Mortgage-Backed Securities Without Mortgages?

Market-Ticker ^ | 11/16/10 | Karl Denninger

[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?

[azhenfud]

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.

http://www.govtrack.us/congress/vote.xpd?vote=h2010-573

[azhenfud]

"Firms that had it last and lost it can have a lawyer fill out a state form and affidavit to document the lost documents."

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))

[NVDave]

This is why I continue to believe that we have two political parties in the US:

The Evil Party (ie, the DNC)

and

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.

[Fee]

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.

[azhenfud]

"Most mortgage experts feel the docs can be located or accounted for."

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.

[azhenfud]

It tells me the GOP majority has no conservatism left and they’d want the FedGov in a state’s issue to cover up ???.

[Fee]

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.

[Kartographer]

“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?

[azhenfud]

"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."

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.