I've been writing about the MERS monster since 2010. Here is one of my early pieces.
I suppose it is now safe to reveal that a staffer of Representative Marcy Kaptur put me on the trail of this fraud -- in dollar terms it has to be the single biggest fraud in human history. In sheer utter disregard for law, it is certainly the most audacious fraud in Western history. To tell the truth, I had never heard of MERS until she called. If you recall the Michael Moore movie, Rep. Kaptur stood on the steps and told homeowners facing foreclosure to stay in their homes. She was right: the banksters have no legal claim on the homes they are foreclosing. Foreclosure is theft. Any bank that used MERS has no legal claim on property -- there are 65 million such mortgages to which no bank has a legal claim to foreclose.
And, to be sure, even those mortgages that were not run through MERS are suspect if they are handled by any of the five biggest servicers. These servicers keep such shoddy records that they cannot be trusted to accurately credit payments. They've been adding on fees and penalties that were unwarranted since they cannot keep track of records.
Folks, there are $7 trillion of securitized mortgages. It was (mostly) the securitization process that demanded fraud. Securitization could never have been profitable -- it was a flawed way to go about financing homeownership. It was simply too expensive to compete with Jimmy Stewart thrifts. It required fraud to show profits. (As Bill Black always says: fraud is a sure thing. It is always the most profitable way to run a business -- until you get caught.)
In addition to the MERS monster, we also know the securities did not meet the "reps and warranties" claimed. The banks that did the securizations will continue to get sued to take back bad mortgages. They are trying to shovel as many of these back to Fannie and Freddie as they can so that Uncle Sam will take the losses -- as discussed in my previous blog they are now doing it through sale of servicing rights.
And of course Uncle Ben has helpfully put a lot of them on the Fed's balance sheet. This is all part of the cover-up to avoid the obvious: all these big banks are massively insolvent as soon as the courts wake up to the fact that the whole damned real estate finance onion is layer upon layer of fraud.
But let us stick to the MERS fraud.
There should be an immediate and complete halt to all foreclosures in the US, and all foreclosures that have been completed over the past decade should be nullified. Yes that will get messy. But continuing with foreclosures will make the mess immeasurably worse. This foreclosure crisis is not going to stop.
No one should buy any bank-owned real estate because it is probable that eventually the US will return to the rule of law. The property will be returned to the rightful owners -- those who were illegally kicked out of their houses.
Now that might be a pipe dream, but if the US is not going to be a nation ruled by law then it will not survive.
The biggest banks -- including the GSEs -- created MERS and proceeded to destroy our nation's real estate property law. That is not an overstatement. Robo-signing is just one small and inevitable consequence of the fraud. The truth is that foreclosure cannot go through without fraud because the banks do not have the documents to show clear title.
Banks don't have them because they do not exist.
There are no records because that was MERS's business model: destroy all records of ownership while speeding the securitization process.
And since the mortgages themselves were often frauds (designing "affordability products" that homeowners could not afford), many would end in delinquency. So MERS was designed to speed the foreclosure process -- it would be so much easier to foreclose if you didn't bother with documents, records, and property law. Just kick the owners out, take the home, sell it, and reboot the whole scam again.
Another whistleblower has come forward, this one from CBO. Lan Pham was fired because she refused to get with the program: the government is supposed to help the banksters cover up their frauds, NOT expose them! She refused. So she was fired. Now she tells her story.
I won't repeat her entire story -- you can read it at Zerohedge. Here are a few quotes from Lan Pham, the CBO whistle-blower:
I was repeatedly pressured by the CBO Assistant Director, Deborah Lucas... to not write nor discuss issues in the banking sector and mortgage markets that might suggest weakness in these sectors and their consequences on the economy and households......Issues at the heart of the foreclosure problems pertain to securitization....and the Mortgage Electronic Registration System (MERS), which purports to have legal standing on electronic records of ownership on about 65 million...mortgages... MERS...facilitated Wall Street's ability to expedite the pooling of subprime mortgages into MBSs by bypassing standard ownership transfer procedures as the housing bubble escalated...
