Are Obama and Congress Set To Screw American Counties, Homeowners and Give Wall Street Mortgage Banksters a Retroactive Immunity Bailout?

There are rapidly emerging signs the Obama Administration and Congress may be actively, quickly and covertly working furiously on a plan to retroactively legitimize and ratify the shoddy, fraudulent and non-conforming conduct by MERS on literally millions of mortgages.

From CNBC:

When Congress comes back into session next week, it may consider measures intended to bolster the legal status of a controversial bank owned electronic mortgage registration system that contains three out of every five mortgages in the country.

The system is known as MERS, the acronym for a private company called Mortgage Electronic Registry Systems. Set up by banks in the 1997, MERS is a system for tracking ownership of home loans as they move from mortgage originator through the financial pipeline to the trusts set up when mortgage securities are sold.

Just to make clear the implications of this craven action, the White House and Congress are conspiring to give a get out of jail free bailout card to the biggest banks and finance companies in the country to cover up and mask their illegal behavior and behavior that did not conform with state, county and local laws throughout the United States. On at least sixty (60%) percent of the existing mortgages in America.

There are dozens of implications to individuals and both private and public entities. At a root minimum, it will likely decimate, if not bankrupt, most counties in every state of the union.

If courts rule against MERS, the damage could be catastrophic. Here’s how the AP tallies up the potential damage:

Assuming each mortgage it tracks had been resold, and re-recorded, just once, MERS would have saved the industry $2.4 billion in recording costs, R.K. Arnold, the firm’s chief executive officer, testified in 2009. It’s not unusual for a mortgage to be resold a dozen times or more.

The California suit alone could cost MERS $60 billion to $120 billion in damages and penalties from unpaid recording fees.

The liabilities are astronomical because, according to laws in California and many other states, penalties between $5,000 and $10,000 can be imposed each time a recording fee went unpaid. Because the suits are filed as false claims, the law stipulates that the penalties can then be tripled.

Perhaps even more devastatingly, some critics say that sloppiness at MERS—which has just 40 full-time employees—may have botched chain of title for many mortgages. They say that MERS lacks standing to bring foreclosure actions, and the botched chain of title may cast doubts on whether anyone has clear enough ownership of some mortgages to foreclose on a defaulting borrower.

Why would the Obama Administration and Congress be doing this? Because the foreclosure fraud suits and other challenges to the mass production slice, dice and securitize lifestyle on the American finance sector, the very same activity that wrecked the economy and put the nation in the depression it is either still in, or barely recovering from, depending on your point of view, have left the root balance sheets and stability of the largest financial institutions on the wrong side of the credibility and, likely, the legal auditory line. And that affects not only our economy, but that of the world who is all chips in on the American real estate and financial products markets.

What does that mean to you? Everything. As quoted above, even the most conservative estimate (and that estimate is based on only a single recording fee per mortgage, when in reality there are almost certainly multiple recordings legally required for most all mortgages due to the slicing, dicing and tranching necessary to accomplish the securitization that has occurred) for the state of California alone is $60 billion dollars. That is $60,000,000,000.00. California alone is actually likely several times that. Your county is in the loss column heavy from this too.

Where will the roads come from? Where will the county courts, judges and prosecutors come from? The Sheriffs? Who will build and maintain the bridges, parks and public works entities? Removal and obviation of this funding mechanism may literally kill any and every county.

That is without even going into the real and myriad effects on individuals, families and communities. This is a death knell to the real property system as we have always known it and the county structure of American society as we have known it. And millions of people will have lost the ability to benefit from the established rule and process of law that they understood and relied on. After the fact. Retroactively. So Obama and Congress can once again give a handout and bailout to the very banks and financial malefactors that put us here.

  1. Jim White says:

    And the absence of accountability for the MOTU’s continues. I hope they plan on hiring all the displaced law enforcement and fire protection folks the counties are going to have to lay off…

    • seaglass says:

      Accountability and law is only for “little people” not BIG Corps ( big people). It’s becoming more and more obvious that we now live in a “looking glass” world where $$$ is the law and those without it bear the full brunt of it’s impacts. Congress as Dick Durbin said in 2009 is owned by Wall st. So this attempt to retroactively move the goal posts should be no surprise. Get used to it SSI and Medicare’s goal posts are going to be moved as well and the Oligarchy is going to lower it’s taxes and raise the rest of ours to pay for it all. What are we going to do about it is the challenge thrown at the rest of us with a sneer. The Plutocrats in DC are going to do as their told to do, they have absolutely no allegiance or concern about how it effects the rest of us anymore. They only begin to care after they’ve lost their fancy jobs.

  2. Jim White says:

    We need to hit the phones hard this weekend and Monday morning to find someone in Washington who will try to put a stop to this.

    Back when Congress tried the quickie patch on retroactive immunity for warrantless wiretapping, we got Chris Dodd to help us and we at least made it take a lot longer for Congress to achieve the immunity, and they got a lot more attention while doing it than they thought they would get. Sadly, my first guess is that this time Dodd won’t be on our side, even at the beginning of the process.

  3. ubetchaiam says:

    Any petitions,letters,orgs being created to address this stealth? Heads up to Counties somehow? Are the tea-partiers connected to this idea?

    Really do wonder when enough shit will have occurred for people to take it to the streets.

  4. SmileySam says:

    What MERS would pay Calif. would not only put Ca. in the Black, it would give it a couple yrs reserve. Making MERS payout could save many a State Budget, someone explain why this is a bad thing ?

    • bmaz says:

      Put them in the black? This is money they were getting on the first technical conveyance and look to be losing not only that, but the fees from the additional ones that they should have been getting and are entitled to seek to collect in arrears now. So, not only will the combined counties of a state like California loose the right to get those back fees, they look to loose in the future even the fees that they previously did collect. If this plays out as bad as appears to be being contemplated, it is a geometrically factored whammy on counties. Worse off than they already are.

      All to protect the Master of the Universe all important Banksters. There is no “Mian Street”, there exists only “Wall Street” to Obama and Congress.

    • zapkitty says:

      Because that money actually belongs to our lords and masters… as does all money… as does all property… get the message yet?

  5. Peterr says:

    Putting the recordkeeping of the ownership of property into the hands of a private corporation — a private corporation owned and operated by the lender’s side of many property transactions — strikes me as the height of folly. MERS’ interest is in protecting its owners — the banks — and those to whom the banks have sold mortgage-backed securities.

    Why anyone would view MERS as an impartial recordkeeper is beyond me.

    • bmaz says:

      This would be a complete obliviation and restructuring of the American real property rights system as we know it and has existed literally forever. Why? To protect the asswipes who caused the problem, and so many of our other problems and strife.

  6. posaune says:

    Today, I was reading about Hjalmar Schact, president of the Reichsbank from 1922-44. He oversaw the merger of the Bundesbank & Danatbank in 1922. He is credited with “whipping inflation” from the Weimar Republic. On of the techniques used was the currency revaluation (the Rentenmark). The new currency was supported by the bonds issued by the Reichsbank (the new natl bank) based on assets ceded to the Reichsbank from private banks from all the mortgages foreclosed from 1916-1924. Real-estate based currency revaluation on the backs of the middle class.

    And that’s where the Obama Administration is going.

    p.s. Schact was one of only three persons acquitted in the Nuremburg trials. He was sent to Dachau for telling Hitler he couldn’t print money fast enough to pay for Barbarossa.

    • captjjyossarian says:

      Yeah, Schacht was Germany’s Central Banker. A clever crook.

      He was one of the ones who signed the letter urging Hindenburg to appoint Hitler Chancellor.

      Some days it really does feel like the Central Bankers are trying to recreate the 1930’s.

        • captjjyossarian says:

          They’re only half way there. It’s a lot harder for them to totally wreck things so long as Social Security and FDIC are in place. If shrub had managed to privatize Social Security… 2008 would have been many times as bad.

    • bobschacht says:

      p.s. Schact was one of only three persons acquitted in the Nuremburg trials.

      The correct spelling is Schacht, same as mine, but we are not related, so far as I know. One of my great uncles actually had a chat with him once, and claimed they were kindred spirits, but no geneological connection that they could determine.

      Bob in AZ

  7. tejanarusa says:

    I was about to close up the laptop, but this…this is …long ago exhausted my synonyms for unbelievable, appalling, horrendous, horrfiying etc. etc.

    I am truly coming to believe their mission is to destroy not only the democratic party, but the country.

    This would upend centuries of property law, and I can’t believe, for that reason, that it would really protect titles . Not to mention the loss of income to governments.

    Are we sure it would cover future fees, too? Make it unnecessary to pay any kind of fee? I guess it is going to eliminate the need to record mortgages or other property transfers?

    How can any title company ever be sure title is clear in order to insure it? How can you ever know someone won’t appear years after you’ve paid off your mortgage to claim superior title?

    • bmaz says:

      I don’t know. The details are not clear yet. But the potential for all that is certainly there. If the electronic transfer of mortgages and property rights is to indeed be federalized, which to some extent has to be the case for an act of the US Congress to make it uniform and control the area, then I think you have to ask the questions you have asked. And if it is really being tasked for the lame duck session, which is hard to believe quite frankly, then every ounce of it will be hung around the Democrat’s necks. And deservedly so.

      • RandallKohn says:

        if it is really being tasked for the lame duck session, which is hard to believe quite frankly, then every ounce of it will be hung around the Democrat’s necks. And deservedly so.

        As intended. Obama is not just a devout corporatist hack but a Republican agent.

  8. captjjyossarian says:

    Is there no limit to how high absurdities may be stacked?

    Tax breaks are preserved for the rich while Social Security cuts are pushed on the poor.

    High unemployment is met with a focus on reducing government spending.

    Mass lawlessness is met with mass get out of jail free cards. MERS is but one example of this.

    A President who’s professional background is in law presides over an administration hell bent on ignoring rule of law.

    Time to have Obama declared mentally incompetent.

  9. papau says:

    There is no free lunch.

