I been living in a house that the owner has not made
any mortgage payments for about a year.
 To date, the bank has not sent any notice of
foreclosure. The owner says that he will challenge any
foreclosure in court asking the bank to produce the
the original property deed. Courts are ruling against
the banks if they cannot produce the original deed
to foreclose on property. The owner, including
myself, and others, have been without jobs since
last December.

RC'53, why wouldn't a bank be able to produce an original deed? If they didn't have the original, who would have it? The county?

As a side note, has the owner of the house where you are living been paying the property taxes? What would happen if he didn't?

(Excuse my ignorance on these matters, I've never owned a house in this country.)

How are you surviving with no jobs?

The bank would not be able to produce a deed because, obvious reason: they don't have it. This is surprisingly common after the recent run up. With loans being sold so frequently and even securitized, in all the hyper-financing, banks got pretty sloppy in doing the requisite recordings, in just generally making sure their paperwork was in order. With the loans changing hands so fast and frequently, the notion of getting the deed fell by the wayside.

The same mentality perhaps as no-doc loans led to no-deed loans  

This tactic of requesting the deed is actually quite effective and not all that new. Judges invariable rule against foreclosure filings if you can't produce the deed (as they should).

It's not without problems, however, as you can't exactly ever 'own' the property yourself, since the deed is lost somewhere, no one can deed it to you. Of course the county should have a recording too, but if a chain of banks haven't been doing the paperwork, that last recorded title could be from several banks ago, which could still be a bank with no valid claim (they sold it, just the bank they sold it to has no record, etc). It gets ugly. You'll never 'own,' but it's definitely free rent.

I been living in a house that the owner has not made
any mortgage payments for about a year.
 To date, the bank has not sent any notice of
foreclosure. The owner says that he will challenge any
foreclosure in court asking the bank to produce the
the original property deed. Courts are ruling against
the banks if they cannot produce the original deed
to foreclose on property. The owner, including
myself, and others, have been without jobs since
last December.

My 2 cousins and their respective husbands are doing the exact same thing. Both couple had the homes, lost jobs, fell behind, etc etc. This is in Sacramento, CA, probably the worst area in California in terms of value lost. So, the banks don't want these things, they can't sell them at auction.

The bank has actually told them to stay. It makes sense if you think about it, as they'd rather have someone living there maintaining the property than the place becoming a derelict and the county forcing them to pay to maintain the house or pay to tear it down. Having 'tenants' (in quotes because they don't pay) is better than the property being unoccupied.

They'll have to be careful though, these banks, as squatters actually do have rights, and more importantly, those living in the property and not foreclosed upon will have a laches defense, which has worked in the past believe it or not (*not* to be confused with statutes of limitations!)

My .02

Incredible. It's true what you say about the free rent but don't forget about all the money already paid by the buyers, who could have perhaps been living more cheaply all that time in a rental unit or apartment.

Aren't those deeds in a computer database somewhere? It's relatively easy to get a lost auto title; why doesn't it work the same way for houses?

Make no mistake about it, there *is* a deed, it just doesn't have the claimant's (the bank) name on it!  

So yes, easy enough to look those things up, but these banks swear they have a claim on the property because they bought the loan, it just wasn't recorded when it was bought and sold a dozen times or whatever. So, the deed on file is 'outdated' (so says the claimant). Ask the bank whose name is on the deed, they say they sold it. There's a chain of banks sometimes between the bank trying to foreclose and the bank that was the last one actually bothered to record the change of title. Some of those 'intermediate' entities have lost their paperwork as well, as to who they even sold it to, and some are even out of business, belly up, kaput...  

Quote from: St Jude Thaddeus

Incredible. It's true what you say about the free rent but don't forget about all the money already paid by the buyers, who could have perhaps been living more cheaply all that time in a rental unit or apartment.

Aren't those deeds in a computer database somewhere? It's relatively easy to get a lost auto title; why doesn't it work the same way for houses?

Make no mistake about it, there *is* a deed, it just doesn't have the claimant's (the bank) name on it!  

So yes, easy enough to look those things up, but these banks swear they have a claim on the property because they bought the loan, it just wasn't recorded when it was bought and sold a dozen times or whatever. So, the deed on file is 'outdated' (so says the claimant). Ask the bank whose name is on the deed, they say they sold it. There's a chain of banks sometimes between the bank trying to foreclose and the bank that was the last one actually bothered to record the change of title. Some of those 'intermediate' entities have lost their paperwork as well, as to who they even sold it to, and some are even out of business, belly up, kaput...  

Yikes. What a mess! Thanks for the explanation, though.

Glory be! A rather well-written article on MSN.com about the hard times in the Rust Belt:

http://www.msnbc.msn.com/id/34459843/ns/us_news-washington_post

WARREN, Ohio - All day long the front door buzzes at Uptown Gems & Jєωels. The people come in with their trinkets wrapped in tissue or velvet boxes. They say their hours have been cut or they've been laid off. Some have their first names stitched in cursive on their uniforms, others wear safety-toe boots.

At campaign time, they are celebrated as the people who built America. Now they just want to know how much they can get for a wedding band.

Just wait for the coming collapse of commercial RE.  It has started, but it will get worse and do much more damage than the residential collapse.

I have noticed that there is a lot of inexpensive commercial space available compared to residential. If I could not find an affordable apartment, I was going to find an office space and outfit it with a "murphy bed".  

Fortunately, I ran into a landlord who likes artists and was able to get a "legal" efficiency apartment at a rate I can afford if I am frugal, but office-camping may be an emergency solution for some.