By David Dayen, a lapsed blogger, now a freelance writer based in Los Angeles, CA. Follow him on Twitter @ddayen
The top Republican on the House Financial Services Committee has tucked a provision into his mortgage finance reform bill that would create a privately held “National Mortgage Data Repository.” The repository would basically look like MERS, the bank-owned electronic database tracking mortgage transfers. The difference is that, while MERS’ activities have drawn legal challenges across the country, the National Mortgage Data Repository would have the force of statute to carry out the exact same behavior. According to the bill text, any document arising from this repository would be seen as presumptively legal, pre-empting state and federal laws on demonstrating the right to foreclose.
Jeb Hensarling, the chair of the House Financial Services Committee, introduced the bill last Thursday. Hensarling has already gotten into trouble this year for taking a ski vacation/fundraiser with Wall Street lobbyists, including an official from the American Securitization Forum, just six weeks after getting the Financial Services Committee gavel. Financial interests donated over $1 million to Hensarling in the last election cycle. It’s not a stretch to suggest that legislation offered by Hensarling at least has the stamp of approval from Wall Street, if it’s not directly written by their lobbyists.
The bill is called the Protecting American Taxpayers and Homeowners (PATH) Act, and it’s the House Republican response to a series of bills and initiatives to resolve Fannie Mae and Freddie Mac, and set a course for the future of mortgage finance. Most of the bill deals with that: in Hensarling’s vision, Fannie and Freddie are totally dismantled within five years, and private actors take up the slack with virtually no government guarantee. While in the past I’ve trashed the idea of just reconstituting Fannie and Freddie under a different name, in reality, expecting private actors to recreate a secondary mortgage market without any guarantee (or even with one, in my view) is wishful thinking.
But that’s not what’s interesting about Hensarling’s bill, which sprouts from the same “GSEs caused the housing crisis” rhetoric that conservatives have parroted for years. No, it’s this revelation of the banks’ true desire to wrap up the documentation failures of the bubble years that should raise alarms.
Title III of the PATH Act directs the Federal Housing Finance Agency to provide a charter for something called the National Mortgage Market Utility (NMMU). Basically, whatever the FHFA Director approves as the NMMU is acceptable – through a cooperative, partnership, whatever. The FHFA then regulates the NMMU. Basically this utility would create standard practices for origination, servicing, pooling and securitization of mortgages, and operate a common securitization platform, something we’ve seen in other drafts of mortgage finance reform bills. Allegedly, community banks would not be discriminated from participating in the management of the utility, but if this has to take on a spate of duties formerly performed by Fannie and Freddie, there’s little question that big financial institutions would be favored.
There’s a lot to this National Mortgage Market Utility (for one, its creation, under the bill, would allow for the exemption of mortgage backed securities from SEC oversight under the Securities Act of 1933), but let’s focus on how it’s empowered to bulldoze state and federal property rights laws. According to Section 331 of the bill, the utility would “organize and operate” the National Mortgage Data Repository. The repository would be a standardized catalog into which any qualified depositor (qualified by the utility, it appears) could stash all their mortgage-related documents – including notes, mortgages, and any related information. The repository would set the standards for the required information in the documents, as well as standards for recording a “creation, assignment, or transfer of interest.” You’ll notice the lack of any regulatory oversight of these procedures. Basically, this private entity, the National Mortgage Market Utility, which could be owned by banks, sets the rules for a brand new private mortgage transfer and document database, not dissimilar to MERS. Theoretically, the data in the repository would be publicly available, with privacy safeguards.
Now here’s the kicker. The repository’s defined purpose is to “address problems that can arise when paper notes cannot be produced, due to loss or destruction as a result of natural disaster or other causes; and to provide a uniform procedure for demonstrating the right to act with regard to such notes or other registered data for all actions in any State or Federal proceeding, judicial or nonjudicial, involving such notes or other data.” Emphasis mine.
