rights are ill defined because nobody has proper documentation. And where no clear property rights exist, it’s the government’s job to create them.

That won’t be easy, but there are good ideas out there. For example, the Center for American Progress has proposed giving mortgage counselors and other public entities the power to modify troubled loans directly, with their judgment standing unless appealed by the mortgage servicer [link]. This would do a lot to clarify matters and help extract us from the morass.

Huh?  That would expedite negotiations of mortgage relief, since the homeowner wouldn't have to track down the current holder of the mortgage and could just negotiate directly with his Congressman's precinct captain or whoever Krugman and the progressives endorsed.  But lowering the payments on a mortgage with no clear owner would hardly "clarify" the matter of ownership (well, unless the payments were reduced to zero, which I guess Krugman would endorse).

MOREZ: James Joyner provides a brutal beat-down of Krugman's column and suggests the peril of reasoning from extreme cases.

Comments

[Sue]

I hope my Rangers beat the crap out of the Yankees.

[Paul Krugman]

Ok, ok, but I've been underwater since I lost the Enron gig.

[Rob Crawford]

Damn, someone beat me to the Enron joke.

Does anyone think the press would be nearly as successful now as they were then at switching around which party was closest to a corrupt failure like Enron?

I think there may be too many alternate sources of information, now.

[Rob Crawford]

That won’t be easy, but there are good ideas out there. For example, the Center for American Progress has proposed giving mortgage counselors and other public entities the power to modify troubled loans directly...

Screw contracts! Screw legal rights!

Anyone else less than thrilled at the idea of a "mortgage counselor" being given carte blanche to rewrite contracts?

[Threadkiller]

--"Does anyone think the press would be nearly as successful now as they were then at switching around which party was closest to a corrupt failure like Enron?"--

Yes.

[Danube of Thought]

Unexpected:

Confidence among U.S. consumers unexpectedly declined in October, with Americans more pessimistic about current economic conditions. The Thomson Reuters/University of Michigan preliminary index of consumer sentiment decreased to 67.9, the lowest since July, from 68.2 in September. Economists estimated an October reading of 68.9, according to the median forecast in a Bloomberg News survey.

[Ignatz]

Good, sensible article on the foreclosure flap at Minyanville via RCM.
Especially helpful are the author's replies in the comments section.
I can't speak to the intricacies of MBSs and the like, nor do i pretend to know what the results of all this hulabaloo will be, but I have been buying and selling property for twenty years. I've held deeds of trust and promissory notes on properties I've sold and I've bought properties on which the same were extended to me by the seller. I've also had considerable experience with conventional mortgages. Admittedly this experience is essentially restricted to CA.
It is my understanding in CA that a deed to property does not have to be recorded. Nor does a deed of trust or mortgage. Promissory notes are not recorded and in fact aren't recordable. A notice of default is about all that is required to be recorded. In a quick look at the CA code my memory seems to be correct but I'll be happy to be proved wrong and of course this only applies to CA.
But if the above is correct in what way is MERS illegal and how has it deprived county governments of rightful revenues?
And if the robo signed and other improperly notarized docs turn out to be substantially correct (as the vast majority no doubt will) as far as amounts owed and who the defaulted borrower is and who the current assignee of the debt is, how has there been a fraud upon anyone other than the technical and admittedly serious one of fraud upon the court? No one has suffered injury, least of all the delinquent debtor. Nor have any predecessors in interest to the current holder of the mortgage.

[Danube of Thought]

Seems to me that Krugman's solution would run afoul of the constitutional prohibition against any law that impairs the obligation of contracts.

[Mark Folkestad]

Sue, I'll be rooting with you for the Rangers. My beloved Twins were the original Washington Senators in the musical "Damn Yankees", and I'm in that same mindset. It's nice when the teams with less financial resources for signing the best free agents can win.

[Charlie (Colorado)]

--"Does anyone think the press would be nearly as successful now as they were then at switching around which party was closest to a corrupt failure like Enron?"--

Yes.

Then you're a fool.

[lyle]

"Seems to me that Krugman's solution would run afoul of the constitutional prohibition against any law that impairs the obligation of contracts."

And you think this bothers Krugman at all? Charmin has more value than the constitution with proggs like Paully K as far as paper goes.

[Melinda Romanoff]

I'm short some things that are justifiably "stinky".

