Time To Put A Fork In MERS?

Market Ticker ^ | 2/13/2011 | Karl Denninger

[Chunga85]

I was wondering how long this would take.... it appears that all the crooners that have appeared in front of Congress and elsewhere have finally had their heads cut off by.... as I expected..... a bankruptcy Judge.

Bankruptcy Judges are federal judges. The Federal bench tends to have a very low tolerance for bullcrap, although they do get bamboozled and fall prey to political arguments from time to time, like any body composed of humans. Nonetheless if you want to find justice, you usually will have a better shot at it in a Federal courtroom than in a State one. This means that if you're trying to play a game, you want to be in State court - but if you're looking for facts and logical analysis, you want to be in Federal court.

The case at bar here is one in which the debtor actually lost his motion to debar the creditor from lifting a bankruptcy stay. How, you might ask, can MERS get cornholed from a win? Simple: The debtor lost not on the merits but on res judicata, the legal principle that says "what's decided is decided." In this case (if I'm reading this correctly; I don't have the entire case history) the foreclosure hearing was held and decided before the debtor filed bankruptcy.

But the judge was obviously ****ed off and tired of the games. He could have issued a one-page order saying "go away." He didn't. Instead, he analyzed the entire MERS edifice and found that it does not comply with NY State Property Law.

Oops.

cont'd..

[Chunga85]

cont'd...

From the memorandum, at the top:

The Court recognizes that an adverse ruling regarding MERS’s authority to assign mortgages or act on behalf of its member/lenders could have a significant impact on MERS and upon the lenders which do business with MERS throughout the United States. However, the Court must resolve the instant matter by applying the laws as they exist today. It is up to the legislative branch, if it chooses, to amend the current statutes to confer upon MERS the requisite authority to assign mortgages under its current business practices. MERS and its partners made the decision to create and operate under a business model that was designed in large part to avoid the requirements of the traditional mortgage recording process. This Court does not accept the argument that because MERS may be involved with 50% of all residential mortgages in the country, that is reason enough for this Court to turn a blind eye to the fact that this process does not comply with the law.

In other words, take your "too big to be judged unlawful" argument and shove it up your arse!

On to the body of the decision: (Click through)

[Chunga85]

Is it even worse when they don’t bother to make believe they have valid assignments ping?

[Yo-Yo]

Are these the same courts that rolled over on the GM and Chrysler bankrupcies, wiping out bond holders in favor of the Unions?

[muawiyah]

Different courts, but there are still bondholder suits ~ eventually some judge will be persuaded that the legislation in place at the time the bonds were sold is the one that counts.

At the same time the bondholders who took a bath are filing tax returns reflecting the losses. That reduces their tax obligations considerably.

That means you and I get to pay for the UAW's leveraged buyout.

[Free Vulcan]

I want to get rid of or at least strictly limit MERS because it along with Fannie/Freddie create a passthru situation that allows companies like Countrywide to originate large numbers of zero down and/or ARM loans without assuming any risk. These then get traded away and packed into the MBS which are ultimately poisoned when these crap loans default because the home owner is leveraged to the hilt.

[BenLurkin]

“if you want to find justice, you usually will have a better shot at it in a Federal courtroom than in a State one.”

http://www.johnspeedie.com/healy/crap.wav

[FromLori]

Here’s some other news on Mer’s you should see...

Law Suits, Timmy’s Bank and the “Po’s” Dough

“A few interesting lawsuits going on in mortgage land. One of interest to me is directed at Fannie and Freddie. The accusation is that these entities made false statements in order to avoid paying required realty transfer taxes to states and municipalities. I’m not sure of the merits of these cases, but they are moving forward.

A description of the case being brought in Massachusetts:

snip

TAUNTON, Mass. (CN) - Massachusetts and 14 of its counties claim Fannie Mae and Freddie Mac conspired to duck property transfer taxes by falsely claiming to be government agencies. The commonwealth and its counties claim the defendants are corporations - not governmental bodies - and owe money for tens of thousands of property transfers and conveyances.