To that end, here is Section 332 in its entirety:
Notwithstanding any provision of State or Federal law to the contrary, by proper demonstration of registration with the Repository, any holder of an interest in any mortgage-related note shall satisfy any requirement for demonstration of a right to act regarding such note or other registered data that exists in State or Federal law, including any obligation to produce or possess an original note. The Director (of FHFA) shall provide for the establishment of procedures for proper demonstration of registration of any mortgage-related document and of an interest by the holder of an interest in any such document with the repository. Once registered with the Repository, such registration shall be a legal right enforceable in any judicial or nonjudicial process.
What you have here is the total pre-emption of every state or federal law regarding the right to foreclose and ownership of the note. All of that gets shoved aside in favor of the doctrine that every document in the National Mortgage Data Repository is presumptively legal. Period. This would wipe away in an instant all the challenges to the failures in securitization. Under this new process, all property and due process rights that currently hold would be subservient to the ability for a note holder to get its documents blessed by the repository. Judges would have to follow the statute, and regardless of robo-signing, backdating, forgery, lost notes that magically reappear, or the failure to properly convey notes to the trusts, they would have to treat any registrant from the repository as having an enforceable right to foreclose.
It’s certainly an elegant solution, I’ll give it that. Take all the questions arising from whether MERS has the legal right to foreclose, and all the myriad problems with mortgage documentation, and just will it away with a brand-new private database that pre-empts all those questions and concerns. All those losses MERS has suffered in state courts? Gone. All those problems servicers are having foreclosing in states like Nevada and California and elsewhere? Poof!
States have always controlled property law, and this Republican bill would wrest away that state control, putting it not in the hands of the federal government, but a private entity. The banks would be able to foreclose because a repository, in all likelihood owned by the banks, said they had that legal right. People thought the IRON Act would clean up the banks’ problems; this does all of that and much, much more. The provision is best described as Foreclosure Fraud-Away.
I normally don’t jump at every Republican bill that comes down the pike. The Hensarling-authored PATH Act isn’t going to become law, and indeed, Congress doesn’t appear to be in the business of making laws these days. However, this is important because it represents the opening negotiating position of House Republicans in the ongoing debate over what to do with the GSEs, which may actually turn into legislation someday. And given Hensarling’s close association with Wall Street, it almost certainly represents the banks’ desired solution on how to resolve foreclosure fraud for the future, by simply making it impossible to challenge fraudulent documents and enlist one’s personal private property and due process rights. That this was tucked inside a larger bill shows that financial interests want to keep the whole thing very quiet and hopefully get it through in whatever mortgage finance legislation ultimately emerges.
This is also a vindication of sorts, because for years we’ve heard from the banks and their allies that these are merely “back-office” screwups, nothing to worry about, and that they complied with all existing state and federal laws. Furthermore, they’ve claimed that these problems have ended, and that the documentation system is now clean as a whistle. Well, obviously that wasn’t true, since they continue to try to use their kept men and women in Congress to dig them out of the very real hole they created for themselves, using the time-honored tradition of de facto legal immunity. If the system was working there would be no need for pre-emption.
At least the Corker-Warner GSE bill only had the problem of likely not working. That’s nothing compared to Hensarling’s bid to eliminate private property rights in every state in the Union.
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Perhaps I’m missing something, but where in the constitution does it give the federal government the right to make laws preempting state real property law?
Oh that?
I think folks like Obama and Cheney, Feinstein and King decided to wipe their ass with it.
It’s a bipartisan thing, you see, reducing the US Constitution to toilet paper.
This is commerce. Right?
Maybe if you don’t securitize across state lines or if you don’t even own a mortgage, you have a shot at staying out of the database. But, still, even very local activities, because they can be widely practiced, can affect interstate commerce.
That is quite the distortion.
While the US Constitution was indeed quite a victory for the likes of Alexander Hamilton and Robert Livingston, who operated in the tradition of Thomas Hobbes and called for an all-powerful central government (the Leviathan), the liberals were not completely routed. The philosophy of Montesquieu also proved influential, and the separation of powers — between the three branches of government, between the state and federal governments, and between state and religion (more generally speaking, between the public and the private realms) — also made its way into the constitution.
