The MERShole Yawns Wide

Market-Ticker ^ | October 15, 2009 | Karl Denninger

[combat_boots]

We have a real judge!

“The foreclosure sales (in question are) invalid because they failed to meet the requirements of (Massachusetts law),” Land Court Judge Keith Long wrote yesterday in reaffirming a decision he originally reached in March.

At issue is "lost" (or improperly endorsed) paperwork when mortgages are sold from party to party, as typically happens many times during a securitization process.

I have often argued that a lot of "lost" paperwork is in fact intentionally destroyed, as this is one of the few ways to cover up blatant fraud in the origination of mortgages - brokers putting the same application through with a half-dozen ever-higher "claimed" incomes, for example, until they get an approval. The original paperwork that is executed by the borrower, if it bears hand-written numbers that don't match the signature, could be a strong indicator of fraud committed by those brokers (and willingly ignored by securitizers.)

Judge Long wrote:

“The issues in this case are not merely . . . a matter of dotting i’s and crossing t’s. Instead, they lie at the heart of the protections given to homeowners and borrowers,”

Yep.

[combat_boots]

.

[HiTech RedNeck]

Oops, they will have to stop feeding their homework to the dog!

[Lorianne]

Bump.
This is going to get real intersting.

Interesting comments here: http://www.tickerforum.org/cgi-ticker/akcs-www?subindex=The MERShole Yawns Wide

[texas booster]

The willful destruction, non-retention, or improper (or no) recording of these documents makes all such affected securitizations fraudulent, as they were sold off to investors as being "asset backed" when in fact they were not, as being "asset backed" requires compliance with state law in the perfection of the security interest. No security interest, no asset backing, and the offering prospectus is representing that which is known to be factually incorrect.

So it could be that this is the avenue that mortgaged backed securities can use to open up loan originators and banks that knowingly accepted fraudulent documents for mortgages?

Not that anyone will beat up on AC*RN, but in the Northeast they willfully ignored the law to gain commissions.