For a few examples, see: Banker Jekyll Will Hyde Your Money - 5, Banker Jekyll Will Hyde Your Money - 4, Banker Jekyll Will Hyde Your Money - 3, Banker Jekyll Will Hyde Your Money - 2, Banker Jekyll Will Hyde Your Money, Getting Caught Is The Only No No, and Banque AIG & Family.
Now we focus on one of the many aftermaths of that debacle, the Mortgage Electronic Registration Systems, Inc. (MERS) potential catastrophe:
The growing furor in the United States over improper foreclosure documents is focusing intense attention on MERS, a mortgage-record service company that tracks more than 60 million mortgages.(Reuters, emphasis added). I read some depositions of MERS officials to come out with the impression that it borders on sham, has a fundamental flaw in its concepts, and should be avoided until massive repair is done.
Mortgage Electronic Registration Systems has filed thousands of foreclosure actions around the country on behalf of lenders. Its right to do that is under challenge. Several courts around the country recently have ruled that MERS lacks the right to file such cases. Federal regulators say they are investigating its role. On Tuesday JPMorgan disclosed that it had stopped using MERS.
I don't like the avoidance of the filing of deeds and such in county records of the state where the real property is located, because that system is far more safe and secure.
The officials under oath intimated that one of the purposes of creating MERS was to avoid state filing fees, but a closer look indicates that there is more to it than that.
The potential catastrophe caused by this drive-thru McMortgage approach is made apparent by the fact that state laws govern much of the scenario, and those state laws can vary:
MERS was convenient for the mortgage industry, but courts are now questioning the impact of all of this financial juggling when it comes to mortgage ownership. To foreclose on real property, the plaintiff must be able to establish the chain of title entitling it to relief. But MERS has acknowledged, and recent cases have held, that MERS is a mere “nominee” — an entity appointed by the true owner simply for the purpose of holding property in order to facilitate transactions. Recent court opinions stress that this defect is not just a procedural but is a substantive failure, one that is fatal to the plaintiff’s legal ability to foreclose.(Power Teams). A case in The Supreme Court of Maine is to the same effect, meaning this is an issue that is as serious as a heart attack.
That means hordes of victims of predatory lending could end up owning their homes free and clear — while the financial industry could end up skewered on its own sword.
The latest of these court decisions came down in California on May 20, 2010, in a bankruptcy case called In re Walker, Case no. 10-21656-E–11. The court held that MERS could not foreclose because it was a mere nominee; and that as a result, plaintiff Citibank could not collect on its claim. The judge opined:
Since no evidence of MERS’ ownership of the underlying note has been offered, and other courts have concluded that MERS does not own the underlying notes, this court is convinced that MERS had no interest it could transfer to Citibank. Since MERS did not own the underlying note, it could not transfer the beneficial interest of the Deed of Trust to another. Any attempt to transfer the beneficial interest of a trust deed without ownership of the underlying note is void under California law.
A blog The Home Equity Theft Report specializes in these and similar issues, and Huffington Post has a post discussing other effects of the problem.
There is little wonder why a Gallup Poll shows that about half of the country thinks the federal government (a.k.a. Department of Just Us) is a danger to the well being of American citizens.
The banks of the banksters are "too big to fail", the banksters are too big to jail, just as the Circle W Cowboys like it.
Perhaps this is a Pogo moment for the government to realize that all these endless wars should cause some self-reflection to come up with the realization "we have met the enemy and it is us".
The next post in this seris is here, the previous post in this series is here.