Skip to comments.Mortgage-Backed Securities Without Mortgages?
Posted on 11/17/2010 11:28:01 AM PST by Kartographer
Remember, the allegations made by various legal folks in the practice (and apparently validated by the case law thus far) is that not one note has been able to be produced that contains all of the required conveyances and endorsements.
What's going to happen when (or if) these folks gain access to the files and find that they're missing - that is, that the custodian doesn't have them?
Well now that would be interesting, no? "Mortgage-backed securities" that in fact have no mortgages in them? Why that would be a wee problem, no?
(Excerpt) Read more at market-ticker.org ...
Can you say “sh** storm”? I thought so.
Wait until the MERS hits the fans.
WaMu must return foreclosed home
Does anyone know how that vote on HR-3808 Veto Override Attempt went today?
Just another ‘Dead Beat’ that needs to be ‘Tarred and Feathered’! (sarc)
If the prospectus states mortgage backed securities and the paperwork is actually screwed up and legally no mortgage note exists, then the issuer of the prospectus is vulnerable to the charge of fraud. Legally the buyer of the mortgage backed securities can return the investment to the issuing bank and demand their money back. This is known as a putback which can cost the banks billions if the investors choose to do this. This is on top of the state investigations that can conclude the prospectus for these securities were inaccurate and if the issuer knew this they can be charged with fraud. You are talking about hefty fines and prison terms for the ones involved. Bankers are already threatening the US gov that any prosecutions would result in no new mortgages. They even threaten the US gov that if the investors successfully sue them, the US gov must bail them out or they will crash the US economy. If Obama or the new GOP House of Rep really want to score PR points, put the criminal bankers on trial and jail them. After melting down the economy with liar loans and bailouts, the bankers are not contrite but have become more strident in their private demands to the US Treasury and Congress.
It will be a voice vote. They'll probably have paper bags over their heads as they vote for their masters.
Did you see the outbreak yesterday?
>>Legally the buyer of the mortgage backed securities can return the investment to the issuing bank and demand their money back.<<
Why on earth would someone want to do this with the rate of inflation we currently have?
OK I figured it out.
You got that right.
Confirmed with Adelholts [R-AL] office that vote is taking place tonight sometime in the next two hours. This morning was a discussion and agreement to limit discussion to 10 mins.
ANTICIPATED FLOOR SCHEDULE
On Wednesday, November 17th, the House will meet at 10:00 a.m. for legislative business. Following One Minutes, the House will recess in order to accommodate the Democratic and Republican Organizing Meetings.
At approximately 4:00 p.m., the House will reconvene and resume legislative business. Last votes expected: 6:00 p.m.
One Minutes(15 per side)
Disposing of the Presidents Veto of H.R. 3808- Interstate Recognition of Notarizations Act of 2010
(Sponsored by Rep. Aderholt / Judiciary Committee)
If the portfolio performs, the investor will keep it, but on the other hand if the portfolio does not perform (ala too many properties are defaulting) the investors may execute this option. The other problem is if the investor needs cash and wants to sell their performing MBS to another buyer, these buyers may balk due to the bad PR, thus the investors may decide to exercise the put back option on the banks if such sales fail. The other issue for investors is the price they paid for the MBS was based on a AAA rating. They could have paid less for the risks they are taking, that is why many are using put back to get their money back so they can invest in other financial products with proper price to risk. Ironically Freddie Mac and Fannie Mae under pressure from Congress to keep their liabilities low are one of the biggest put back exercisers of MBS.
This is one of the reasons why the banks are very scare. The homeowner is the least of their problems because the banks must pay for an investigator to back track and locate the last known location of the title/note. Firms that had it last and lost it can have a lawyer fill out a state form and affidavit to document the lost documents. This option always exist for banks and service companies in case lost documents happen (usually due to natural disasters, fire, etc). The mess up in the MERS just gave more time for the homeowner to stay in their house, but eventually the documents will be located or accounted for and the foreclosure process will restart. However the MBS is another story because these investments were sold with a prospectus that must be accurate and meet SEC/banking regs. Claiming that the MBS are backed with mortgage notes/docs and rated AAA when they are not opens the banks to hot legal problems. Whoever prepared and signed off on the prospectus is already in legal trouble. Question now is will the state governments prosecute and disrupt the banking system with trials. Sec of Treasury and Fed Reserve may be lobbying via federal government for the states to hold off or risk causing more public panic and triggering another financial meltdown of 2008.
