The spectacle of Senators in Tuesday’s banking committee hearings on the mortgage largely siding with articulate, fact-driven critics of the mortgage securitization is a sign that financial services industry misdirection and lame excuses are wearing thin. But far more devastating is the contrast between the long-promised American Securitization Forum paper on mortgage transfers, versus the Congressional Oversight Panel report on the broader issue of mortgage documentation.
A securitization lawyer called me to say he’d gotten calls from investors as soon as the ASF report was out. He said they were surprised at how weak the paper was, and complained that it did nothing to alleviate investor concerns. Georgetown law professor Adam Levitin, in the Senate Banking Committee hearings on Tuesday neatly dispatched the ASF paper. To give a rough paraphrase:
I agree with much of what is in the American Securitization Forum paper, as far as it goes, but it doesn’t go far enough. It is analyzing the wrong law. The paper discusses Article 3 of the UCC, which covers negotiable instruments, and Article 9, which covers promissory notes. But the UCC allows for parties to enter into other contractual arrangements, and the pooling and servicing agreements do that. Most securitization trusts are also governed by NY trust law, and they force additional measures for transfer.
In other words, this is pretty much the same argument that the industry has offered from the outset. There is no mention of the conflicts between the actual steps taken versus. those required by the PSA, no discussion of post closing transfers. There are some citations where courts supposedly held the PSA was a sufficient “assignment” of the mortgage loans to make up for any other transfer failings; I’ll have to read them to see how narrow they are.
It should probably not be a surprise that this report was so flimsy. The ASF had originally indicated its report would be out two dates after it promised it, which should have been the very end of October. It is noteworthy that they released it the same day as both the Congressional Oversight Panel report and the Senate Banking committee hearing. If it had been a potent document, there would be every reason to have gotten it out sooner so it could inform the hearings and the COP report. The fact that it was presented at the same time seems to be a tacit admission that it had little new to add. But having the report come out the same day as the COP paper still serves to blunt its impact. And today, Moody’s issued a report on MERS and robo signing. As a securitization expert remarked,
Great timing by Moody’s – coming out the morning of the COP report and hearings to say that they see no risk. No doubt, this was coordinated by the ASF to be timed with their white paper.
Doesn’t speak well for Moody’s having learned anything in the past three years or for their independence.
By contrast, the Congressional Oversight Panel paper is painstakingly thorough. It ties the robo signing issue into broader concerns:
While these documentation irregularities may sound minor, they have the potential to throw the foreclosure system – and possibly the mortgage loan system and housing market itself – into turmoil. At a minimum, in certain cases, signers of affidavits appear to have signed documents attesting to information that they did not verify and without a notary present. If this is the extent of the irregularities, then the issue may be limited to these signers and the foreclosure proceedings they were involved in, and in many cases, the irregularities may potentially be remedied by reviewing the documents more thoroughly and then resubmitting them. If, however, the problem is related not simply to a limited number of foreclosure documents but also to irregularities in the mortgage origination and pooling process, then the impact of the irregularities could be far broader, affecting a vast number of investors in the mortgage-backed securities (MBS) market, already completed foreclosures, and current homeowners. This latter scenario could result in extensive litigation, an extended freeze in the foreclosure market, and significant stress on bank balance sheets arising from the substantial
repurchase liability that can arise from mistakes or misrepresentations in mortgage documents.3…The severity and likelihood of these various possible consequences depend on whether the irregularities are pervasive and when in the process they occurred.
It also highlights the New York trust law issue we have discussed at length here:
New York trust law requires strict compliance with the trust documents; any transaction by the trust that is in contravention of the trust documents is void, meaning that the transfer cannot actually take place as a matter of law.40 Therefore, if the transfer for the notes and mortgages did not comply with the PSA, the transfer would be void, and the assets would not have been transferred to the trust. Moreover, in many cases the assets could not now be transferred to the trust.41 PSAs generally require that the loans transferred to the trust not be in default, which would prevent the transfer of any non-performing loans to the trust now.42 Furthermore, PSAs frequently have timeliness requirements regarding the transfer in order to ensure that the trusts qualify for favored tax treatment.43
And it draws out some implications:
Failure to follow representations and warranties found in PSAs can lead to the removal of servicers or trustees and trigger indemnification rights between the parties. Failure to record mortgages can result in the trust losing its first-lien priority on the property. Failure to transfer mortgages and notes properly to the trust can affect the holdings of the trust. If transfers were not done correctly in the first place and cannot be corrected, there is a profound implication for mortgage securitizations: it would mean that the improperly transferred loans are not trust assets and MBS are in fact not backed by some or all of the mortgages that are supposed to be backing them. This would mean that the trusts would have litigation claims against the securitization sponsors for refunds of the value given by the trusts to the sponsors (or depositors) as part of the securitization transaction.