    Those recording fees, if paid, would cause the Federal Gov to cough up money as it again saved the Banks. It would seem to be more efficient to simply send money to the states in a stimulus.

    Indeed the legal system is dead in the water if every mortgage is litigated – so I suspect Congress must make MERS legal. Why the banks got Congressional approval under Clinton for check clearing electronically with no returned check, but thought that Bush’s no regulation would go on for ever and give them cover on MERS is beyond my ability to understand. In any case the forgotten need to get Congressional approval for MERS will be taken care of soon. But I hope the states can use the situation to make the GOP approve that second stimulus payment to the states.

    • bmaz says:

      I do not disagree that there should be some uniformity installed. But, this is just hand a freebee to the banks, in a way that undermines the rule of law, and throwing money at the malefactors still without addressing the underlying problem. Say you throw some pixie dust in the air and legitimize all the foreclosures; what are the banks gonna do with all of them? Who will buy them? Hedge fund investor groups? How does that help the real citizen base that drives the economy? How does that help the substantive property value system? There are better ways to do what you describe, which is ultimately necessary, and really do some good for the populous in the process. Want to help the economy? Put some money and asset value in the fucking people for once instead of the platinum lined pockets of the financial sector. We been down that road before.

      • papau says:

        I agree getting money to individuals is best – but I doubt that will be done – or even attempted.

        The fees lost is an argument for a stimulus payment to the states.

        Banks taking more losses for a procedure the government had no problem with until foreclosures became a massive problem is not going to be solved by tying up the Courts trying to get money from MERS and its owners – the banks – that just adds to the problem of the banks.

        Nationalizing the banks was the route to go – but that moment has passed.

        • bmaz says:

          Yeah, sadly agree. I think the foreclosure/MERS mess actually could be used to go back, do an honest capitalization review of banks, and then proceed with nationalization and resetting, but there is no will for it. You know, Obama is getting tagged heavy for being a big government socialist anyway, he might as well have the balls to earn it and go do what needs to be done. But he won’t.

      • jdmckay0 says:

        this is just hand a freebee to the banks,

        If congress does this, it’s more then that: it’s a(nother) get-out-of-jail-free card.

        MERS was an agent for fraud. Banks/WS knew by end of ’07 they did not have title to much of what they sold as mortgage securities. Doing so allowed WS’ fueling of the housing bubble while masking it’s “bubbleness”, a fulcrum which also masked evaporating of US economy this smoke screen bubble was used to hide.

        (…) and throwing money at the malefactors still without addressing the underlying problem.

        EG. problemS. The fraud, of which MERS was integral, is/was multi-layered and many many layers deep.

        Nothing surprises me these days, but… if congress did pass such a thing, I think there’s enough reasonable honest FED judges left so that such a declaration would be ruled unconstitutional on a number of grounds. Among other things, it would rubber stamp fraud as legitimate legal standing over very well, long standing property right law.

    • captjjyossarian says:

      Which is why the big banks need to be taken over by the government. Clear out the criminal management.

      • liberalarts says:

        Who in government would you trust to not be hand in glove? That’s the problem here, collusion. This is not a matter of criminal on the one hand and incompetent on the other hand. There’s criminality and incompetence on both hands, but the criminality on the government hand is the larger problem, IMO.

        • captjjyossarian says:

          Yeah, sort of. But I think it’d be a mistake to view all the bad actor’s in this as one solid tight knit group. If the politicians correctly perceive that the risk level is too high, they can and should pull the plug. Unfortunately for our Congress critters, President Obama is insane and will protect the banks to the very last Democrat.

          Just because some politicians did some favors for the bankers doesn’t mean they are on the hook for the bankers crimes. Look back at the S&L crisis, John McCain was one of the Keating 5. We cleaned up the S&L’s, put over a thousand bank officers in jail and…. John McCain went on to run for President.

        • captjjyossarian says:

          And the politicians probably always will be dirty. But if they are smart, they’ll make use of thier self preservation skills when things get sufficiently ugly. Notice that John “Keating 5” McCain didn’t go to jail with the 1000+ banksters of the S&L crisis.

          How many political bullets do our politicians really want to take for the bankers? Obama’s clearly willing to support the banks to the very last Democrat. But I’m not so sure the Democrats are going to agree to fall on thier own swords.

  10. gannonguckert says:

    I remain very unsure that an effort to federally legalize and substitute MERS for the last 6 – 7 centuries of Western real estate law.

    There are very many, very powerful people, firms and other entities that would lose so much…

    • sixtysomething says:

      I agree. Something else may be going on here, but I work with counties all over the country. The revenue commissioners/recorders etc are not going to lose this…especially not those whose incomes derive from the collections for fees…. Have looked at some MERS docs and the trail seems clear on the ones I’ve looked at as well. Not in-depth study by any means, but still.

      • readerOfTeaLeaves says:

        I hope that you are correct and that pushback from counties (and state AGs) will be so fierce that everyone near the conflict gets burnt badly. For any county, this is its lifeblood (economically). This is the purpose for which it exists.

        But this:

        This is a death knell to the real property system as we have always known it and the county structure of American society as we have known it. And millions of people will have lost the ability to benefit from the established rule and process of law that they understood and relied on.

        If the rule of law is so gutted that the territory they’ve sweated and toiled for is removed, then I see the entire system of government imploding. And I’m not a big fan of chaos, so whatever bankster interests are pulling this bullshit are playing with fire.
        Unbelievably stupid.

        Then again, whoever is pulling this shit probably assumes that the nation-state has been superceded by Supercapitalism. If so, I see chaos ahead.

        This reveals, as nothing else has, that our economic assumptions and philosophies are far too outdated and urgently need to be revamped. As Yves Smith has pointed out brilliantly, our economic arguments have relied far too much on math and ‘science-ish’ disguises.

        The county commissioners have a chance to fundamentally reclaim not only the law, but also call into question the neoclassical economic stupidity (aka, “Shock Doctrine” economic behavior).
        That would be a completely unexpected, surprising turn of events.

    • prostratedragon says:

      Ordinarily that would seem to be true, but I’ve been coming round to the view that those forces, who probably are a small enough group to be an effective decision body, have either 1) been paid their price, bearing in mind that that price would be deeply discounted for the hellacious effort that would be needed otherwise to uproot the vandals, or 2) concluded that letting the vandals grease their own skids provides the best opening move when that handcart to hell really gets going. Note that both of these guesses could be true. The second one is my idea of almost unbelievable good luck.

    • bmaz says:

      Well, yet to be determined, but maybe not if creatively attached to something already in process or an omnibus bill or something.

    • nonquixote says:

      Have you forwarded this to Feingold’s office and asked him the question you possed? Don’t just sit there. If this is stopped in the lame duck session, and favored by Ron Johnson after January, Johnson could be out of office that much sooner.

  11. bigbrother says:

    These are Bushco Housing Bubble Mortgages that went belly up in 2006. That was the top of the value curve. The crime family used some of these techniques in the 1980’s… Altogether, it’s been calculated that bailing out the failed S&Ls countrywide cost the US taxpayer around $1.4 trillion! They deregulated then and again under Clinton. The securitization of these loan bundles guarantee multiple owners with an interest in the pools handled y a Trust. MERS and others did the paperwork of transferring ownership/title. Each investor was owed a payment on their investment, Pension funds, retirement funds, mutual funds, soverieign funds all got burned as the value curve got lower and lower, The curve is still going down…last month 5%. The foreclosures and short sale inventory are downward pressure on the property values. The mortgage payer underwater has no motivation to service their debt.
    Obama is going to bail out the banks again and the homeowners are scavaged. Unfair and outrageous. Media calls them deadbeats. The banks do not want to take a haircut so BO is going to give them our federal treasury and Quantitative easing what is left for a safety net for millions of dispossed?

  12. marymccurnin says:

    I am officially confused. Totally. If MERS was a way to NOT pay the fees to counties haven’t the counties already absorbed the losses? Where does the loss come in?

    • sixtysomething says:

      Yes, the losses would have already occurred, but, that said, the few I’ve looked at tonight and tracked, all have multiple receipts/recordings and cancellations when the mortage is paid off. By no means a meaningful sampling, but come Monday morning, I’ve got folks I can talk to about this.

      • marymccurnin says:

        So how would the counties go under if the losses have already happened? Is it due to the continued worsening in the housing market and the loss of property taxes?

        • sixtysomething says:

          Beats me, I just work here :) There’s tons of MERS recordings…for which fees were collected… I think possibly folks are thinking some of the transactions weren’t recorded…can’t tell about that. But rest assured, hell hath no fury like a revenue commissioner who doesn’t get a piece of the action and lemme tell you they are very political animals and will be burning up the wires to DC if this is something that’s going to affect income.

        • bigbrother says:

          If I may, counties have been lowered reciepts from strapped states cutting many of the programs. Real Estate is reappaised in a down market and the results are lower income and they have to make tough budget cuts three years now and more coming as CA is more than $20 billion short. The the construction industry is frozen which is where the economy usually gets moving again.

        • sixtysomething says:

          A couple of things I’m pondering… I wonder if counties know that they possibly haven’t collected money for transfers… ie in the old days, a mortgate was recorded, held until it was cancelled (paid off) or until the property was sold, and thus recorded again as another doc. Soooo, they wouldn’t have noticed anything no drop in the average number of recordings or revenue…. Now, I’m thinking there are two things they are going to be riled up about…..Whether they are D’s, R’s or purple martians…these are little fiefdoms and if it’s not recorded at the county level, it does not exist…period. The other thing is if they realize they have been cheated out of money, they will be all over local news railing against it….and calling everybody they know up the food chain. So, it wouldn’t hurt for everyone to check in with their locals and take their temp on this. There are a lot of players in this. Murky area to be sure.

        • bmaz says:

          I don’t see how they really could easily know or track it. Crikey, the freaking servicers on the loans cannot even seem to keep track, how is some county recorder’s office?