A similar suit has been filed in Nevada. A link to the court filings is worth a look. Consider the defendants that are listed. Basically the Whose Who of finance. (PDF Link)

The claim is that the banks and Fannie/Freddie avoided state transfer taxes. The suggestion is that Fannie lied and claimed that it was a government agency and therefore exempt from the taxes. From the filing:

Fannie Mae used those false records and/or statements to conceal and/or avoid its obligations to pay or transmit money owed to the State for payment of taxes upon the conveyance or transfer of title to real estate in the State by intentionally misrepresenting to the State that defendant Fannie Mae was a government agency exempt from conveyance or transfer taxes.”

continue

http://www.zerohedge.com/article/law-suits-timmy%E2%80%99s-bank-and-%E2%80%9Cpo%E2%80%99s%E2%80%9D-dough

Foreclosure Sale — Buyer Beware!

http://www.huffingtonpost.com/richard-gaudreau/foreclosure-sale-buyer-be_b_819977.html

Does Fannie Mae Or Freddie Mac Now Own YOUR Mortgage? Find Out

http://www.fanniemae.com/loanlookup/

https://ww3.freddiemac.com/corporate/

[FromLori]

I think they should be shut down too the banks are off loading all these toxic mortgages onto the taxpayer’s through Fannie/Freddie. Even the one’s they get sued for are only being settled for a lousy penny on the dollar WE eat the rest. But then if you realize who these big global banks donated to (obama) it shouldn’t surprise you.

Is Fannie bailing out the banks?

http://finance.fortune.cnn.com/2011/01/03/is-fannie-bailing-out-the-banks/

Unlimited credit for GSEs seen as backdoor bailout

http://www.reuters.com/article/2010/01/05/us-usa-housing-bailout-idUSTRE6044YU20100105

How about what the banks did to investors? Have a bond/pension fund/401’k invested in MBS’s?

Banks accepted and bundled ‘deficient’ loans
Mortgages rejected by due-diligence firm were lumped in, crisis panel says

http://www.marketwatch.com/story/banks-accepted-rejected-loans-crisis-panel-2011-01-28?reflink=MW_news_stmp

[Free Vulcan]

Things that has gotten us and alot of countries in trouble is leverage and the deferral/passing of risk. Enter govt entities like Fannie/Freddie and that compounds that.

We’re based on the free market philosophy that if you take the risk you reap the rewards and the consequences. I understand that any business like to be able to hedge, defer, leverage in a number of situations. These are good practices if managed correctly.

We don’t do well with these though in the aggregate on a national scale. We create situations in our financial system where we have leverage on top of risk passing on top of leverage on top of more risk passing. We allow entities like Goldman Sachs (we used to call them The Golden Sacks) to construct these giant financial architectures of derivatives and leverage to the point where they are too-big-to-fail and ham-hand the govt to get involved.

Simple changes like getting rid of MERS and Fannie/Freddie would solve alot of this, as well as other modifications to our banking system. We just haven’t had the political will to do it.

[Kartographer]

This will brust Forclosuregate wide open. The whole system is rotten to the core and now it’s exposed for what it is.

[Kartographer]

I liked this:Here is the beginning and end of the problem. MERS cannot prove that the note was transferred properly because it doesn't have it, never had it, and never touched it. It is simply a database.

Therefore, any "assertion" that the note was assigned is hearsay and inadmissible. MERS cannot form the foundation to be able to admit these alleged facts as evidence as you can't lay a foundation without the physical evidence necessary to do so and MERS is bereft of actual knowledge, since once again it never saw the note, never held the note and never negotiated the note. Therefore, all it has is a database entry which under long-standing legal precedent is a nearly-perfect example of hearsay and is thus inadmissible.

Rule of Law includes Rules of Evidence

[RKBA Democrat]

thoughts?

[Kolokotronis]

I’m submitting the AGARD decision to our state Supreme Court as a supplemental to my brief in a MERS case I have already argued but not yet received a decision on. The useful part of that case is all dicta, but useful, very useful, dicta.

If you are interested, you’ll find this:

MERS v. Saunders 2 A3d 289 (Me. 2010)

quoted with approval in Agard, an interesting and informative decision.

Here’s another tidbit for you. Virtually all the appointments of the thousands of “assistant vice presidents” or “asst. secretaries” of MERS were ultra vires acts as the man who claims he had the authority to create them in fact never had that authority. This will break soon. The sloppiness of MERS is simply astonishing.

[RKBA Democrat]

Fascinating. Does MA law prevent the use of an ultra vires action?

Where do you think this is going to lead, at least in MA?