If successful, in the most extreme scenario this would mean that MBS trusts (and thus MBS investors) could receive complete recoveries on all improperly transferred mortgages, thereby shifting the losses to the securitization sponsors.
If a significant number of loan transfers failed to comply with governing PSAs, it would mean that sizeable losses on mortgages would rest on a handful of large banks, rather than being spread among MBS investors… in many cases, any put-back liability is likely to rest on the securitization sponsors. Although these put-back rights sometimes entitle the trust only to the value of the loan less any payments already received, plus interest, the value the trust would receive is still greater than the current value of many of these loans. As a number of originators and sponsors were acquired by other major financial institutions during 2008-2009, put-back liability has become even more focused on a relatively small number of systemically important financial institutions.
There is a great deal more informative discussion in the report, and I encourage you to read it. And the discussion above no doubt explains the industry’s dilatory response to these legal concerns. The banks appear to be relying on their TBTF status to bulldoze the law. And even though they are getting pushback in the courts, the industry seems almost constitutionally unable to see that it may not be able to bully its way through the colossal mess it has created.
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If a significant number of loan transfers failed to comply with governing PSAs, it would mean that sizeable losses on mortgages would rest on a handful of large banks, rather than being spread among MBS investors… in many cases, any put-back liability is likely to rest on the securitization sponsors. Although these put-back rights sometimes entitle the trust only to the value of the loan less any payments already received, plus interest, the value the trust would receive is still greater than the current value of many of these loans. As a number of originators and sponsors were acquired by other major financial institutions during 2008-2009, put-back liability has become even more focused on a relatively small number of systemically important financial institutions.
It seems like reality is intent on discovering the real value of all the toxic assets on those zombie balance sheets, no matter how much the Bailout tries to resist.
Yves writes: “The banks appear to be relying on their TBTF status to bulldoze the law. And even though they are getting pushback in the courts, the industry seems almost constitutionally unable to see that it may not be able to bully its way through the colossal mess it has created.”
Is it too cynical at this stage in the game to believe that they can indeed bully and cheat their way through? After all, the TBTF banksters apparently do control the Fed, the Congress, the President, the Supreme Court and the media. It would seem that the Fed could again simply volunteer taxpayers to buy back all their toxic waste with treasuries purchased through Goldman Sachs. Likewise, Congress and the Court could steamroll the constitution and state law to paper over crimes retroactively. Surely this will destroy any remaining confidence in the market, but that seems doomed already, and the looters: A) don’t care, from their global perspective; B) can’t see that far ahead; or C) this game is engineered to consolidate the coup on a global scale.
This all reminds me of a movie plot..Where some Dr. Evil hands the US government an extremly unstable time bomb, and then proceeds to go around kicking the legs of the table it is resting on.
Like a domino array, if one brick goes down, so too do all the rest. I would vote for the Banksters having constructed this as their very own ‘Doomsday machine’. At this point, it doesn’t matter, the only question is whether the people will surrender everything. And I mean everything they have ever believed in or hoped for. There is no middle ground here.
It is either or! Either the world suffers a financial Armagedon or we and our decendants become the slaves of the Global State. I am neither mad, nor deluded.
In the case of a sufficiently large surrender there will be no turning back. There will be no place on earth to escape to. ( http://www.newsmax.com/InsideCover/GOP-Widen-Terrorist-Detention/2010/11/16/id/377166 ) This little world is not big enough to hide in.
This is so much bigger than the billions of dollars which will probably be offered to the individual members of the COP and other regulators. I don’t envy their responsibility.