Montesquieu’s discovery can be contained in one sentence: that only “power arrests power,” and that in a conflict between law and power it is seldom the law which will emerge as victor. Power can be stopped and kept intact only by power, so the principle of the separation of power is the only way to provide a guarantee against the monopolization of power by one part of the government, or by the public sphere over the private sphere.
The Constitution, therefore, erected a system of powers that would check and balance in such a way that the power neither of the union nor of its parts, the duly constituted states, would destroy one another. The perennial struggle over states’ rights was therefore built into the Constitution, by design.
How well this part of Montesquieru’s teaching was understood in the days of the foundation of the republic! On the level of theory, its greatest defender was John Adams, whose entire political thought turned about the balance of powers. “Power must be opposed by power, force to force, strength to strength, interest to interest, as well as reason to reason, eloquence to eloquence, and passion to passion”, he wrote.
John Adams made only one mistake – he thought that HE had been elected President.
Alexander Hamilton tried to take him down a peg or two for that presumption, but did the job a little too well, costing Adams the election. It took Hamilton a few years to finally co-opt Jefferson.
Before he could impose his ideas through Jefferson, Hamilton made the mistake of making a deadly insult to Aaron Burr. Hamilton’s death did not completely wipe out the Federalist faction, but it forced them to hide within the unelected parts of the government such as the judiciary.
Jefferson was the ultimate pragmatist.
Jefferson’s economic ideas were no good, and he realized it pretty quickly after being elected President. Hamilton’s economic ideas worked, so Jefferson adopted them.
Jefferson had no scruples about violating his own principles — look at the Louisiana Purchase for an example. Jefferson knew it was unconstitutional for him to do it, so he did it anyway, and then threw himself on the mercy of the Congress — where he controlled 2/3 of both houses.
Honestly, Jefferson was a great President, in the way that Emperor Augustus was a great ruler of the Roman Empire. But you have to remember that principles were quite unimportant to him — he was all about getting-it-done. We are lucky that he was generally on the side of good.
Great post, fM, these ideas are critical. Only power arrests power indeed–something the left in this country completely misses. They, in contrast, believe that sermonizing will shame the power-elite into compromise with progressives or, worse, that the electorate will be persuaded by arguments to vote for tweedledum or tweedledumber in the one Party State with two right-wings.
Yes but it is the exact same distortion that lies at the basis of the war on medical marijuana (and indeed much of the war on drugs). It is also the center of the state level guns vs. federal guns fight currently ongoing.
You’d think that the tea party would be pissed as hell about this.
>> That is quite the distortion.
A distortion from your interpretation or perhaps original intent? Or a distortion from case law from the past 80+ years?
The power of the Commerce Clause grew with “technology”, as in “cheap travel” and “cheap communication”. Tough to limit it now.
And while they’ve got Hensarling working on this, the finance industry should also submit a bill that rescinds RICO. Just to protect taxpayers the banks will simply confiscate everything from everybody before it gets taxed.
Ye Olde Commerce Clause because, ya’ know, real property regularly crosses state borders.
Why are Republicans, those devoted to smaller government, comfortable with an attempted power grab from the state’s? I’d love to especially hear the “original intent” crowd answer this one, since I’m assuming that those who signed the Constitution had their own houses recorded in local registries. That crowd was especially big on protecting land rights from corrupt, large, distant central institutions.
Simple. States better than Feds and Banks better than States.
Why are Republicans, those devoted to smaller government, comfortable with an attempted power grab from the state’s? Michael Olenick
Because they are of, by and for banks?
Quite simple, really, because the Democrats don’t hold them to account and therefore the media doesn’t either. The progressives don’t hold the Democrats to account and nothing changes nor can change other than the inexorable drift to neo-feudalism.
Easy. This new bank is private. See, in the Republican world view, having your freedoms and rights restricted by government (especially the Federal govt) is bad, but having the same freedoms and rights restricted by a private entity that is even less accountable to the citizen than elected officials is good. I believe they call this view libertarianism :-)
This.
Republicans want a “smaller government” so it will be less able to restrain exploitation and oppression by crony private firms.
