Posted on 01/21/2011 2:49:02 PM PST by Kartographer
MERS has screwed up the records so badly that in many or most cases no one knows who holds the notes, who is entitled to receive mortgage payments, and who has got the deed. What we used to call “mortgage backed securities” are probably mostly unsecured. It is not clear that any of the securitizations of home mortgages were done properly. In that case, the securities are not mortgage backed. Mortgage servicers do not have the right to foreclose, and neither do the securities holders. Homeowners can follow the example in Utah because, apparently, all states have a similar provision to allow “quiet title action”. The mortgage debts are not secured by homes. The homeowners can keep their homes and tell the banks to take a flying leap.
(Excerpt) Read more at businessinsider.com ...
He also blogs at New Economic Perspectives, and is a BrainTruster at New Deal 2.0. He is a senior scholar at the Levy Economics Institute, and has been a visiting professor at the University of Rome (La Sapienza), UNAM (Mexico City), University of Paris (South), and the University of Bologna (Italy).
PING!
All these bank consolidations and mergers and tricky paper-shuffling that started in the Reagan de-regulation era is coming back to bite the greedy bankers in the butt.
I think 2011 is the year “MERS” will become a household word.
I lost my home to foreclosure just before the bubble popped. I wonder if I have any recourse?
With no way to win, they endeavored to create a game of pass the bag with mortgages that would never be collectible for anything like what they were written for...and botched the attempt.
Check your state for the statue of limitations over a contract.
The author of this article starts to address one of the other big points I made back then: At some point, it will become clear that forcing the banks that signed the original mortgages to "take them back" will be the best opportunity for investors in mortgage-backed securities to recover some of their losses. In other words, the most effective legal strategy for these investors to pursue is to make the case that they never "owned" the mortgages in the first place and therefore they should get back the money they invested.
One more thing for not widely reported: for all those folks who have done the “right thing”, made all their payments one time, maybe took a 15 or 10 year loan and plan on having their loan paid off free and clear, guess what? The bank probably won’t be able to produce your note when you demand it, because they are only servicing the loan, and nobody really knows who is holding the actual note. Assuming that someone doesn’t show up in the future holding the note and demand “their” house, since there is no record that the mortgage servicing company actually paid them, you will never be able to get title insureance if you decide to sell your home.
The consequences of the scams these grifters have pullled and still are pulling will continue for years and years.
“All these bank consolidations and mergers and tricky paper-shuffling that started in the Reagan de-regulation era “
MERS was started in 1995. I believe BJ Lewinski was president then, not Mr. Reagan.
The Utah situation is also serving as a fascinating precedent because of some peculiar thing in Utah state law that makes it hard for someone holding a mortgage-backed security to foreclose on a property. There's a case involving Bank of America working its way through the Utah courts right now. The owner of the home in question has (as far as I know) been able to successfully make the case that Bank of America has no legal standing to foreclose on his property because they don't meet Utah's legal standards for pursuing that kind of legal action (Bank of America wasn't the original mortgage holder -- they purchased the loan from his local bank that originally wrote the mortgage).
I lost my home to foreclosure just before the bubble popped. I wonder if I have any recourse?
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If it was securitized the answer is quite possibly you have a suit for wrongful foreclosure.
Mergers and consolidation in the banking industry probably doesn’t have a big impact on THIS particular banking issue. Canada only has something like five or six banks nationwide, and their banking system is much more stable than ours.
It may behoove you to look into it. You won't be the only one asking that very same question.
Most mortgage backed securities have a “give back” clause. If any loan in the portfolio is not properly documented as claimed by the prospectus, the investor can return the entire portfolio back to the seller and get his original investment back. It is like a money back warranty. In the past when people were on time with their payments, investors were not sticky about minor document details. However today many of these portfolios are not performing and the investor will seek out any defect to return the investments to the seller with money back.
Banks knew about this when they accepted and encouraged liar loans, etc. Reason was the originator, his upper management and etc just wanted to meet their monthly sales quotas to get their bonuses. The banks had no intention of keeping the loans for more then six months so they did not care if the application was accurate, all they want to do was make as much loans possible and sell them off quickly and the profit will come from the fees and points. Sooner or later the whole system will collapse, but the bank personnel in charge did not care, because they figure they will retire before the bubble burst. Today the ones responsible made their millions before they reached 50 years old and are in Boca Raton in a mansion with a trophy wife. All his coworkers are stuck with the legal liabilities and financial mess and the US taxpayers are stuck with financing the cleanup.
If the American people do not want to see this crisis repeated, the gov need to go after the borrower and loan officer for the liar loans. Otherwise two generations from now a new young generation of loan officers and bank officers will repeat the scheme. Why not, the last bunch who did this made tons of money and were never punished. The risk is worth the rewards.
Up here, even the judges have started calling these pinstriped crooks “Banksters”.
Check your state for the statue of limitations over a contract.
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No limitations on fraud which is what he is talking about if the “bank” cannot show ownership ...
They flout the laws. The meanings are almost diametrically opposite. When they floutlaws they flaunt their disdain for them. When they "flaunt" laws they publicly wave them about proudly.
When they "flout the laws they disregard them and deliberately contravene them.
This and similar articles can be read as encouraging mortgagees to stop paying their mortgages even if they do not have any financial problems. The real chumps in the process are the responsible and moral people who pay on time, even if it hurts. I wonder where this all will end?
I wonder if this will work for the party that bought the MB security in the first place. In essence, you can make the bank who created the bond verify that all the mortgages behind the bond are properly documented.
If they never owned the mortgages behind the bond, can the validity of the bond be challenged somehow?
It’s like selling a bond on a pipeline you don’t own. Once I find out you don’t own it, I’m going to probably take you to court. I just don’t know what I’d sue you for.
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