... Ellen Hodgson Brown, J.D. author of The Web of Debt asks in her article Homeowners' Rebellion: Could 62 Million Homes Be Foreclosure-Proof? if it's possible people won't need to pay off their mortgages after all. To put it simply, the banks have recently been disclosed to have technically lost the chain to millions of titles to properties on its ledgers. In other words, banks have lost rights to the promissory notes due to selling the mortgages to third parties bundled as securities. The third parties repackaged the mortgages and sold them again as derivatives on the market. This amounts to the chain of title being broken that millions of people don't technically owe the banks!
via Cheryl Meril's Candid Blog- Nob Hill Notary: No Trick or Treat! Foreclosuregate is Scary as Hell.
What a mess. If my Countrywide loan was granted due to fraud on the part of the lender, getting out via a short sale should not reflect poorly on my credit. Give first time buyers who acted in good faith but were swindled into purchasing ARMs they couldn't afford their good credit back.