And I wrote a lot about this last night.

Don't make me wade in again.

[Melinda Romanoff]

Ig-

The distinction is the 23 judicially guided foreclosure states. Those must show wet ink paper trails. CA isn't one of them.

They're special.

[Danube of Thought]

"how has there been a fraud upon anyone other than the technical and admittedly serious one of fraud upon the court?"

I'm not sure I even see how a court has been defrauded. But I confess I'm not reading the fine print in all of this.

[Extraneus]

That would expedite negotiations of mortgage relief, since the homeowner wouldn't have to track down the current holder of the mortgage and could just negotiate directly with his Congressman's precinct captain or whoever Krugman and the progressives endorsed.

Well said. The word "commissar" comes to mind.

[Threadkiller]

Geez ChaCo, sorry I don't see it happening yet. When you study h&r's timeline of Obama's downfall, on the previous thread, where do you find the mainstream doing anything different?

Enron was a blame shift that the recipients of that blame never tried any real defense. At this point I just don't see a political party that is ready to defend themselves as strongly as it's supporters will.

The press will demonize the supporters and the political leaders will sit on their thumbs.

This doesn't leave me without hope though. I just think the mortgage mess will by hung around the necks of the conservatives because the people at the top lack the fortitude that their supporters have.

[Danube of Thought]

Don't bother, Mel. You and Pagar and a few others seem to have laid out all the facts for us. Although I couldn't begin to repeat them, I have seen enough to conclude that it's a dumpster fire.

Incidentally, now even Newsweek is saying Dingy Harry stank.

[Danube of Thought]

Wilders acquitted on all counts.

[Process, my man, process.]

Yep, I love the Dutch, and the trial proceeds.
===========

[Ignatz]

--Ig-

The distinction is the 23 judicially guided foreclosure states. Those must show wet ink paper trails. CA isn't one of them.--

Mel,
I know that 23 states require a foreclosure be a judicial process in all cases, and in all of the others I believe a contested foreclosure is also a judicial process.
However I still have not seen a cite that each assignment of a mortgage by law must be recorded in any state. Maybe it does in many or all of them but some guy at ZeroHedge or Daily Kos shouting it from the rooftops doesn't make it so. What if in one of those 23 states the original note is lost, the homeowner gets a free house? No, you go through the affadavit process. They may be required to do that better but the process still exists.

I'm no fan of the banks, but IMO this isn't even a dumpster fire. But it does have the capacity to be turned into an economic firestorm if it is exploited sucessfully by those who would benefit from such.

--I'm not sure I even see how a court has been defrauded.--

DoT,
For the sake of argument I'm granting the charge that presenting false affidavits that a document has been properly notarized or that the info contained therein has been reviewd for accuracy is a fraud on the court. I have never dealt with the issue so am not sure what constitutes fraud on the court. Perhaps if the affadavits said the statements were made under penalty of perjury that is more apt. Enlightenment?

[Frau Feuerzangenbowle]

Give sharia a chance! Ginsburg won't mind a little international help. The Germans now know that *their* courts are using sharia "where it's helpful."
A leading law professor has contradicted Chancellor Angela Merkel’s statement that Sharia law was not practiced in Germany, saying a variety of Sharia-based rulings were being made all the time.
“We have been practising Islamic law for years, and that is a good thing,” Hilmar Krüger, professor for foreign private law at Cologne University, told Der Spiegel magazine.
Family and inheritance rulings were often made according to Sharia law, he said, listing a range of examples.
Women who are in polygamous marriages legal in their countries of origin can make claims of their husbands in Germany regardless of the fact that their marriages would not be lawful here. They can claim maintenance from their husbands and a share of an eventual inheritance, said Krüger.

When I was to be married in Germany, the officials looked at California marriage laws to ensure the German marriage would be valid in California. That's different from using foreign/religious laws to determine domestic inheritance, alimony, etc., isn't it?

[Danube of Thought]

Filing a knowingly false affidavit (or declaration under penalty of perjury) is indeed a fraud on the court. I know of at least one circumstance where it happens thousands of times a day, and everyone including the courts winks at it.

When an original document is to be filed with a court and copies are to be served on all parties, the secretary signs a declaration that he has served it as required. He attaches that declaration to the original, then makes the required number of copies of the whole thing (including the declaration), sends the original off to the court and mails out the copies. Only once in my career did I ever see a judge make an issue of it, and he was widely understood to be nuts.