The implications have profound financial and economic consequences that would be of compelling interest to Congress and the public, but the CBO sought to silence a discussion of such risks, that in reality have been materializing. These risks put into question the ability of investors or bondholders to make claims on the collateral (the homes) that underlies trillions of dollars in MBSs, the bulk of which are now guaranteed by ...Fannie Mae and Freddie Mac. This affects $10 trillion in residential mortgage debt outstanding, of which $7 trillion in mortgage-backed securities (MBSs)...
The CBO dismissing such issues prevents an analysis of the risks, so that the public may be forced again to shoulder the consequences for which they have not been a given a voice or a choice.
Essentially, the chain of title on securitized mortgages appears broken, whether or not there is a foreclosure. This would pertain to most homebuyers in the past 10 years as most mortgages were securitized by Fannie Mae and Freddie Mac providing the guarantees, and the largest banks ("The $7 Trillion MBS Problem - Foreclosure Problems and Buybacks"). Recall that these same entities founded MERS, which expedited securitization and purported to have foreclosure authority from its electronic records of ownership on about 65 million mortgages. "Robo-signing" emerged as fraudulent or defective documents were used or created to establish the legal authority to foreclose as MERS faced legal challenges; as of July 22, 2011, foreclosures could no longer be initiated in MERS' name. At last year's pace, some figures suggest it could take lenders in New York 62 years to clear their foreclosure inventory, 49 years in New Jersey and a decade in Florida, Massachusetts, and Illinois.
It is unclear how the recent State attorney generals' agreement to a proposed yet unpublished terms of the $25 billion robo-signing settlement would repair the chain of title issues that continue to mutate. In January 2011, the Massachusetts Supreme Judicial Court reversed the foreclosure actions of two banks for lacking proof of clear title, followed by a decision in October 2011 that a buyer who purchased a house that was improperly foreclosed upon does not make the buyer the new owner of the house; the sale does not transfer the property.
A striking little mention fact of the Massachusetts foreclosure case was that the lenders could not show that the two mortgages were part of the securitization pool. Let's consider a thought exercise. Others have the raised the question: if the entity that has been taking the homeowners' mortgage payments is not the real owner, what happens when the true owner(s) of the mortgage shows up? Are homeowners on the hook again for those 'missed' mortgage payments? It was not uncommon for mortgages to be sold multiple times, and it is my understanding that loans were intentionally not given unique identifiers as it moved from origination or purchase through to securitization.
This is what I've been arguing since 2010. This will not go away -- no matter how much the Administration, the Congress, and the banks try to cover it up.
Cross-posted from EconoMonitor
Tracy Van Slyke: Obama AWOL as 15.7 Million Homeowners Underwater
Doug Lebda: Housing Doom to Housing Boom: Five Fixes to Keep the U.S. Housing Market on Track
Judge Lorenz cited and adopted the California Court of Appeals’ decision in Calvo v. HSBC Bank and ruled that MERS and U.S. Bank complied with California law when foreclosing on the debtor’s property.
Breach of contract.
Mortgage companies charge borrowers a fee to register the title of a property to the new buyer/homeowner.
That's all fine, right? except mortgage companies using the MERS system? never do any such thing. They pocket that fee, and split the profit with MERS, without ever having registered the property with the County Clerk of Courts or Auditor.
And the next time the same property is sold? they do the same thing again. In many cases failure to file a timely notice of property assignment or lien is against the law. In some cases, it could even result in the new "homeowner" losing all property interest in their home.
MERS is simply trying to replace the legal statutory requirement to file liens in county courts with their own "system", and charging homeowners for services they do not provide.
That? is fraud.
Furthermore, not only is the banks on the hook; but we need to focus on the Government too, since they continue to bail (cover up) the banks out with taxpayer money. The reason the Government are bailing them out is because they are IN on it!!!!
