I wrote this a week ago in reply to an earlier post on the same
subject and failed to send it.
Keith wrote:
> Presumably, if the procedures for thousands of putative foreclosures
> are themselves going to be foreclosed (either in law or equity) and
> people are going to be allowed to carry on living in their homes --
> presumably at much reduced payments
Well, maybe they don't have to pay anything at all.
>From the original article [1]:
MERS breaks the chain of title so that no one has standing to
foreclose. The homes are effectively owned free and clear.
If "owned free and clear", the owner(s) can live there, eh?
That does not mean the homeowners don't owe money to someone. They
do. But the claim for relief is not in "law" (by virtue of an
enforceable contract or rule) but in "equity" (a remedy provided
just because it is fair), and MERS is not the proper
plaintiff. Every MERS case involves a securitization, which means
the real parties in interest are a group of investors somewhere;
and before the homeowners can be made to pay, the investors have
to come forward and prove not only that they are the parties owed
the money, but the actual sums they are owed. In some cases they
might already have been paid; for example, by insurers on credit
default swaps held by the investment pool. The investors are
entitled to recover in equity only so much as they are actually
out of pocket, not the full amount of the original promissory
notes, since they were not parties to those notes and there is no
way to re-establish the chain of title.
So just how much trouble and expense will it be for some person or
entity in possession of a piece of paper, a piece of paper with a
notional value based on derivatives trading in the financial
marketplace, to prove (or at least evince) creditor or ownership
rights related to hundreds or thousands of original, realestate-secured
note?
Off the top of my head, I would guess at some kind of sophisticated
criminal enterprise obfuscated in a pseudo-legal architecture
resembling the acquisition, at the end of the USSR, by the
heterogeneous Russian "mafia" of the widely distributed citizens'
equity rights to former state enterprises.
So, what the original article recounts is no surprise to me:
"The paperwork problems range from potentially forged documents to
bank employees who never read borrowers' files before signing off
on an eviction. . . ."While we don't expect our review to find
that consumers were harmed, we will take appropriate action if we
find any impact," JP Morgan spokesman Tom Kelly said."
No harm perhaps except the illegal taking of thousands of homes
without due process . . . .
On September 30, Rep. Alan Grayson posted a devastating
seven-minute video, in which he gave four real-world examples of
such travesties of justice, including a man who was foreclosed on
when he didn't have a mortgage and paid cash for the home; a home
that had two foreclosure suits against it because both servicers
claimed ownership of the title; and a couple foreclosed on over a
contested $75 late fee.
I've never had a mortgage. We had a personal bank loan for $2000 (!)
to buy our first house, I had a slightly larger personal loan from a
friend to buy and renovate my first big studio and an unsecured loan
from a family member to move to a notably better house. But we've
successfully avoided doubling the cost of shelter, paying a mortgage
lender an amount equal to the price of the property.
I suppose, if it's the effective consensus that the financial
institutions must be secured, that the criminal enterprise option will
be mandated by legislation, creating some blanket principle that will
leave the investors holding ownership collateral. If there should be a
(miraculous) consensus that the body civic should not be pillaged,
then the courts might hold that the homeowners are just that and the
investors owners of ink-stained but meaningless paper.
Wouldn't that be nice?
- Mike
[1] Posted here by Mike Gurstein, referencing
Shock Therapy for Wall Street: JPMorgan Suspends
56,000 Foreclosures; GMAC and BOA Many More
Saturday 02 October 2010
by: Ellen Brown
http://www.truth-out.org/shock-therapy-wall-street-jpmorgan-
suspends-56000-foreclosures-gmac-and-boa-many-more63803
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