In other words, where it's a harmless white lie that saves a lot of paperwork, it gets overlooked. Whether that rationale would apply here I cannot say.

[Rick Ballard]

I'm pretty sure it's a dumpster fire in a thick fog with a light breeze blowing from the direction of a huge pile of smoldering leaves.

[Clarice]

The WaPo has a front page article on judges and foreclosures, obviously pleased with a Judge Rapkin in Sarasota who's doing what he can to halt them. If I remember correctly he's the judge who let off a child molester who shortly afterward went on to kill a kid.
http://www.wftv.com/news/2836479/detail.html

[Walter]

I represented a client some time ago who had a rental property forclosed in FL. Because the bank chose the expedited route rather than a judicial foreclosure, state law prohibited deficiency judgements.

The evil bank sold the right to collect on the (non-existent) remaining debt. For several years thereafter, this "debt" was traded to a different collection agency after I pointed out that they were in violation of state and federal collection law.

Unfortunately, it was never worth the hassle to sue any of them--the penalties are miniscule and they were out-of-state with respect to the FL property, the owner, and my practice. It was no problem to send a form letter, but the process continued until he passed away.

A long-winded way of saying that formalities matter. If any of them had an intelligent person looking at the original documents, it should never have been sold forward. It is just one reason to require someone to personally swear that a debt is valid.

[maryrose]

The mortgages were underwater the moment the house owner stopped making their payments. Why do they get to renegotiate it? Find out who owns the mortgage' have that company call the former house owner' ask if they have at least one or two months worth of payments, if not; foreclose immediately. Krugman cannot pole vault over existing contracts and paperwork to have an instant do-over. That is madness.

[Threadkiller]

--"When I was to be married in Germany, the officials looked at California marriage laws to ensure the German marriage would be valid in California. That's different from using foreign/religious laws to determine domestic inheritance, alimony, etc., isn't it?"--

Yes, but it is the same as determining a persons citizenship as it pertains to another nation.

[matt]

my brother, who is almost as devious as I am, received an e mail today from Organizing for America (or was it Onanizing for America?).

The have a new tool for their minions to reach out and mobilize the masses.

Younger Brother suggested that we pirate the link and use it for our own nefarious purposes. Said link below.

[NK]

Who's Paul Krugman?

[Neo]

HAMP nightmare story LUN

[Captain Hate]

was it Onanizing for America?

Truth in labeling.

[Jane (sit on the couch or save your country)]

Okay I did my civic duty, I went to Matt's link, clicked on 5 names and declared none of them spoke English - which is pretty funny when you are calling "John Cotter" of Hyannis.

[matt]

Subverting Organize America. Hee hee....LUN.

[Porchlight]

Ras has Tancredo within four points of Hickenlooper, 42-38 with Maes at 12%. Wow.

[hit and run]

Well. Perhaps http://news.yahoo.com/s/ap/20101015/ap_on_re_af/af_kenya_obama_s_brother_1>with this news Obama will go all Cain with the "brother's keeper" line now:

NAIROBI, Kenya – President Barack Obama's polygamist half brother in Kenya has married a woman who is more than 30 years younger than him.

The 19-year-old's mother told The Associated Press on Friday she is furious that her daughter quit high school and married the 52-year-old.

Mary Aoko Ouma says her daughter tried to marry Malik Obama two years ago, but the mother says she wouldn't give permission.

Malik Obama, who is Muslim, has two other wives. Polygamy is legal in Kenya if it falls under religious or cultural traditions.

In an interview broadcast by Kenya's NTV that was filmed without his knowledge, Malik Obama says he married the 19-year-old but didn't say when.

[Jim Ryan]

Okay, just skimming the thread, I gather Hickenlooper is onanising with Cooter?

[Ignatz]

--I'm pretty sure it's a dumpster fire in a thick fog with a light breeze blowing from the direction of a huge pile of smoldering leaves.--

Rick,
There is a huge pile of smoldering leaves and Barry is standing next to it with a squirt gun full of nitro.
I just don't think the leaves are MERS, out of state notarizations and stupid corner cutting by lazy banks, but they might very well serve as an immediate source of ignition if somebody pushes all three together at once.