That is, when the government bothers to restrain private greed at all, which is less and less these days.
Well, we no longer are a Constitutional Republic, that is so Eighteenth Century. Today, we are a Consumer Democracy, and our one over arching right is the Right to Borrow (if we qualify and behave ourselves), so nothing becomes more important than protecting Creditors Rights, and if Property Rights have to go, so what? Nobody is hurt except for those who bought for cash and are likely to find themselves plundered by scammers phoneying up mortgage notes and assignments. I have worried about this for about five years and fully expected this kind of solution.
Of course the states will be devastated by this, losing all the revenue from recording fees, mortgage taxes, etc. Those quaint little rooms filled with musty books, in which one could actually determine a chain of title (and where, in 1999, I discovered my title insurance company was offering me insurance coverage on the wrong property) will go the way of the dodo.
All in all, a Great and Glorious and Colossal Fuckup which will only in affect about 2 people in ten, since the remainder of the population owns only the clothes on their backs.
Some id*ot deleted my earlier post, claiming it was awaiting moderation. WTF must one do to be accepted here? [That is, if you know]
recovering from surgery. don’t have the energy for this. to hell with it.
I hope your surgery went well. My mother had a heart valve replaced recently and I was worried for a while. Now she’s much better and I hope you’ll be too.
We’ve noticed you missing in action. Enough with the excuses already. Consider your responsibilities. Who wants a bland commentariat?
Who wants a bland commentariat? charles sereno
“And what am I? Chopped-liver?”
I was talking to Jake. When you get surgery, you’ll get a chance.
I’ve just been wanting to use that expression.
I don’t think I can afford surgery; 20% of infinity is still infinity.
Sorry, Charles. Lost my head. Apparently, if you stay away a week they forget you are a (mostly) reliable snark. It seems my offering was belatedly restored (see above). What I can’t figure out is what standard I offended. Any thoughts?
Hope you get well soon.
I’m slowly working through one of your top book picks, Veblen’s “Theory of Bus. Ent.” (taking a break from it right now to read some lighter essays by Umberto Eco among others.) A long time ago I tried “Theory of the Leisure Class” and gave up quickly due to his prose style. Now I’m starting to actually appreciate it, but it can be difficult and I have to be in the right mood and have the energy for it.
His idea of “business enterprise” as running counter to the goals of “industrial enterprise” is certainly not the version (or myth) of capitalism one absorbs from conventional wisdom.
meant as reply to jake chase above
Try Leisure Class again. IMHO it is one of the few economics or sociology books worth reading.
Don’t you agree that business is the sabotage of industry for private gain?
“His idea of “business enterprise” as running counter to the goals of “industrial enterprise” is certainly not the version (or myth) of capitalism one absorbs from conventional wisdom.”
This is one of Veblen’s crucial insights. The distinction between “industry” on the one hand (providing useful goods and services) — and “business”/”leisure class”/”finance” on the other hand, acting as parasites on the economy and actually damaging industry.
What gives them the right is that we own property, and the elites have run out of other things to take from us. Same as any other third world nation.
Every one who has every had an issue with Fidelity Title or any of its subsidiaries should email the Federal Trade Commission of your objection to Fidelity ‘s buyback of a criminal enterprise like LPS DOCX.
L
Now that Lorraine Browne has been indicted and charged no one or any corporation should be allowed to buy a criminal enterprise whose business is to create, produce and use forged and fraudulent documents to steal and transfer stolen property.
The states are not doing much better. Seems they think they can rely on case law that is not tied to state or Federal law.A court in Texas claimed that the plantiff didn’t make sense and ruled against them. Here is the deal, The state of Texas has requirements of contracts, debt and of mortgages. Those judges only needed to know that, because they do not make the law. The job they have is to interpret it. This is all in an effort to repair WallStreets bad behavior that was at such a neck-breaking pace that the 200 plus years of property law didn’t fit into their needs.Mers was their creation one that eliminates any cloud on the title ;-);-) and any way to trace chain of command..Sweet,why would anyone sign on to that sh*t And BTW we did bail them out, guess they want another pound of flesh… as long as we a giving.
