Beware The Second Real Estate Collapse is Coming

[loosecannon]

It pocketed or did not charge the fees required for note transfer at least many clerks offices can find no record of the money owed them. And LC MERS or MERS-3 is the term being used in legal blogs, journals and books such as "Clouded Title" (which may have not dropped yet.) M(ortgage)ER(ecords)S is simply a utility that keeps track of ownership changes in notes and titles. If note transfers are not recorded in the Clerk's office they have no standing and a fee must be paid for the recording.

Here is their website:

MERS - Mortgage Electronic Registration Systems

MERS is an innovative process that simplifies the way mortgage ownership and servicing rights are originated, sold and tracked. Created by the real estate finance industry, MERS eliminates the need to prepare and record assignments when trading residential and commercial mortgage loans.

they even have a forum where you can ask questions about how it works:

MERS - Forum Categories

 

[loosecannon]

from their about us page:

About MERS


MERS was created by the mortgage banking industry to streamline the mortgage process by using electronic commerce to eliminate paper. Our mission is to register every mortgage loan in the United States on the MERS® System.

Beneficiaries of MERS include mortgage originators, servicers, warehouse lenders, wholesale lenders, retail lenders, document custodians, settlement agents, title companies, insurers, investors, county recorders and consumers.

MERS acts as nominee in the county land records for the lender and servicer. Any loan registered on the MERS® System is inoculated against future assignments because MERS remains the nominal mortgagee no matter how many times servicing is traded. MERS as original mortgagee (MOM) is approved by Fannie Mae, Freddie Mac, Ginnie Mae, FHA and VA, California and Utah Housing Finance Agencies, as well as all of the major Wall Street rating agencies.

So they register mortgages, but are they a legally binding authority on title transfer? That always was a county authority.

 

[loosecannon]

JPMorgan exits electronic mortgage tracking system

NEW YORK — JPMorgan Chase's CEO says the bank has stopped using the electronic mortgage tracking system used by major financial institutions.

Lawyers have argued in court proceedings that the system is unable to accurately prove ownership of mortgages.

JPMorgan Chase & Co. and other banks have suspended some foreclosures following allegations of paperwork problems in thousands of cases.

JPMorgan's CEO, Jamie Dimon, made the announcement in a conference call Wednesday to discuss the bank's quarterly earnings.

The Mortgage Electronic Registration System, or MERS, acts as a trading house for millions of mortgages. Lawyers for homeowners say the system lacks the required paper trail to prove mortgage ownership in foreclosure proceedings.

The Associated Press: JPMorgan exits electronic mortgage tracking system

 

[loosecannon]

UPDATE:50 State Attys General Investigate Mortgage Servicers

UPDATE:50 State Attys General Investigate Mortgage Servicers - WSJ.com

 

[william the wie]

This is headed towards extra innings. Among other things for foreclosures if the mortgagee does not produce all required documents if challenged then the mortgage is void. MERS is in violation of real state law in every state I have knowledge of as well. Add in the Countrywide fraudulent mortgage accusations and this may be a bigger hit than 2008.

 

[loosecannon]

This is headed towards extra innings. Among other things for foreclosures if the mortgagee does not produce all required documents if challenged then the mortgage is void.

Mortgage is void?

MERS is in violation of real state law in every state I have knowledge of as well. Add in the Countrywide fraudulent mortgage accusations and this may be a bigger hit than 2008.

I keep wondering if MERS is a party in violation of state law, they are used by all the alphabet soup agencies as well as the whole industry, escrow firms, title insurance etc.

You may be right but I need a lot more legal info from a RE attn.

 

[william the wie]

Quote is not working no document involving any critical documents and the mortgage ceases to have legal standing. And yes check with a lawyer.

 

[loosecannon]

"Quote is not working no document involving any critical documents and the mortgage ceases to have legal standing."

This is a recipe for gridlock, disaster and world wide shock waves and dominoes falling.

Yet at the same time the market for mortgage backed bonds is not shaken at all by this disruption in the force. Prices for even the greasiest mortgage backed bonds issued for bubble era mortgages have fallen less than 1% since news of this situation broke the MSM threshold.

Probably because the government accounts for about half of this whole mess and you know damned well congress will bail out the federal agencies involved in insuring all of these mortgages.

This will be settled by fiat.

I predict that shortly after the election, once the magnitude of this crisis is vetted in the MSM, Obama will sign the bill he vetoed recently. He used an unusual veto that allows him to revisit the legislation at a later date.

 

[william the wie]

You could well be right but congress will not fund the bill.