[bgates]

I went to Matt's link, clicked on 5 names and declared none of them spoke English

Remind me again of the circumstances in which a voter would be unable to speak English?

[jimmyk]

However I still have not seen a cite that each assignment of a mortgage by law must be recorded in any state.

Ig, I can't claim to be an expert on this stuff either, but I'm going to hazard a guess here that whatever these laws are in the various states, they were put in place before anyone conceived of MBS and CDOs and the mass movement and repackaging of mortgages that took place. The creation of MERS, or the kind of "wink" practice that DoT alludes to, was probably a big reason that no one took another look at these laws and said, "Wait a minute, it makes no sense to demand all these recording fees and paperwork for these types of transactions."

[Jim Ryan]

The government got drunk at a whorehouse with some businessmen and crashed our car under a bridge. We're stuck in the car and there's an air bubble, but instead of saving us Barry has gotten out of the car with our purse and is now maxing out our credit cards.

[Captain Hate]

Speaking of onanizing with cooter, Tammy Bruce has been scorching the head of NAG of Calicaliphate for stating that though Jerry Brown calling Meg Whitman a “whore” was a poor choice of words, the description was accurate. Teh Tam pointed out that anybody contributing to the national NAG was in effect supporting mysogyny by the Vichy feminists.

[Rick Ballard]

Ignatz,

I should have said "wet leaves". I keep looking for BOzo's cunning plan in this but that's because I forget that he's an idiot from time to time.

[hit and run]

Jim:
The government got drunk at a whorehouse with some businessmen and crashed our car under a bridge.

We handed the keys to the Democrats after the 2006 elections and they promptly slammed the car in drive (which starts with D,like Democrat) to take us in a newD irection. We were coming to a bridge,and they made a hard left.

[Ranger]

Remind me again of the circumstances in which a voter would be unable to speak English?

Posted by: bgates | October 15, 2010 at 02:54 PM

Under Clinton, the requirement for naturalized citizens to know english was eliminated. I think its been re-instated, but I'm not 100% sure of that.

[heir2freedom]

It never ceases to amaze and amuse me how when shills like Krugman discover a freshly laid turd, always act surprised when they exclaim, "Whewy! That stinks."

Morons, that's why it's called a turd... because it does stink.

One feculent policy after another that emerges from Obama and his abettors in Congress -- and then heralded by the social engineering geniuses like Krugman -- focused solely on redistributing the wealth of America, all stink to high heaven.

It's past time we sweep these turd-laying progressives from power.

NEW POST: COMMUNIST CHINESE LEADERS MAKE A BOLD CALL FOR FREE SPEECH. MEANWHILE, OBAMA FIGHTS FOR CENSORSHIP.
http://heir2freedom.blogspot.com/2010/10/communist-chinese-leaders-make-bold.html

[Melinda Romanoff]

Ig-

The offending issue is NOT the foreclosure side of it, but the NY Trust law and Federal securities law, covering origination of the securities. If the nots are not legally conveyed (sold and registered under prevailing real estate law of the home county) within the formation period of the security. It is invalid. Any sale, or conveyance, of said security is knowingly fraudulent. If just ONE of the mortgages bundled is supposed to be recorded at the county seat, it voids the ENTIRE security, dependent on caveats within the prospectus. These caveats would be very, very low, meaning 2 to 5% of these mortgages might have problems, and if they do, the originator will take them back and return your original purchse price.

Since 1995.

That's the can of worms.

[Melinda Romanoff]

nots=notes, the financial part of the mortgage.

[Rick Ballard]

Porchlight,

McMahon comes off the mat. I don't see any signs of the wave subsiding.

[Stephanie]

Have y'all seen the latest installment from the mole in the WH?

LUN

[Porchlight]

Oh, I hope you're right Rick. It's interesting how many House races are breaking toward the 'Pubbie but the Senate is all neck and neck or Dem pulling slightly ahead. Of course the Senate races are statewide and harder to poll, so maybe that's one reason.

How often does it happen that the House flips and the Senate doesn't?

