The Great MERS Whitewash Bill - Class Action Lawsuits Force Mortgage Puppet To Turn To Captured Congress
The only problem I see with John Carney's analysis is the political risk that Obama would face in signing such a bill. The American people, and most certainly the righteous economic blogosphere, are watching this story too closely for it to slip through as an unnoticed rider attached to larger legislation.
So it will be scrutinized, and objections will be raised from all sides, especially the progressives, and Obama will not sign it. That's our only chance, because John Boehner and Harry Reid have the banking lobby on speed dial with a campaign contribution account attached.
I touched on these rumors yesterday at the bottom of the Matt Taibbi story.
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Background:
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Guest post from John Carney
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.
The system has come under scrutiny by critics who charge MERS with facilitating slipshod practices. Recently, lawyers have filed lawsuits claiming that banks owe states billions of dollars for mortgage recording fees they avoided by using MERS.
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.
Now it appears that Congress may attempt to prevent any MERS meltdown from occurring. MERS is owned by all the biggest banks, and they certainly do not want it to be sunk by huge fines. Investors in mortgage-backed securities also do not want to see the value of their bonds sink because of doubts about the ownership of the underlying mortgages.
So it looks like the stage may be set for Congress to pass a bill that would limit MERS exposure on the recording fee issue and perhaps retroactively legitimate mortgage transfers conducted through MERS private database.
Self-styled consumer advocate Neil Garfield says the legislation is already being drafted:
- After years of negative judicial decisions about the use of a straw-man on mortgages, MERS was about to lose its existence as well as its credibility. But now all of that is set to change as Wall Street money is pouring into the coffers of those who are receptive (i.e., almost everyone in Congress). The legislation is already being drafted under the interstate commerce clause to ratify MERS and everything it did retroactively. It appears that the Obama administration is ready to pardon all the securitization deviants by signing this bill into law. This information is corroborated by several people who are in sensitive positions — persons who would be the first to know such proposals. Fortunately, there are some people in Washington who have a conscience and do not want to see this happen.
Garfield is overstating things a bit. In truth, the results of the legal challenges to MERS have been mixed. But it is very plausible that the banks might want to put to rest any ongoing uncertainty about the legality of MERS. I wouldn't be at all surprised if Congress manages to pass a bill that bails MERS out of its legal issues.
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Watch an interview with the CEO of MERS...
More detail on this clip is here:
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Important background:
Several recent stories from John Carney are immediately below in comments.
Nov 13, 2010 at 1:05 PM
Reader Comments (16)
Answer: having your house foreclosed upon twice . Unless, of course, you get it back the second time.
Homeowners in Massachusetts are now facing "back-to-back foreclosures," due to problems with property titles. When lenders are unable to get title insurance for the property on which they have foreclosed, they are now opting to try the whole process again. In Massachusetts, where the issue has affected at least hundreds, and "possibly thousands," of homeowners, it has become common enough to merit its own name: "re-foreclosure."
http://www.cnbc.com/id/40153805
http://www.cnbc.com/id/40152641
http://www.cnbc.com/id/40152707
Try not to throw up...
http://www.cnbc.com/id/40150788
John, sorry, but it's already destroying the dollar...and yes you are correct...it won't work..we ARE in a liquidity trap...
http://www.cnbc.com/id/40156107
Whether the Fed's bond-buying policy, also known as quantitative easing or QE, will enter a third phase when the $600 billion in purchases is completed in June is another matter.
http://www.cnbc.com/id/40155003
for the record, i said months before QE2 was announced that it was coming, that it would fail, and there would be a QE3 in 2012...and when that fails, if Bernanke has not retired, there will be a QE4 with the next president starting in january of 2013..
My Civil Case regarding Wrongful Foreclosure went Judicial in California.
The Judges turned a “Blind Eye” to the Back-Dated, Forged, Non- Acknowledged Fraudulent Foreclosure Documents and EMBEZZLEMENT Scheme, removed the LIS PENDEN, allowing GOLDMAN SACHS to FORECLOSE ON MY PROPERTY.
GOLDMAN SACHS does not own my property, but their name is all over the Insurance documents.