        • sixtysomething says:

          Just shot off an email to a county administrator friend to see what the average knowledge is about this… I’m thinking most just don’t understand how this has been working…or not working as the case may be.

        • marymccurnin says:

          Seems to me the counties knew what was going on cause as the housing went up so did the property taxes. All you have to do is look at your tax bill from the county to see the shift up or down.

        • readerOfTeaLeaves says:

          Walk it back a few paces, mm.
          From what I saw in the 90s and early 20s, the local officials were bleating about ‘jobs’. Along comes Subdivision Developer A, with his buddies from the Local Mortgage Bank. They hang out at developer breakfasts, and local Chamber of Commerce gabfests. And so do the local electeds.

          Now the local electeds — county exec, county councilmembers — their bread & butter comes from blathering about high employment, a huge boom in the economy, all those fully employed realtors, and their tax base is affected by REET (Real Estate Excise Tax), which goes up each time a house or condo or commercial development is bought or sold.

          So for the local electeds, none if any of whom really get economics but all of whom assume that Market Fundamentalism and Free Marketeering is as natural a law as e=mc(2), believe that they have to ask the builders and mortgage brokers for advice on how to allow housing permits — which all over the US are issued by cities and counties.

          You want to build a house? Gotta get a permit.
          Where do you get the permit? Your local city or county.

          So sixtysomething is totally correct that these municipal government folks have their fingers on the pulse, because basically its their paycheck.

          Now, I’ve seen way, wayyyyyyy too much deference from county employees to anyone who wants to build a crap subdivision. And I’ve watched electeds totally cave to subdivision developers — basically, they just let the lobbyists write the regulations, as well as the laws, and as long as no one pulls the curtain and Toto’s not barking, everything goes along fine. Until it doesn’t.

          So some of the county employees who have been around long enough to have watched weeny electeds allow the subdivision developers to call the tune are now probably dealing with horrendous budget shortfalls.

          I’m with sixtysomething in that the tax folks and the recording folks tend to be different fiefdoms.

          But there were people even 4 years ago who claimed that the laws of nature no longer applied, and that housing prices would never, ever come down.
          These are also people who can’t believe that fraud ever happens.
          They also don’t seem to grasp the concept that if one of the hedge funds happens to be driven by investors from Taiwan, or oiligarchs from Russia, or Korean shipping interests – none of whom give a rat’s ass about the local schools or budgets of your county – then you’ve kind of handed your ass on a platter to whoever wants to carve it up first.

          So if the Obama admin and the Dems assist in any kind of retroactive immunity or ‘legalizing fraud’, this is the system they are making ‘legal’. And Phil Gramm, and Richard Shelby, and some of the former Clinton economic advisers continue to be deeply invested in making sure this is all pixie-dusted into ‘legality’, because just imagine if it isn’t… they might then at some point be help accountable.

          In a Wall Street configured DC, our best hope probably lies with county administrators and commissioners all over this nation raising holy hell with their Congressional members.

        • bobschacht says:

          Now, I’ve seen way, wayyyyyyy too much deference from county employees to anyone who wants to build a crap subdivision. And I’ve watched electeds totally cave to subdivision developers — basically, they just let the lobbyists write the regulations, as well as the laws, and as long as no one pulls the curtain and Toto’s not barking, everything goes along fine. Until it doesn’t.

          Speaking of crap subdivisions, I owe the view out of my back windows to a crap subdivision developer, who bought up a bunch of acres of piney woods west of my house to turn into a high-concept development (houses and condos, plus a little shopping center and service area). They built the streets and put in the sewer lines and then the bottom fell out of the housing market. So now for the foreseeable future, my backyard view is still dominated by piney woods rather than small, closely packed condominiums.

          Bob in AZ

        • readerOfTeaLeaves says:

          Interesting. I’m in a somewhat similar situation, and I figure that it’s only a matter of time before all the trees start getting bulldozed. My local government couldn’t tell a donut to go dunk itself, let alone tell a developer that they had to meet some kind of standards.

          parsnip@137, I’ve also read Tao Jonesing’s commentary and it’s always quite insightful IMVHO.


          Those folks have got their mitts into places that ought to be a conflict of interest.

          Well, after 30 years of Free Marketeering Reagonomics, too few people (electeds, biz, or academic) seem to have a realistic, fundamental grasp on the term ‘conflict of interest’, let alone why it might be a big deal. This is the logical outcome, and it’s quite likely to wake up a lot of people.

          The next question would be: who are the shareholders? What’s the ownership structure? (Would it surprise me if Chertoff turned up on that corporate board, as well as all the others he’s on? Not a bit.)

        • bobschacht says:

          Interesting. I’m in a somewhat similar situation, and I figure that it’s only a matter of time before all the trees start getting bulldozed.

          I agree. The trees that I see from my back yard will start getting bulldozed when the company that owns those lots figures it can sell the condos and other housing units it plans to build for the kind of profit their business plan calls for. And I figure that ain’t gonna happen for about 10 years. So until then, I’ll enjoy the view.

          Bob in AZ

    • Jim White says:


      Yes, you are correct that the recording fees, which generally average around $30 at a time, have already been “lost” for the counties each time a mortgage changed hands in the financial Ponzi scheme with MERS registration only. However, the event that has triggered the covert action in Congress is that a pair of very bright attorneys (Robert Hager and Treva Hearne) in Reno, Nevada has figured out that in some states, the fine for failing to register a property transaction with the county can run as high as $5000 to $10,000.

      If you read the AP article that is linked in the second blockquote of bmaz’s post, you will see that there is some thought that these lawsuits, which the attorneys have filed in 17 states so far, have the potential to generate fines that would add up to truly staggering numbers if each MERS-recorded transaction is assessed fines of thousands of dollars. Those fines would be payable to the counties and would represent a huge “stimulus” to local governments everywhere. The attorneys would receive a portion of the fines, too, in return for having initiated the action against MERS. It is the removal of any hope of recovering these huge fines that would have the huge, devastating effect on counties that bmaz points out here.

      By protecting the banks against the fines and pre-emptively preventing the counties recovering even a negotiated settlement on the fines, Obama and Congress would just be demonstrating once more that they will do anything to protect all illegal activities by the banksters and will do so with no thought to the harm caused to homeowners or local governments.

      • pdaly says:

        in some states, the fine [to MERS] for failing to register a property transaction with the county can run as high as $5000 to $10,000.

        If you read the AP article that is linked in the second blockquote of bmaz’s post, you will see that there is some thought that these lawsuits, which the attorneys have filed in 17 states so far, have the potential to generate fines that would add up to truly staggering numbers if each MERS-recorded transaction is assessed fines of thousands of dollars. Those fines would be payable to the counties and would represent a huge “stimulus” to local governments everywhere.

        Amazing that Obama would want to get in the way of a “privately paid for” stimulus package to the public. What a corporate tool. If the money were traveling in the other direction, from counties to private corporation, I doubt Obama would see the need to intervene–in fact that’s what has been happening with MERS’ failure to repay each time the mortgage note changed hands. Neither he nor Bush intervened, Blessed be Holy Corporate Profits.

  13. miketaylor says:

    At the beginning of the financial sector collapse, before Bush started the bailouts, I started reading financial pieces that eluded to some potential legal problems associated with the “fruits” of the banking deregulation that happened under Clinton (i.e. the gutting of Glass-Steagall, which allowed for the propagation of mortgage-backed securities etc.). I was thinking “maybe we’ll get to see some investment bankers jumping out of skyscrapers”. Then the government bailouts came (which shot that all to hell).

    But later (during this administration) came the pieces about the clusterfuck of fraudulent foreclosures, banks trying to circumvent state foreclosure laws, judges rewarding homes to delinquent homeowners because of the broken “chain” of ownership (or whatever it is). For a little while I was thinking “maybe we’ll see some skyscraper-jumping after all”.

    But all my hopes of seeing any skyscraper-jumping were dashed with the banksters’ first attempt at circumventing state foreclosure laws, HR 3808, which passed the House on a voice vote and the senate by unanimous consent and no record was kept on who “voice-voted” or “consented” to it. Although inconsequential (because Obama vetoed it), the fact that 3808 passed the house and senate (and we don’t know who “voice-voted” or “consented” to it) is the real story because it’s indicative of things to come and it’s creepy as hell. I’m afraid the only reason Obama vetoed it was the coming election

    I guess Durbin was right (the banks own the place). They’ll own us if the pattern holds (the rights of all property owners could rest on how this foreclosure fraud deal shakes out).

    • conservative1 says:

      It is naive to think that banks will be held accountable for taking advantage of policies that were not thought out well to begin with. To blame this on Bush or the Republicans is non-sense. The Democrats were up to their eyes in this by supporting anything that Fannie Mae and Freddy Mac did. The point is that we have a home owner nightmare out there and that is what needs to be fixed. People are loosing their houses and their savings and nothing is being done about it. If the government really wanted to get the country back on it’s feet again, it COULD pay off every mortgage in the United States for about 900 billion dollars. Could you imagine what our economy would look like if no one had a mortgage payment?

  14. bgrothus says:

    I recently received a copy of my title insurance policy, something that I recently discovered was missing from my packet when I refinanced my house in 2008. When the papers came, I found that my mortgage is registered (?) with MERS.

    I have “owned” my house since 1987, and there should not be any question about the title. But this whole thing makes me puke.

    I have now started battle with my county related to the “tax lightening” that has become another feature of the mortgage fraud/foreclosure fraud. This is what they do to try to collect higher taxes from some people because other people have properties in the system that are “under water.”

    This becomes another way to lose property, when the taxes suddenly become so outrageous that the property owner cannot pay them. I think there is another story coming.

  15. bigbrother says:

    Local Bank chain VP told me today to look at what Harding and Coolidge did to run things amuck. An avowed conservative but the Bamks are repeating what was done to cause the Depression.

  16. Stephen says:

    Once, we wondered if the sorcerer’s apprentice was playing eleventh dimensional chess to win the good fight. When all along he was making moves to screw the country.

