13-Moon Date: Moon 3 Day 25Gregorian Date: October 14, 2010
378 days till Oct. 28, 2011 - Calleman Alternative Mayan End Date
798 days till Dec. 21, 2012 - Conventional Mayan End Date
426,750 Years till the end of the Vedic Age of Kali Yuga (Cycle of 4 Yugas/Ages)
All Aboard the MERS crazy Train !
Next stop: Home Foreclosure Hell!
What do you think happens in a country when the citizens realize they don’t need to pay their debts?
I smell a "screw the banks" movement right around the corner. People by the millions are going to stop making their mortgage payments and banks won't be able to do a damn thing about it. Gonzalo Lira explains:
..the banks are screwed—again. By the same fucking thing as the last time—the fucking Mortgage Backed Securities!
If they’ve been foreclosing on people they didn’t have the legal right to foreclose on, then those people have the right to get their houses back. And the people who bought those foreclosed houses from the bank might not actually own the houses they paid for.
A recent conference call Citigroup had with investors/clients. It featured Adam Levitin, a Georgetown University Law professor who specializes in, among many other financial regulatory issues, mortgage finance. Levitin says the documentation problems involved in the mortgage mess have the potential “to cloud title on not just foreclosed mortgages but on performing mortgages.”
1 hour ago
The big question is "do mortgages processed using the MERS system have the ability to produce a cleared title even if you pay off your mortgage in good faith and on time?" Should anyone continue paying their mortgage?
***
Here is one legal scenario, according to Prof. Levitin:
The mortgage is still owed, but there’s going to be a problem figuring out who actually holds the mortgage, and they would be the ones bringing the foreclosure. You have a trust that has been getting payments from borrowers for years that it has no right to receive. So you might see borrowers suing the trusts saying give me my money back, you’re stealing my money. You’re going to then have trusts that don’t have any assets that have been issuing securities that say they’re backed by a whole bunch of assets, and you’re going to have investors suing the trustees for failing to inspect the collateral files, which the trustees say they’re going to do, and you’re going to have trustees suing the securitization sponsors for violating their representations and warrantees about what they were transferring.
The fraud committed by the foreclosure mills casts enough doubt that now, all foreclosures come into question. Not only that, all mortgages come into question.
Josh Rosner, of Graham-Fisher, put the following out in a note today, claiming violations of pooling and servicing agreements on mortgages could dwarf the Lehman weekend:
Quite the can of worms. Anyone who says that the banks will fix all this in a few months is seriously delusional.
MERS?
MERS (Mortgage Electronic Registration Systems) functions as a centralized electronic registry of mortgages and tracks ownership of mortgages. MERS allows mortgage ownership to change hands efficiently and relatively quickly since it is electronic and allows all parties to forgo making a filing in local land records. Indeed, MERS was designed to function as a substitute for local land records.
Although MERS was designed to enhance efficiency in the mortgage assignment process, Levitin argued it may not conform with the law. “Slowly but surely” courts are issuing decisions which “cast validity on the MERS process.” Although ~60% of mortgages list MERS as the “nominee” which owns the mortgage, a handful of recent court cases have ruled that MERS has no standing in foreclosure actions either because (1) physical paperwork must be transferred when a mortgage is assigned by one party to another or (2) MERS has no true economic interest in the mortgage in question since it collects no payments from the borrowers.
The Washington Post reports that regulators are getting more insistent, but they really appear not to have a grip:
Federal regulators sought Wednesday to prevent the growing furor over improper foreclosures from escalating, pressing mortgage lenders to replace flawed and fraudulent court documents while insisting that foreclosures continue apace.
Yves here. Huh? “Replace flawed and fraudulent documents” and press forward? This is nuts. Why do you think servicers and foreclosure mills provided bogus documents in the first place? Because they had made such a botch of things that that was the least bad approach, from their perspective. You don’t make up documents if you have the real ones, and if you don’t have the real ones, you are really stuck. So the idea that the banks can somehow magically find documentation they clearly DON’T have and get back to life as usual is a complete non-starter.
And the regulators appear also to assume that the courts will tolerate banks showing up with different documentation. If the bank discovers it has filed a case in the name of the wrong party, it will probably have to refile the case. And some judges will not accept new affidavits, since it’s an admission the earlier submissions were improper, which is a sanctionable offense.