Thanks for expanding on this.
HR3808 failed to muster the 2/3 “YEA’s” to override. I note it was mostly supported by Republicans. That’s disturbing to me because I’m sure they KNOW the corruption banksters are perpetrating, yet would further the hand of crime by support of such a bill.
It would have seemed a more prudent and less harmful thing to postpone action on the bill until the current banking mess subsides, but they chose not to because banksters hides are beginning to sear. I hope America’s public takes note of the bill and of those who chose to vote “YEA” and would consider if “YEA’s” had prevailed, how their prevalence may have forever negatively affected the rule of law.
Apparently one of their bankster friends was on the floor and voted “YEA” as well.
Sounds simple, but fact is it won't happen because the assignments have to be in order and when the instrument has changed hands several times without the assignments, getting an affiant with true and accurate knowledge of each exchange would be nearly impossible. Someone will to have to lie to fill in the information gaps. If I were challenged by an affidavit from someone swearing of an incident of more than a year past, I'd ask to depose them and disprove their affidavit b/c there's absolutely no way they remember one particular note's assignment on one particular day amid hundreds of other assignments.
"....but eventually the documents will be located or accounted for and the foreclosure process will restart."
Don't be so sure. If the assignment banks produce in court can be proven fraudulent, they LOSE their rights to enforce. (§ 3-203(b))
This is why I continue to believe that we have two political parties in the US:
The Evil Party (ie, the DNC)
The Stupid Party (ie, the GOP).
The GOP is too stupid to understand the scams the bankers have been running on the investing public, and continue to believe that because the bankers like to espouse “free market” rhetoric, that the bankers must be swell and gosh, just honest-as-the-day-is-long people.
Well that is the trick. The company that last physically owned the note/title and failed to foward it to the buyer, and the buyer who never received the note/title fowarded the MBS and hoping to eventually get the note/title are the ones on the hook to account for it. The state forms that they must fill requires a rep/lawyer to sign a sworn statement on what had happened to the lost docs. It means the lawyer or statement giver is liable for making false statements if they chose to lie and risk their careers/licenses. Most mortgage experts feel the docs can be located or accounted for. Despite the dizzy pace of the MERS system, its electronic transactions can be retraced, unless someone in the MERS erases all the digital records (that would be a disaster for the banks involved). It means the banks must hire someone to take his time and diligence to retrace the transactions and attempt to locate the documents.
Methinks then they ought find those docs without forgeries or perjuries. If it benefits a servicer to delay foreclosure via reimbursable fees, why would they rush to foreclose with falsified docs if indeed, the originals exist? Methinks those "mortgage experts" are living in a fairy world, soon to be awakened.
Methinks too those "mortgage experts" are the same ones who drove this cart into the ditch and are refusing to recognize the wreckage.
It tells me the GOP majority has no conservatism left and they’d want the FedGov in a state’s issue to cover up ???.
I agree. Time will tell. Every case that reappears in front of a judge will depend on circumstances and the judges discretion. Lawyers representing the homeowners will challenge the new docs and the banks know this before they appear in front of court. They already blew the first trial and the last thing they need is being caught “lying” the second time. The reason I brought out the points in my posts is there is an impression that the delinquent homeowner will get their home free and clear of the mortgage/bank. They are really not out of the woods yet.
“The state forms that they must fill requires a rep/lawyer to sign a sworn statement on what had happened to the lost docs”
So who’s going to be the first to fill out that the documents were shreaded in an effort to promote an investment fraud?
And may never be. MERS and its inventors have possibly irreparably fouled hundreds of thousands of good titles and when the last payments or an attempt to sell on these are made and a clear title cannot be acquired without significant further cost to the homeowner, who then will guarantee the owner's interest in the property to be safe?
When you're dealing with a mammoth that refuses to produce the documents asserting their legal rights to monthly consideration and will only reveal a suspect copy, the only option is to make a photocopy of a deposit slip of depositing the payment amount into an escrow account until the issue is settled in court. If they prove standing, the money is there to effect reinstatement and good faith has been established by a continuance of the funds being set aside. If they can't prove standing, the homeowner has funds on hand to compensate the rightful holder of the Note, which is the fair and equitable thing to do.
This problem isn't limited to those the public thinks are deadbeat home inhabitants, this extends to anyone with an outstanding, securitized mortgage of which MERS has tainted the assignment process.
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