Titles and Deeds

We have to have a ’clear title’ before we can sell a car, plane, truck, or boat.  A title is, according to a dictionary definition, “A claim or right.”  A “deed”, according to law, is, “A document, under seal, which, when delivered, transfers a present interest in a property.”  They are almost the same, except the titles are usually for cars, boats, and trucks, and the deeds are for real estate.  What’s hot in the news currently, is that the major mortgage holders have foreclosed on hundreds of thousands of properties, because of non-payment usually, and have signed court papers as fast as they can sign, without reading the contracts, deeds, or papers.  This has created chaos, and most have stopped all foreclosures.  Sounds simple?  Not quite!

If you get a mortgage on your home from a bank, the bank usually sells it instantly to someone else, who sells it to someone else, who sells it to someone else, and it can change hands many times.  Bundles of these mortgages have been sold around the world, and most have gone to zero because of non payment. These bundles, or Credit Default Swaps (CDS) when they failed, the buyer held the seller responsible, and the seller had taken out insurance against failure, which bankrupted insurer AIG, and we bailed them out.  Naturally, the taxpayer, nee federal government, has bailed out everyone, thereby devaluing the buck, which is leading to hyper-inflation.  Also fairly simple.

The current mess, has totally failed to note the plain fact that probably none of the Credit Default Swaps were worth more than a dead caterpillar anyway. It gets complex when deeds have been passed on and on and on, without the actual deed being passed.  Only papers substituting for deeds.  The result, is that no one knows, or has the slightest idea of who has the actual, physical deeds on properties being foreclosed upon, and as a result, foreclosures may be impossible, regardless of AIG and CDS.  If you transferred your deed to the lender when you took out a mortgage, isn’t it reasonable and logical, as well as legal, to demand that when someone attempts to take your property from you, he be able to prove he owns it?  The deed belongs to the owner or owner of a lien on the property.  No deed?  No ownership!  No tickee,  no laundly.  No title?  No car.  The courts have already ruled that no deed, no house, and a million such cases are yet to be decided, but the outcomes are pretty obvious to me.

Could this mean that a person who mortgaged a property, and no deed can be found, can own the property free and clear, or possibly live in it for years, until the deed can be found?  If it can be found?  These mortgage backed securities (credit default swaps), have been sold all over the world, and it is doubtful that deeds went with them.  In actuality, the inability of mortgage holders to repossess and re-sell the foreclosed homes, could bring down the banking system.  Since all foreclosures have been stopped because of legal glitches, no one can buy a foreclosed property either, which could as I have already said, bring down the banking system.

I begged a client of mine, as she was about to lose her home, to listen to me, and even have her lawyer call me, to stop her home being foreclosed, but to no avail.  No one called, she didn’t protest to the judge, and she lost it.  It was a technicality, and is still technicalities, but it is so awfully obvious, that if you have no deed, you don’t own it, and can’t take it through foreclosure, I don’t care how far behind in payments the homeowner is, if there is no deed produced.

One other fact which makes the real estate debacle far from over:  Hundreds of thousands of ARM’s, (adjustable rate mortgages), will come due in the next couple of years, and will need to be re-financed.  Are those homes under water?  Deeds missing?  The mere tip of the iceberg in home ownership and finance is showing, but it is a snarly mess underneath, and all the unctuous speeches by the fed, politicos, and other riff-raff won’t change things one iota.

Should people stop making mortgage payments?  I don’t advise it, but I’d think it wouldn’t be a bad idea to have proof that whoever you are making payments to, has the deed, which is proof of ownership and legal ability to collect those payments.  Gold and silver have no deeds or titles, and are not dependent on legal hassles.  They’re real money in all nations, regardless of a collapsed banking system, currency devaluation, or total chaos.

This morning, gold is up over $15, and silver almost 20 cents.  Is a correction imminent?  If I knew that, I would sell every ounce I have and buy it back after the correction is over!  I’m not selling. No one knows, but the virtual panic around the world, with everyone wanting to get out of paper money and into precious metals, is obvious.  A year from now, it won’t make any difference, because prices will probably be 25% higher anyway.