Do you think it will be an outright bailout, or an attempt at legislation that would basically say “whatever documentation the banks have is now enough”?
I am trying to see a silver lining here, and all I can come up with is that lawyers will now have a lot more disposable income.
I think any attempt to say “whatever documentation the banks have is enough” would be challenged and lose in the courts. There are 50 states, all with their own documentation requirements, who are being abused here. There are 50 states in which county recorders are being denied lawful recording fees for conveyance by the MERS mess. They all have standing, and I’m sure that every state’s governor and legislature would be reaming their Congressional delegations a new orifice if they tried something like that.
The Republican governors, legislatures and Congresslime excluded, of course.
I think the bailout takes the form of Fannie, Freddie and the Federal Home Loan Banks taking a dive on this one, recognizing a whole snootful of bad debt, and then asking Uncle Sugar to pour more money into them. It would be a disconnected process, stretching out over three or four quarters’ reporting periods, which would mean that only those of us with an attention span longer than that of a goldfish would be able to string the individual actions together into one coherent bailout narrative.
Yes, if you’re a lawyer who has as their specialty “real estate law,” you’re about to be gainfully employed for the next three to five years.
“Do you think it will be an outright bailout, or an attempt at legislation that would basically say “whatever documentation the banks have is now enough”?”
I just don’t see how the Feds can wave any kind of magic wand and fix this, with or without federal legislation. They’d have to override all state law regarding public recording of liens and deeds of trust for real property, and even if they did that, assignment of them would be completely arbitrary since the chain of ownership transfers has been broken and the terms of all of the loan documents have been violated. Flip a coin? Heads, the person currently living in the house takes title? Tails, the institution currently receiving payments (if any) takes title? You tell me.