FedUpUSA

Archive for February, 2011

How the banks could inflict such damage on the country’s home title and mortgage registry system would take another investigation by Congress to determine – assuming Congress was interested.

The Mortgage Electronic Registration Systems company (known as MERS), which has been at the center of legal problems affecting the securitization of home mortgages and foreclosures, has given up one of its principal corporate objectives. It is now instructing its members to cease foreclosing on residential properties in the name of MERS, and to begin immediately to register all assignments of mortgages with local county recorders of deeds. (Image)

The whole purpose of MERS when it was established in 1996 was to by-pass the county recording process, and the billions of dollars of fees that banks and mortgage companies would have had to pay to comply with state and local real estate laws. MERS operated on a legal assumption that it could have its cake and eat it too, by acting as an agent for its member banks in their real estate transactions, but also acting if necessary as a principal in its own name when it came to assigning mortgages and foreclosing on properties.

This legal principle took a devastating blow last week when US Bankruptcy Judge Robert Grossman of New York issued a ruling stating that MERS cannot operate as a principal when it came to assignments and foreclosures. The company only maintained a parallel data base of mortgage assignments that gave it no legal rights to interfere in real estate legal processes. By making changes to its rules today that will abandon any pretense that MERS is a principal to real estate transactions, the company is bowing to Judge Grossman’s ruling. By also instructing its members to begin filing mortgage assignments with county clerks, MERS is defeating one of the basic purposes of its establishment: the avoidance of real estate fees.

Fee avoidance was essential if the home mortgage was ever going to be securitized, since securities require multiple assignments of the same mortgage which eventually finds itself in the hands of a trustee for the security. It is now open to question whether mortgage backed securities can remain profitable with fees having to be paid multiple times for as many as 1,000 mortgages in a security. This is going to have serious implications for Fannie Mae and Freddie Mac, which are the only parties left in the US which issue and securitize home mortgages. Fannie and Freddie were founding partners in the establishment of MERS, so this is as much a blow to their business model as it is to MERS, which the two government agencies can ill afford when Congress is debating their future.

Judge Grossman was fully aware of the implications of his ruling.

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. Link

MERS claims that over 50 million mortgages in the US have been registered on its system. Given the action MERS took today, it will be much harder now for lawyers to argue in court that assignments made only on the MERS registry are legally valid. Unfortunately, for any of these 50 million mortgages that were securitized, chances are the various assignments along the way to the trustee were not recorded on local government records. This now means the chain of title is “clouded”, and such uncertainty affecting tens of millions of mortgages is the last thing the housing market needs. Sellers and buyers don’t know if the title will be clear of any other claims should they engage in a transaction, and homeowners might not even know if they are making monthly payments to the right bank.

Similarly, trillions of dollars of mortgage backed securities are now clouded too, because they aren’t backed by mortgages. MERS is effectively admitting that these securities are uncollateralized, which means investors now have a sound legal claim that the banks issuing the securities should buy them back at 100% of face value. There are, in fact, reasonable claims already being made by some investors against, for example, Wells Fargo and JP Morgan Chase, that these banks perpetrated a fraud by selling so-called “mortgage backed securities” which they should have known were uncollateralized.

It is questionable if MERS can even survive this capitulation to legal reality, but MERS only has 50 employees. Whether Fannie Mae and Freddie Mac can survive is now also open to question, especially if the housing market is going to revert to the old model where mortgages are kept forever by the bank originating the transaction, since securitization will be defunct. Even if Congress intervenes and passes a national law that recognizes the principal rights of some entity that replaces MERS, this will still probably require that each assignment in a securitization be registered locally and fees paid.

How the banks could inflict such damage on the country’s home title and mortgage registry system would take another investigation by Congress to determine – assuming Congress was interested. One thing is for certain: if the CEOs of all the major banks don’t resign because of this scandal, if there isn’t a thorough house cleaning of the boards and executive ranks of the major banks behind the mortgage securitization process, if in fact no one takes any responsibility for placing tens of millions of American homes in legal limbo, than we can conclude malfeasance and corruption have taken firm root on Wall Street.

