Tag Archive: Mortgage Crisis


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Politics / Legislation

Rules Chairman Dreier announces retirement after 16 House terms

By Pete Kasperowicz – 02/29/12 10:13 AM ET

http://thehill.com/blogs/floor-action/house/213273-rep-dreier-announces-retirement-on-house-floor

House votes to overturn Supreme Court decision on eminent domain

By Pete Kasperowicz – 02/28/12 05:19 PM ET

$744,000 Buys Cooperative Guantanamo Captives a New Soccer Field

http://www.nationofchange.org/744000-buys-cooperative-guantanamo-captives-new-soccer-field-1330536310

AIPAC Undermines Democracy at Home and in the Middle East

http://www.nationofchange.org/aipac-undermines-democracy-home-and-middle-east-1330533329

Goodbye, First Amendment: ‘Trespass Bill’ will make protest illegal

http://rt.com/usa/news/348-act-tresspass-buildings-437/

Barack Obama Waives Rule Allowing Indefinite Military Detention Of Americans

http://www.huffingtonpost.com/2012/02/28/indefinite-military-deten_n_1308129.html

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Napolitano defends U.S. drug war in face of legalization debate

http://www.reuters.com/article/2012/02/27/us-mexico-drugs-idUSTRE81Q2CA20120227

Justice on the High Seas

The Supreme Court says corporations have a right to free speech. But can they get away with murder?

http://www.slate.com/articles/news_and_politics/supreme_court_dispatches/2012/02/the_supreme_court_considers_whether_royal_dutch_shell_is_immune_from_liability_for_human_rights_abuses_because_it_is_a_corporation_.html

NDAA Nullification Passes Virginia Senate by a Veto-Proof 39-1 Vote

http://tenthamendmentcenter.com/2012/02/28/ndaa-nullification-passes-virginia-senate-by-a-veto-proof-39-1-vote/

Economy

US deficit a serious threat, says IIF

http://www.nation.com.pk/pakistan-news-newspaper-daily-english-online/business/27-Feb-2012/us-deficit-a-serious-threat-says-iif

http://www.democracynow.org/embed/story/2011/8/5/new_expos_tracks_alec_private_prison

Worried Dems pressing Obama on gas prices

By Alexander Bolton – 02/28/12 09:45 PM ET

Clinton: No timeline yet for new Keystone pipeline decision

By Ben Geman – 02/28/12 03:54 PM ET

Banks post most profitable year since 2006

By Vicki Needham – 02/28/12 04:34 PM ET

Bernanke warns lawmakers nation headed for ‘massive fiscal cliff’

By Peter Schroeder – 02/29/12 01:26 PM ET

http://www.huffingtonpost.com/l-randall-wray/new-yorks-us-bankruptc…

If you have a mortgage that passed through MERS (Mortgage Electronic Registration Service), it has been declared by a US Bankruptcy Judge to be illegal, and your bank may not have any right to foreclose!  Take this article to your attorney and discuss, if this is the case.

New York’s U.S. Bankruptcy Court Rules MERS’s Business Model Is Illegal

L. Randall Wray

Professor of Economics and Research Director of the Center for Full Employment and Price Stability, University of Missouri–Kansas City

Posted: February 16, 2011 03:00 PM

United States Bankruptcy Judge Robert Grossman has ruled that MERS’s business practices are unlawful. He explicitly acknowledged that this ruling sets a precedent that has far-reaching implications for half of the mortgages in this country. MERS is dead. The banks are in big trouble. And all foreclosures should be stopped immediately while the legislative branch comes up with a solution.

For some weeks I have been arguing that MERS is perpetrating foreclosure fraud all across the nation. Its business model makes it impossible to legally foreclose on any mortgaged property registered within its system — which includes half of the outstanding mortgages in the US. MERS was a fraud from day one, whose purpose was to evade property recording fees and to subvert five centuries of property law. Its chickens have come home to roost.

Wall Street wanted to transform America’s housing sector into the world’s biggest casino and needed to undermine property rights to make it easier to run the scam. The payoffs were bigger for lenders who could induce homeowners to take mortgages they could not possibly afford. The mortgages were packaged into securities sold-on to patsy investors who were defrauded by the “reps and warranties” falsely certifying the securities as backed by top grade loans. In fact the securities were not backed by mortgages, and in any case the mortgages were sure to go bad. Given that homeowners would default, the Wall Street banks that serviced the mortgages needed a foreclosure steamroller to quickly and cheaply throw families out of the homes so that they could be resold to serve as purported collateral for yet more gambling bets. MERS — the industry’s creation — stepped up to the plate to facilitate the fraud. The judge has ruled that its practices are illegal. MERS and the banks lose; investors and homeowners win.

Here’s MERS’s business model in brief. Real estate property sales and mortgages are supposed to be recorded in local recording offices, with fees paid. With the rise of securitization, each mortgage might be sold a dozen times before it came to rest as the collateral behind a mortgage backed security (MBS), and each of those sales would need to be recorded. MERS was created to bypass public recording; it would be listed in the county records as the “mortgagee of record” and the “nominee” of the holder of mortgage. Members of MERS could then transfer the mortgage from one to another without all the trouble of changing the local records, simply by (voluntarily) recording transactions on MERS’s registry.

A mortgage has two parts, the “note” and the “security” (not to be confused with the MBS) or “deed of trust” that is usually just called the “mortgage”. The idea behind MERS was that the “note” would be transferred from seller to purchaser, but the “mortgage” would be held by MERS. In fact, MERS recommended that the “note” be held by the mortgage servicer to facilitate foreclosures, but in practice it seems that the notes were often lost or destroyed (which is why all those Burger King Kids were hired to Robo-sign “lost note affidavits”).

At each transfer, the note and mortgage are supposed to be “assigned” to the new owner; MERS claimed that because it was the “mortgagee of record” and the “nominee” of both parties to every transaction, there was no need to assign the “mortgage” until foreclosure. And it argued that since the old adage is that the “mortgage follows the note” and that both parties intended to assign the notes (even if they did not get around to doing it), then the Bankruptcy Court should rule that the assignments did take place in some sort of “virtual reality” so that there is a clear chain of title that allows the servicers to foreclose.

The Judge rejected every aspect of MERS’s argument. The Court rejected the claim that MERS could be both holder of the mortgage as well as nominee of the “true” owner. It also found that “mortgagee of record” is a vague term that does not give one legal standing as mortgagee. Hence, at best, MERS is only a nominee. It rejected MERS’s claim that as nominee it can assign notes or mortgages — a nominee has limited rights and those most certainly do not include the right to transfer ownership unless there is specific written instruction to do so. In scarcely veiled anger, the Judge wrote:

“According to MERS, the principal/agent relationship among itself and its members is created by the MERS rules of membership and terms and conditions, as well as the Mortgage itself. However, none of the documents expressly creates an agency relationship or even mentions the word “agency.” MERS would have this Court cobble together the documents and draw inferences from the words contained in those documents.”

Judge Grossman rejected MERS’s arguments, saying that mere membership in MERS does not provide “agency” rights to MERS, and agreeing with the Supreme Court of Kansas that ruled “The parties appear to have defined the word [nominee] in much the same way that the blind men of Indian legend described an elephant — their description depended on which part they were touching at any given time.”

Read the  rest  of  the article  here  :

http://www.huffingtonpost.com/l-randall-wray/new-yorks-us-bankruptcy-c_b_824167.html