If the citizens surrender, then their representative have no moral right or reason to fight for justice. Some of them are so bent and involved in the crimes that they will oppose their mandate. But, there are alays good and courageous leaders. Please make sure that they have your support so that their efforts are not in vain. Please make your voices heard so there can be no mistake of your desire for freedom.
You know what’s weird? NPR reported on this yesterday morning, and made it sound like no big deal. They said that the COS report said that the paperwork problem – their words, I believe – could be nothing, or could be a serious problem for the banks. They took about a 900-foot view and reported on what the report said in the most general and “unbiased” terms with no background on how, yes, there is evidence on the ground of the more dire situations described in the report.
On the one hand, I was glad to have reporting on the COS release. On the other, I found it misleading. At this point, saying “it could be nothing” is coddling the banks, as far as I am concerned. I wonder if they were influenced in their reporting by these other items released the same day? I normally like NPR, but was disappointed on this one.
Sorry, fingers and brain not on the same page — that would be “COP,” an acronym I’ve always found a little funny.
On NPR, you are listening to the typical reporting from the modern American press- facts, but not truth-seeking. The difference between the later and former is that the later is focused on not just objectivity, but also about which of two positions in a “he said, she said” argument is ultimately right. In other words, the later ultimately seeks to determine which point of view is right. Some would call the point of view subject, but I call it not pretending all information is equal. Some is information is false. Some of it is more probative. Some of it is misleading. Etc. None of these standards of seeking truth are applied in modern journalism.
There is a false equivalence between saying the earth is flat, and the earth is round as far as pretending that objectively both arguments should be balanced as far as the presentation of evidence. Yet, if an NPR were to cover it, they could create a false equivalence that would make you think the debate is far more balanced than it really is. When all you hear is “he said the earth is flat, she said the earth is round” without additional judgment regarding which of the two arguments are valid, you are left as the audience to discern which is which, often with no basis for doing so other than your own judgment. A judgment, which is mostly based in emotional allegiances or beliefs.
In other words, the objective view is that there are two sides to an argument. The individual facts of each side may or may not be true, but the “truth” is supposed to be found through allowing both sides present their case.
The problem with this, from a “getting at the truth” stand point, is that there is no weighing of arguments as valid or invalid. Were there really two sides to the Watergate Scandal? What about our involvement in Vietnam? What about any instance of criminality? Sure. But, is one side representative of what truly happened more so than just a presentation of the facts as both sides see it? Absolutely. Sometimes one gets the truth wrong, but the idea is far more exacting as a standard than balanced presentation that relies solely on “he said, she said.”
In other words, what modern journalism, like NPR, lacks is judgment. In the legal system, we are forced all the time to bring judgment to a case. We are subject to certain rules that require even the strongest advocates, for example, to adhere to certain rules of ethics. Moreover, we have a system of evidence that requires a higher standard as far as what is admitted as evidence. We have rules regarding standards of proof. We have judges. We have juries. Etc. What we are seeing here is an assault on that higher judgment by the forces of corruption. The view is that its not just enough to have a “he said, she said” exchange or the rules wouldn’t be necessary.
That’s why conservatives assault the judiciary so much. They fear this higher standard of argument because they can not just make things up that soley appeal to emotions and/or know-nothings, or simply engage in “he said, she said.”
This is off topic, but representative of my point. During the Prop 8 Trial (the federal case) almost all of the arguments that are normally accepted as “fact” in the “he said, she said” debates in the press about gay marriage were destroyed under the heavier burden of requiring the defendants to prove their position in the courts.
Why is that the case? Because, as Olson/Boies noted, the arguments could not withstand the harsher scrutiny of proof that is required in the Courts. So, when you watch NPR, you need to realize their standard of evidence as far as what is important is weaker.
I guess my point is what you are seeing is a clash between what modern journalism defines as “objectivity” and what other approaches like the legal system might consider “objectivity.” The later is far more exacting than the former because its trying to get at truth on a whole other level than “he said, she said.” That’s the difference you were probably sensing.
Outstanding, Jane Doe!
Hope to see more from you in the future.
What Kevin Smith said.
Excellent writeup! I certainly hope to hear for from this voice of reason in the future!
Amen to Jane Doe’s analysis.
