Grayson blamed the massive foreclosure problems largely on the electronic shortcut called MERS. "The banks simply digitized mortgage titles into a privatized system, called the Mortgage Electronic Registry System (or MERS)," he said. "And it did the transfers by trading Excel spreadsheets among the banks and trusts, rather than endorsing the notes as required by their own contracts, by state real estate law and by IRS rules." He stated that 60 million properties are recorded in the name of MERS -- 60% of the mortgages in the USA, and 97% of the loans made between 2005 and 2008......For all those mortgages filed in the name of MERS, say these courts, the chain of title has been irretrievably broken. Humpty Dumpty has had a great fall and cannot be put back together again.
"There will be a head-slapping moment when title carriers, attorneys, judges and administrative agencies and clerks suddenly realize that the monster created on Wall Street has its equivalent in the public records of counties across the nation. I doubt if more than 6-7% of all the foreclosures in the past 10 years have resulted in clear title delivered to anyone. And the only corrective instrument can come from the original owner. That homeowner is sitting in the catbird seat and doesn't know it."
MERS is simply an electronic data base. On its website and in assorted court pleadings, it declares that it owns nothing. It was set up that way intentionally so that it would be "bankruptcy-remote," something required by the credit rating agencies in order to turn the mortgages passing through it into highly rated securities that could be sold to investors. MERS not only has no assets; it has no employees. The thousands of people enlisted to sign affidavits on its behalf are merely conduits. The arrangement satisfied the ratings agencies, but it has not satisfied the courts. Increasingly, judges are holding that if MERS owns nothing, it cannot foreclose, and it cannot convey title by assignment so that the trustee for the investors can foreclose. MERS breaks the chain of title so that no one has standing to foreclose. The homes are effectively owned free and clear.
A major title insurance company has already said it will not insure title to properties foreclosed upon by GMAC until further notice.
banks sell these loans back and forth to each other and the promissory note accompanies the sale, so when foreclosure takes place by the "servicing agent", its not done by the holder of the note. In fact, title has also been questioned, who is the owner of the property.....
Servicers perform billing and collections on home loans. When borrowers default, the firms handle the foreclosure process. Affidavits lay the legal foundation for a foreclosure by attesting that the borrower is delinquent and that the lender is entitled to seize the home. Details of the JPMorgan case were reported earlier last week by the Financial Times.
Lawyers in Florida and New York, among other states, have halted foreclosures and evictions by showing affidavits were faulty. Attorneys general in Texas, Iowa and Illinois have started investigations into mortgage practices at GMAC Mortgage following last week’s revelations. California has ordered the company to prove its foreclosures are legal or halt them. [Note by JJR: California is NOT one of the "23 states" that require review by the Courts before foreclosure and eviction..... so this IS bigger than the "23" states!]
If the documents are shown to be false after a home has already been resold by a bank, that casts doubt on who is the rightful owner, said O. Max Gardner III, an attorney at law firm Gardner & Gardner PLLC in Shelby, North Carolina, who has represented homeowners in fighting foreclosures and has cases pending against JPMorgan....
“Now there are enough disputes out there about ownership of loans that the judges are starting to feel like they need to hold the financial institutions to the basic rules of evidence.”.....
Read More....OMG! It just keeps getting better and better: Read This One:
...REMICS were newly invented in 1987 as a tax avoidance measure by Investment Banks. To file as a REMIC, and in order to avoid one hundred percent (100%) taxation by the IRS and the Kentucky Revenue Cabinet, an MBS REMIC could not engage in any prohibited action. The "Trustee" can not own the assets of the REMIC. A REMIC Trustee could never claim it owned a mortgage loan. Hence, it can never be the owner of a mortgage loan....."
Is your pension or retirement fund invested in REMIC's? If so, subtract some dollars..... where is this one gonna spin to next????
or this: banks have lost track of promissory notes signed by the homeowners....data was put into MERS and original documents were lost/destroyed....which means that in 45 out of the 50 states they lack the legal right to foreclose. There are 60 million homes which banks loaned money on, and now they might not be able to legally get the property back if the homeowner defaults! Another colossal problem for the banks is the trillions of dollars in mortgages bundled into securities.Remember, the banks were giving anyone who could fog a mirror a mortgage which allowed them to create and sell lucrative mortgage backed securities.
So, there are trillions of dollars in mortgage backed securities that now could have NO backing!
Would you like to be the pension fund manager who bought that security? Do you think this just might cause an accounting problem for the banks?
Do you think this could push some of the big banks into bankruptcy?
Will there be another financial meltdown and government rescue?
http://www.webofdebt.com/articles/breakup_banks.php
Sixty-two million mortgages are now held in the name of MERS, a ploy that the banks have realized won’t work; so Plan B has been to try to fabricate documents to cure the defect. Enter the RoboSigners, a small group of people signing thousands of documents a month, admittedly without knowing what was in them. Interestingly, it wasn’t just one bank engaging in this pattern of coverup and fraud but many banks, suggesting the sort of “organized crime” that would qualify under the RICO statute.....Only the beneficiaries—the investors who advanced the funds—can claim ownership. And the mortgages had to have been recorded in the name of the beneficiaries the year the Mortgage Backed Security (MBS) closed. The problem is, who ARE the beneficiaries who advanced the funds? In the securitization market, they come and go. Properties get sold and resold daily.
The Kanjorski amendment—which slipped past lobbyists largely unnoticed—allows federal regulators to preemptively break up large financial institutions that pose a threat to U.S. financial or economic stability.
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