[Janet...off the couch & sportin Tea Party chic]

OT -
If any of you guys know voters in Minnesota please mention Dave Thul for Minnesota House 26A.
He is a soldier I sent some books to from a Powerline posting years ago....he wrote a thank you note back that was really great. Recently I saw his name "float" by on Facebook & I friended him...he wrote & asked if I was the same Janet S. that had sent him books in Iraq! Small virtual world!
Here he is in a local TV spot.
Anyway, great guy that fought for our nation in Iraq, & is fighting for it now at home. He is a district director of Vets for Freedom.

[Ranger]

McMahon comes off the mat. I don't see any signs of the wave subsiding.

Posted by: Rick Ballard | October 15, 2010 at 04:01 PM

And most people don't even know their health insurance premiums are going up 30-45% because of Obamacare next year yet. Wait till that campaign commercial hits the air.

[Old Lurker]

I rise in support of Iggy's 12:06.

Like Iggy, I have been on all sides of Notes and Deeds of Trust, and Purchase Money Mortgages (coming and going) since probably before I was legally allowed to sign some of them.

The parts of Iggy's statement that ring true to me are:

Notes are never recorded and almost always include an "and assigns" phrase.

Deeds, and Deeds of Trust, in our area do not have to be recorded but one places his claim to clean title at risk if something else goes on the record ahead of it.

There are times an unrecorded deed can be useful but we won't go into that here. :-)

All of my transactions include Title Insurance to protect the Lender who might have to defend against an unrecorded claim or defect (forgery, undisclosed spouse, etc) elsewhere in the Chain, and I always get Title Insurance for my equity above the loans for the same reasons. The Title Insurance for my equity is optional, but I have never gotten money from a Lender without buying it it for him. Yes you have to negotiate very carefully with the scheduled exceptions if it to be worth anything. I'm sure others have horror stories but I suspect most come from not reading the policies at the outset.

There have been times I knew my lender was likely to sell my note or pieces of it. There have been times when I made it a condition of my taking his money that he NOT sell the note so that there would be no question who I had to take to lunch if something needed to be renegotiated. In those cases, I paid a slightly higher rate to know who my lender was at all times.

My partner and I have always avoided "conduit loans", particularly with short terms "bullet loans" precisely because dealing with a faceless Trustee at the end if an extension might be needed would keep me awake at night.

Finally, like Iggy I am having a hard time seeing how the concept of a MERS custodian crosses any lines at all, any more than the times I borrowed money from out of state or out of country lenders, knowing that they would sell slices from time to time to many participants. The county always got paid when the original sale and loans were recorded, and they never would have been paid again as a lead bank sells or buys back slices of the loan during it's life.

Note none of that forgives the Noteholder, even a MERS custodian, for not following exactly all of the formalities for attempting to terminate the loan and recover his money. I'm saying the idea sounded OK to me but the practice was very sloppy I gather.

[sbw]

DOT: run afoul of the constitutional prohibition against any law that impairs the obligation of contracts.

And how is this different from the GM bailout ignoring contract law to favor its special friends?

[Old Lurker]

Nothing I just wrote disagrees with Mel's 3:58. On his side of the aisle, I am sure the bundlers and securitizers of these things goofed up big time, but it seems that while those problems are securities and tax law issues of immense size as Mel has been explaining...back down at the dirt level there is a hard asset, owned by an owner, with title pledged to secure a Note, and as long as the borrower paid his payments and could prove it, the homeowner would be in good shape. Now as Mel shows, there are lots and lots of investors who did not get what they thought they were paying for. But that's high finance. Not dirt.

[Danube of Thought]

sbw, it's a complex issue but it was done in accordance with the bankruptcy laws and, while unfair and corrupt, was not unconstitutional.

[Danube of Thought]

I should add that the contracts clause on its face applies only to state governments, and does not apply to court decisions.

[Jack is Back!]

Is it me or does anyone else relish these conservative women taking on these asshat gentlemen that are democrats. The Angle v. Reid matchup was a left hook followed up by a hard right to the gut. Harry looked like Casper Milquetoast and was so quiet and dull I couldn't understand how he could have been elected dog-catcher in Nevada much less a US Senator. I thought Nevada was hard nails - gamblers, miners, cowboys and desert rats.

Then there is Linda McMahon with this skinny, shiny Blumenthal who looks like he should be in an after-shave commercial. All these guys need to man-up and have some cheeseburgers and fries like Barry does and Moochelle does.