First published at The Agonist

The following organizations are Shareholders of MERS.

American Land Title Association
Bank of America
CCO Mortgage Corporation
Chase Home Mortgage Corporation of the Southeast
CitiMortgage, Inc.
Commercial Mortgage Securities Association
Corinthian Mortgage Corporation
EverHome Mortgage Company
Fannie Mae
First American Title Insurance Corporation
Freddie Mac
GMAC Residential Funding Corporation
Guaranty Bank
HSBC Finance Corporation
Merrill Lynch Credit Corporation
MGIC Investor Services Corporation
Mortgage Bankers Association
Nationwide Advantage Mortgage Company
PMI Mortgage Insurance Company
Stewart Title Guaranty Company
SunTrust Morgage, Inc.
United Guaranty Corporation
Washington Mutual Bank
Wells Fargo Bank, N.A.
WMC Mortgage Corporation

Source:  MERS

Adam Levitin testifying before Congress regarding foreclosure practices:

MERS & The Foreclosure Crisis

The Big Banks & Lenders Have Committed Mortgage Fraud

Now, someone tell me exactly why MERS and its owners/members have not been prosecuted?  And please tell me why foreclosures initiated or assigned by MERS, especially in non-judicial states, are still continuing.

h/t Analyzer

 Credit: AP Photo / Elaine Thompson

Problem solved.   It’s that simple.

This is what needs to be done, not just in the UK, but all over the world.  The majority of taxpayer money is now going to support the large banks, which are insolvent due to their reckless gambling with the money they made from creating money, charging interest and inflating the prices of things you need to buy.  Well, now governments have made it possible for them to continue gambling, but now, using the money you pay the government in taxes.   Is it little wonder governments are now broke?  All their revenues collected are going to the banks!  Cut entitlements to BANKS and then we can…..

STOP THE LOOTING AND START PROSECUTING!

The first one: STATE.

You know, that thing that has all of the powers of government not explicitly delegated in The Constitution to The Federal government?  Yes, that thing.  There are 50 of them in The United States.

Notice that we don’t call the nation “The United Federal Government.”  We call it “The United STATES.”  That’s because States have supremacy.  Always have.  They originally joined together under a promise of a limited Federal government, which was mostly about the common defense – and little more.

Now as for the second word….. Sedition.

–noun
1. incitement of discontent or rebellion against a government.
2. any action, especially in speech or writing, promoting such discontent or rebellion.
3. Archaic . rebellious disorder.

I’m going to draw the line between the word sedition and the act of seditious conspiracy; the latter is a federal offense.  At least today, that line may still apply.  It may be true, however, that as facts develop we will discover that this line has been crossed.

In America we have these things called elections.  After the 2008 election Barack Obama was having a discussion with Republican lawmakers where they were objecting to some of his plans.  They asked him why they should negotiate with a wall, effectively, and his answer was simple:

“I won.”

Ok.  Fair enough.  Elections have consequences, right, and one of the key points that Barack Obama himself has put forward time and time again as justification for his alleged “mandate” was that he won the 2008 election.

Never mind that he lied about virtually everything he said he was going to do.  Among other things he said he did not come to Washington to favor the banksters, but in point of fact he has provided more Lewinskis to them than Monica ever did to Bill Clinton.  His so-called Attorney General, Eric “Place” Holder, can’t even find a felony to indict and prosecute when they’re apparently admitted to under oath before the FCIC.

It is clear at this point that the game is to run the Statute of Limitations so that prosecution becomes impossible.  That is, for those who elected Barack Obama, you by doing so – yes, this includes me – provided every bankster a “never go to jail” card for what they did.

In fact, Angelo Mozilo had the criminal probe against him dropped yesterday, if reports are correct.

Of course McStain was going to do the same thing.  So it’s not like we really had a choice between “D” and “R” in this regard, right?  Well, no.

