(Thanks for the ping paladin1_dcs)
The Comedian's "Economic Holocaust" ping list...
Frowning takes 68 muscles.
Smiling takes 6.
Pulling this trigger takes 2.
I'm lazy.
Posted on 01/19/2011 10:16:36 AM PST by survivingcalifornia
The foreclosure mess just got messier.
Inquiring minds are watching the fallout in Utah where a man just beat the banks in court by agruing that the bank had no right to foreclose…and he got his house given to him with clear title. This means Mr. Walter Keane does not even have to pay his loan of $132,000. All because of the way MERS handled his documents…or that MERS handled the documents:
A Utah court case in which the owner of a Draper townhouse got clear title to the property, even though he still owed $132,000 on it, raises new legal and financial questions about a property-records database created by mortgage bankers.
The award of a title free of liens means that whoever owns the promissory note on the Draper property — likely a group of faraway investors — no longer has the right to foreclose to collect on a delinquent loan. Indeed, the townhouse owner has sold the property and kept the money. Those who own the promissory note probably don’t even know what occurred.
This is now the second state which has decided against the banks. Remember this SurvivingCalifornia.com post on Massachuetts Supreme Court’s similar decision last month.
This case in Utah may have even more importance:
Decisions such as the one 3rd District Judge Glen Iwasaki handed down in the Draper case could have a big impact as the state wends its way through hundreds of lawsuits involving foreclosures, loans on properties for more than they’re worth and predatory lending practices that led Utahns to lose their homes as the real-estate bubble burst.
As always it seems, MERS is at the center of the storm:
This is all tied up with MERS, the online database that has stood in for the land records system in as many as 60% of the mortgages in America over the past decade or so. As we’ve seen, MERS is essentially a way for the largest banks to avoid recording fees, by naming them as the mortgagee on the original record and then transferring the mortgage and the note through their database. The problem is that MERS is named as an owner on loans in which it has no financial interest, and the judicial system doesn’t yet know how to manage that. This has confused the hell out of title insurance companies, who cannot determine who holds the note or even who can collect payments on it. As a result, in this case, the courts and the title company failed to figure any of that out, so they gave title back to the homeowner.
The ‘why’ in this case has been discussed before here at SurvivingCalifornia.com. If you remember one our most popular posts “The F-Bomb” you will see a similar metaphor of “photocopying a $100 Federal note” used by Christopher Peterson of the University of Utah quoted in “The F-Bomb”. Mr. Peterson says that in this case in Utah, MERS calls into question their ability to succeed:
Under laws adopted by all 50 states, the owner of a “negotiable instrument” such as a promissory note must be in physical possession of the document, said Peterson. Otherwise it would be like someone trying to cash a photocopy of a check instead of the actual check. [SC editor's bolding]
“One cannot be a holder of a note unless one is in physical possession of that note,” he said.
But Peterson said evidence is coming out in courts that shows the actual promissory notes or mortgages signed by buyers were not transferred as the notes made their way into the mortgage-backed securities investment pools.
Yes, we have been saying that 2011 was going to be an interesting year…and the fireworks have already begun!
Other SurvivingCalifornia.com posts on this topic:
“Foreclose on the Foreclosure Fraudsters“ “More on Mortgage Mess“
MERS doesn’t actually own the loans, they’re just a servicer. Their website allows for owners to look up who currently holds their note.
https://www.mers-servicerid.org/sis/
It seems to me like some judges are overstepping their authority on the hopes that public sentiment will keep them from getting busted for it.
When a borrower signs their name and promises to repay the loan based on the terms therein, no judge should be allowed to let them skate. If this is allowed to stand, judges can be bribed to simply nullify any number of mortgages and banks will refuse to make home loans.
(Thanks for the ping paladin1_dcs)
MERS has never been thought of as an owner.
They came about because MBS dealers realized what they had done and have been trying to put the genie back into the bottle ever sense. They are a go-between. But they originally told a court (Florida, I think) that they were the owners. Actually they are a clearing house of info. They are supposed to know where EVERTHING is...paperwork, owners, etc.
MERS attempted to get around the law of recording a loan everytime it was bought and sold by having one of their people assigned as a VP at every security’s firm (dealer in MBS’s). They tried to say that the MBS’s never really got bought and sold. They were just ‘transferred’ from one location to the next.
This was thrown out immediately. MERS has lost in many states.
You see that is the thing, no one can prove that any one signed their name
Not quite, if it takes Fifteen* or more years for them to sort things out you can claim Squatter's Rights**.
*Depending on the State
**Actually termed "Adverse Possession"
Is it very difficult to locate properties that are clear (fully paid for)? It seems that this should be the route for serious buyers.
As mentioned on other threads on these events, there are a numbber of legal-moral constants that should apply.
When you sign a mortgage with its terms weighted for the lendor, it becomes a negotiable instrument. The rules of how they can sell your loan, trade on it, or slice and dice it are few. But to have true ownership to your property, those few rules must be followed. The buyer of a lender’s mortgage must hold it and properly record it so that who you owe and how your property has claims against it is absolutely clear at all times to protect you and your property.
If the lending community goes of an orgy of government encouraged borrowing and trading of their own and fails to honor the legal standards that have been in place for centuries with cute games and schemes, then a good court and good legal procedures will slap them down.
If I go build somewhere and don’t register in the state and don’t make myself liable for taxes but yet cheat and fight with those I do business with in that state, I know the courts will say “who are you”, deny me standing to defend or claim and I am screwed because I didn’t follow time honored rules. Claims of “what’s right is right” should not be the resort of gamesmen.
Hmmmmmmmmmm
I give you credit, you don't excerpt your posts and try to direct traffic to your site to read the rest like a lot of bloggers who bring their stuff here.
Who will write a policy for a "vehicle" that's been stolen, used to injure a bunch of people on a crime spree, then totaled?
Oh, and we mustn't forget the "vehicle" was over-appraised to begin with.
sfl = save for later (reading)
That is exactly my point.
The cost of the hours of investigation that would be required before a title company could write a policy could be $40,000 or more.
This has to be reversed.
>> “The history of this country is replete with great business ethics” <<
.
You are living in the pre-obama world that passed away three years ago, and I can’t forsee its return in my lifetime. The economic damage that has been done to the entire world to put that bag of vomit and his agenda into office is obviously more than you have been able to comprehend.
Start stocking up on storable dry food and tents now and don’t ask why; your education will arrive later.
.
Perfectly said. I agree 100%
Pefectly said. I agree 100% with you.
Thanks. I did at first because I thought that is what was wanted by the group. My blog is just my journal of where I see the economy going and such. I am not doing it for money or anything. I am just glad that others are finding it helpful/interesting.
Makes me feel like I am not alone...and, of course, contributing to the solution side.
oooooh! I looked it up in the urban dictionary and sfl was “stop f’ing lying” or “so f’ing lame” or a coule of others.
Yours is so much better.
Multiple pledged notes...huh...must be a scriveners error (or millions of scriveners errors).
$nip>
“Indeed, it appears as though many loans and other mortgage-related assets have been double and even triple-pledged to various constituencies“
Ha Ha! They're not gonna get away with it.
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