To all Foreclosure Victims:
If you are in need of Affirmative Defenses to combat these thieves and injustice, feel free to visit my blog at http://www.bushnellcomplaint.blogspot.com.
And Click on this link to view my current Unlawful Detainer:
https://fdaaccount.box.net/shared/nuym44jzj0
Concur entirely. Stay tuned. Trouble's brewing.
Five year-old wakes up in the middle of the night goes to the kitchen for a glass of water. There's dad, naked, with a HUGE boner. (Hand extends outwardly.)
"What are you doing, Dad?"
Dad doesn't feel like getting into the birds and the bees right now.
"Looking for that pesky mouse."
"What are you gonna do?" the kid asks. "Fuck it?"
Because most people believe the MSM. Most of the MSM with plenty of corporate and government encouragement is covering up the truth. The few news organizations who are trying to expose the truth are being overshadowed by the propaganda the majority of the MSN is pushing. I believe if the American People knew the real causes of the collapse and all that gone on afterwards, Washington and Wall Street would burn and the bankers and politicians would be running for their lives.
Sooner or later it's all going to be exposed, and when it is there will be hell to pay and the revolt will begin.
Yes it was, and its going better than they planed too. This clip will show you how "ALL of THIS" Was planed back in 1971. Back when Hennery Kissenger found a young lad named Barry Soroto, and wisked him a way to be the new president in 2008.
"The New World Ruler". If you wont watch it, you will have no Clue as to whats realy going on. YES, all of this was all planed out. It dont matter which Domamo you want to pick apart in anything & everything that has gone into the shitter since 2006, it was all planed to cave in on us. Wait till July of 2011..?
The homes, banks, jobs, cars, monatizing the money when everything else has failed as planed. All with intent to take down the middle class American People. This is but 1 of 100 clips I have on how the "Shadow Goverment" has had this all planed out for 2008-2012.
Sooner or later it's all going to be exposed, and when it is there will be hell to pay and the revolt will begin.
Yes, Sagebrush, it will start sooner than we'll be ready for it. My thought, our new goverment wont be able to change a thing. The people who voted them in will rise up becouse "Nothing Is Changing", more unemployment, and homeless.
The American People will rise up, ban togeather, and find out thAre is nothing to shoot at. They are all in Washington, Wall Street, Big Pharma, Big Ins. and hiding on the inside knowing its suiside to try and go home. They do go home in Cars, where they "Can Sleep at Night"............
What the people will do next is nothing you evan want to think about. Grab a 6-pak & Pop Corn, and spend 2 hr. finding out whats instore for us. Its not nice. You guys been waching the Bank Domanos wile I've been watching the Inside Goverment Domanos, ant thAres a big differance.........................but the end result is still the same.
This houseing, banking, and the "Ben-Ber-Nank" monatizing, is going to take down the country
http://editorialdigest.com/videos/obama-dec.html
Will, its the way they planed it all a long.................... Fuck-da-People, they will pay-up......? Them "Dumb-Fuckers" have NO-Fucking- Clue, what were doin to them.....................
Tell them what they want to hear, and they will send ya to Washington.....................Fuck Them Little-Bastareds"...................they owe it to us........................
Goverment is the man in washington that speaks for my people, but the people dont like ya's........................you screw'ed the people over for yr gain.....................
Read My Mouth, Fuckker...........................................your life is over, we're taking your "GS" way of life, over. Its Over-Fucker...............................We have had enought......neaver again will the goverment control the American People...................???????
Then, I guess im just a "Bad American", and my temper gets the best of me Again............... I realy try and not cuss, but them naughty boys and girls in Washington aint doing what I want them to doooooooooo ? & Roy Blunt is right back in thAre screwing the Mo. folks.
He's always got the Smug look..............Im F@#$%$##ing you people over and you cant touch me. Anyone in as long as he has been, aint working for the people.
And I gotta hand it to Ron Paul, year, after year, after year, he just plugs away for us hoping he can get a break. Just think what it would be like if he got in, instead of "The Wizzered of O-Bama Oz".......................................
Crap, we'ed all be over to S. Gompers eatting deer steaks on his "Mega-Grill", with Jake digging Cold Beer from the cattle tank. Why maby George W. may swing by when he hears about the cold beer. Tell us them "Texas Jokes" after he's had a few !