Why your bank may not be able to reposess you

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OK answering a few questions here.

Digging beyond the original Telegraph piece - it looks like the main issue is that someone - presumably in their rush to get as many loans as possible - didn't do their paperwork properly. I'm not saying there's a systemic problem here - but I wouldn't mind betting that they wouldn't be the only bank who didn't dot the "i"s and cross the "t"s in the gold rush.

That's the real story and it doesn't take much of a twisted mind to turn it into a headline like "Why your bank may not be able to repossess you".

Why Northern Rock? Northern Rock's business model was based on flogging the loans it had taken on the markets asap. Because of this - perhaps it's more likely someone screwed up along the way or perhaps they simply had highly efficient/scalable systems with lots of checks. It only takes one test case in this country...

For Deutsche being a German bank trying to put the squeeze on hard-working Americans probably doesn't grant them any favours with the US judge either.

Of course, it's hilarious. Institutional incompetence always makes me laugh. Especially when getting it right is central to their core business. And the only people I know who love banks - work in them (and most of them hate them too).

twhurl

Who has the deeds to the house ? I know with interest only mortgages the bank keeps possession of the deeds

geordie_joe

twhurl wrote: »

Who has the deeds to the house ? I know with interest only mortgages the bank keeps possession of the deeds

I think the bank keeps them until you have paid off the mortgage, but that's not the point.

In this case the mortgages were sold to another bank. When the that bank tried to reposes the houses the court refused to allow it as the bank could not prove it owned the mortgages.

A court will not allow someone to reposes your goods if there is a doubt that they owe you the money.

You can't go to a court and say "There's an 85% chance that we own this man's mortgage, and he hasn't paid it so can we reposes his house?"

The court would just say "go away and come back when you can prove it 100%"

Unfortunately some people have been so keen to sell mortgages they have not completed the paper work correctly. Added to this banks have been "lumping" mortgages together and selling them on without keeping accurate records.

This can cast a doubt on whether the bank actually owns your mortgage, and it is them you owe the money to. If there is a doubt that you owe the bank then the courts should not allow the bank to reposes your property.

dippy

Too right!!! The banks have been lending money willy nilly without proper checks, charging high interest and screwing anybody who can't repay. Look at the untold misery in the DWD boards. Now, if they haven't done their paperwork properly with "securitising" and all these new-fangled I sell you a bit-of-paper finanical products, we should screw them back.

Isn't this the spirit of this whole website and what Martin is trying to accomplish?

geordie_joe

Ian_W wrote: »

Only my opinion and I could be wrong.

Yes but you can't argue with the fact that is HAS HAPPENED.

An American judge has prevented Deutsche Bank from repossessing 14 homes because the bank could not prove it owned the defaulting mortgages involved.

twhurl

geordie_joe wrote: »

I think the bank keeps them until you have paid off the mortgage, but that's not the point.

In this case the mortgages were sold to another bank. When the that bank tried to reposes the houses the court refused to allow it as the bank could not prove it owned the mortgages.

A court will not allow someone to reposes your goods if there is a doubt that they owe you the money.

You can't go to a court and say "There's an 85% chance that we own this man's mortgage, and he hasn't paid it so can we reposes his house?"

The court would just say "go away and come back when you can prove it 100%"

Unfortunately some people have been so keen to sell mortgages they have not completed the paper work correctly. Added to this banks have been "lumping" mortgages together and selling them on without keeping accurate records.

This can cast a doubt on whether the bank actually owns your mortgage, and it is them you owe the money to. If there is a doubt that you owe the bank then the courts should not allow the bank to reposes your property.

I am in the process of remortgaging my house as I'm coming off the discount rate and am going to get hammered by SVR. We are selling the house emigrating eventually. I am just remortgaging to give a buffer whilst I sell the house. Should I worry that the new guys have the paper work right and can reposses ? Would it be safer to bite the bullet and stay with my current provider hoping they've chooped and changed it to 50 different buyers and I can tell them to do one ? :j

epz_2

twhurl wrote: »

I am in the process of remortgaging my house as I'm coming off the discount rate and am going to get hammered by SVR. We are selling the house emigrating eventually. I am just remortgaging to give a buffer whilst I sell the house. Should I worry that the new guys have the paper work right and can reposses ? Would it be safer to bite the bullet and stay with my current provider hoping they've chooped and changed it to 50 different buyers and I can tell them to do one ? :j

oops thanked by mistake, basicly if the bank cant reposses its their problem not yours.

as long as you keep paying the mortgage nobody can do anything to you anyway

m00m00

there is no way this judgement will ultimately stand

it would bring down banking pretty much as we know it

and that's just not going to happen

the game is rigged after all

geordie_joe

m00m00 wrote: »

there is no way this judgement will ultimately stand

it would bring down banking pretty much as we know it

and that's just not going to happen

the game is rigged after all

It's quite possible that the bank was caught off guard. It went to court expecting the court to accept the people owed them money just because they said so, as courts have always done. They may not have took evidence to prove this, but they may actually have this evidence and may go back to the court with it.

It could be that they don't actually have enough evidence to prove it.

It is a fundamental part of law that if you accuse someone of something, in this case owing money, then you have to prove it. if you can't prove it you won't win, simple as that.

I doubt that this case will result in people not paying their mortgage and beating the banks. But it will make the mortgage lenders go back through their paper work and make sure it is correct. They may also get together with the courts to work out what is the minimum they need to present as proof of a debt.

RabbitMad

in this country it is different. NR don't sell the mortgages on. They borrow money at x% which they lend out at x%+Y%. Y% covers their costs and gives them their profit.

NR's problem is that some of their loans came up for repayment and they couldn't get anyone else to lend to them.

basically if you don't pay back your mortgage your house will be repossesed; no matter what some lazy deluded journo says