On July 22, 2011, the State Regulatory Registry LLC (SRR) issued a Request for Public Comments on a proposal to collect, centralize and publish all state regulatory enforcement information concerning mortgage loan originators. By creating a central source of investigation information, the SRR aims to provide a repository of background information for both consumers and other state and federal regulators. Before implementing, the SRR has asked for public comments to be submitted by September 20, 2011.
To YankeeFrank:
If you do not fight legally for your constitutional rights, you do not have any. So, they can pass all the unconstitutional laws they want, and if the States take a dive and do not challenge then that is the Law.
See OPT OUT at airport as illustration.
From the article:
“What you have here is the total pre-emption of every state or federal law regarding the right to foreclose and ownership of the note….
States have always controlled property law, and this Republican bill would wrest away that state control, putting it not in the hands of the federal government, but a private entity.”
What is truly depressing and alarming about this and other events, including the whole Massive Crime Wave, is that, with rare exceptions, the States do not fight back. Many of these Crimes could be prosecuted at the State level. Despite losing both revenue and power, the two drivers of politics, the States are dormant. I cannot even think of one State politician of any note who has seen the opportunity here to build a political career.
The message then is that the States have been coopted both by Lobbyists and their own National Political Parties who control much of the patronage, goodies, bribes, corruption,etc. that is passed out. There is much more Loot and Plunder available to the National Party than the State Party.
Personally, I had hoped there would be some State Blowback but there is little or none. So no State is willing to fight for its rights under the Constitution.
The Bigger Fish on this agenda, I believe, is a National Sales Tax a la European Vat Tax. They will have to blow out the States on that one too, as Sales Tax is a State right. Would you like that with or without an Internet Tax?
The states are owned. Fight back? Pfffrt. See Georgia’s attempt to reign in banksters and real estate for history of note. Better yet, see the pathetic AG bailout.
This is the face of evil.
“Catch-22 says they can do anything we can’t stop them from doing.”
Great discussion!
Mr. Dayen, thank you for broaching the topic, “who wrote the bill?” This should always be asked. These bills we see year after year are so ponderous, no mere mortal can read them; and their true intent is commonly contained in a few choice lines pocketed “here and there”.
More and more frequently I am reading about explanation of laws and see the excuse “and nobody knows who inserted that line.” Seems like a shoddy excuse and a shoddy way to pass laws.
If a dog peed on my homework I would probably know who’s dog.
“Protecting American Taxpayers and Homeowners (PATH) Act.” How Orwellian.
Yes, how many times have we seen this formula before? Devise a crude piece of legislation which is neither well conceived or well researched and wrap it in the veil of the American flag. Comical, if it weren’t so depressing.
Like the “Affordable” healthcare act, or one of our insolvent “trust” funds. Sometimes the name says it all.
We decry ‘journailsts’ inability to locate, much less cover, objectively, or with some aggressive scrutiny, these types of stories. All anyone has to do is listen to the name of the ‘program’ when they trotted out in the trial balloon stage:
Clear Skies Initiative, Affordable Care Act, Healthy Forests…Orwellian, indeed. Couple it with NSA / tech monitoring, and Katie bar the door. We have arrived.
One of my favorite titles for a legislative act which became a law, other than the famous and absurdly named Patriot Act–read as Unpatriotic Act–is the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (the bankrupcy reform bill) which allows corporatation to discharge their liabilities for fraud, but not indivuals (unconstitutional and yet to be tested the the RESCAP (GMAC) bankruptcy and which is extremely hard to individuals in bankruptcy but gives bankrupt corporations tremendous power (in addition to the stated right to discharge liabilities for fraud.) I call it, where individuals are concerned, the Bankruptcy Prevention and Consumer Abuse Act of 2005, which was the real intention behind its enactment–and just in time for the foreclosure “crisis,” too!
Or the “PATRIOT Act” (nothing patriotic about totalitarianism) or BAPCPA – nothing to protect consumers – just a bill written by bankster lobbyists – typical Rovian ploys.
