House Stealing: Tickerguy's Perspective
We have turned a blind eye to these lawless acts for the better part of a decade - not one indictment has issued for securities fraud over these matters. And it's not just mortgages - we know banks were involved in ripping off communities such as Jefferson County, we know they are alleged to have been involved in rigging municipal debt offerings (which raised the cost of living for everyone through higher taxes) and yet not one bank officer or bank itself has been placed under indictment for any of it. Further, the FBI warned in 2004 of an "epidemic" (their words) of mortgage fraud, and instead of it being prosecuted the agents were pulled and reassigned.
We have had two sequential administrations - Bush and now Obama - that have intentionally refused to prosecute any of this lawless behavior. This refusal continues to this very day with admissions in depositions under oath of the commission of literal tens of thousands of felonies per month (each instance of falsely swearing before a court is a separate count of fraud upon the court and, in the case of "robosigning", forgery - affixing a notary's signature by other than the actual notary.) Yet despite this having been confirmed in multiple depositions going back several months not one indictment has issued thus far and Attorneys General talk about not wanting to "upset" the banks or the "economy." FULL STORY
Foreclosuregate: Time to Break Up the Too-Big-to-Fail Banks
Only the beneficiaries — the investors who advanced the funds — can claim ownership. And the mortgages had to have been recorded ( with the county register of deeds ) in the name of the beneficiaries the year the 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. They can be sliced up and sold to multiple investors at the same time. Which investors could be said to have put up the money for a particular home that goes into foreclosure? MBS are divided into “tranches” according to level of risk, typically from AAA to BBB. The BBB investors take the first losses, on up to the AAAs. But when the REMIC is set up, no one knows which homes will default first. The losses are taken collectively by the pool as they hit; the BBBs simply don’t get paid. But the “pool” is the trust; and to qualify as a REMIC trust, it can own nothing.
The lenders were trying to have it both ways; and to conceal what was going on, they dropped an electronic curtain over their sleight of hand, called Mortgage Electronic Registration Systems or “MERS.” MERS is simply an electronic data base. On its website and in assorted court pleadings, it too declares that it owns nothing. It was set up that way 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. According to the MERS website, it was also set up that way to save on recording fees, which means dodging state statutes requiring a fee to be paid to establish a formal record each time title changes hands.
The arrangement satisfied the ratings agencies, but it has not satisfied the courts. Real estate law dating back hundreds of years requires that to foreclose on real property, the foreclosing party must produce signed documentation establishing a chain of title to the property; and that has not been done. 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. FULL STORY