  17. bgrothus says:

    Everyone I know is paying higher taxes in my county this year. My taxes increased from $5000 last year to $15,000 this year. Of course, it is impossible to pay this amount of taxes.

    I thought I would never face foreclosure, but I see now how it can happen so easily.

      • bgrothus says:

        That is correct. They are using 2008 “values.” I have been successful in getting some of it resolved to a reasonable amount of increase. But one of my properties has buildings they value at $65,000 and they have valued the land at $503,000. The taxes went from about $2400 last year to almost $9000 this year. This is a residential lot in a neighborhood where all of the other lots are valued around $25,000. I have not been able to find a single similar property with this value anywhere in town. I cannot understand how they continue to tell me it is correct. There is a Walgreen’s on a major corner nearby that has a land value similar to mine. But it probably collects in a week gross receipts tax alone that exceeds the rents on my property in a year. I simply cannot understand it.

  18. Stephen says:

    Considering HR 3808 I would very much want to get a statement from Pelosi come Monday morning if not sooner. Put her on the record.

  19. liberalarts says:

    Somebody help me out, here. I remember that the S&L debacle was a humongous taxpayer bailout that mostly glossed over and underwrote the worst of the scams, including, rimshot, please, Neil Bush at Silverado. Oh, there were a few prosecutions, but not nearly what were warranted; most of the crooks made off clean with their loot. The whole rotten mess was swept under the taxpayers rug and everyone at the Resolution Trust Corporation offered themselves hearty congratulations at a job well done. Only cost the taxpayers an estimated $124,000,000,000. One hundred twenty four billion. Dollars.

  20. mzchief says:

    Some interesting things I saw in passing:

    1) ‘“Freddie Mac, one of the primary government-sponsored enterprises involved in the purchase of mortgages, recently announced plans to enter the secondary market in subprime loans by purchasing significant numbers of “A minus” subprime mortgages by 1998 and the higher-risk “B and C” loans by 1999.(20) ”

    -excerpt from “Why Did Bill Clinton Change Mortgage Lending Rules?,” Mar. 15, 2010

    2) When ARMs appeared, I would have never considered one but knew folks that found themselves in the position of having to take one in 2004 just to get into a home when they moved for a job:

    ‘An “option adjustable rate” mortgage on the other hand is nothing but a sub-prime mortgage in the making, plain and simple’

    – excerpt from “Bloom of Doom II: Of Mortgage Brokers, ARMs, Attrition and Marathons,” Jan. 28, 2010

    3) Meanwhile, “Mortgage brokers to be fingerprinted and registered” (Jul 28, 2010) but I’d like to know why the bankers aren’t being subject to the same?

    4) Apparently the banks are poised to deliver the “kill shot” on dramatically decreasing competition from mortgage loan brokers:

    Kill the Fed Rule Round Two,” Nov. 10, 2010

  21. Stephen says:

    I’m trying to pin down a time frame for Pelosi on H.R. 3808. From my review it had a voice vote in the House on Apr. 27/10, then it passed unanimously with a voice vote again in the Senate Sept. 27/10 and Barry got it Sept. 30/10. He then gave it a pocket veto on Oct. 7/10 and a White House statement came from Gibbs stating H.R. 3808 “has unintended consequences on consumer protections”. Now Pelosi, apparently just before the veto, started to yip and yap calling for investigations into the foreclosure fraud scandal on Oct. 5/10 in a Huff Post interview. I cannot find any statements given by her in my review regarding H.R. 3808 and her take on the silent unanimous vote in the Senate. I recall Marcy did a piece and mentioned Leahy’s dubious story about why he voted the way he did. Does anyone know if she gave any statements or interviews regarding her knowledge of events either in the house or senate at that time?

  22. kabuki101 says:

    I said at the time that the “e-notary law” was not going to go away. They’d come back for another try. Well, here they are. Back with the new version. Serfdom v 2.0

  23. normanb says:

    Retroactive protection, like retroactive punishment, is expressly forbidden in Article One, Section 9, Sentence 3 of the US Constitution, written 2 years before the Bill of Rights (1787) and passed 2 years before it (1789): “No Bill of Attainder or ex post facto Law shall be passed.” It doesn’t say “maybe” and it doesn’t say “sometimes;” it says “No.” Ex post facto is Latin for “after the fact.” That’s Article One. Any politician who claims this is legal should be disbarred and removed from office for malpractice. No journalist should let ex post facto laws or Bills of Attainder pass.

    Bill of Attainder is a concept related to ex post facto in its injustice: A Bill of Attainder targets a particular person or group, like the law that targeted ACORN. Bills of Attainder making persons or groups illegal in Merry Olde English territory were a primary reason for the American Revolution, hence its inclusion at the start of the Constitution. No person or group is illegal in the United States, where no one can be arrested just for being who they are, not according to the Constitution anyway.

    • bmaz says:

      What is being contemplated here would presumably be entirely civil in nature, and thus ex post facto and bill of attainder concepts would not apply.

  24. papau says:

    To MZchief at 56

    You may want to take a look at mortgage performance – including those A- “sub-prime” loans under Clinton (and actually the loans post Reagan’s agreement to purchase sub-prime so as to end red-lining). You will see that there was no problem in performance – until Bush killed all regulation.

    Many here try to trace all evil in the Bush administration back to Clinton in order to smear Hillary. However it never seems to hold up once one investigates the actual facts. Mortgage problems is one of those areas where it is very very obvious that the problem began under Bush and culminated in liar loans and securitization of C rated assets as A rated assets based on “geographic diversity” (the later actually started in 2001).

    • mzchief says:

      When I see something that piques my attention, I just note it as “data” (I put it in the “I need more to evaluate this” category). Thanks for your response and the perspective. I agree that regulation is regulation. Without it nothing works. From my perch at the time in the late 1990s and into the early 2000s, it really did look like the lawless had been planned because things started happening really fast once folks gained access. This was the appearance at the systems level and with the particular occurrences. It was like the dogs had been let loose against the American people.

    • readerOfTeaLeaves says:

      Mortgage problems is one of those areas where it is very very obvious that the problem began under Bush and culminated in liar loans and securitization of C rated assets as A rated assets based on “geographic diversity” (the later actually started in 2001).

      If you are able to see the movie “Inside Job” in a theatre in coming weeks, you’ll spot one scene where it mentions that Hank Paulson was behind approaching the SEC in 2004 to raise the ‘leverage ratio’. That meant that the superstructure created upon all these mortgages allowed someone to gamble — whereas previously, they could gamble $1 to lose $3 (or win $3), after the SEC changes implemented quietly by GWBush in 2004, the ‘leverage ratio’ went to 1:30.

      So instead of being out $3 if all these uberBanks lost a bet, they were out $29.

      And who did GWBush later appoint as his Sec of Treasury…?
      Awww, good ol’ Hank Paulson of Goldman Sachs. Who’d risen to the top of the alpha dog scrapheap because of his success in pushing the derivatives trade at GS. [See Nomi Prins’ superb “It Takes A Pillage” for details.]

  25. OhioGringo says:

    The holiday season is coming. The banksters, their puppet President and minions in Congress will of course try to legalize their massive thefts while people’s attention is distracted. They also know that if that fails, they have wild cards to deal with.

    The wild cards are the newly elected Teabagger types in the House. As much as I detest those people on so many fronts, many of them do believe in local control, states’ rights, the Tenth Amendment, things like that. Federalizing notary laws will just naturally rub many of them the wrong way. Some may even see a righteous crusade against the big banks as a ticket to political fame and fortune.

    Combine that with the real progressives left in Congress who don’t even have Democratic Party control to lose anymore, and Wall Street politicos may have some real opposition to their schemes to face come January. Better get ‘er done now.

    In the long run, none of this matters. The current mortgage bubble is still unsustainable no matter what they do. Americans simply aren’t making enough money to pay for it, Wall Street isn’t about to pay for it, and most big employers are still trying to outsource all they can to drive down wages and increase their profits even further.

    Closer and closer to “interesting times” we come.

    • gesneri says:

      Interesting thoughts about the Tea Party and states rights. I think that some of my positive feelings about the federal government came from the times in the fifties and sixties when the federal government seemed to be the only hope and/or defense against egregious state governments. Now it’s starting to appear that we’re going to be needing some defense against the federal government, but I wonder if the state governments will be up to the job. And certainly state governments can be as corrupt/bought as the federal government now is, only possibly by more local players.

      • OhioGringo says:

        Absolutely state and local governments can be corrupt. I live in Cuyahoga County, so I know just a little bit about that :) But a lot of state and local government officials, and judges, are very protective of their own little pieces of turf. Many of them won’t take too kindly to the federal government telling them they must honor a title transfer system made by and run for the Wall Street banks.

        Perhaps we should all try calling some of our county officials about this MERS/notary fraud mess. Let them know that they will risk defeat in the next election if they don’t at least try to do something about it. After all, it doesn’t take as many votes to throw out a county commissioner or elected judge as it does a congresscritter.

  26. klynn says:

    bmaz, I am glad this post was front paged on FDL. However, this is a symptom of the lack of the rule of law we needed the country to stand up in a strong unified voice for last weekend.(Thank you for your efforts on that BTW.)

    This now becomes the next important concern. This is actually a matter of the rule of law and we need to be loud about this. Will FDL devote a strong effort this weekend on this matter and perhaps do a StrangeBedfellows move? We need something big and we need a loud, unified voice.

  27. klynn says:


    One of our local cable providers is dropping FOX. This is making us consider cable for the first time ever!