I would only clarify that from my very humble experience, American journalism in particular is afflicted with this mania for “objective-ness.”
When I listen to CBC radio, I hear journalists interrupting politicians, digging into their responses, pushing them for clarification, asking direct and pertinent questions, and only rarely backing off. I’m afraid our Hollywood culture of infotainment has ruined journalism in the US, where politicians are treated more like celebrities than servants of the public, complete with softball interviews and constant ego-coddling on a massive scale.
I want to thank everyone for the compliments. I want to also to clarify a point.
We make the mistake of calling American journalism “objective.” The point I did not make so well because I fell into the trap of calling it objective is that it is biased or subjective regarding truth seeking.
“Objectivity” does not mean lacking in a thesis or hypothesis. It means something else entirely. It means the willingness to test a theory or thesis. The concepts that I describe: weighing evidence, considering probative value, considering prejudicial value, etc. are objective analysis because it is seeking to find the right answer rather than treat all answers as equal, and, thereby, biasing outcomes.
Finally, think about this like like the sciences. Are all theories equal in science or does one test theories to see which one is likely to be correct and which theory is wrong. This is how ideas pass from being theory in the sciences into laws. No one would reasonability argue as journalists do that to be “objective” one must not probe for the truth. Obviously, this is not science. But the analogy holds as far as arguing that objectivity is defined as ignoring truth in favor of “he said, she said.”
Indeed, thoseas described by RegReader
Your arguments are well reasoned to a point. The rejoinder is that if all the facts are presented, there need be no exercise as to objective interpretation. The reader can decide for himself. That is the rationale of many in MSM. It matters not that by ommission of facts, a bias has been exercised.
While that is my point of view, I must say that for contemporary media what purports to be objective journalism is little more than space filling blather that has been frothed up with that which are the most sensationalistic aspects of the purported news item.
Taken in total, contemporary journalism consists of people who try to obtain and present all the facts whilst performing limited opinionation. There are, as well, people who purpose is pure propaganda; and there are those who in their fervor to support their cause will shade the facts to their purpose. As is the case with the general population, execellence is a rare occurance. Whether talking head or journal scribe, what we get is largely drivel and it’s like a Gresham’s Law being played out in MSM.
Just to pick a few nits, and only because I think that what you are pointing to is really important: I tend to agree with the philosophy of science along the lines of Prof. Karl Popper and his ideas about how to distinguish between an **ideology** as opposed to a thought process that is generative in a way that does a better and better job of describing things as they exist (i.e., ‘reality’, which itself is in constant flux).
Having fled Vienna in the 1930s, Popper became particularly interested in the problem of what we might call ‘closed, self-reinforcing systems’ such as Nazism, and Marxism. He argued that the ability to **disconfirm** ideas underlies much of the power of scientific inquiry.
This is different from claiming that a pile of evidence, if accumulated high enough with a great enough page length, somehow translates into ‘laws’ of science. It doesn’t. It can’t.
It can serve as a further understanding; the questions then become how well was the research conducted? What were the variables? What was the subject pool? What stats were used, and were they appropriate? But nothing in this process absolutely claims that something is ‘true’ nor ‘false’; at best, it can claim to have developed a better, more powerful model. But if that model is truly ‘scientific’ then it must be subjected to ‘refuation’; and if refuted, then it is no longer relevant as a line of inquiry.
This contrasts with ideologies – whether Marxism, or Free Market Fundamentalism – in the sense that an ideology reinforces itself. It does not lend itself to refutation; indeed, it only accepts questions and ideas taht tend to reinforce its core belief system.
I apologize if I seem too nit-picky, but I believe the distinction extremely important. Nothing in science ‘proves’ anything; it is only the best current paradigm for understanding the nature of things. If it is conducted in a fashion that lends itself to being questioned and refuted, then it is ‘scientific’. If not, it is ideology.
It is important to recognize the distinction.
I would argue that the non-judgmental he said-she said nonsense is one form of ideological narrative; it escapes the challenge and effort that a genuine inquiry would require, while providing palliatives that solve nothing but make people ‘feel better’. It is, in a news sense, a placebo.
FWIW, Mr. George Soros, who studied under Prof. Popper, has the best mastery and articulation of the conceptual power of the spirit of true inquiry that I’ve ever encountered outside of science.
