Wrong. This obtains _until_ a court with jurisdiction issues an order foreclosing your right to pay-off the entire mortgage loan.

“Distilled, I contend that it is almost always true that a necessary condition for a foreclosure is for the homeowner to have failed to make his mortgage payments. It is my understanding that Vox disputes this.”

Necessary, but not sufficient. The sufficient cause is that the mortagee has justly proven his foreclosure claim in a court of law, with certain other legal concepts implied, such as notice, evidence, etc. etc.

My understanding is that Vox is disputing that the banks have been able to justly prove their cases in court –they can’t find the original, or best available documents, they blatantly disregarded federal and state laws regarding aspects of executing the documents, there’s a big and growing dispute amongst third-party purchasers of the rights to those mortgage payment streams regarding the terms of the sales of those streams, etc. etc. etc.

That said, what’s seems to me to be omitted from most of the blog conversations about this is that, at least by my prediction, the vast majority of US citizens will admit, at least at some stage of any legal proceeding, that they took out a mortgage for so and so amount of dollars on or about such and such date. That basic honesty, however, is being challenged as the other side of the deal gets continually bailed out and retroactively favored by the powers that be. Chalk up another one for the overwhelming state: incentive to immorality for its put-upon citizens.

What I want to know and haven’t seen in any of the reports is if this problem also affects home sellers as well as banks. I plan on retiring and selling in about 10 years. I would hate to find out 10 years from now that I don’t have standing to sell the property.

As for the banks erroneously foreclosing on properties I say bring it on. I’m about $100k underwater and that would be a godsend.

A friend with a house that I’m interested in OWNING (outright) has a home assessed at $546,000 – but he’s asking $729,000. People are saying he is ENTITLED to that because he bought (at market peak) at $675,000 (2006 assessment was $701,000) and put money in it. I stated “he is no more entitled to $729,000 from me than I am entitled to $35 for GE because I paid $35 per share (now selling for $17)”. But the softhearted think that bad economic decisions should be mitigated by others. Needless to say, I will not be the one who buys a house 34% over assessment (when they are going for 8% over assessment on my street).

The banksters, the bundlers, the AIG insurers, and the home purchasers made bad economic decisions. Bailing them out guarantees that the same malignant pattern continues indefinitely until Economic Armageddon results.

I have to side with Vox on this one. I’ve been reading about this for quite a while.

However, this obtains just as long as you honor your mortgage payments. Should you default on these, the bank will acquire a lien on the property.

Not quite accurate. The homeowner hold title to the house and there is a lien on the property in the form of a mortgage or trust deed (depending on the state – there is a legal difference between the two that’s irrelevant to this discussion).

Distilled, I contend that it is almost always true that a necessary condition for a foreclosure is for the homeowner to have failed to make his mortgage payments.

You are correct. But Vox (along with I and others) contend that it’s the foreclosure proceedings that are exposing the fraud that was committed by the banks at the time of loan origination. The “errors” of homes being foreclosed on that do not even have a mortgage assigned to them is merely a symptom of a much larger problem.

Please click This link to see the in-depth legal, social and political commentary by Karl Denninger of The Market Ticker. He’s been on this for years, it’s finally just getting noticed. He’s not some conspiracy nut either.

In short, consider this (and I worked in the mortgage industry not to long ago): When the chain of title is broken for whatever reason (except fraud on the part of the homeowner) then the underlying mortgage against that property is no longer valid.

Put another way, when the chain of title is broken, it can no longer be proved who the homeowner owes the money to or who has the right to foreclose so in essence, the homeowner no longer owes anyone.

In order for the banks to unwind this mess, they would have to pay back BILLIONS to their investors since the money didn’t actually come from the banks to fund these mortgages. They’re not going to do that.

I urge you to read the Denninger material and reconsider your position. I think you will find it very informative and chock full of smoking gun evidence of the fraud.