Well said. Had I scrolled down to your posting first I would not have replied to Screwball. You can do my thinking for me any day. I have a hard time keeping up with Orwellian word play.
Isn’t congress a hoot? The only time the proles pay most attention is whe stooges introduce harm, which is what they do most of the time when lawmaking. Think about it, when have we seen legislation that clearly, 100% – not an advertised token gesture that doesn’t immediately get watered down in the world of banking and finance – benefits the 99%? It’s hard to find.
Call Hensnarling and ask politely for his resignation:
2228 Rayburn HOB
Washington, DC 20515
Phone: 202-225-3484
Fax: 202-226-4888
Suggested acronym for “kept men and women in Congress” — PNAs (persons of negotiable affection).
It’s more prima facie evidence of the intent on the part of the financial-industrial complex to systematically cheat the general population out of their homes and reduce it to debt slavery. Apparently the wolves find the sheep’s clothing uncomfortable and would find it convenient to prey on people openly and without constraint, and are prepared to drop any pretence of providing a ‘useful service’.
There is already overwhelming evidence that the present circumstances crushing the middle class were deliberately engineered. Once the rentiers have pre-emptively confiscated the product of all labor and all assets, it’s natural to assume that next they’ll be wanting your first-born child and various body parts as well.
They have already been well on-course to pillage the planet until there’s nothing left to steal. But now they’re looking to speed up the process as much as possible.
A new MERS. MERS is dead, long live MERS. A National Mortgage Data Repository. This bill mentions nothing about the absolute necessity for a clean chain of title. The bedrock of property rights. Of course that is exactly what MERS was designed to do – to destroy the chain of title. This stuff doesn’t happen by accident. What better way to launder money? Create all sorts of bogus “securitizations” and duplicate mortgage documents without notes and do not record any of them so that they do not have any person of interest on record, and of course the dog ate the documents, etc. They you can shuffle those “properties” around at will, pretend money changed hands, and nobody can ever trace it because there is nobody of record to trace. Clever.
Another case of the national media looking the other way. So much easier to detract stupid Americans with non-stop coverage of the Zimmerman trial than tell us how we’re being screwed yet again.
Go ahead, pass it, i dare you, and I promise that Ill be one of the first to bring a test case to the U.S. Supreme Court, then work with the constituents to get these idiot crook “plotiticians” (aka financial industry baggage hounds) sponsors of this “bill” voted out of office poste haste
Glenn-
While your intent is worthy, the politicians would love nothing more than to have this bill struck down by the Court. Having pocketed a pretty penny for passing the bill the first time, this would allow them to shake down their Wall St. paymasters for another go-around.
You see, to a politician, a complicated problem with solution after solution struck down is the equivalent of a gift that keeps on giving, while an easy problem solved with a quick piece of legislation is an end to a potentially lucrative lobbyist money gravy train.
To Glenn Russell-AMEN!
Jeb Hensarling is a natural disaster……
Doesn’t suprise me at all.
MERS losses in court have been coming in hot and heavy as of late.
http://scholar.google.com/scholar_case?case=17333865539032738494
“On remand, the trial court must determine whether MERS had the authority to assign the mortgage and/or the note as the nominee for Countrywide in light of the claim that Countrywide was no longer in existence when the mortgage was assigned to BAC.”
Aw, how awful for poor Karmela – tee-hee.
To indio007: Thank you for the link!
With text like this would we not expect a companion retroactive immunity for past misdeeds involving MERS? Shades of FISA retroactive immunity?
Never mind the “race to the bottom” effect of pre-empting state laws affording various protections. Why settle for a mere Delaware (credit card issuers) or such when you can go straight to the federal level? Praise be to the commerce clause.
“Theoretically, the data in the repository would be publicly available, with privacy safeguards.” — unless the entity is quasi-public, such that they snare all FOIA-type requests in court over their rights as a private entity, or consumer protection re privacy, or who-knows-what. If it’s not mentioned from the beginning, and there’d be profit in obfuscation, I’d expect the information to stay largely blocked from public access.
