In a nut shell - WTF does this mean in plain language ???
Ownership was not transferred via MERS.
What it means is that you have to actually have legal title to a property if you expect a court to uphold your claim in foreclosure. What’s really sad, it all the people who invested in real estate backed securities. They ultimately are going to be the losers as I see it. They bought stock investments in mortgages that were part of bundles of mortgages. But the banks have not gone to the trouble to do the paperwork required to maintain the chain of custody of the properties involved. Ergo, the investors ultimately loose their investments and the banks and brokerages skate with the money, which is nothing new now is it!
Intead of recoding liens on proprties in their local county clerks office.. The wall street lenders recorded mortgages using "mers". An electronic registry. And so far courts have not recognized these electronic recodings as admissable.
The court laid it out right here:
“Other than First Franklin, a division of National City Bank, none of the Defendants owned the indebtedness, owned an interest in the indebtedness secured by the mortgage, or serviced the mortgage.”
That’s it. Other than First Franklin, none of the banks claiming to have a right to foreclose actually did. And since First Franklin has been paid off by those who bought the mortgage, they have no cause to foreclose.
I’ve been saying this for nearly the last year here on FR, and catching all manner of crap for it. For those of us who can read and understand the inner clanking and banging in the real estate finance industry, this isn’t news. The banks screwed themselves by creating MERS to do an end-run around already established and long upheld title law in all 50 states. The bankers wanted to get out of paying filing and recording fees to 3,300 counties in the US, they wanted to be able to peddle mortgages like electronic securities.
They failed. Plain and simple. The bankers thought that they could create a system to end-run the law. What they didn’t factor in was a widespread recession in home prices and attending defaults on the loans. Bankers, real estate agents, loan agents, mortgage brokers and politicians all assumed that real estate prices only go up.
They were wrong.
There are penalties for being wrong. This is one of them.
It means free homes for all!
No really, it means that when the bank sold their mortgage they did not comply with the law. That makes the sale of the mortgage improper, and the people who foreclosed cannot foreclose because they do not hold the proper lien.
How this plays out in the end, who knows. I suppose if the sale of the mortgage was improper, than the original mortgage holder still holds the rights to foreclose and I suppose ultimately they just unwind these transactions and then foreclose.
BUT the larger issues are things like, can you ever get clear title to your home? You work and pay for 30 years only to find out that the paper trail is so complex that you cannot actually ever own your home and land free and clear, because there is nobody with the ability/authority/assurance to say that you complied with all the terms.
Congress will have to intervene at some point, I think. How and in what way I dunno. Over my head beyond the rudimentary level.
MERS and the banks have a lot of unsecured debt floating around there because they failed to convey ownership properly.
And some homeowners essentially have houses free from foreclosure because of the above mistake.
The holders of mortgages through securitization may not have the right to foreclose on them. A homeowner who is behind owes somebody money, but it's not going to always be clear just who.
It appears the judge is of the opinion that the Banksters have to follow the same property laws that us peons do.
What a revolting development this must be to the high-flying banksters who thought they were above the law.