The economic collapse is revealed as a series of events that unfold like dominoes cascading towards their demise. The Last Drop tells us about problems related to foreclosures. Not only did foreclosures hit a record in September 2010, but public awareness also peaked with the banks’ investigation of potential mistakes.
I am not an expert on this subject, but from a recent study I will try to give a basic overview of this vital topic of personal finance. Nicknamed “foreclosure door” and “fraudulent foreclosure,” banks are “under the gun” of the light that illuminates their mortgage banking practices. Due to reports of “theft” signers “(signing foreclosure documents without actually reading them), several large banks initiated temporary freezes of document processing.
A technical procedural misstep would be bad enough, but in fact the automatic signature in question diverts the attention of the elephant in the boardroom: systemic flaws.
The banking industry’s homeownership ad campaign of the early 2000s attracted countless Americans to become “true believers.” The mantra of “real estate would only go up” seemed to mesmerize the masses. Millions threw caution to the wind to explode the real estate gold rush.
At first, real estate agents and mortgage brokers gladly racked up larger commissions than ever before and sometimes under-the-table lender bonuses; turning a blind eye to inflated income levels, bogus home appraisals, and other lies embedded in mortgage underwriting documents. In turn, the word on the street was “all systems work” for those who would never otherwise qualify for a loan.
The rest is history.
Time has shown that many of these financial products were really designed to benefit the financial sector, not the small one. Wall Street bankers developed them as long as the government allowed them; A joyful joint venture!
Most real estate professionals were well aware of their clients’ likely (often subprime) inability to pay long-term. Bottom line: a delinquent loan and a home in foreclosure were ultimately worth more money. However, the housing bubble and collapse were only the tip of the iceberg.
At the heart of this story is MERS the so far elusive creation of a group of elite bankers who in the early 1990s sought to streamline (speed up) the real estate mortgage process while avoiding traditional county recorder title registration fees as well.
MERSCorp Inc. (Electronic Mortgage Registration System) was incorporated in Delaware in 1995. MERSCorp Inc. operates as an electronic “conduit” of legal passage, owns nothing, and has no buildings or employees. Surprise surprise, the shareholders listed on their website are some of the usual suspects and the biggest beneficiaries of the TARP bailout and overall global revenue: Bank of America, Chase, CitiMortgage, Inc., Fannie Mae, Freddie Mac, HSBC , SunTrust and Wells Fargo. .
Below is the best overview of MERS I could find by Christopher L. Peterson, Associate Dean of Academic Affairs and Professor of Law, University of Utah, SJ Quinney College of Law.
“MERS operates a computer database designed to track home loan servicing and ownership rights anywhere in the United States. Originators and secondary market players pay membership and transaction fees to MERS in exchange for the right to use and access MERS records.
“But, in addition to keeping track of property and service rights, MERS has tried to take on a different and more aggressive legal role. In closing home mortgages, mortgage lenders now often include MERS as the” mortgagee of record. ” on the paper mortgage, rather than the lender who is the actual mortgagee. The mortgage is recorded with the county property recorder’s office under the name of MERS, Inc., rather than the name of the lender, although MERS does not apply for , finance, service, or ever own a home loan. MERS intends to remain the mortgagee for the life of a home loan even after the original lender or a subsequent transferee transfers the loan to a pool of loans that are eventually sold. investors, a process known as securitization. Although MERS is a young company, 60 million credits are registered in its system. mortgages “. (Now 62 million in 2010 – ed.)
Some of these 62 million homeowners are extremely concerned about the implications of MERS showing up as a registered mortgagee. US loan laws state that only the owner of a loan can initiate a foreclosure and the MERS cannot legally own mortgage loans. Furthermore, investors who bought sets of bank loans called securitisations now question the accuracy of the ratings assigned to the loans at the time they were purchased. In addition, the legitimacy of the same group of loans was sold and again different investors is also being investigated.
Serious questions remain as to how the private MERS government of the nation’s real estate registration system quietly supplanted the century-old property law without an act of Congress. To date, class action lawsuits against MERS are pending in California, Georgia, Kentucky, Nevada, and Arizona. Who knows, maybe the big banks will be forced to allow families to stay in their homes, as well as buy back deceptive loans that they sold to investors.
In case the problems of incomplete and erroneous information given to the borrowers, the loss of solid evidence of title ownership (broken title chain) and the deception of the investor turn out to be true; Will such revelations be to level the playing field between the banks and the people?
Time will tell.
Some analysts say that President Obama, sometime after the midterm elections, will most likely sign the same executive order that he vetoed out of pocket on October 7 to make it harder for families to sue the banks. This could include an official retroactive redemption of mortgage banking sins and the blessing of MERS as the digital savior of the “old school” county title registration system.
October 20, 2010, on ABC News Today, Housing and Urban Development Secretary Shaun Donovan said that while reviews continue on foreclosure documentation issues regarding specific lenders and banks that may not be following the rules , there does not appear to be any “underlying systemic problem”.
If you believe this … I have a bridge that I would like to sell you!