Posted on 03/07/2011 5:56:41 AM PST by TigerLikesRooster
Banks Face Renewed Headwinds
In the fall of 2010, there was no shortage of news regarding faulty foreclosure processes, aka "robo-signing." Bank stocks took a hit and the threat of a nationwide foreclosure moratorium appeared imminent. Then came the concept of put back risk to the big banks claiming violations of reps and warranty agreements or pooling and servicing agreements (PSAs). Since that time the media has gone rather quiet on the subject and the price action in the bank stocks would imply all is well. BAC settled for pennies on the dollar with one of the GSEs and the stock rocketed that very day as investors were no longer "worried about the uncertainty."
The story may have gone cold but the lawsuits, court rulings, class actions, investigations have only heated up and continue to grow. In fact they have grown to the point where keeping up with all of it was next to impossible. Banks have tried to downplay any of these threats in their most recent earnings releases and conference calls but suddenly things seem to have changed. Recent SEC filings by JPM, earnings restatements by BAC, a quick departure of Howard Atkins from WFC and regulators investigating CDO transactions by C have begun to turn the spotlight back to the banks and the balance sheet risk they face.
MERS was recently sued by a small county in Massachusetts for $22 million for failure to pay recording fees. This is just one small county in one state. The warning shot has been fired. States face hundreds of billions in budget gaps. States have been defrauded of legal recording fees by MERS who will argue their electronic system of registration was a more efficient process in a fast moving mortgage market.
(Excerpt) Read more at zerohedge.com ...
P!
Yep large potential penalties for banks using MERS, but the real issue is the uncertain ability to convey clear title to new purchasers of property involved in MERS transactions. I have read we are talking about 1/2 of the entire U.S. home mortgages. That is “existing mortgages”, what about those that were involved in MERS and already sold to new owners not involved in MERS. Imagine the lawsuits by the property owners when they learn they may not have clear title to the property they purchased. Think about the sheer magniture of this mess.
He says, "The politicians would not be interested in Libya if its primary export was broccoli."
LOL LOL !
THX THX.
This will go nowhere. The entire political establishment is in the pocket of the Big Banks. Look at how the Big Tobacco companies are still in business despite hundreds of billions in lawsuits and generous settlements with the States.
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