Read Karl Denninger’s analysis at “The Market Ticker.”
While this is a plaintiff’s complaint, and the defense to it isn’t stated, it looks pretty damning. There’s been a lot of rumbles about poor record keeping behind securitization.
Normally, someone who did such a bad job of documentation would get hosed by the courts. But, as seems so often the case these days, this is so huge that it is systemically destabilizing. The whole MBS market rests on sound title tracking, and here we have possibly trillions that have clouded ownership (never mind the underlying soundess of the loans) due to one of the biggest examples of the Peter Principle in action I have ever seen or heard of.
I remember the phrase: The title insurance company insuring the mortgage.
They've been getting away with a whole lot of crap on the basis of "the whole system will collapse unless you let me do this". The whole 2008 TARP fiasco was based on "too big to fail".
Well, I don't see a good way out -- they need to let the system collapse. It's rotten to the core, no use pretending and trying to string it along endlessly.