For big banks, “there’s a possible nightmare scenario here that no foreclosure is valid,” said Nancy Bush, a banking analyst from NAB Research. If millions of foreclosures past and present were invalidated because of the way the hurried securitization process muddied the chain of ownership, banks could face lawsuits from homeowners and from investors who bought stakes in the mortgage securities – an expensive and potentially crippling proposition.
And this wasn’t hurried – it was intentional.
MERS allowed big financial firms to trade mortgages at lightning speed while largely bypassing local property laws throughout the country that required new forms and filing fees each time a loan changed hands, lawyers say.
You mean ignore the law, not “bypass” the law. Oh wait – bypass does mean ignore, doesn’t it?
Kentucky lawyer Heather Boone McKeever has filed a state class-action suit and a federal civil racketeering class-action suit on behalf of homeowners facing foreclosure, alleging that MERS and financial firms that did business with it have tried to foreclose on homes without holding proper titles.
“They have no legal standing and no right to foreclose,” McKeever said. “If you or I did this one time, we’d be in jail.”
Indeed, just as if I showed up, busted in your house and changed the locks I’d be in jail too.
But heh, when they do that in Florida, the Sheriff refuses to arrest the perpetrator.
Janet Tavakoli, founder and president of Tavakoli Structured Finance, a Chicago-based consulting firm, said that for much of the past decade, when banks were creating mortgage-backed securities as fast as possible, there was little time to check all the documents and make sure the paperwork was in order.
But now, when judges, lawyers and elected officials are demanding proper paperwork before foreclosures can proceed, the banks’ paperwork problems have been laid bare, she said.
The result: “Banks are vulnerable to lawsuits from investors in the [securitization] trusts,” Tavakoli said.
Darn tootin’ they are.
Gee, if the so-called Trust never took delivery of what it claims it did when it sold those MBS to investors then the investors are holding an empty box, and they’re likely to get a bit pissed when they figure it out.
TIME TO GET PISSED FOLKS – THERE ARE MORE THAN SIX TRILLION DOLLARS WORTH OF THESE POTENTIALLY-EMPTY BOXES OUT THERE!
There are a few people – Janet included – who have been on this for a long time. Indeed, when the light came on in this regard in early 2007 it is what prompted me to start writing The Ticker in the first place!
“Joe on the Street” largely doesn’t understand what happened here. He thinks, and the mainstream media sells to him incessantly, that his was all just “unbridled speculation” or “mistakes.”
It was not.
Janet, myself and a few others – including Bill Black – have said that the essence of what happened here was fraud and deception, not “speculative froth” or “mistakes.”
Until the common man on the street comes to understand that he didn’t get screwed because of bad luck, but rather he was intentionally assaulted, he will not rise and demand that these screwjobs be unwound and the people involved held to account.
Yet until that happens we cannot clear the economy or begin to rebuild this nation’s productive economic resources.
WAKE UP AMERICA!