Letter: Loophole from foreclosure
Long Island homeowners had the highest foreclosure rate in New York, a rate that grew even as New York City's foreclosure rate declined, the state's fiscal watchdog reported Monday. Credit: AP, 2008
Regarding "Bank's costly delay" [News, Oct. 20], the foreclosure case was dismissed due to a missed filing deadline. Did the homeowner have other grounds to have the case thrown out before having to wait six years?
When that homeowner took out her loan in 2006, many of the mortgages that were non-qualified -- not Freddie Mac or Fannie Mae -- were being put into trusts called real estate mortgage investment conduits by the banks, so they could avoid paying taxes. By contract, these trusts required mortgages to be specifically endorsed to the trust by the depositor within 90 days, at which time the trust closed. Many of these mortgages were never executed properly and subsequently went into default.
The majority of homeowners were unaware of these trusts when they lost their homes to foreclosure. Fortunately, many are now learning about them and are defending themselves against these criminal banks. The trusts are filed with the Securities and Exchange Commission.
Steven M. Wimmer, New Hyde Park
