Posted on 10/04/2010 3:05:22 PM PDT by the invisib1e hand
“If they don’t have title and can’t foreclose, how can they demand payment on a loan they can’t prove they own.”
I know. I wonder the same thing. Of course the judges wouldn’t be too impressed right now, with real people in trouble losing their homes.
We found out that back in 2007 when we did a refinance that our loan was sold to Fannie. We didn’t know that. We thought that Citibank owned our loan. This spring, Fannie sends us a letter that says that BofA owns our loan, and please make payments to CitiMortgage now. What??? So, we called Fannie and they said “No, BofA doesn’t own your loan and the loan number on Fannie’s letterhead was bogus.” Uh???
So now it seems both Fannie and BofA think that our loan is theirs, and CitiMortgage says it is Fannies. Who knows?
That is what the problem is. THEY DON’T KNOW EITHER!!!!
They both keep trying to send us, “Refinance Now” deals. I smell a rat. Nothing doing. They just want to get paperwork on our home. They lost it, too bad for them. They have already stolen our money with TARP. #$&*&$@#@!!
As best I can make out is that the mortgages were bundled into new paper in various tranches, sort of homogenized into super paper (CMOs), that could be given an investment rating depending on the proportion of safe, somewhat safe, average, poor, and garbage (no-doc) mortgages in the tranche. It may be that one mortgage was split to numerous instruments - perhaps in an anonymous fashion, so the nominal servicer of the mortgage has passed the paper on to the bundler, and remits most of the payments to the bundler, which entity splits and forwards it on in turn to the various CMO owners. Probably a one-to-many problem. Many own a piece of the defaulted mortgage, perhaps unknowingly.
Where’s the nut? The servicer doesn’t own the mortgage, the bundler doesn’t own the mortgage, the CMO holders don’t own the mortgage. I cannot think that sophisticated financiers could build themselves this trap - but looks like they did.
Oh, but it doesn’t ultimately matter, because the US taxpayer, will eat the dirty end of the stick - courtesy of our most estimable representatives.
If title can be traced to the building of the home and there were no foreclosures in its history (or at least during the era of the go-go financing), it ought to be OK.
Hooray! A loophole for the deadbeats. Free houses!
Taxpayers, bend over.
There is some bathwater to be thrown out, and precious little baby. The author's viewpoint seems to border on anarchist (the financial reform bill is "tepid;") and she seems almost aglee that ownership may be rescinded upon a technicality.
On the face of it, MERS is analogous to DTCC, which nobody has ever heard of but without which (or without something quite like it) the cost of trading stocks would be incalculable. Now, if there is some difference between "real property" and "corporate equity" that is rooted in something other than archaic law, perhaps there is a good reason that MERS is portrayed as a nefarious "front" operation. And given that big money is, in fact, a lot more nefarious these days than it was when DTCC was being set up, perhaps, again, the suspicion is somewhat justified.
But the piece reads like a standard bogey-man story that is getting heavy rotation in all victim classes these days.
And speaking of DTCC, if you buy stock in another person's name to hide your ownership, a court will, if it can, point to you as the "beneficial owner" and the other individual as the nominee. And liabilities associated with ownership will be, naturally, the concern of the "beneficial owner." This is merely just.
So, then, if Citi is the beneficial owner of a mortgage, and MERS is a mere nominee, then Citi in fact owns the liabilities (or assets) associated with that mortgage -- in principal, at least. The suits mentioned in the article seem to only want the "beneficial owner" precedent to apply when there's liability involved, not assets. No fair on that.
Finally, however, the owner of the mortgage(s) is(are) the owner(s) of the bonds that own them. It's that simple. And somewhere, there is a record of who owns what bond and mortgage that bond owns.
And those owners deserve recourse.
Free and clear title thanks to some slimy lawyers' ambitious class action? Maybe it'll fly, but it won't be good for anyone. Except lawyers.
I posted this article, completely unaware of the recent MERS buzzes -- I posted it because I want to see the Impenetrable Death Star known as the Information Complex be blown to bits and I felt that any suit that targets database activity would be a helpful step along the way.
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