We were also told our health insurance payments would go down.  Mine went up – more than 20%.  This, despite being told it wouldn’t.  That we would get “relief.”  Well, no, we didn’t get relief.  We got cornholed. 

After two years of this blatant abuse Americans had enough.  They went to the polls again.  And this time they threw a lot of Demoncrats out of office.  One of the newly-elected politicians was Republican Governor Walker in Wisconsin.

He ran on a platform that, among other things, promised to do away with collective bargaining for teachers for all items other than pay. That is, pensions, health insurance, work rules, everything else.  All those things, if they were going to be larded up on the public, would have to survive a public vote by the people.

What’s wrong with this, may I ask?  Teachers are employed by the people.  Did you notice your property tax bill?  You’re the boss.  You pay the check.  You make the rules.  And in a representative government, you hire people through the ballots to do as you demand.

Wisconsin did exactly that.

Governor Walker did exactly what he promised.  Faced with a monstrous budget problem that was gimmicked and gamed by his predecessor to appear smaller than it really was (just as occurred in New Jersey with Governor Christie) he put forward a bill. 

Remember now, the standard is “I won” when it comes to justification – by our own President.

Mr. Walker won.

So what did our President’s campaign organization – “Organizing For America” – do?

OfA Wisconsin’s field efforts include filling buses and building turnout for the rallies this week in Madison, organizing 15 rapid response phone banks urging supporters to call their state legislators, and working on planning and producing rallies, a Democratic Party official in Washington said.

Really?

Our own President’s campaign apparatus is attempting to prevent a vote from taking place?  To overturn an election?  To incite discontent against a duly-elected government, perhaps by importing people who aren’t actually Wisconsin residents?  And to spread that discontent to other states?

Really?  Our own President is doing this?

That’s textbook stuff folks.  As in Mubarak’s textbook.

Didn’t we just see a government go down with our support in Egypt over this exact same thing?  A government where the people said “do X”, government did “Y”, and the people rose?  And let us not forget that in Egypt it was not the people who were shooting, it was government goons – rifles are prohibited from private ownership in Egypt.

These acts have a word folks: Sedition.

Just a month ago we heard from our very same President that we had a “responsibility” to tone down the political rhetoric.  This, incidentally, is why these bussed-in protesters who aren’t Wisconsin residents are waving signs that claim Walker is Adolph Hitler and have targets on him?

To anyone who believes that these teachers are in some way deprived, I’ve run the analysis.  The average teacher in Wisconsin receives about $86,000 in total pay and benefits annually.  Like all teachers they also get three months off every year.  That $86,000 has a huge benefit component, like all public employees – including pension and health care.  But the important point is this figure is roughly $25,000 more than the average private-sector worker makes – even when you include the ridiculously over-compensated people like those at Goldman Sachs.

Here’s the reality folks: We’re broke.  The States are broke and so is the Federal Government.  We’ve allowed political hacks from both sides to make promises that can’t be kept.  That’s a fact and no amount of spin is going to change it.  We must cut the Federal Budget by more than half and at the same time raise taxes in order to start to pay down the debt.

Five entitlement programs: Social Security, Medicare, Medicaid, Welfare and Unemployment consume more than half of the entire Federal Budget.  We borrow 42 cents of every dollar.  You can cut to zero every other program, including defense, and we can’t balance the budget if we do not severely cut these five programs. 

This is not a problem for the future, it’s a problem that must be solved right now.  We could have cut the budget by 10 or 20% a decade ago, but we didn’t.  Now it’s half.  Soon it will collapse.  And this same picture exists in the States.

The pension and health care cost issues are particularly severe.  There is no solution to these problems that “keeps the promises” people believe were made to them.  It’s not possible, no matter what you wish to believe or who is speaking.  These are mathematical facts.

But today, the issue is this: We have a President who is attempting to overturn the results of an election in a State.  That election was held, the people spoke, and the majority of Wisconsin residents support what Governor Walker is doing.  The President has exactly zero right to interfere in the sovereign matters of a State’s Government in violation of the expressed will of The People and by doing so he has, in my opinion, committed an impeachable offense.