  28. parsnip says:

    For those who plan to search bills for language that may be included in the MERS retroactive legalization section (which will probably be buried in a totally unrelated bill), here’s Neil Garfield’s suggested list of terms to look for:

    CROWDSOURCING: Blog Readers Getting Together To Hunt Down The PARDON BILLS

    Neil Garfield, LivingLies, November 12, 2010

    I’m impressed. A lot of people have hooked onto the MERS bill and the 5% Exemption Bill and they are looking for some help from the main bloggers on this subject. So here is my take on some things to keep in mind:

    It doesn’t matter which blog you post your information or findings on as long as it is one of the major ones. It all gets spread around like grease through a goose within minutes. Here are some key words you might want to look for:

    Electronic registry


    electronic registration

    electronic systems

    secure database

    negotiated instruments

    securities issuance

    mortgage transfer

    mortgage assignment

    mortgage indorsement

    mortgage endorsement

    loan transfer

    loan indorsement

    loan endorsement

    loan assignment

    note transfer

    note indorsement

    note endorsement

    note assignment

    obligation transfer

    obligation indorsement

    obligation endorsement

    obligation assignment

    master servicer




    special purpose vehicle




    loan originator

    mortgage broker

    investment banker

    investment banking



    validity of obligation

    validity of instruments

    affidavit of transfer


    Real Estate Mortgage Conduit

    Real Estate Mortgage Investment Conduit

    Mortgage Bonds


    credit default swap





    parole evidence


    presumption of validity

    irrebutable presumption

    burden of proof

    private right of action

    administrative agency

    regulation of banking

    bank regulator

    interstate commerce


    uniform code


    I’ve added these terms I got off of an official MERS power point:


    Transferable Record

    Authoritative Copy of Note


    Controller’s Delegatee

    Electronic Signature

  29. MadDog says:

    Though I missed this because of an early night yesterday, this is really an excellent piece bmaz, and the commentary top-knotch as well!

    A wee bit of OT news that many here are interested via the WaPo:

    Opposition to U.S. trial likely to keep mastermind of 9/11 attacks in detention

    Khalid Sheik Mohammed, the self-proclaimed mastermind of the Sept. 11, 2001, attacks, will probably remain in military detention without trial for the foreseeable future, according to Obama administration officials.

    The administration has concluded that it cannot put Mohammed on trial in federal court because of the opposition of lawmakers in Congress and in New York. There is also little internal support for resurrecting a military prosecution at Guantanamo Bay, Cuba. The latter option would alienate liberal supporters.

    The administration asserts that it can hold Mohammed and other al-Qaeda operatives under the laws of war, a principle that has been upheld by the courts when Guantanamo Bay detainees have challenged their detention…

  30. b2020 says:

    Welcome to the National Insecurity State. If you think they will not go ahead and retroactively digitize the foundation of the concept of property, kindly remind yourself that they already made electronically malleable the concept of voting.

    Computers are bureaucrazy multipliers, sustaining the unsustainable on both ends – computerized process cannot be trusted, and opens the floodgates for profitable systemic fraud as well as hacking attacks, but computerized surveillance and coercion offer staggering amounts of revenue from “securing” that “critical” electronic infrastructure. It is the self-licking ice-cream cone, with wires. That’s why “identity theft” will not be solved, and that’s why :retroactive MERS immunity” is a logical step for the minds that conceived FISA “reform”.

  31. dude says:

    As ever, I see the folks at FDL are alert and aware. I think this is a splendid “heads-up” article. But I have some concerns–

    1) The CNBC report is naturally light on details–it is essentially a rumor. It assumes the worst. We assume the worst, and perhaps not without reason. But I would like to know –if is being broadcast– why wouldn’t the Libertarian and T-party activists be screaming about 10-times louder than FDL right about now? They can’t all watch FOX exclusively and they can’t call be unaware of the nature and machinations of Congress-critters. It just seems to me the stink would already be unbearable country-wide if even a shred of this story were true.

    2) In that same vein, the remarks above about HR 3808: if this were such a baldface effort, wouldn’t the very notion of its coming back be obvious (and thus cause the same stink)? And with Repubs set to return in force after this Congressional session, surely everyone expects it to come back again and again.

    What I am saying is: when it comes to private property, the loudest dogs aren’t barking–and they have been keenly listening. (FDL dogs bark, but we don’t get the same attention.

    • radiofreewill says:

      dude, good to see you!

      When I google ‘mers retroactive immunity,’ bmaz’s article comes up, and it looks like it’s percolating-away through the toobz.

      Also, from what I can tell, the source of the original shout of ‘fire!’ is this article from a title expert at the Garfield Continuum:

      It looks legit to me, but ianapropertyguy…

      I think bmaz caught the wave on this one.

      • thatvisionthing says:

        I went to the Neil Garfield link — here’s a comment of interest:

        Delegate Bob Marshall, on November 12, 2010 at 6:50 pm said:
        I am the author of the 2010 VIrginia law, Health Care Freedom Act, which has given Virginia special standing to sue the Obama Administration over the individual mandate. (elected in 1991)

        There is NO authority for COngress to abolish any state taxes, nor to absolve MERS from not paying back state and county taxes.

        I worked inCongress for 6 1/2 years. If you have any information regarding this alleged bill, please contact me and I will activate my Capitol Hill contacts.
        delegatebob at gmail dot com or bob at delegatebob dot com or delegatebobmarshall at hotmail dotcom

        Delegate Bob Marshall (R-VA, 13th District)


    • bmaz says:

      Well, I am hearing some other “dogs barking” pointedly on this, but do not have sources of record such that it was appropriate to publish. As a result, the conclusion I came to instantaneously last night was that the only thing worse than allowing this to happen would be to allow it to happen in secret.

    • Kassandra says:

      Well, if it benefits the rich…and the Tea Party WAS created by the rich and the corporations…..does That answer your question?
      We have no news worth watching, unless we’re interested in crippled cruise ships and the “ordeal” of the passengers or what latest celebrity ( usually one I’ve never heard of) has been remanded to treatment. So, nobody finds out there.
      I suspect and believe the worst, based on Obama’s prior bad actions.

      I just wonder, constantly, why all the treason against America by her government? Or am I thinking of some other entity when I think “government”.
      By the way, this explains HAMP failure nicely

  32. wavpeac says:

    This affects millions…in a very personal way. We have to rise up. We have to gather. We have to say “NO” if Obama does not.

    Here’s the problem:

    Right now those of us dealing with these mortgages are literally drowning. Treading water. Many are so preoccupied with the work of living that they cannot get settled down to organize and gather.

    This problem is huge. It’s keeps those on the lowest end of the continuum truly shackled.

    Where do you go for help…? They all say ‘NO’. We need to get a list of the lawyers, judges and congressmen who are sympathetic and start creating real solutions for people.

    Rent has become outrageous. Credit checks to rent a home. Need first and last months rent, which is usually several thousand dollars. I have two kids looking to rent in an area where there should be plenty of homes to rent…and appears to be..but there are 10 or more applying for the same homes. (under a thousand a month). Best credit score and most money down wins. These aren’t fancy homes.

    Apartment living with kids and animals…not easy. My son has a dog…lots of places won’t take a dog and the cost is prohibitive when they do.

    We have to come up with solutions ourselves…because our government is failing us. There is no rule of law anymore. How many examples do we need to realize that our protections are virtually gone.

    We have to solve this without our government. We have to sink or swim.

    Thanks Bmaz…great article. But for many of us, who have been fighting this…it’s expected. It’s just more of the same. I am looking for an answer outside of the system.

    • gesneri says:

      What I can’t understand are the rents. They are still very high in my area. I had seen numerous signs advertising rentals outside nice apartment developments where I have never, in 50 years, seen them before and made the mistaken assumption that rents were probably dropping to a more reasonable level. WRONG. I was considering trying to sell my house recently, but when I investigated apartment rents in my area I realized it wouldn’t cost me very much more annually to pay my mortgage. Obvious solution would be to sell and relocate to a cheaper area, but family considerations make that impossible right now.

  33. goldstandard says:

    When does Congress not ever screw their own people and when the hell are the American people ever going to wake up and take their government back?
    You didn’t get mad when the Supreme Court stopped a legal recount and
    appointed a President.

    You didn’t get mad when Cheney allowed Energy company officials to
    dictate Energy policy and push us to invade Iraq.

    You didn’t get mad when we illegally invaded a country that posed no
    threat to us.

    You didn’t get mad when we spent over 800 billion (and counting) on
    said illegal war.

    You didn’t get mad when Bush borrowed more money from foreign sources
    than the previous 42 Presidents combined.

    You didn’t get mad when you found out we were torturing people.

    You didn’t get mad when Bush embraced trade and outsourcing policies
    that shipped 6 million American jobs out of the country.

    You didn’t get mad when the government was illegally wiretapping

    You didn’t get mad when we let a major US city, New Orleans, drown.

    You didn’t get mad with the worst 8 years of job creations in several

    You didn’t get mad when over 200,000 US Citizens lost their lives
    because they had no health insurance.

    Yes, illegal wars, lies, corruption, torture, job losses by the
    millions, stealing your tax dollars to make the rich richer, and the
    worst economic disaster since 1929 are all okay with you, but speaking truth to power….Oh, Hell No!! Wake up America. We have the right to take our government back and make it work again.

    “This country, with its institutions, belongs to the people who inhabit it. Whenever they shall grow weary of the existing Government, they can exercise their constitutional right of amending it or their revolutionary right to dismember or overthrow it”……A. Lincoln 1861

    • PJEvans says:

      We did.
      A lot of us still are.
      But we don’t have a voice that can be heard: we don’t control any newspapers or TV or radio stations.
      So we’re assumed to be silent.

      • bobschacht says:

        But we don’t have a voice that can be heard: we don’t control any newspapers or TV or radio stations. So we’re assumed to be silent.

        A good way to come out of silence is to use the “Spotlight” feature at the end of the top post. Just click on the word “Spotlight”– or better yet, right-click on it so you can open Spotlight in a new tab, leaving this tab open for review.

        Bob in AZ

    • brutaltruth says:

      “This country, with its institutions, belongs to the people who inhabit it. Whenever they shall grow weary of the existing Government, they can exercise their constitutional right of amending it or their revolutionary right to dismember or overthrow it”……A. Lincoln 1861

      I vote for the latter. It’s way too far gone to simply amend it into being something decent.

