(CBS News) If there was a question about whether we’re headed for a second housing shock, that was settled last week with news that home prices have fallen a sixth consecutive month. Values are nearly back to levels of the Great Recession. One thing weighing on the economy is the huge number of foreclosed houses.
Many are stuck on the market for a reason you wouldn’t expect: banks can’t find the ownership documents.
It’s bizarre but, it turns out, Wall Street cut corners when it created those mortgage-backed investments that triggered the financial collapse. Now that banks want to evict people, they’re unwinding these exotic investments to find, that often, the legal documents behind the mortgages aren’t there. Caught in a jam of their own making, some companies appear to be resorting to forgery and phony paperwork to throw people – down on their luck – out of their homes.
Mortgage mess: Who really owns your mortgage?
Do you know who really owns your mortgage? As Scott Pelley reports on “60 Minutes” this week, that question has become a nightmare for many homeowners since the invention of mortgage-backed securities. Yes, those were the exotic investments that sparked the financial collapse in this country. And the’re still causing problems.
As it turns out, Wall Street cut corners when it bundled homeowners’ mortgages into securities that were traded from investor to investor. Now that banks are foreclosing on people, they’re finding that the legal documents behind many mortgages are missing. So, what do the banks do? As Pelley explains in this video, some companies appear to be resorting to forgery and phony paperwork in what looks like a nationwide epidemic.
Even if you’re not at risk of foreclosure, there could be legal ramifications for a homeowner if the chain of title has been lost. Watch the “60 Minutes” report and listen to Pelley’s discussion with “60 Minutes Overtime” editor Ann Silvio about the findings of his reporting team.
Have you contacted your mortgage servicing company to find out whether your mortgage has been bundled and sold? Did you get a clear answer and a copy of your mortgage paperwork to back it up? Share your experience with other homeowners below.
Extra: Eviction reprieve
Florida residents AJ and Brenda Boyd spent more than a year trying to renegotiate their mortgage and save their home. At the last moment, questions about who owns their mortgage saved them from eviction.
Great job everyone! Let’s see where this one takes us…