The CBO wants to cover it up too...
http://www.zerohedge.com/news/terminated-cbo-whistleblower-shares-her-full-story-zero-hedge-exposes-deep-conflicts-impartial-
Terminated CBO Whistleblower Shares Her Full Story With Zero Hedge, Exposes Deep Conflicts At "Impartial" Budget Office | ZeroHedge
the bottom line is, my number ain't up yet!!!
STOP HALT
Unless some piece of legislation just passed that I'm unaware of...The US has NO legal obligation to make good on Fannie and Freddie. NONE WHATSOEVER.
The transfer of bad mortgages/MBS from BofA and others to these GSEs is just a stalling tactic...a shell game to give investors THE SENSE that the US will be there when the S#it #its the fan.
We must never allow these private losses to again transfer onto us...NEVER.
So, again, we don't owe Fannie and Freddie jack.
So yes, we ARE paying for their losses. Investors don't have a sense that taxpayers will be there wth TSHTF, they know it!
http://www.huffingtonpost.com/charles-ferguson/the-financial-crisis-and-_1_b_782927.html
Charles Ferguson: The Financial Crisis and America's Political Duopoly
"...My answer is this: far from being in an era of brutal partisan warfare, as conventional wisdom holds and as watching the nightly television news might suggest, the United States is now in the grip of a political duopoly in which both parties are thoroughly complicit. They play a game: they agree to fight viciously over certain things to retain the allegiance of their respective bases, while agreeing not to fight about anything that seriously endangers the privileges of America's new financial elites. Whether this duopoly will endure, and what to do about it, are perhaps the most important questions facing Americans. The current arrangement all but guarantees the continuing decline of the United States as a nation, and of the welfare of the bottom 90% of its citizens.
[snip]
In my personal conversations, I sense an emerging consensus based on nothing more complicated than a sense of basic honesty, fairness, and common sense, qualities which the American people still have in abundance. Let us hope that this can be translated into some organized force that can put an end to the present political cartel. "
I say show me, because in most States you still can't find an honest Judge in a foreclosure case, nor an Attorney who can "afford" to take a case for fear of retribuition from the 'Baums' of the foreclosure mill world.
http://www.southcoastaccidentattorney.com/faqs/is-robo-signing-illegal.cfm
Is robo-signing illegal?
"Is robo-signing illegal?
A: Robo-signing IS illegal. Anytime you file a fraudulent or false document in court whether it is an affidavit or another document that your saying is true, and it's false, is illegal. To understand robo-signing you must know what an afidavit is.
An affidavit is a document you file in court as a substitute for testimony. The testimony holds the same as a trial testimonly which means it is under oath, carrying the pains and penalties of perjury. When filling out an afidavit, you must know what you are talking about. Under law it says you have to have personal knowledge about the information in the affidavit.
In the foreclosure crisis, when they had stacks of documents, affidavits, written by someone else in front of them claiming that they were suppose to review the loan file, and they did not do so, they did not sign those documents on personal knowledge. The affidavits were FALSE. The same happened with respect to assignments. The assignments were backdated, which is a problem, and the people signing the assignments were robo-signers who did not have the authority or knowledge to bind the company inside those documents. Many times these documents were filed in court, often attached to affidavits, doubling the problem.
Signing and filing false documents in court is illegal and has always been illegal..."
that is what happened to our friend in Rockland County, NY, where Steven Baum is co- Attorney, with a major NY law firm, Hogan & Lovells. They represent Plaintiff HSBC as Trustee for a Trust our friend was never even seuritzed in.
On Thursday, March 15, 2012, they were alerted the Assignment of Mortgage, dated a week after Baum's Lis Pendens, and signed by notorious robo signer John kennerty as Assistant Secretary Of MERS, which had assigned the mortgage from Fremont(MERS) to HSBC and was dated August 17, 2010, was missing from case 10821/10. Upon inspection they in fact, found this to be true.
Again, is the disappearance of these signed and filed false documents illegal ??
Is this kind of behavior normal in these foreclosure cases?
this kind of Law is out of my comfort level.
I posted that link and another from attorneys' web sites, in response to BlairCase who stated that robo-signing was legal.
I always recommend consulting an attorney, in this case a foreclosure attorney.