This is starting to get interesting, although it is far from conclusive. Massachusetts Land Court judge Keith Long reaffirmed a 2009 ruling (Ibanez) that invalidated foreclosures on two properties because the lenders did not hold clear title to them at the time of the foreclosure sale. Now this decision is still subject to appeal, and Richard Vetstein of the Massachusetts Law Blog (hat tip reader Barbara W) thinks the Massachusetts Supreme Judicial Court might hear the case directly, given the potential significance of the ruling. I am still gobsmacked that this issue is even in dispute. Who has ownership is the foundation of commercial law, and it permeates our life in ways most people do not recognize. The reason you get a receipt at the grocery store is that it is evidence that the title of the goods transferred from the store to you. The idea that banks were too lazy to do a decent job of keeping on top of title instruments, when that was the SOLE basis for their ownership interest in the collateral underlying their loans, is equally stunning. I have seen all sorts of deals in other areas founder (water rights is a biggie) because investors were unable to "perfect" certain rights they sought. This is a well established area of law, but the banks couldn't be bothered to spend the money and time to do things correctly. And now they think they can go to banks and assert, "Yeah, we really do own this stuff" and get away with it it is brazen. If you lost a $1000 bill or a bearer bond, no one would take "yeah I really do own this stuff" claims seriously either. From Ralph Vetstein: When mortgages are packaged to Wall Street investors, the ownership of a mortgage loan may be divided and freely transferred numerous times on the lenders' books. But the documentation (i.e., the assignments) actually on file at the Registry of Deeds often lags far behind.... Despite the lender's attempt to convince him otherwise, Judge Long came out (again) in favor of consumers: The issues in this case are not merely problems with paperwork or a matter of dotting i's and crossing t's. Instead, they lie at the heart of the protections given to homeowners and borrowers by the Massachusetts legislature. To accept the plaintiffs' arguments is to allow them to take someone's home without any demonstrable right to do so, based upon the assumption that they ultimately will be able to show that they have that right and the further assumption that potential bidders will be undeterred by the lack of a demonstrable legal foundation for the sale and will nonetheless bid full value in the expectation that that foundation will ultimately be produced, even if it takes a year or more. The law recognizes the troubling nature of these assumptions, the harm caused if those assumptions prove erroneous, and commands otherwise. Judge Long also had some choice words for lenders: [T]he problem the [lenders] face (the present title defect) is entirely of their own making as a result of their failure to comply with the statute and the directives in their own securitization documents... What the plaintiffs truly seek is a change in the foreclosure sale statute (G.L. c. 244, § 14), which can only come from the legislature.
Massachusetts Land Court judge Keith Long reaffirmed a 2009 ruling (Ibanez) that invalidated foreclosures on two properties because the lenders did not hold clear title to them at the time of the foreclosure sale. Now this decision is still subject to appeal, and Richard Vetstein of the Massachusetts Law Blog (hat tip reader Barbara W) thinks the Massachusetts Supreme Judicial Court might hear the case directly, given the potential significance of the ruling.
I am still gobsmacked that this issue is even in dispute. Who has ownership is the foundation of commercial law, and it permeates our life in ways most people do not recognize. The reason you get a receipt at the grocery store is that it is evidence that the title of the goods transferred from the store to you. The idea that banks were too lazy to do a decent job of keeping on top of title instruments, when that was the SOLE basis for their ownership interest in the collateral underlying their loans, is equally stunning. I have seen all sorts of deals in other areas founder (water rights is a biggie) because investors were unable to "perfect" certain rights they sought. This is a well established area of law, but the banks couldn't be bothered to spend the money and time to do things correctly. And now they think they can go to banks and assert, "Yeah, we really do own this stuff" and get away with it it is brazen. If you lost a $1000 bill or a bearer bond, no one would take "yeah I really do own this stuff" claims seriously either.