And McDonnell if you watch the whole debate held her own and pretty much won on issues but lost on the typical gotchas from the biggest loser ever on Jeopardy. If she had been briefed better should could have answered the Supreme Court case question by asking Wolf "is this one of the questions you got wrong"?

But it was watching Meg Whitman who ran a silly little garage band kind of internet business into one of the most successful on earth eat Jerry Brown for lunch and toss away the bag. I forgot what a scum-bag, miserable little twit Brown can be and hopefully he will remain that way scratching out a living as a public defender in Oakland after November 2nd.

I am sensing something akin to a full blown landslide in both houses or maybe I am totally confused as to the public environment out there.

[LilAnnieLou]

Banks should be held to all the terms of the contracts signed, but the other half of the deal, the homeowner, should be able to change whatever they want right? Both sides agreed to a deal and both sides should be held responsible for what they agreed too.

[daleyrocks]

Old Lurker - If Notes and Deeds don not have to be recorded in your area, how does a Title Insurance get comfortable enough to issue a Lenders Policy?

[daleyrocks]

Title Insurance Company

[Ignatz]

--Nothing I just wrote disagrees with Mel's 3:58.--

I'm not disagreeing with Mel either OL.
As I said, I don't know that side of the ledger and it may very well make for a tidy little (or perhaps quite large) explosion for the banks and others.
But I just can't see on our side of the ledger any appreciable intent to defraud borrowers, county clerks or delinquent homeowners.
All I see are some lazy shortcuts from the banks and other mortgage servicers thinking they could pawn off shoddy and apparently sometimes fake (but accurate, heh) paperwork on courts to grease the wheels of the process. If any of it rose to the level of criminality it should be prosecuted, if it is in the public interest to do so. Otherwise for chain of title, rightful foreclosures etc it's a tempest in a teapot IMO.

[daleyrocks]

Ignatz - I'm not disagreeing either. I'm just wondering how you get any kind of title policy that isn't so full of exclusions that it looks like swiss cheese if practice in an area is not to record deeds or liens.

[Old Lurker]

daleyrocks, if something dated earlier comes along after the lender records his loan, the lender wins and the title company is happy. Which is exactly why one needs a really good reason not to record the deed or deed of trust. But there are times recording is delayed on purpose, sometimes for a long time, and when that is done, great risk is taken that an intervening lien gets recorded by somebody. Don't forget that there can be claims that will be senior to the lender even if they are not recorded when the loan is recorded...taxes for example, and contractor claims not yet filed but within the statutory period. The Title Company and the Lenders always make me sign something making me liable to them if they have to pay on such a claim.

[Extraneus]

Is it me or does anyone else relish these conservative women taking on these asshat gentlemen that are democrats.

It's not just you. I hope to attend the Palin inauguration myself, and be there in person to watch Obama sit through her speech. (Won't Todd and Michelle be sitting together, too?)

[Ignatz]

--Old Lurker - If Notes and Deeds don not have to be recorded in your area, how does a Title Insurance get comfortable enough to issue a Lenders Policy?--

I'm not OL but I hope you don't mind if I take a crack at it.
I have never conveyed a property without recording the deed and deed of trust (if there was one).
Title Insurance, at least the standard policies I've been issued, usually only insure a buyer for those things recorded in the public records and specifically exclude easements, liens, encumbrances and virtually any other thing which has not been recorded in the public record.
So theoretically it should make no difference to a title company underwriter that issues such a policy whether there are unrecorded claims on a property.
Perhaps OL due to his type of property and area can negotiate a different deal but not in my neck of the woods.

[Old Lurker]

My family tree is probably not unique. Somewhere back in the trunks are deeds my (nutty) grandmother signed to various kids and grandkids - whoever had her approval at the time, that were not worth the cost of their paper. The family lawyer protected the actual chain of title but for years the old gal held those deeds over the whole clan. My uncle claims she sold him the same farm three times before she died.

[Ignatz]

I didn't quite finish that post. Title insurance also excludes from coverage every item and encumbrance concerning the property which IS recorded.
So the only thing the typical policy covers is some item in the public record that the title search by the title company missed.

[Ignatz]

--how you get any kind of title policy that isn't so full of exclusions that it looks like swiss cheese if practice in an area is not to record deeds or liens--

You don't. They're all swiss cheese.

[Army of Davids]

Come to California for the sunshine and stay for the social justice.

