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« Dylan Ratigan With Rep. Marcy Kaptur: MERS Whitewash & Fraudclosure Cover-Up | Main | Former Goldman Sachs Executive Gene Sperling Floated As Larry Summers Replacement »
Sunday
Jan092011

MERS SHOWDOWN: Banks' legal right to foreclose is questioned in testimony before House panel

Source - Washington Post

The system of pooling and selling mortgages around the world has caused widespread confusion about who owns the loans and raises questions about whether banks in some cases have the legal standing to foreclose, a state judge and consumer attorneys testified before Congress on Thursday.

New York State Supreme Court Justice Dana Winslow said that "standing has become such a pervasive issue" in the cases he sees "that I frequently use the term 'presumptive mortgagee' " to describe the entity trying to foreclose.

Winslow, academics and attorneys defending homeowners described a fundamental problem that goes beyond recent revelations of shoddy paperwork and "robo-signing" in foreclosure cases. They said there is a much broader question about the legality of designating a single company, Mortgage Electronic Registration Systems (MERS), as the holder of mortgages and then trading these loans to investors around the world without updating the ownership documents in local clerk offices.

They said it is unclear whether using this system has stripped those investors of the right to foreclose on homeowners who miss their payments.

University of Utah law professor Christopher L. Peterson said MERS has a "problematic legal foundation" because it undermines state recording laws. Peterson called MERS a "deceptive" and "anti-democratic" institution because it also uses thousands of employees who work for mortgage lenders, servicers and law firms to sign mortgage paperwork in the name of MERS. That practice is also clouding the ownership of the loan, he argued.

"How is a homeowner to understand with whom they can negotiate a settlement, or from whom to obtain additional information, or how to distinguish a legitimate employee from the thousands of mortgage-related con artists and charlatans?" Peterson asked.

Continue reading at the Washington Post...

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Reader Comments (7)

They switch to a shoddy, corner-cutting system in the name of making monstrous profits, and now they're getting the legal bitch slap they deserve. HAha!
Dec 6, 2010 at 4:52 PM | Unregistered CommenterAngry Jones
The Popular Delusions of Crowds

http://www.caseyresearch.com/displayCdd.php
Dec 6, 2010 at 5:47 PM | Registered CommenterDailyBail
@angryjones...

will be very interesting to see how things shake out...right now it's a bunch of separate legal battles...something will have to give...either congress does some sort of legislation to protect mers and the banks or bac and a few others might need another bailout...you know my opinion of course...let them fail...no more bank bailouts...
Dec 6, 2010 at 5:49 PM | Registered CommenterDailyBail
DB-

Congress will have to supersede all the state laws already in place (states govern foreclosures), but this would be only another beginning. Such Legislation would certainly be challenged in many Federal courts and on and on and possibly rise to the US Supreme...meanwhile, back at the ranch, the banks sit on these loser properties sickening their already fragile balance sheets...Mmmmm??
Dec 6, 2010 at 7:33 PM | Unregistered Commenterjosie
Lender Processing Services Produced More Bogus Foreclosure Documents Than It ‘Fessed To

http://www.nakedcapitalism.com/2010/12/lender-processing-services-produced-more-bogus-foreclosure-documents-than-it-fessed-to.html

Thanks josie...
Dec 7, 2010 at 2:17 AM | Registered CommenterDailyBail
The following link has lots of past and recent information with respect to mortgage fraud.

http://www.mortgagedaily.com/MortgageFraud2003.asp
Dec 7, 2010 at 11:39 AM | Unregistered Commenterjohn
This story of incompetence and corruption is not surprising at all. What Americans have to look at now is what Congress and Obama are doing to what's left of the housing industry. When the truth comes out these dogs will surely qualify for treason not just incompetence.
Feb 17, 2011 at 11:37 PM | Unregistered CommenterRichard De Rose

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