Comments (scroll down to add your own):

1. On the flipside, I wonder how many files they lost of people who are paying on their mortgage. I wonder if it could ever create a really annoying paperwork nightmare when they want to sell their house.

   Of course it would get worked out, but would probably take a bunch of phone calls to get straightened out.

   Comment by My Dollar Plan — Oct 1st 2008 @ 10:55 am

2. This is going to sound crazy given the current economic environment, but my mortgage started with Regions Bank and has stayed with them for 4 years. Since I banks there as well, I’m hoping it never gets sold!

   Comment by Ron@TheWisdomJournal — Oct 1st 2008 @ 10:52 pm

3. I was writing to tell you of my experience and how my readers didn’t like it when I implemented a Captcha system.

   However, this system ate my first comment and then wouldn’t let me repost my comment on the other post. Take that for what it is worth.

   Comment by Double Journey — Oct 2nd 2008 @ 2:00 am

4. The legal issue isn’t whether or not the defendant owes the money, it’s whether or not the plaintiff is the entity legally entitled to file suit & thus receive the foreclosure.

   For example, if my friend loaned you money, I can’t sue you to get it back.

   The plaintiff has to prove that they are the legal owner of the mortgage.

   It’s vexing to be sure! Especially because if the defendant were actually paying, the funds would probably go in an escrow until the ownership could be figured out, but the dispute is over non-payment, so there is not much else to be done.

   Comment by LadyBug — Oct 2nd 2008 @ 8:56 am

5. LadyBug: Yes, but what if your friend told me that he had sold the debt to you, and I shifted to paying you for awhile before I ran into financial trouble? In that case, it would seem pretty clear that I recognized you as the rightful owner of the debt, even if you can no longer find the paperwork. But, as I said at the end, common sense doesn’t always intersect with legalities.

   Comment by nickel — Oct 2nd 2008 @ 9:15 am

6. My fear would be that I’m paying my mortgage to a particular entity and later find out that someone else (due to sloppiness, hyper-complexity-caused confusion, etc.) later claims that my payments should have gone to him. Wall Street’s slicing and dicing, fomenting super-fragmented ownership, may just yield such results. Who shall sort that out? State law ought to clarify that the burden falls on the lender — via local property record lien filing and clear written notice requirements — to ensure proper and accurate payment paths. And where state law falls short, federal law should act by default. That way, the debtor may rely on the public lien filing for direction on payment, and be forever protected from contrary claims downwind.

   Comment by Chris Desmond — Oct 2nd 2008 @ 11:04 am

7. The debtor does not magically get out of owing the mortgage just because a judge stops the foreclosure proceeding. The issue is not whether the homeowner owes the mortgage or not, the issue is that the courts must be satisfied that the entity wanting to foreclose has a legal right to the property. Imagine if courts did not require this proof– scammers would start foreclosing on homes to which they did not hold the mortgage, defrauding the actual mortgage holders. Although the short-term effect delays the foreclosure and benefits the debtor, this is a protection for the lender.

   Comment by Kevin M — Oct 2nd 2008 @ 11:53 am

8. This doesn’t surprise me at all. It really became a juggling act over time. Lenders would take on a loan and then sell it shortly after. Especially if you had bad credit. I once new an individual who got a loan and had it sold to a new lender every month 7 months in a row.
   Keep track of that paper mess.
   The lenders were just playing a game of hot potato until someone got fried.

   Comment by Chris Holdheide — Oct 7th 2008 @ 10:50 pm

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