From Ralph Vetstein:
When mortgages are packaged to Wall Street investors, the ownership of a mortgage loan may be divided and freely transferred numerous times on the lenders' books. But the documentation (i.e., the assignments) actually on file at the Registry of Deeds often lags far behind.... Despite the lender's attempt to convince him otherwise, Judge Long came out (again) in favor of consumers: The issues in this case are not merely problems with paperwork or a matter of dotting i's and crossing t's. Instead, they lie at the heart of the protections given to homeowners and borrowers by the Massachusetts legislature. To accept the plaintiffs' arguments is to allow them to take someone's home without any demonstrable right to do so, based upon the assumption that they ultimately will be able to show that they have that right and the further assumption that potential bidders will be undeterred by the lack of a demonstrable legal foundation for the sale and will nonetheless bid full value in the expectation that that foundation will ultimately be produced, even if it takes a year or more. The law recognizes the troubling nature of these assumptions, the harm caused if those assumptions prove erroneous, and commands otherwise. Judge Long also had some choice words for lenders: [T]he problem the [lenders] face (the present title defect) is entirely of their own making as a result of their failure to comply with the statute and the directives in their own securitization documents... What the plaintiffs truly seek is a change in the foreclosure sale statute (G.L. c. 244, § 14), which can only come from the legislature.
Despite the lender's attempt to convince him otherwise, Judge Long came out (again) in favor of consumers:
The issues in this case are not merely problems with paperwork or a matter of dotting i's and crossing t's. Instead, they lie at the heart of the protections given to homeowners and borrowers by the Massachusetts legislature. To accept the plaintiffs' arguments is to allow them to take someone's home without any demonstrable right to do so, based upon the assumption that they ultimately will be able to show that they have that right and the further assumption that potential bidders will be undeterred by the lack of a demonstrable legal foundation for the sale and will nonetheless bid full value in the expectation that that foundation will ultimately be produced, even if it takes a year or more. The law recognizes the troubling nature of these assumptions, the harm caused if those assumptions prove erroneous, and commands otherwise.
Judge Long also had some choice words for lenders:
[T]he problem the [lenders] face (the present title defect) is entirely of their own making as a result of their failure to comply with the statute and the directives in their own securitization documents... What the plaintiffs truly seek is a change in the foreclosure sale statute (G.L. c. 244, § 14), which can only come from the legislature.
The other interesting factor in this is that the further one gets from Wall Street and Washington, the less sympathy there is for the banksters and their problems. The best bet for the banksters might be in the venue of the Supreme Court of the United States. However, were I the attorneys for the defendants, I would go to any lengths possible to keep the cases in state courts up to the level of State Supreme Courts. As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
OTH: The effects of such a game would be fun to watch. Land of the Free would turn into the Wild West, with the rich of China/Germany/Netherlands/England owning all of the USians and our/their Commons. Never underestimate their intelligence, always underestimate their knowledge.
Frank Delaney ~ Ireland
the rich of China/Germany/Netherlands/England owning all of the USians and our/their Commons
For the SC it would be like the old Jack Benny routine where he is being held up at gunpoint:
Robber: "Your money or your life!"
Benny: "I'm thinking! I'm thinking!" As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
History says that JPMorgan and GS have enough inside info to merely sell off at advantageous times and survive even stronger - being able to watch their moves would be the key. Anyone in ET want to be the mole? Never underestimate their intelligence, always underestimate their knowledge.
Can anyone confirm that such is the case. If what you say is correct, the only thing that will prevent most people in the U.S. from stopping payments on their mortgages is their own individual moral sense. Given what the banks have been up to lately, I'm not sure I'd want to bet on that...
If what you say is correct, the only thing that will prevent most people in the U.S. from stopping payments on their mortgages is their own individual moral sense.
I learned the reality a few years ago in London, talking to a commercial bank strategist there. "We've had an intellectual breakthrough," he said. "It's changed our credit philosophy."... "The poor are honest," he said, accompanying his words with his jaw dropping open as if to say, "Who could have guessed?" The meaning was clear enough. The poor pay their debts as a matter of honor, even at great personal expense. Unlike Donald Trump, the poor are less likely to walk away from their homes when market prices sink below the mortgage level. In today's neoliberal Chicago School language, the poor behave "uneconomically." That is, they make choices that do not make economic sense, but rather reflect a group morality. This sociological gullibility is what made them rich pickings for predatory lenders such as Countrywide, Wachovia and Citibank.