And I would add that Yves brings the same fearless, intellectually powerful analysis to the ideologies so prevalent in current economic mumbo-jumbo in Econned.
The thread is now headed for yesterday’s posts, so I hope you don’t mind my pointing out that claiming that things from science ‘become laws’ (as in ‘laws of nature’) is not accurate with respect to my observations of how researchers and scientists actually conduct their investigations. The recognize that they’ll never create ‘laws’, but their goal is to better recognize the nature of reality. It’s a very humbling endeavor.
Laws must be left to legislators and judges, I fear ;-)
PBS (Propaganda Broadcasting System) also covered it last night in a real fluff piece on The MacNeil/Lehrer Nightly News — its called lies of omission — and FYI, BAC underwrites PBS
———————
Moodys has the credibility of The Three Stooges.
This entire housing market is a poisoned market, the trust is gone. The legal parasites now fight the banking parasites for fraud crumbs. I don’t think the “tough stand” by the butt heads in congress will be enough to restore confidence and may even make it worse by drawing attention to it. There is a preemptive CYA move smell to it.
Its after 10 PM, do you know where your mortgage documents are?
No, then why are you still paying?
Scamerica — scams rising, marks showing severe strain with gullibility falling.
Deception is the strongest political force on the planet.
Neither NPR nor PBS serve the public interest any longer, and their acronyms should be respectively shortened to PR and BS. Both have been thoroughly captured and folded into the corporate-military MSM.
The Senate panel video from CSPAN seems to be available here
http://www.c-spanvideo.org/program/id/237839
also on CSPAN3 this morning if you happen to have that channel (many cable/satellite providers don’t carry it).
I assure you despite all of the evidence I don’t think much will come of this. we are way to far down the path of fraud to allow anything to get our baks in trouble. after all it will put the “recovery” in danger, and the sky will fall. I assure you the goverment will find a way of getting the banks off the hook. by gov’t I mean fed as well. the hearings as far as I can tell will be like they always are, all sound and fury with no bite.
Lets face it the white house is owned by these people, so is the congress and senate. Or the QE two is really just giving money to the banks for their eventual exposure to this mess.
anyone who tings QE has to do with the economy is insane. it is all about the TBTF banks find the link and liability, you will find the reason
I think a lot will come of it.
Intentionally screwing with and poisoning the mortgage market is going to have BIG push back consequences. This fraud doc stage is a severe escalation of the violation and assault on the public’s belief in private property, and their wallets, and will cause many to opt out to the sidelines and those stuck in properties and investments to be pissed and anxious as prices plummet. It goes too far! It is too deep a violation.
It is similar to the escalation of having some homeland security airport screening goon now running their hands up the crack of your ass and feeling your crotch at the airport.
Rage is right around the corner — of course that’s the plan.
Are we ready for those election boycotts yet?
Deception is the strongest political force on the planet.
I find both of these comments sound in the sense of antinomy. The system is captured and will continue to protect itself cybernetically, but that system oppresses and vitiates the lives of many people who are within it. Think Foucault, Fanon, Arendt and others on dialectic resistance and delegitimization. Realizing that this nation is not what we learned as children is the bitterest of pills. The child in most of us must come to grips -as many here a NC seem to have done.
We haven’t truly come to terms with it until we begin to act together against it. We’re getting there, though, almost grown up….
As a number of originators and sponsors were acquired by other major financial institutions during 2008-2009, put-back liability has become even more focused on a relatively small number of systemically important financial institutions.
Alas, perhaps we shouldn’t have “saved” the economy using the Bush/Paulson/Obama/Geithner/Summers plan. Once we started down the Too Bigger to Fail program of economic recovery, we were doomed to this Sophie’s choice.
overall this is an excellent post. perhaps I am just falling into despair, but it just seems to me that maybe the banks aren’t as delusional as we think they are.
they just need to continue stringing this along for months to years until the public forgets, and then they’ll find some way to retroactively legalize everything. Disgusting… but seems to be the modus operandi.
I On the Ball Patriot is correct. The people won’t forget. If they fail to liberate themselves, the system will continue heading down the path of a model similar to the Russian Federation. A big black market and mafia system where if either party steps on each others revenue streams extreme retribution results.
