[RobRoy]

This could become a nightmare for our econonmy. The whole thing survives on faith and the rule of law. If we get to a point where even people who have made their payments religiously don’t know if anyone will be able to give them title when they make the last payment, well, we will be in a world of hurt. A form of “Road Warrior” hurt, frankly.

[FromLori]

I agree and I suspect that is exactly what will happen this has all been papered over no real problems have been solved and worse in the meantime the banks are being allowed to dump these loans onto the taxpayers and psss...the ones they haven’t dumped on us already for a penny on the dollar.

‘Toxic’ Assets Still Lurking at Banks

http://online.wsj.com/article/SB10001424052748704570104576124701144189910.html

“But how sharp is Freddie if all it can do is squeeze a $1.28 billion payment out of a giant customer in exchange for relinquishing fraud claims on $117 billion worth of outstanding loans? The very best its million-dollar executives can do is claw back a penny on each bubbly subprime dollar?”

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

[Fee]

The mortgage bankers will go thru what the tobacco companies went thru, Eventually the court cases will be resolved over a prolong period of time. The banks will survive and regroup just like the tobacco companies. What the banks need to fear is the criminal charges against the individual officers because the prospectus must be reasonably accurate before it is used to represent the investment products to the investors. Not having the titles to the mortgage notes bundles in the portfolios sold but stating otherwise on the prospectus is a major bolo that can lead to jail/fines.