There are also serious issues in Wisconsin with the Teachers and also with State Senators.  If you are a parent with children in a Wisconsin school you must demand that any teacher who falsely called in sick to protest be debarred from teaching your child.  It is absolutely essential that our children understand and be taught that the representative process of government is sacred and that violating that premise is unacceptable.  No parent who honors our form of government can permit their child to be instructed by a teacher who participated.  I therefore call upon all parents to perform a “KidOut” and demand these teachers be immediately fired and replaced, or their children will not return to class.  There are millions of unemployed people in this nation and many are qualified to teach.  There is no shortage in the labor pool.  Force the Superintendents to fire every one of these teachers – right now.

Second, Governor Walker needs to sign an executive order declaring a State of Emergency and ordering the Senate to come to order.  If the Democrats refuse he should then declare their seats abdicated and hold special elections.  The Democrats need only lose one seat in that special election to be irretrievably screwed.  It is fine to disagree but the fact remains that a legislator has a job, and that is to legislate.  That means showing up, speaking your peace, debating in a civil manner and voting.  That’s how we do things in America. 

Finally, to those in Organizing for America who are playing these games, let me make this very, very clear: You set the standard in 2008 when your President, who heads your group, said “I won” as justification for refusing to compromise on his bills.  Well, this time you lost.  Live to your own standards or you risk the people deciding to shut down commerce.  To de-fund the government and your goon squads by doing an entirely-legal thing – deciding to cease all commerce and demonstrate via peaceful means exactly as was done in Egypt.

Government exists only because it has a believed ability to raise revenues via taxation.  That’s what allows government at all levels to sell bonds and transact business.

We the people, via peaceful and lawful means, always have the right to revoke that belief among those who buy those bonds and transact business, and I believe we are not far from a critical mass in this country of people who are willing to do exactly that, particularly when our government refuses to honor the just results of a fair election of representatives and governors.

I call upon all Ticker [and FedUpUSA] readers to call Darryl Issa’s office Tuesday, along with their Representative and Senators, and demand an immediate halt to this interference in the affairs of Wisconsin and other States.  And while you’re at it, demand that Mr. Issa issue subpoenas and find out exactly where the money came from for those buses, where the people came from, and who’s coordinating what.

There may be a federal offense in there.

Speaking of which, is it time to impeach Eric Holder yet?

Representative Darrell Issa

Phone: 202-225-3906
Fax: 202-225-3303
E-Mail

Find Your Representatives

The Market-Ticker

“It’s the DEBT, Stupid!”
We’re Doing Something About it! Come Join the Swarm!

If the U.S. dollar is being devalued so rapidly, then why does it sometimes increase in value against other global currencies?  Well, it is because everybody is recklessly printing money now.  The 6 charts which you are about to see below prove this.  The truth is that it is not just the U.S. Federal Reserve which has been printing money like there is no tomorrow.  Out of control money printing has also been happening in the UK, in the EU, in Japan, in China and in India.  There are times when one particular global currency will fall faster than the others, but the reality is that they are all being rapidly devalued.  Unfortunately, this is a recipe for a global economic nightmare.

Right now you can almost smell the panic as it rises in global financial markets.  Investors all over the world are racing to get out of paper and to get into hard assets.  Just about anything that is “real” and “tangible” is hot right now.  Gold hit a record high last year and it is on the rise again.  In fact, it just hit a new five-week high.  Demand for silver is becoming absolutely ridiculous right now.  Oil is marching up towards $100 a barrel again.  Agricultural commodities have exploded in price over the past year.  Many investors are even gobbling up art and other collectibles.

Paper money is no longer considered to be safe.  All over the globe investors are watching all of the reckless money printing that has been going on and they are becoming alarmed.  An increasing number of investors and financial institutions are putting their wealth into hard assets that are real and tangible in an effort to preserve their wealth.