The ultimate “too big to fail” is the US population. The bailouts should have started and ended there. It’s not too late though.
Fractional reserve banking is a crok. Supposedly the bust is a necessary hangover but who ever heard of innocent people getting the hangovers of the drunks? The analogy thus fails.
Thank you for another very helpful post Yves, and thanks to all pricipled and informed commentators, a group that I hope to join someday.
Folks, we should be celebrating. Those with the power to actually do something about all this are slow-ly catching on. It has been maddening to hear our legislators spewing the “deadbeat borrowers” and “paperwork SNAFU” memes, like parrots in a cage. Even if it is slow and halting, like the first steps of a toddler, it is wonderful to behold. What the U.S. Congress needs to learn is that the global banking cartel is the blood enemy of workers, worldwide. It needs to be put in a cage. Once they figure that out, we could relax. I pray that day comes soon.
We’ve come up with a bunker busting litigation strategy for investors in RMBS deals. It is not a class action strategy, but rather relies on a handful of large RMBS institutional investors. The complaint and the law that it relies upon have not heretofore been employed by any plaintiffs as far as we can tell. (If it had, it would be known by now.) It is expected that this litigation strategy will cause the banks to settle with investors, and do so rather quickly. We shall see.
steelhead23 — this public performance is designed to convince you and the rest of the observing public that some authority has finally arrived on the scene to halt the criminal element in its’ tracks. It’s the part of the movie The Sting where the real cops (corrupt, off duty, getting paid on the side) arrive to escort the mark from the scene, all the while assuring the mark that those who stole all his money will surely be sent to prison, and every effort will be made to recover their money, if only it can be located. Yeah, well if you
choose to believe that, I recommend you don’t hold
your breath waiting for it….
Weeks after the hearings die off again
and the politicians take a measure of public anger to see if we’ve lost interest and moved on to the next shiny object, I’m sure a few well placed campaign donations of sufficient size will result in a “things were done incorrectly, but those who did it are very very sorry, humbly repent, have been heavily fined (a token amount not reflecting what was grifted), and promise never to do it again” end result.
Politicians are still running the same playbook,
which means they still don’t understand how ready
the population is to gum up the works.
That might have been true if these idiots who’ve been perpetrating fraud hadn’t sought to enrich themselves at the expense of public pensions, retirees, and homeowners.
And as Yves points out, the banksters offering weak tea on a day when other related events are going to overshadow it, because they know it can’t withstand scrutiny?
When the investors are calling the securities lawyer, who is then calling Yves — and when the congressional report includes info like this:
the winds are shifting.
I don’t know about you, but I’d sure like to know that my meagre investments are backed by something of value, something tangible; rather than some MERS-rococco’ified swindle.
This isn’t a slam dunk, but it’s progress.
as i posted in other comments, my servicer basically confirmed that this is the case for my mortgage note. she said, i quote, “Your closing documents (Note, Deed of Trust) will not be altered in the case of changes to your loan’s investor or servicer. These may change multiple times over the life of the loan. It is possible that Fannie Mae was not your loan’s investor when it originated. We are unable to provide any additional documentation as proof of Fannie Mae’s current ownership of your loan.”
So Indymac admits that it did not endorse the Note over to the trust, as i understand it.
My guess is that they do not have the note and have no idea who owns it. Running through my friend’s problems, I got a reply from infamous Indymac that his loan was not available for inspection but a certified copy could be mailed; nor has any paperwork been produced that shows any transfers of the note despite federal rules to the contrary. In other words catch us if you can. I suspect the only way it can be resolved is through a lawsuit to quiet title.
Yves, this event was originally scheduled for 10:00 AM EDST. It got moved to 2:30 PM, and eventually happened about 3:20 PM. The stock market closes 4:00 PM. Like it was timed to have the lowest possible effect on the active stock market. BofA is already under $12.00 a share, and some have suggested $10 is possible for it.
Barbara Desoer actually blamed BofA’s employees for BofA’s servicing problems. Did you catch it?
It was also rather annoying to see little-issue camera hog Senator Charles Schumer expending all his bloating energy going after FourLoko, rather than be present at the meeting.