We have unemployment at 12.4% here.

We have the worst bond rating in the country.

We have the second worst K-12 (we’ll try harder)

We have the highest gas tax at the pump.

We have a 500 billion underfunding in our public pensions.

We have the highest percentage on welfare.

We’re good at writing IOUs

Henry Waxman, Nancy Pelosi, Pete Stark, Maxine Waters join me in inviting you to come to California.

California….come for the sunshine. Stay for the social justice.

I’m Barbara “Babs” Boxer (Call me Senator) and I endorse this message.

[Army of Davids]

Angelo Mozilo of Countrywide settled w/ the SEC today.

Countrywide (owned by B of America now) is at the heart of the whole mortgage meltdown.

They were the number one home lender during the Housing Boom and Bust.

Are you a "Friend of Angelo"?

[Rick Ballard]

"I am sensing something akin to a full blown landslide in both houses or maybe I am totally confused as to the public environment out there."

JiB,

The result may look like a landslide but the total votes cast VEP percentages are going to reveal more of a TKO with Dem voters having flat out refused to come out of the corner at the bell.

AFAICT - the Reps will have a mandate to Just Say No to the One Stooge Left while cutting spending. The Dems are going to lose at least 60 and perhaps as many as 80 House seats but the Senate turnover is dependent upon a 2-3% edge in Illinois and Washington on election day. If it's less than that then the King and Cook County thieves will frolic.

[Rick Ballard]

"I am sensing something akin to a full blown landslide in both houses or maybe I am totally confused as to the public environment out there."

JiB,

The result may look like a landslide but the total votes cast VEP percentages are going to reveal more of a TKO with Dem voters having flat out refused to come out of the corner at the bell.

AFAICT - the Reps will have a mandate to Just Say No to the One Stooge Left while cutting spending. The Dems are going to lose at least 60 and perhaps as many as 80 House seats but the Senate turnover is dependent upon a 2-3% edge in Illinois and Washington on election day. If it's less than that then the King and Cook County thieves will frolic.

[daleyrocks]

"Which is exactly why one needs a really good reason not to record the deed or deed of trust."

OL - Thanks for the reply. I'm probably missing any reasons that might be straightforward, but I can think of plenty that I would not want to discuss publicly.

[Old Lurker]

"...virtually any other thing which has not been recorded in the public record..." AND which is listed below on Schedule X.

Ours are the same, Iggy. And like you I have never been involved in a business transaction that did not require recording on the day of closing, and I have had a bunch of money delayed until the title guy returned with the recordation receipts before the money got wired. I have turned down deals when a party requested a delayed recordation. And I always avoided the fairly common device in the East of "Contracts for Deeds" which come about when a guy sells property for a stream of monthly payments, promising to record the deed when the final payment is made. You'd be surprised how many idiots accept that sort of thing, not seeing the risk of an intervening lien or conveyance.

The nutty grandmother episodes come along per the above, and I have seen "controlling fathers" sign a series of deeds intended to be recorded when certain future events occur or don't occur, with instructions to destroy the others under different circumstances. Yes, there are soap opera scripts in those.

[daleyrocks]

"So the only thing the typical policy covers is some item in the public record that the title search by the title company missed."

Ignatz - Which happens a helluva lot mopre often when things are busy and begs my question about why a deed holder or other obligee would not insist on recording an instrument.

[Old Lurker]

daleyrocks "I would not want to discuss publicly"

:-))

[Extraneus]

Love that insider interview stuff, Stephanie. Even if it's fake, people talking about it is all good.

[Old Lurker]

No knowledgable deed owner and certainly no lender of money would ever want to skip recordation. Many sellers and many borrowers would love to skip that step, and you'd be surprised how often it happens.

[Clarice]

I once represented friends who had a contract for deed in Md where the trustees who were supposed to record it were drunk and a bit senile when the time for recordation came up. I had to threaten them with an injunction and demand for attys fees unless they both made it to the Rockville courthouse to sign the damned thing in the recorders' office in my presence.

[Old Lurker]

Yep. And they were just senile drunks. Imagine if they had been crooks.

[Army of Davids]

A common Democrat talking point on ObamaCare is that they promise health insurers will not be able to deny coverage (come 2014)

Like promises of transparency.

Like promises of deficit neutrality.