  34. dipsop says:

    Every reader of this blog should immediately contact their county council member. We should be able to get every county council in the country screaming about this.

    I have just emailed my county council member here in Montgomery County MD and urged him to ask our two Senators and congresspeople and tell them this is unacceptable and to get the county’s fiscal people to give him an estimate as to how much the mortgage scavengers already owe the county and how much future revenue would be lost.

    • bobschacht says:

      Every reader of this blog should immediately contact their county council member. We should be able to get every county council in the country screaming about this.

      Good idea. I just did.

      Bob in AZ

  35. pdaly says:

    The trial balloon this past week of cost saving measures the treasury could consider included of doing away with federal tax deduction on primary residence mortgage interest. Made me wonder whether the MERS registration mess has something to do with the issue.

    If enough of the mortgages on performing loans will be changed to unsecured loans, by the failure of MERS to own the note and by current litigation uncovering the widespread banking/servicer fraud, then homeowners would be happy to out of the mortgage fraud but upset that they lose a tax deduction (i.e., no tax deductions on unsecured debts)–unless there no longer is a tax deduction for mortgages to compare their updated situation to.

  36. cregan says:

    bmaz, I disagree here. This whole subject, with some allowance for particular odd or egregious cases, is similar to the guy who signs up for a car loan, and then says, whoops, you spelled my name wrong on the loan, that’s not technically me and so I don’t owe the money.

    It is true the title implications need to be better sorted out, but to me, if you signed for the loan, it doesn’t matter who later the loan was sold to or the accounting of it, you owe the money.

    The beef is between the mortgage holder and the servicer to sort out WHO the money is technically paid to, but not WHETHER it is owed.

    Lastly, this doesn’t alter the fact I feel that many more loan modifications need to be made and more help given to homeowners who got bum loans. But, not because of this paperwork excuse.

    • Jim White says:

      You couldn’t be more wrong. The beef here is against a completely illegal, fraudulent scheme that was set up to bypass paying fees to counties every time a loan changed hands. And now Congress wants to step up and make it all go away, proving again that large scale crime by the MOTU, even when they threaten to take down the entire world economy will be excused while the little guy, who expects services from the county to be funded by those fees, gets the shaft. You’re going to have to come up with a better justification for opposing this one.

    • jdmckay0 says:

      It is true the title implications need to be better sorted out, but to me, if you signed for the loan, it doesn’t matter who later the loan was sold to or the accounting of it, you owe the money.

      Oh, but it does matter.

      Few things… many of them directly tied to MERS, many of them entirely removed.

      * Huge misrepresentation of values… bribes to appraisers, inflated “projected value(s)” used as appraisal, etc. etc.
      * Many, many were sold various flavors of ARM(s) when they qualified for standard FHA (eg: Countrywide). This was done exclusively for higher fees. By any measure, these folks should be re-fied at FHA rates. And if any justice, COUNTRYWIDE (et’al) should cough up the difference.
      * Market was hugely distorted by bubble, fed by those still collecting fees on this stuff. Nobody wants to talk about it because it’s so TBTF, but it was fraud upon entire global finance system: they lied about AAA, they built prices upon fraudulent appraisals, they ignored so many income (qualification) assessments in a way that those buyers who played by the rules were swallowed up in loss of value (upside down) in a number of different ways.

      MERS was used as a means to facilitate fast marketing of these bonds. It was integral to feeding the fraud of those AAA rated junk bonds. MERS was creation of the banks who executed the fraud.

      It’s all inter connected, and all those who participated in the fraud are responsible. Whether courts/congress choose to seek accountability is, of course, another matter.

      Given magnitude of this thing, (with all due respect) your generalization does not hold. There are too many affected who played w/in fraudulent rules by which this whole thing happened. Based on what’s been done so for (eg: nothing), it certainly is conceiveable that US legal structures will somehow try an generalize it all into an explanation which fleshes out as you describe… particularly w/this incoming congress bought and sold by K-Street.

      • Gitcheegumee says:

        What are the implications for collecting on homeowner’s insurance?

        Say the house burns down,is the person who has been paying the mortgage note and insurance entitled to be made whole?

        WHO is considered the rightful titleholder?

        • wavpeac says:

          This explains why the mortgage company in these subprime loans requires a co signer to the mortgage holder. I make the payments, but my insurance check must be cosigned by the bank. The banks will not co sign these payments. What they do, is force you to hire a contractor, have the contractor sign off on the work and pay you in thirds. This is what is required by the mortgage company if something happens to your home, and the damage is more than 2500.00$. However, a lot of evidence suggests that people never get these payments returned to them at all. Always some paper work boggle that prevents the mortgage company from paying out the homeowners insurance.

          This was a huge problem for Katrina survivors who were hit with a smaller hurricane shortly after, then some flooding. People could not fix their homes and were not given the insurance money.

    • bmaz says:

      There is nothing in this post that even touches on that “paperwork excuse” argument (and note direct violation of law is more than a paperwork excuse); this is about a systematic effort that has been engendered to avoid, withhold and defraud state, county and local governments out of fees they were due and a refusal to comply with the relevant statutory law of local jurisdictions by banks, simply because they found it inconvenient to do and cheaper to ignore. This area has nothing to do with your relentless argument that financial businesses who engage in widespread fraud, misrepresentation, perjury and racketeering should nevertheless always be protected over the individual victims of their avarice and adhesion con games.

    • Mary says:

      You aren’t really disagreeing with bmaz, you’re talking about something completely different. A note is a note is a note – no one is talking about invalidating notes – they are commercial paper and fall under commercial paper laws.

      Maybe it would help you think through your car example further. This isn’t about an “oops, you got my name wrong on my note, so I can walk away.” Instead, look at what your car lender likely did when they made the car loan. In addition to loaning you the money, had you put up your car as collateral for that loan, “security” for the loan. Generally, they’d have to get the title processed (and pay fees for that) to have their name show up, or they’d have to file something else (not going to go into UCCs and financing statements here). Now, lets say they didn’t do that bc they didn’t want to pay the money for the processing fees. They had every opportunity to “perfect” their lien against your car, but since it would cost money they just decided not to pay the recording fees to have your car now listed as “their” collateral under state law.

      So a) not an oops, but a deliberate decision to not pay a fee and make filings that would make your car their collateral, and b) the issue isn’t about the note and whether or not someone owes on the note (although there are issues, with lots and lots of parties involved, on who really has the right to payments on the note, if anyone) but is about whether the lender on the car loan has any better claim to the car collateral, since they knowingly and intentionally refused to pay filing fees and perfect, than any other creditor.

      No reason why they should. It’s all a lot more complicated than that example, bc there were some initial mortgages, but the thing is, if the current noteholder didn’t want to pay fees to keep their primary interest in the collateral, then there’s no reason why someone should let them violate all the state laws on collateralization just so they could avoid fees – and then keep the collateral rights.

      • bmaz says:

        Right. First off the post was not about what Cregan is talking about. But further, as to what he IS talking about, if you understand the legal arguments being made on that issue, contrary to the right wing/banker talking points, it is NOT about not owing the loan you agreed to or invalidating said indebtedness, it is simply about whether the real property, i.e. land and house, is legal collateral for that debt. Either way, the mortgagee/debtor still legally owes the money pursuant to the loan.

      • robspierre says:

        I am not a lawyer, but, even as a layman, I can’t see how anyone is taken in by the argument that Mr. Cregan seems to have accepted so readily:

        “To me, if you signed for the loan, … you owe the money.”

        So maybe I can refute his apparently common-sensical point of view with some actual common-sense (even if the legal understanding is a bit naive).

        Mr. Cregan’s argument seems to rest upon the notion that if you don’t pay for something, you don’t own it, and the seller takes it back. This clearly does not apply with a typical mortgage. In a mortgage situation, there are logically three parties, not two: the buyer, the seller, and the bank. At settlement, the seller gets paid in full by the borrower, who then owns the house. The borrower uses borrowed money. But, thus far, in a common-sensical way, the situation is no different than it would be when buying a pizza using a credit card instead of cash. Once I buy a pizza I own it and can eat it just as if I bought it for cash. I still owe the bank. But the bank does not own the pizza. My debt and my property are separate things.

        What makes a mortgage different from a credit-card transaction is that the borrower has agreed to pledge his new possession–the house–as security for the loan. It is this pledge–the security agreement between the borrower/owner and the bank–that is at issue in a foreclosure, not the ownership of the property. All the recording and liening and such has to do with defining the collateral and the conditions under which the bank can take posession of it.

        So it is this side agreement that gives the bank the right to foreclose, not the debt itself. If the bank fails to live up to the conditions of the agreement governing the collateral, it shouldn’t be able to collect the collateral. This is as much a case of the sanctity of contractual agreements as anything else. If the bank doesn’t follow the contract or the laws governing such contracts, the bank is unsecured and has no right right to take property away from the owner.

        The owner’s debt still exists. But the situation is then again like a credit-card purchase of pizza. The bank that lends me the money to pay the pizza chef does so without any security or collateral. Once I eat the pizza–the property–it is gone. I still owe the price of my meal, and the bank still has legal recourse for collecting it. But it can’t come and take the pizza away.

        So, in common-sense terms owning a house, owing a debt, and being subject to a foreclosure are simply different things. If they re tied together in any given case, it is because of the laws and contracts that apply. To pretend that borrowers need to obey the rules but lenders do not is just foolish.

        • readerOfTeaLeaves says:

          This is as much a case of the sanctity of contractual agreements as anything else.

          Yes. And given that a home is most people’s most valuable asset, the sanctity of the mortgage contract is kind of a big deal.

  37. Route66 says:

    This is why the country is on the skids. The gvmnt has been aiding and abeting wall street crimes for 10 years or more and now they want to pass laws to make these crimes legal.

    The outrage should bust loose after this happen’s. Its the only bipartisan thingy going.

  38. Mary says:

    Jeez freakin louise!!!!