Allegedly, there’s a lame duck House version tomorrow. We’ll see….
It will be interesting to see the current state of the ‘rule
of law’, remarkably exposed in the latest Paul Craig Robert’s
article: “American Hypocrisy: Destruction of the Constitution, Collapse of the Rule of Law”
http://www.globalresearch.ca/index.php?context=va&aid=21922
Meanwhile Der Spiegel interestingly reports on the BP law
suit proceedings having just begun, trial to start November 2011…
I wish that we could get a range of lawyers and legal experts to prognosticate on this. There seems to be an inherent problem for the TBTF banks: Even if they can get the courts to go along with their “nothing to see here; let’s move along” strategy, the consequent unhinging of contract law will open up OTHER legal areas to question. If it is alright for the banks to slop over their paperwork, well, why not you and I when we do ours for the IRS, for example? “Oh, I didn’t keep receipts. But, believe me, they were surely there!”
“Although providing a clear chain of title has seemingly relinquished its position as servicers’ main document-management concern for the moment, remedying missing mortgage assignments remains a tedious aspect of the business. The number of missing assignments is huge, according to vendors that handle documents, and it is the result of rapidly changing loan ownership and lackluster due diligence.
Not least among the reasons for servicers to perfect collateral is the growing judicial requirement for files to be airtight.”
http://www.mortgageorb.com/e107_plugins/content/content.php?content.7130
So Barbara Desoer thinks the employees were the only ones making mistakes…
IN REPLY TO phemfrog WHO WROTE: as i posted in other comments, my servicer basically confirmed that this is the case for my mortgage note. she said, i quote, “Your closing documents (Note, Deed of Trust) will not be altered in the case of changes to your loan’s investor or servicer. These may change multiple times over the life of the loan. It is possible that Fannie Mae was not your loan’s investor when it originated. We are unable to provide any additional documentation as proof of Fannie Mae’s current ownership of your loan.”
So Indymac admits that it did not endorse the Note over to the trust, as i understand it.
————————–
No, that’s not what they are saying. When a note is endorsed over no public records change. Only Mortgage Assignments are recorded, and with MERS that often does not happen which is one of the big legal issues with MERS.
When a mortgage was assigned in the pre-MERS days the assignment of mortgage was recorded. However, the MERS member banks decided that was too much hassle (multiple assignments of the mortgages as they moved from originators to aggregators to the actual REMICs (trusts) so they just recorded the assignments on the MERS system – and its system is not public. I
n some states and municipalities there are sizeable fees for recording mortgage assignments, in others you just pay something like $50 to cover the county’s processing of your paperwork. MERS also allowed avoidance of these fees so it was a “win win” in the minds of the big banks that were originating and then selling these loans for securitization.
thanks RegReader. I did find that it was put into MERS in the same month as closing, and MERS identified OneWest as the servicer. you are right, though, that i cant get any more MERS info than that.
I was sure to point out that i am and always have been, and will continue to be on-time with my payments.
so one thing confuses me…is MERS legal? or are they just skirting around the law. i figured that MERS was the holding place for the information of transfers, but that the note had to at least be initially endorsed to the trust with MERS as the Mortgagee? If you are right, then what does Yves mean when she writes about all the foreclosures lawyers have found where there was no endorsement of the Note from A-B-C-D?
sorry if i am confused…
I don’t think the MERS program is the least bit legal, just the recording fee avoidance is fraud in my mind, but then I think the whole scamerican government has been illegally and immorally hijacked by the wealthy corporate elite.
If you are going to own the scamerican dream in scamerica you now need to go to a Securitization Seminar …
Excerpt …
“Source of Payments for Distributions–This diagram is extremely complex and shows that the miscellaneous proceeds specified in the security instrument (and in the SEC Filings) should be applied to the sums secured by the obligation upon the event of a loss in value of the property, whether or not then due, with the remainder, if any, returned to the borrower. This document combines UCC 3-602(a), UCC 9-315, UCC 9-336, UCC 2-609, and UCC 3-501 together with NY Code Section 4545 and the SEC Filings to show that the miscellaneous proceeds can be applied to the borrowers obligation.
The following flow chart reverse engineers the mortgage on the Ekstrom family residence. It took Dan over one year to take it this far and it clearly demonstrates what happens when there are too many lawyers being manufactured.
