Although I'm no fan of the behavior of some of the large mortgage loan servicers, I thought some of the glee that some commentators took in what was spun as a monumental screw-up by MERS and/or US Bank, the trustee for the loan securitization trust, that gave a delinquent Florida homeowner his house free and clear was perhaps missing the point. Apparently, the situation with foreclosures in Florida is such a FUBAR that anything is possible, so maybe MERS did make a mistake and released the wrong property, or maybe US Bank was at fault. The facts are that the homeowner paid less than $1,000 on his $72,000 mortgage loan and yet the loan servicer, after commencing foreclosure, not only dismissed the foreclosure action but released the mortgage lien, claiming in documents filed with the court, that it "has received full payment and satisfaction ... and does hereby cancel and discharge said mortgage."
The speculation as to why the investors would just walk away from a foreclosure that the borrower had not contested seemed to center primarily on an act of either God or the Peter Principle.
"This is crazy," attorney David Goldman said as he looked over the files at the Times-Union's request.
"They won," he said referring to the mortgage holder. "They're standing at the goal line, and they just need to sell the house."
"One possibility is that they did it by mistake," said Chip Parker, an attorney who specializes in foreclosure defense. "There are just so many cases out there."
However, Parker also speculated about another reason, one that the loan servicer confirmed.
Parker also theorized that the mortgage owner simply made a business decision.
"The lender was faced with retaining new counsel," Parker said. "Maybe it looked at the value of the property, realized it's way, way underwater and simply not worth it."
That appears to be the case, though the mortgage holder provided few details when contacted.
The loan was being serviced by America's Servicing Co., a subsidiary of Wells Fargo.
"The investor on the loan, the bondholder on the trust, decided to write off the loan balance," said a Wells Fargo spokesman, "because of the significant decreased value of the property."
He declined to give more details or further explanation.
To me, he didn't need to provide further explanation. It's contained later in the article.
The home — two bedrooms, one bath and 1,120 square feet — is structurally solid, Laspina said. But many of the interior walls are covered with mold ever since the coils were stolen from the air conditioner.
Mold! If you're trying to sell a home, at least in this Southern state, disclosing the existence of mold is like saying the house is infected with the Plague or the Ebola virus, or worse, that your next door neighbor is Nicolas Cage. Potential buyers envision guys wrapped in hazmat suits, with giant vacuum hoses, bleach, and respirators waddling into the infested hell-hole to take one for the team. Making it your home-sweet-home becomes a tough sell. Perhaps the investors considered that factor and said the risk/reward ratio wasn't high enough to take any action other than simply walking away.
No worries for the homeowner, though. Apparently, he plans to scrape off the walls with a few fast strokes of a putty knife and then go for the quick flip and a cool windfall, now that this gift from heaven has fallen in his lap.
As for Laspina, he plans to clean the mold, mow the lawn and try to sell the house.
"I could certainly use the money," he said.
Now there's a closing line you could build a meltdown on. "I could certainly use the money." So could we all, Mr. Laspina, so could we all. It's ironic that after the big banks and Wall Street have been slammed for packaging and selling toxic waste, the cycle has spun to the point where homeowners are now getting their own chance to do the same.