Like promises of the bill "creating" jobs.

Be skeptical of this claim.

Joe Leiberman "the Senator from Aetna", Ben Nelson and Blanche Lincoln were owned by a few healthcare companies who called the final shots in the Senate bill (the final bill).

There is a reason Howard Dean is so @#$%&! about this.

It will likely not go like (Patty Murray) Democrats are claiming.

Leiberman, Aetna and others likely watered down large swaths of uninsureable risks in the bill. Joe had the bill by the balls.

[Ignatz]

Joe Biden, who knows a thing or two about thick skulls, finally explains what's wrong with Barry:His brain is bigger than his skull.
Now I'm pretty sure that isn't hydrocephalus. What is the correct medical term for his condition?

[Old Lurker]

"Assholitis" ?

[Ignatz]

Some of these three links to articles about the foreclosure mess may have already been linked, but they all explain the problem from Mel's end of things pretty well. The last one is a short basic primer for those looking to catch up and has links to the other two.

[Ignatz]

--"Assholitis" ?--

I believe that's the vernacular OL.
Looked it up;
Encephalocele or anencephaly.
Caveat;not for the squeamish if you look it up and get pics.

[Extraneus]

Otorrhea?

[Janet...off the couch & sportin Tea Party chic]

Here is video of the debate from last night -
Wonderful strong Bielat vs. Rumpled loser Barney.

[Ignatz]

Just for DoT is Reuters poll with Carly only one point behind the mangey old Boxer dog.

[glasater]

I worked at a title company-briefly-years ago. Then moved to working on elections at the courthouse where that department was located next to recordings.
All the title company does in our area is trot down to recordings-see what's on the property description-and sell the insurance. Anyone can do the title search on their own.

[Janet...off the couch & sportin Tea Party chic]

No need to watch the video above. Jane's snark-blog at You Too covers the whole thing nicely...& you don't have to wade through Barney talking, and talking, and talking,and......
Bielat is wonderful.

[Boatbuilder]

Microcephaly?

[Danube of Thought]

Thanks Iggy.

[Jane]

I am sensing something akin to a full blown landslide in both houses or maybe I am totally confused as to the public environment out there.

I'm a gut player - and when I listen to it, my gut usually gets it right. My gut felt the Scott Brown ascension, and it feels the end of Barney, Reid and a whole lot of others. I do think Bielat is on a trajectory upward, just like Brown. I think Angle won that battle last night. The Tea party has gone from fringe racists to representing the majority of the nation. So if nothing changes in the next 18 days it will be a very good night for us. The other thing that heightens my optimism is early voting has started. I have no doubt if the election were today we would win everywhere, and for some people the election is being held today.

Then of course we have to get more than they steal. And that cannot be predicted.

[Jane]

Stephanie,

That insider report is spectacular!

[Ignatz]

--Anyone can do the title search on their own.--

On any complicated deal, especially ones that stretch back into handwritten deeds, with a little time, anyone can do a better job than the usual title company employee.
They get handed a giant stack of deeds to trace and chances are if they miss something, especially if it's old, no one will ever know the difference.
I came into possession of a nice residential lot for essentially nothing just by doing a little research one time.
The court had missed it's disappearance in a probate fifty years ago and no title company had ever caught it subsequently.
And that's my quota, and probably everyone else's, for title company stories.

[matt]

front page of the Telegraph has an article on the granny who kicked Harry Reid's ass.

[PD]

I started reading Bob Woodward's "Obama's Wars" today. Reasonably interesting read so far, but occasionally you run across some "things that make you go 'hmm'".

Like this on p35, in the context of planning what to do about Pakistan:

"Obama later said he would neither confirm nor deny any specifics about contingency plans, but he acknowledged that he had inherited unfinished business from Bush."

Yes, I recognize our President there: The man who's oh-so-reluctant ever to admit that he might have inherited any problem from his predecessor.

[PD]

But do you expect a Nobel Laureate to provide economic analysis or hyperventilating hyperbole?

Depends. Did he used to work for Enron?

[Pops]

I am so proud of Obama, how he is pissed off about the Chamber of Commerce shipping our jobs overseas. Obama has stood up to them, and is making sure those jobs stay here! Where Obama makes sure they go to Mexicans, and Nicaraguans, and Hondurans, and Chilians, and ......