Take a look at this chart and then decide how long you think it will take for Barney Frank and Eric Holder to sort everything out. There is a link to an expandable version at the end of this post.”
More here …
Go to zero hedge and search; 11/15/2010 “Just When You Thought You Knew Something About Mortgage Securitizations”. Comments is kicking out the link I believe.
Deception is the strongest political force on the planet.
Also, I think the “your closing documents (note, mortgage) will not be altered” is their polite way of saying that the terms of your loan (payment amounts, rates, collateral, etc.) remain the same so you should continue to make your payments to them.
Have the securitization sponsors purchased protection from losses in the form of credit default swaps (or another form of insurance), and if so, do we have to bail out AIG again?
Jim Sinclair has labeled government economic propaganda as M.O.P.E. >>>> Management of Perspective Economics.
He makes comment today on it here….
http://jsmineset.com/2010/11/17/how-management-of-perspective-economics-mope-backfires/
(you might have to search for the headline because the site is dynamic with posts added under the same link)
Siggy:
There are issues like expertise, perfect information, bias, prejudice, etc that rebut your position.
Don’t laugh too hard.
“These flaws are entirely unacceptable to me,” Marano said. “I directed my management team to devote whatever resources are required to correct these flaws and bring integrity back to the foreclosure process.”
http://www.housingwire.com/2010/11/17/ally-ceo-of-mortgage-operations-says-foreclosure-flaws-unacceptable
So while the money was flying through Ally’s hands, they didn’t really care how they were making it. Until they were caught avoiding the law?
Great post, extremely informative and helpful! This is a cool site, and I’ve tagged it many places and will be back when I can get more involved. Sure thing, relationships are so complex. In my experience that it’s too often the case that it’s just a mangled mess of projections and reactions that we don’t know WTF we’re doing most of the time. Sorry if that’s harsh.
ReaderofTealeaves
I am not certain whether you will see this, but your post is an excellent rebuttal to mine. Thanks.
Jane Doe, this thread is pretty much archived at this point, so here’s hoping that it’s just you and me left ;-)
I didn’t mean to ‘rebut’ you in the sense of opposing, because I believe that you are aiming at a very key, fuzzy issue that needs to be more widely recognized and understood.
You are, in my view, quite rightly pointing out that the Cult of Objectivity with respect to ‘newz’, a manufactured commodity unlike any other, is an impediment to clear thinking, and therefore to problem solving.
I’m only hoping to encourage you along, by pointing out one flaw that I’ve spotted in your thinking: that science does not in any way ‘create laws’, but rather that good science is full of humble questions, and the best science admits it is only a tool in an effort to better describe reality. This is best done by admitting how much we **don’t** know, which makes it vulnerable to threat and attack by the numbskulls like global warming deniers who then want to shriek, “You didn’t prove it!”
Math has proofs.
Science has conjectures, hypotheses. Until one is ‘refuted’ or disconfirmed, or until you can unpack a piece of research as sloppy, error-riddled, or asking the wrong questions, people tend to use the ongoing assumptions.
Because science has so much social cache in the modern world, economics clothed itself in ‘sciencish’ garb (see “Econned” for the premier exposure of this sort of fraud).
Keep at it.
Please think of me as trying to assist, rather than in any fashion seeking to claim your argument lacks validity. It is quite valid, just needs to be a bit more elegant and refined IMVHO.
Appreciate your courteous response.
(One of Popper’s key writings, and one which blew my mind when I stumbled on it entirely by accident earlier in life is “Conjectures and Refutations”. I admire Soros for his money, but I’m downright envious that the gentleman studied under Prof. Popper. It’s my view that Soros has brilliantly outpaced his tutor, BTW. You can see this in “The Age of Infallibility” or “The Alchemy of Finance”, should it be of interest to you. Soros’s work on the theory of reflexivity, in which Soros points out that economics is fundamentally a social activity – and therefore doesn’t lend itself to the sort of antiseptic study given to geology, chemistry, or physics – is spot-on, IMVHO. But if you’ve already encountered these works, let me apologize for rattling on at too great a length.)
Keep at it.
You’re making some wonderful points.