“The Director (of FHFA) shall provide for the establishment of procedures for proper demonstration of registration of any mortgage-related document and of an interest by the holder of an interest in any such document with the repository.” So we’d have the courts, aware of centuries of state law and relevant case law, chasing instead the words of an appointed official? And this official could change with each administration, and change his/her words over time? Presumably if a court case were inconvenient, he/she could simply restate. The courts move slowly, so setting a system up to change whenever an appointee decreed (possibly often and quickly) is presumably a feature, not a bug.
Of course there should be immunity. “Mistakes were made.”
Don’t like banks? Then gut them with a Postal Saving Service and the abolition of government deposit insurance and the Fed.
But that would cause massive runs on the banks so first bailout the entire population equally until all deposits are 100% backed by reserves. Then those deposits and reserves can safely xfer to the PSS leaving only the gamblers to keep their money in the banks.
Or continue to tolerate the bastards until they eventually kill you.
The PATHological Act – created by sociopathic political prostitutes – how appropriately named.
Excellent–PATHological!
Just read the Housing Wire story on this bill. Not ONE mention of an ex post facto MERS fix or the plot of “repairing that pesky note-thingee”. If no frauds have been committed (gag), then why is legislation so badly needed?
News flash: Horse laughs now permitted for any Republican blathering on about the “private property.”
Great catch by Dayan.
Reply to George re pushback to banks: The problem is, NO bank will accept your rider, all fall into the same category of rigging the deal to the banks’ advantage, and fall into line supporting each other. They also rig the credit bureaus so that the 99% cannot get good enough credit to borrow on decent terms, either. Then there are the “gotcha’s” of that fine print, selling the note, etc. So, much as I like your solution, it is not workable. I wish it was! The whole debacle of the mortgage and foreclosure crisis would not have happened if it was workable. But the government has allowed the banks and mortgage lenders to get into position where no consumer can ever deal with them again on an equal footing.
Push back to banks needs to continue via the customer. Your money talks.
I will suggest it again here: Banks love to add all kinds of riders and conditions to a loan. Next time you take a loan out, simply refuse to take the loan out with your local bank unless you can add a rider of your own that prohibits the particular bank(s) that you do not wish to profit form your loan. The next time I take out a mortgage, I will only want to deal with my community bank and plan to draft a rider that prohibits JP Morgan Chase from ever servicing, owning, or being the trustee for my mortgage. I simply refuse to begin any new business with them for the rest of my life. If the community bank refuses to accept a rider out of future sale concerns, I will just go to another bank that will allow it.
Quite a stunner here but it makes sense to streamline the system. Whose to blame? The usual suspects and the Republicans are not the number one suspects. It is first, the PR companies/propaganda organs, i.e., the mainstream media which refuses to report on significant issues that really matter day in day out. Second, the left-wing of the Democratic Party that refuses to speak up and protest the heists going on here because they are afraid the Supreme Court, at some point, will overthrow Roe v. Wade and gay marriage may be delayed in some states and stuff like that. The R party is just doing what we all know they are designed to do–they are the honest criminals in this rouges gallery.
sigh – my “replies” are ending up all over the place
Excuse me while I go cry myself to sleep.
The wisdom of having one single authority-database, like MERS 2 the Vendetta , it’s evident folly. Private management has already shown what private management is perfectly competent at: running away with your money, leaving you with troubles. Captive regulators and controllers have shown what they are good at: entering the revoling door. What gives? Probably a distributed, decentralized right management system, in which no one authority can have the final say on anything, but a large consensus is needed to reach a conclusion, one large/complex enough to make exploiting single legal loopholes unprofiteable.
Lets see just how powerful the association of county recorders and clerks is. What happens to all the recording fees in such a scheme?
Well, Dean, with a few noble exceptions, most of the county recorders (and title insurers for that matter) looked the other way while the largest redistribution of wealth/property in history occurred. Did they really think that there would be honor among thieves? Really? This is what they get for selling out their communities.
