From Calculated Risk and Business Week…..

Hat tip to Disempowered Paper Pusher (the backbone of our industry!) for this excellent BusinessWeek piece on homes abandoned by both borrower and lender, “Dirty Deeds.”

An anecdote with all the right motifs:

In 1998, Elizabeth M. Manuel obtained a $34,500 mortgage on the property from IMC Mortgage (since acquired by Citibank). By 2002, the loan had been sold into a securitization trust administered by Chase Manhattan (now JPMorgan Chase) as trustee. It also went into default, and Chase began foreclosure proceedings. In a court filing, Manuel (who could not be located for comment) said she left the home while the foreclosure action was pending. More than five years later, though, the title remains in her name. The house, although still standing, has become a fire-gutted wreck.

In May 2007, Nowak issued a default judgment against Chase for $9,000. But these cases can be notoriously difficult to untangle. Thomas A. Kelly, a spokesman for the bank, notes that Chase sold its trustee business to the Bank of New York Mellon (BK) in October, 2006, and couldn’t locate anyone at Chase able to comment. But he reiterates the industry view that Chase can’t be held responsible for maintaining a property it never owned. He acknowledges that if a home didn’t seem worth taking as collateral, the bank may have made a decision to “just walk away.”

Besides amusing myself by trying to figure out just what documents I’d have to give Judge Boyko to prove standing to foreclose in this case, I am of course deeply impressed by the social acceptability of “just walking away.”