The other day, a reader of this column named James sent me some charts that he had put together.  I thought they were so good that I asked him if I could include them in an article.  These charts show how central banks all over the globe have been recklessly printing money.  Over the last 30 years virtually the entire world has developed a great love affair with fiat currency….

So is everyone printing money?

The U.S. is printing lots of money…..

Source, The St. Louis Fed

The Bank of England is printing lots of money…..

Source: The BoE

The EU is printing lots of money….

Source: The ECB

Japan is printing lots of money…..

Source: The BoJ

China is printing lots of money…..

Source: The People’s Bank of China

India is printing lots of money…..

Source: Reserve Bank of India

Of course anyone with half a brain can see where all of this is ultimately headed.  In the end, inflation is going to spiral out of control and we are going to witness financial implosion on a global scale.

So why don’t these nations just adopt sound money?

Well, it turns out that if you are a member of the IMF, you are specifically prohibited from having gold-backed currency.

Yes, you read that correctly.

In fact, U.S. Representative Ron Paul once sent an open letter to the U.S. Treasury and the Federal Reserve asking about this and he received no response.  The following is the content of that letter….

Dear Sirs:

I am writing regarding Article 4, Section 2b of the International Monetary Fund (IMF)’s Articles of Agreement. As you may be aware, this language prohibits countries who are members of the IMF from linking their currency to gold. Thus, the IMF is forbidding countries suffering from an erratic monetary policy from adopting the most effective means of stabilizing their currency. This policy could delay a country’s recovery from an economic crisis and retard economic growth, thus furthering economic and political instability.

I would greatly appreciate an explanation from both the Treasury and the Federal Reserve of the reasons the United States has continued to acquiesce in this misguided policy. Please contact Mr. Norman Singleton, my legislative director, if you require any further information regarding this request. Thank you for your cooperation in this matter.

Ron Paul
U.S. House of Representatives

Sadly, the truth is that the global elite don’t want nations to start adopting gold-backed currencies.  They want countries to use fiat currencies that they can openly manipulate for their own benefit.

At this point, every nation on earth (to the best of my knowledge) uses a fiat currency.  All of the major global currencies are being continually devalued.  In fact, there are times when counties will purposely devalue their currencies even more rapidly in order to gain a competitive advantage in world trade.

This is why so many investors now have such an aversion to paper currency.  It starts losing value the moment you take possession of it.

In some areas of the world, “gold fever” is absolutely exploding.  For example, China imported five times as much gold in 2010 as it did in 2009.  On the Shanghai Gold Exchange, trading volume soared 43 percent during the first 10 months of 2010.

Gold, silver and other precious metals are now seen as a great hedge against inflation worldwide.  Investors all over the globe are demonstrating a strong preference for “real money” over “paper money”.

So what does all of this mean?

It means that some tremendous imbalances are being built up in the global financial system.  The central banks of the world must continue to inflate these bubbles with constantly increasing amounts of paper money and debt in order to keep the game going.  If at some point the reckless money printing comes to a screeching halt it is going to unleash hell on global financial markets.

But if all of this reckless money printing continues we are eventually going to see horrific inflation all over the planet.  In fact, we are already seeing significant inflation happening in many areas of the globe.  Almost every single day a new headline about inflation in China seems to pop up in the financial news.  Rising food prices are sparking unrest in the Middle East and elsewhere.  Even U.S. consumers are starting to see some uncomfortable price increases at the gas pump and in the supermarket.

So it is not just Federal Reserve Chairman Ben Bernanke that is off his rocker.  The whole world is going crazy with money printing.

Hopefully this whole thing is not going to end as badly as many of us fear that it will.  But right now the central banks of the world are pumping unprecedented amounts of cash into the global financial system, and those in the global financial system are funneling a very large percentage of that cash into hard assets.  Unless something changes, that is going to mean that prices for basic necessities such as food and gas are going to continue to rise.

This is quite a fine mess that we are in.

The Economic Collapse