I have a close friend of many years, a real estate broker, who acquired several properties before the Republicans helped banksters wreck the housing market. She’s a fighter, and has tried desperately to refinance her loans. She’s followed all the steps, and run up against all the dirty little schemes that banksters use to say they are participating in the program, but not really do so. I have shared her pain for over a year over this, and feel great anger over her experience. When I saw this, I immediately forwarded it to her, because it appears that in the midst of their predatory lending greed, the banksters may have screwed themselves.
Over 62 million mortgages are now held in the name of MERS, an electronic recording system devised by and for the convenience of the mortgage industry. A California bankruptcy court, following landmark cases in other jurisdictions, recently held that this electronic shortcut makes it impossible for banks to establish their ownership of property titles–and therefore to foreclose on mortgaged properties. The logical result could be 62 million homes that are foreclosure-proof.
Mortgages bundled into securities were a favorite investment of speculators at the height of the financial bubble leading up to the crash of 2008. The securities changed hands frequently, and the companies profiting from mortgage payments were often not the same parties that negotiated the loans. At the heart of this disconnect was the Mortgage Electronic Registration System, or MERS, a company that serves as the mortgagee of record for lenders, allowing properties to change hands without the necessity of recording each transfer.
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.
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… [emphasis added]
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Don’t get me wrong. I’m not part of the something-for-nothing set and believe that people should pay for what they get, if they possibly can. However, these corporate criminals have been so underhanded, that if this pans out to save their victims, I will dance for joy!
19 Responses to “Have Banksters Screwed Themselves?”
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We don’t share opinions on this one Tom. I say this war the banks and mortgage holders started was begun by setting people up to steal their money with the myriad of mortgage instruments they dreamed up. Money is the weapon of that war and if someone can beat them at their own game I am all for it. This argument about the lien holder not being able to provide the original signed documents has been working in peoples favor for about two years now. BUT as soon as the repthuglicans decide they want to introduce rule changing legislation the democowards will fall right in line and block this avenue.
What is funny, laughably funny, is “strategic default.” How it is perfectly great and good business when a bank that invested millions walks away from upside down commercial property without penalty because it is a good business decision but when a consumer does the exact same thing they are of low moral character and they are taxed on the difference between what the mortgage was and what the house eventually actually sold for.
Nope i say it’s their game they set the rules and if you can beat them at it go for it and if you can declare bankruptcy because your credit is already screwed and let them eat it all. Yes I know Fannie and Freddie are the majority insurers of mortgages and by extension the taxpayer is eating it but you can still bankrupt out of your UNSECURED debt (credit cards) and the bank eats that and then maybe you can afford to pay your too high mortgage. This crap is going to take decades to get back to right.
Mark, I must not have made myselfd clear, because we do share opinions on this one. I said I would dance for joy if the Banksters get stuck. The uber rich declared war on the rest of us years ago.
Nope i say it’s their game they set the rules…
I agree with TWM, I’d like to think the bankers have screwed themselves but they make the rules and control the money.
And so do I.
I certainly hope the banksters do get screwed on this one. I also hope the Democrats will stop joining the Republicans in siding with the banksters against the rest of us.
I hear you, Lib. Me too.
That’s really funny if true but I refuse to believe they haven’t finagled it so they make shit loads any way you look at it! They had everything set up so win or lose they make money and I expect this is no exception.
They’ll still make plenty, Jim. Most perople to whom this applies will never know it.
There’ve been news stories about this before, but I had no idea there were so many mortgages in this category, where the bank can’t foreclose because they don’t have any documentation that they’re the original lender. I think this is great. Once in a great while the villain gets hoisted on his own petard; the hunter gets captured by the game.
And this is the first time I havce seen it reported that courts have upheld it.
There’s NO way the banksters will get hurt; the republicans will introduce legislation that will not require showing the original signed mortgage, and it will pass with nary an peep. Never mind it will probably create problems elsewhere, they will be legislated away if they adversely affect the banksters. Ok, done with that.
Now a couple of other things I find interesting; MERS is used for the convenience of the mortgage holders to facilitate the transfer of property without all the hassle of paper documentation, but then why are borrowers still charged the same or more for the doc fees than they were before the MERS system was put into use??? Nice racket they have going there.
Now, I realize the banks are protected and win in just about every scenario, but how about the suckers, er, I mean responsible “homeowners” who have paid say, $150.00 every month on their mortgage insurance? AIG, the insurer, was bailed out and the bundled mortgage securities holders/banks were bailed out so shouldn’t the mortgage insurance payer be given some kind of refund? If not, why not? The paid their mortgage and they paid their mortgage insurance, yet it wasn’t necessary, and AIG or another insurer who probably got bailed out received those mortgage insurance payments AND the bailout! Further, isn’t AIG supposed to INVESTIGATE fraululent/bad/shady loans before they simply pay off like they did when they received their bailout money? If I pulled some shady mortgage scheme, I not only would not have been paid, I would have been JAILED. The banks win yet again, along with the insurers who get double payments!
Correction; I said: “but then why are borrowers still charged the same or more for the doc fees than they were before the MERS system was put into use???
It should have read: “but then why are borrowers still charged at the same rate (or more) for doc fees when the banks now have the convenience of the MERS system which does away with much of the work in producing these docs???
I hope youb are wrong (#6), but fear you are right.
They only keep it in MERS as long as the transactions ibvolve corporations, not people.
The banks will win, always…until their CEO’s are hung on Wall Street lamp posts.
Let’s wait and see,
Ad hoc JUBILEE! Hallelujah!!
Welcome, Bruce! 🙂
LOL!
It’s either going to end with the thieves giving back some of what they stole, or a bunch of them hanging from lampposts on Wall Street. David Stockman, of all people, recently warned that this is coming, and more and more “mainstream” economists have begun to make the same warning out loud.
Greed has rendered them too stupid to care. Until the mob comes for them.
I have no desire to see banksters physically injured… just destitute.