Mr Dayen says this may not become law, but is the open round of negotiation. I call this the point of origin of the public policy conceptual framework. The legislation is often lifted wholesale if not verbatim from the shadow government apparatus of the militant right wing AEI, CATO or MERCATUS think tanks.
The cancellation of The New Deal and The Great Society as well as the rest of the social and political progress of the 20th Century in America is forged day in and day out on the front pages of the news media by Washington correspondents who blandly report this news as if it was dog bites man. This revolutionary change, all perfectly legal, because it is made legal by the stroke of a pen and the gerrymandered Congressional Districts which fosters the ever rightward drift of national and state politics.
In association with the privatization of GSEs for financing the housing market, this policy position seeks to do do away with the FHA for the most part and replace it with savings accounts for down payments instead of government guarantees, similar to medical savings accounts or the Social Security private savings accounts from the Ryan budget or school vouchers or any other transfer to the private sector in the name of ideological purity of the right wing and their fellow travelers in the Democratic party.
http://www.mortgagenewsdaily.com/07152013_fha_reform.asp
In November 2011 the conservative think tank published a paper by Joseph Gyourko of Wharton titled Is FHA the Next Housing Bailout? This was followed by a rebuttal from HUD and a rejoinder, again published by AEI. Then in December 2012 AEI published a major position paper which MND covered entitled How the FHA Hurts Working Families, by Steven J. Pinter. Since then representatives of AEI have been invited to present testimony primarily assailing the role and especially the recent history of FHA in meeting the nation’s housing needs at several Congressional hearings on housing finance reform.
On June 20, 2013 AEI published another Gyourko paper titled “Rethinking the FHA in which he made the following claims:
FHA is a policy failure: Far too many of FHA’s intended beneficiaries fail to achieve sustainable homeownership. Between 15 and 30 percent of mortgages guaranteed by FHA since 2007 will default.
FHA is a financial failure: FHA’s main mortgage insurance guarantee fund does not have sufficient funds to cover its expected losses, and its most recent actuarial review puts its net worth at a -$13.5 billion. Gyourko said his research concludes it will take $50 to $100 billion to put it on a sound financial footing.
FHA’s business model is fundamentally flawed: Both FHA and its borrowers are leveraged by more than 30 to 1. To be viable, such a highly leveraged business model virtually requires that housing values never fall which we have learned is not a realistic expectation.
Now a senior fellow from the Center for American Progress (CAP), AEI’s equivalent on the left, has taken on Gyourko assumptions. Jim Carr’s remarks in which he laid out five key points refuting Gyourko, came at an event entitled “Rethinking FHA”, sponsored by the two politically opposite policy centers.
Carr says that Gyourko’s paper provides significant information on which to debate the current conditions and future directions for FHA but that “The paper’s first sentence that ‘The Federal Housing Administration (FHA) has failed by any reasonable metric’ makes it clear the writing is not about offering a fair and balanced review of the FHA but rather to proclaim that the sky is falling and to elicit a radical and dramatic response.”
“A rose by any other name would smell as sweet”
No matter what they call it, The GSE Business Model is “fatally flawed”. One cannot put lipstick on a dead pig.
I would suggest a phone call or fax to Mr. Hensarling’s office to let him know how you feel about this.
I did.
Washington, DC. Office
2228 Rayburn HOB
[map it]
Washington, DC 20515
Phone: 202-225-3484
Fax: 202-226-4888
Copy the proposed legislation.
Present your local clerk/recorder with a highlighted copy.
Add notes in the margins explaining “This is where/how you will lose your authority/power,” and “This is where/how the county/state will lose revenue.”
They generally don’t seem to care about anything else (like you), but they generally seem to care greatly about their own power and money.
The mainstream media which refuses to report on significant issues that really matter day in day out.
I smell the same problems that were found with electronic voting: gaming the data to the hardware owners’ advantage, no paper trail, secret software, all that fun stuff.
One morning we all wake up and find that the ‘owner of record’ field on every ‘property’ row in the ‘USA’ database says “Bank of America”.
Wheeeeeeee!!!!!!!!