    So, what is Mr. Con Law smoking to think he can pull that off. What is the Congressional authority for that? I’m partly with T & B @ 15 & 16, but with a louder bang of my head on the table.

    You know what doesn’t move in interstate commerce? Real property. There is NOTHING – nothingnothingnothingnothingnothing – so inherently state law exclusive as rights in real property. If anyone thinks litigating a bunch of mortgages is going to be a mess, they haven’t even begun to think through the litigation in the works when the Feds say they are going to force federal regulation to force states to recognize a change in the interest in real property rights ownership that doesn’t comply with state law.

    This is not just about “regulating” the notes as they flow in commerce. It’s about the wholly separate issue of the security – the real property rights the mortgages lien. And you’d end up, not just with lots of individual lawsuits, but with State AGs who have a bit more resources also actively involved in suits.

    I think JW @73 gets to a bit of the heart of what is going on. The lawyers who found citizens actions states (my guess is that if they’ve filed in 17, those are all they could find) for state fraud actions have precipitated some of this imo and they may be a part of what Obamaco, as a practical matter, wants to address. In most instances, those lawyer could, with some payments, be muscled out of control of those suits by state AGs.

    A threat of a federal attempt at resolution via legislation may be part of a bargaining chip to try to get the state AGs involved so that the feds can try to structure a Feds, MERS, State AG resolution, which is going to be more workable and put a big number up (like the tobacco settlements) for the State AGs, even if the “big number” is really just a paltry amount of what could be on the table.

    One reason a lot has been under the table is that courts were requiring these lawyers suits to be sealed. MOST of the suits are still under seal. I’m trying to watch the end of a once in a year stallion testing that is being live streamed, but I’ll also say that some of the “missed” recording fees arguments are a little bogus.

    Bc of recording fees, it happens all the time even in a regular, non-MERS, setting, that Assignments of interests in real property like a mortgage go unrecorded. What then happens is that in a default setting, the assignments get recorded and that gets rolled into the foreclosure costs. So getting a fraud conviction for non-recording, when a boatload of familes even do a similar thing on non-recording (but not on all the rest of the mortgage carve ups and transfers and securitizing) is not going to be as easy as you might think. And you need fraud for the lawyers suits, not just non-recording, but fraudulent non-recording with intent to deceive.

    OTOH, recording in general is a state law requirement that needs to be met for a valid foreclosure. That’s going to be kind of pricey, depending on the state. Some states charge a flat fee and page fees, so you might be looking at, as JW mentioned, 30 or so for a recording. BUT – some states charge transfer taxes along with recording fees and they are based on valuation, so they’d be based on face value of the mortgage unless a lower value was proven, for each transfer. There’s a bit more ouch. $100,000 mortgage, something like a 1% or 1/2% transfer tax for each recording is different than just a $30 per recording (and gives more credibility to a fraud claim in states with high transfer taxes).

    If MERS had not existed, though, there would not have been 12 or so assignments of each mortgage and all the decentralization of mortgage owners and the underlying real property, from local lenders to international investors. As a practical matter, kicking some AGs in the butts to take over fraud claims for overall resolution, with a nod to negotiating some fees from MERS or the banks involved for the recordings (WHEN documents can be found) is doable, but the armtwisting involved wouldn’tshouldn’t involve something as moronic as publicizing threats to superimpose some kind of federal real estate law (!@&$!) on states.

    And for the MERS sloppiness, well, maybe some houses can’t be easily foreclosed upon. Private companies who made private agreements might have to bear the consequences of their internal negligence and defaults. Wow, what a concept. But I can tell you, mortgage docs for a chunk of the documents can and/or will be found and, in some instances where they can’t, but they can be cured by getting the docs now (filling in holes in the assignments of mortgages by having interim assignees re-sign) that will happen.

    It’s incredible that Obama thinks it helps the situation to put something so stupid on the table and in the public discussion.

  39. bobschacht says:

    So, where’s this week’s Trash Talk?
    Wisconsin-Indiana was a good game, tied at 10-10, until Indiana tried a 50 yard field goal and didn’t get it. Since then, Wisconsin has scored 21 straight points.

    Bob in AZ

    • phred says:

      Bob, just a quick drive-by to say that for the first time ever I saw a Badger game in person at Camp Randall. Holy cow, what a game! Felt sorry for Indiana though, 83-20 makes for a very long afternoon. Incredible experience though at the stadium, I can see why Jim White and so many of the regulars here are such fans of the college game : )

      On topic, bmaz, excellent post. One gets the impression that Obama thinks his job is to make sure the law does not apply to any member of the political/corporate elite. Retroactive immunity worked beautifully for FISA, so now that that tool is in the toolbox, he can use it whenever he wants. Sadly, I am not surprised to see this development at all.

      • bobschacht says:

        Bob, just a quick drive-by to say that for the first time ever I saw a Badger game in person at Camp Randall. Holy cow, what a game! Felt sorry for Indiana though, 83-20 makes for a very long afternoon. Incredible experience though at the stadium, I can see why Jim White and so many of the regulars here are such fans of the college game : )

        Way back when I was a Frosh at You Dub, I was actually a manager for the football team (which means I was a go-fer on the sidelines for home games). So Camp Randall with a stadium full of people at a Big Ten football game can be a heady experience. Alas, it was either do homework, or continue as manager, and I couldn’t manage both.

        Bob in AZ

  40. Gitcheegumee says:

    Does anyone know if the homeowners’ insurance companies are required to be notified each time a mortgage is rerecorded?

    • Gitcheegumee says:

      I am referring to that specific insurance carrier affiliated with that particular mortgage.

      Is it not industry practice that insurers who cover mortgaged properties apprise the policy holder each time any change occurs in the documentation on said property?

  41. readerOfTeaLeaves says:

    Nobody wants to talk about it because it’s so TBTF, but it was fraud upon entire global finance system: they lied about AAA, they built prices upon fraudulent appraisals, they ignored so many income (qualification) assessments in a way that those buyers who played by the rules were swallowed up in loss of value (upside down) in a number of different ways.

    MERS was used as a means to facilitate fast marketing of these bonds. [MERS] was integral to feeding the fraud of those AAA rated junk bonds. MERS was creation of the banks who executed the fraud.

    I also see it this way.
    Which means that if you are a bankster, underwater after having lost swaps bets, or other bad decisions, then probably your best hope of covering your ass is to eradicate any laws that might make you accountable (legally).

    And I think that pdaly@92 raises a brilliant, related topic:

    The trial balloon this past week of cost saving measures the treasury could consider included of doing away with federal tax deduction on primary residence mortgage interest. Made me wonder whether the MERS registration mess has something to do with the issue.

    If you want people to be acquiescent as you eradicate real property, one step in that process would be to demolish the mortgage deduction, wouldn’t it?

  42. marymccurnin says:

    Perhaps another reason to not pay the fees to the counties is to create the most closed system possible. (Don’t know if this has been stated yet) There would be too many public servants to buy off.

    I keep thinking about the first mortgage we had on our house. When we got to the signing the mortgage broker told us that due to one pass due that was suddenly discovered on my credit we had to take a higher interest rate. Then we were told we could refi in a year. I knew we had been played but the furniture was in the emotional truck. And, yes, we did refi into a better loan but that is just the beginning of the story.

    And if I saw this whole nasty thing coming down the pike then so did everyone else. Of course, I didn’t understand how complicated it would become.

  43. dustbunny44 says:

    Seeing this for the first time and have some questions that don’t seem answered scanning both the items and the comments.
    1. It appears that this is the process using MERS: a buyer gets a mortgage, the home is transferred to the bank (the initial mortgage provider) and the deed is done, so to speak. At this point the local entities should get their transfer fees. Are you saying this isn’t being done under MERS, that the system is hiding the transfers somehow so that the local entities don’t know and are not going after those fees? Then the property would remain registered to the previous owner (or previous mortage provider), no?
    2. After the bank issues the mortgage, it packages and resells it to other providers, who in turn resell it, etc. Technically (as I understand the argument) each re-selling should constitute a transfer, and fees should be paid. But the mortgage contract is still with the actual people who live there, and the reselling is a technicality that just benefits the banks and speculators. Perhaps this is what the O administration is looking to do, shield mortgage providers from the effects of that reselling? Perhaps there should be legislation prohibiting mortgage reselling? And haven’t mortgages been resold before – this isn’t a recent phenomenon – ? Were fees paid and deeds re-registered when it was done before, pre-mers?

    Sorry if these are basic and stupid questions, but without these clarifications I’m not following what’s going on.

    • readerOfTeaLeaves says:

      Your 1 = pretty much accurate
      Your 2 assumes that the ‘entire mortgage’ is transferred. Think of it as carved up into 1,000 pieces, each of which is put into as many as 10,000 CDOs. (Because, recall the CDO market is **not** regulated, for which we can thank brainiacs Larry Summers, Jamie Dimon, Goldman Sachs, all the megabanks, and – quite significantly, former GOP Texas Senator Phil Gramm, who later went to be a VP at UBS a Swiss bank whose business plan is built on secrecy and global exchanges. Whhhheeeeeeeeeeeee!) So the ‘complexification’ complicates determining which CDO, which hedge fund, which investment group owns which fookin’part of the mortgage.

      Part of this appears to have been devised so that — by putting 1/1,000th of a mortgage from a householder with an excellent payment record into a CDO with 1/1000th of 999 mortgages with shit credit ratings, the brainiacs at the Ratings Agency’s (Moody’s, Standard & Poors, and ?) could then claim that there was “AAA” mortgage in that CDO.

      Then gamble that CDO filled with mostly crap — but rated “AAA” because one little dustbunny with good credit got slid into the mess – – and now buy a ‘swap’ (or CDS, credit derivative ‘swap’) which is basically a form of insurance that the CDO in question will fail, because all the people in their with poor credit, who were sold ARM mortgages, or were given mortgages with high interest to buyers whose employment stats didn’t enable a mortgage. In other words, ‘designed to fail’. But the credit ratings agencies helped hide the garbage, and then MERS helped hide the questionable recording status.


      This is the kind of b.s. that Congress and Obama are being asked to ‘retroactively legalize’.

      So much for rule of law.
      But clearly, there are powerful interests who somehow believe this kind of sh*t will never hit the fan, or if it does they can escape the damage.

      • dustbunny44 says:

        Thank you for the reply. The explanation of the mortgage mess is confirmation of what I’ve heard before, and explains how values kept escalating until the bottom fell out of financial markets (leading to bottom falling out of housing markets)- there were too many theres with no there there.
        But BMAZ’s story says that this messy new MERS process is somehow responsible for taxes not being paid to cities and counties, and I still can’t understand why. Despite being total bastards and thieves, it doesn’t appear to me that the CDO traders should need to pay a fee every time they resold a mortgage (or resold a piece of it).
        Are mortgages being re-valued under TARP (or a similar program) and so fees are being unpaid for those revaluations?
        Again, thanks.

        • dakine01 says:

          But BMAZ’s story says that this messy new MERS process is somehow responsible for taxes not being paid to cities and counties, and I still can’t understand why.

          Real estate transactions are supposed to be registered with the fees paid to the cities and counties. That’s part of what having a valid, registered title is all about. If the banks/MERS are just passing things back and forth, there is no clear title audit trail to know who actually is in the position to say “I own the property note and therefore have standing to foreclose.”

          And yes, in order to maintain that audit trail, it means the banks should be paying the fees to the cities and counties to register each and every transaction. It is funding that the cities and counties have come to rely upon and the banks thought they could play the system and skip it.

        • readerOfTeaLeaves says:

          But BMAZ’s story says that this messy new MERS process is somehow responsible for taxes not being paid to cities and counties, and I still can’t understand why

          Dakine01@148 has already explained, but I hope you come back. I figure every single one of us who understands this process is one more empowered person.

          You may want to read Dakine01’s comment a few times, because he distills a lot of info. Basically, MERS was set up to circumvent having to use the counties and cities; it was supposed to be ‘centralized’ and so it was supposed to be somehow ‘better’.

          But if you think of a system of law, documenting things is critical to that process. So if you don’t document (or if you just ‘make shit up’ or — to use EW’s phrase about Bu$hCo revising and altering documents ‘pixie dust’), then what has happened to the law? It has vanished, along with concept of accountability.

          MERS was a system that was set up by — and for banks. It’s setup was a way to sidestep what were claimed to be the onerous tasks of having to pay all those county and city recording and filing offices.

          But as it happens, it turned out to be a good way to muddy legal waters with respect to true ownership and title.

          For more, google ‘nakedcapitalism’ blog + MERS + ‘foreclosure fraud’. Yves Smith at NC has done yeoman’s work, on which bmaz is building. This really goes right to the core of whether or not we have a system of private property that will be honored.

          Also, having no documentary evidence that is clear means that any clever asshole can claim ownership, and too many courts and judges have been turning a blind eye to this sloppiness.

          It’s about damn time that some of the local officials in county records offices (and city records offices) start having lunch with their local judges and explaining what the implications of all this fraud really are for the retirement pension funds of — the judges!

          It’s all pretty mind-boggling.

        • readerOfTeaLeaves says:

          This affects the retirement pension funds of judges, because they were invested in CDOs.

          And if those CDOs are based on fraud, then… where’s the money?
          And if all the banks are using fraudulent accounting to list assets that are fraudulently priced… well then, it’s quite likely the banks are insolvent and only using bogus accounting — and the Fed — to keep them on their zombie existence until the piper demands full payment.

          So all the retirement plans that were invested in CDOs are also probably in big trouble, but who wants to talk about that, eh?

        • bmaz says:

          And just guess what the next thing on the chopping block for the rabid austerity push being jammed down our throats by the rich banksters and bond agents that tanked the economy in the first place? Yep, state and local governmental pension plans. They are about to be attacked just like the UAWs were in the auto bailouts. Thanks to the banksters, the economy is so broken they say they cannot afford for teachers , judges, prosecutors, cops and other state and local governmental employees to actually receive the retirement they bargained and worked for. This is just one of the early, gentle, first salvos in what will soon be a full on frontal assault and war on such plans. Everybody must be hurt and broken….except the financial MOTUs that put us here of course.

  44. Mary says:

    @112 – that’s where the foreclosure process is supposed to come in. It’s not “illegal” to have unrecorded assignments, it just opens you up to the possiblity of having someone of record “trump” your interest and it means that you have no right in most states to proceed with foreclosure on your assigned interest until you do record.

    So under the procedures for most states, the foreclosures would have been a bonanza of fees to the recorders offices. If there were a dozen unrecorded assignments, they’d all have to be recorded prior to the foreclosure. What has happened (or, rather, one of the things that has happened), by accident or avarice or combinations, is that no one has coughed up the assignments and put them of record.

  45. parsnip says:

    sixtysomething @ 112

    You better read this item at StopForeclosureFraud. It seems that the county land offices have already been adopting LPS software:

    MUST READ| IS LPS’s Aptitude Solutions Software In Your County Courts & Land Records???. The post lists LPS’s announcements of the dozens of counties that have installed proprietary LPS software with names such as:

    Aptitude Solutions for Court Case Management and Land Records Software

    Aptitude Solutions’ Land Fraud Registration and Notification System

    Aptitude Solutions’ for Oncore Acclaim Land Records Software System

    LPS Aptitude Solutions’ OnCore Acclaim Recording System

    Aptitude Solutions’ OnCore Recording Software for Electronic Recording of Survey Maps

    • sixtysomething says:

      :) Well, that’s what I’ve been doing for the past 25 yrs…. Not that company tho… but software for city/county gov… including digitized images for recording… so know enough to be dangerous about it, but not the day to day intricacies of what this ginormous mess means!

  46. parsnip says:

    sixtysomething @ 130

    You are aware of ‘that company’….LPS? Lender Processing Service? This one:

    The U.S. Attorney’s Office in Tampa and the state of Florida are investigating whether LPS and affiliated companies have fabricated documents and faked signatures. LPS employees “seem to be creating and manufacturing ‘bogus assignments’ of mortgage in order that foreclosures may go through more quickly and efficiently,” the Florida Attorney General’s Office says in an online description of its civil investigation. “We’re concerned that people might be put out of their houses unfairly and unjustly,” Bill McCollum, the attorney general, told Bloomberg Businessweek. In a third investigation, the U.S. Trustee Program, the branch of the Justice Dept. that polices bankruptcies, is looking into whether LPS is “improperly directing legal action” to hasten foreclosures, according to a 2009 opinion issued by the bankruptcy court in Philadelphia. A Trustee spokeswoman declined to comment.

    On Sept. 29, U.S. Representative Alan Grayson (D-Fla.) denounced LPS on the House floor. “The system is so organized that there is a company, Lender Processing Services, who allegedly has created the means to systemize fraud,” he said. Foreclosure-defense lawyers have filed suit against LPS in Mississippi and Kentucky, seeking class-action status and accusing the company of improperly splitting fees with pro-foreclosure lawyers. LPS shares have fallen sharply on the New York Stock Exchange and as of Oct. 20 were down 33 percent for the year.

    Are you implying it’s no big deal for LPS software capturing county land records? …and perhaps having the capability of altering them digitally?

    • sixtysomething says:

      Oh sorry, no. I just looked at the ad…thought it was a software company similar to mine. I don’t know anything about these folks or whatever is going on with that. My company provides software/hardware to record/scan docs but in no way are they available for tampering with… totally controlled by the county…. Counties have been storing scanned docs since mid 90’s at least and before that it was microfiche… I’ll look at that LPS thing a bit later… interesting to say the least!

  47. parsnip says:

    Tao Jonesing, a regular commenter at Yves’, has a post up on this subject at his own site, worth a read. Suggests there will be two pieces of legislation…

    The first piece of legislation will create federal subject matter jurisdiction over foreclosures involving mortgages that have been securitized…..

    The form that the second piece of “legislation” takes depends on whether federal subject matter jurisdiction will be assigned to federal district courts or an administrative agency……

    ….the second piece will take the form of either a bill or a regulation that officially touches on “procedure.”….

    If federal district courts see their jurisdiction expanded, we will see a second bill, it will be to amend the Rules Enabling Act.

    If an adminisatrative agency has its jurisdiction expanded (or a new agency is created), we won’t see much of anything.

    • sixtysomething says:

      Hey, thanks for the name of that company… finally read all the way thru one of the articles and lo and behold recognized an email address…. Was contacted by them the last week of Oct…wanted to know which counties we worked with… lucky me.. didn’t tell them..

      What a mess. Those folks have got their mitts into places that ought to be a conflict of interest. This isn’t something you can just wake up and do one fine morning..and a lot of people have to be in on it. From the post you referenced, the ‘sufficiency of evidence to establish the chain of title’ is going to be the key to this little scam…

  48. jdmckay0 says:

    From this morning’s (Monday) Bloomberg:

    No Breaks for Robo-signing Computer Stamping Mortgage Documents

    Bryan Bly is a pen-wielding “robo- signer” at Nationwide Title Clearing Inc., inking his name on an average 5,000 mortgage documents a day for companies such as Citigroup Inc. and JPMorgan Chase & Co.

    Those are just the ones that cross his desk.

    Nationwide Title employs a computer system that automatically inserts a copy of Bly’s signature on thousands of digital files that he never sees. The system even affixes an electronic notary seal.

    “electronic notary seal”… sheesh.

    I guess this is what WS calls: Increased Productivity.

  49. dano says:

    maybe its time to implement a mortgage holiday for 2 to 3 years. Let the fed print all the money it needs to make interest payments on everyones mortage. meanwhile, the rest of us can get on with our lives knowing we have a roof over our heads and spending what would have been a mortgage payment on consumer goods so we can get out of the ditch the conservatives and motu drove us into.