...
"The poor are honest," he said, accompanying his words with his jaw dropping open as if to say, "Who could have guessed?"
The meaning was clear enough. The poor pay their debts as a matter of honor, even at great personal expense. Unlike Donald Trump, the poor are less likely to walk away from their homes when market prices sink below the mortgage level. In today's neoliberal Chicago School language, the poor behave "uneconomically." That is, they make choices that do not make economic sense, but rather reflect a group morality. This sociological gullibility is what made them rich pickings for predatory lenders such as Countrywide, Wachovia and Citibank.
See "Jingle mail:" The Awful Sound Of "Voluntary" Foreclosure - Couric & Co. - CBS News
When I posted a poll asking whether walking away from a bad mortgage is "irresponsible" or "the smart thing to do," 63 percent agreed with "condoblue" - that walking away is the smart choice. And that's a scary trend for banks and lenders.
But nowhere near as scary as people ceasing to make payments on a perfectly good mortgage if there's nothing anybody can do to them.
* [new] Re: Economy and Finance (4.00 / 5) Ellen Brown: Landmark Decision Promises Massive Relief for Homeowners and Trouble for Banks A landmark ruling in a recent Kansas Supreme Court case may have given millions of distressed homeowners the legal wedge they need to avoid foreclosure. In Landmark National Bank v. Kesler, 2009 Kan. LEXIS 834, the Kansas Supreme Court held that a nominee company called MERS has no right or standing to bring an action for foreclosure. MERS is an acronym for Mortgage Electronic Registration Systems, a private company that registers mortgages electronically and tracks changes in ownership. The significance of the holding is that if MERS has no standing to foreclose, then nobody has standing to foreclose -- on 60 million mortgages. That is the number of American mortgages currently reported to be held by MERS. Over half of all new U.S. residential mortgage loans are registered with MERS and recorded in its name. Holdings of the Kansas Supreme Court are not binding on the rest of the country, but they are dicta of which other courts take note; and the reasoning behind the decision is sound.
A landmark ruling in a recent Kansas Supreme Court case may have given millions of distressed homeowners the legal wedge they need to avoid foreclosure. In Landmark National Bank v. Kesler, 2009 Kan. LEXIS 834, the Kansas Supreme Court held that a nominee company called MERS has no right or standing to bring an action for foreclosure. MERS is an acronym for Mortgage Electronic Registration Systems, a private company that registers mortgages electronically and tracks changes in ownership. The significance of the holding is that if MERS has no standing to foreclose, then nobody has standing to foreclose -- on 60 million mortgages. That is the number of American mortgages currently reported to be held by MERS. Over half of all new U.S. residential mortgage loans are registered with MERS and recorded in its name. Holdings of the Kansas Supreme Court are not binding on the rest of the country, but they are dicta of which other courts take note; and the reasoning behind the decision is sound.
Eventually someone acting on behalf of some lender is going to start researching the Wall Street Mortgage Chop Shops. It should have been done years ago
The FBI has been warning of an "epidemic" of mortgage fraud since September 2004. It also reports that lenders initiated 80% of these frauds.
In the '70-71 downturn in L.A. a kid I was employing at minimum wage to help wire a console and studio in Hollywood managed to con his parents out of $4,000 for a down on a $40,000 house at the top of a canyon overlooking the SFV, with a view! The seller, probably an agent for an estate, self financed the loan. The house had a state park above, between it and the Mullholland Hwy. and had a glass enclosed atrium with a statue of The Buddha recumbent and displaying a mudra that was reputed to have stopped a charging elephant. The neighbor across the street was Gene Cerwinski, founder of Cerwin Vega. Very nice place!
The kid and his girlfriend lived in the house for a year or more without making another payment! It took owners that had all their paperwork in order that long to get him out. So, best of luck to all of the new "homeowners" out there.
I consider that mortgage holders who do this are, in many ways, being patriotic! After all, the bought and paid for US Government and Congress will not do anything about the current situation other than try to prop up the vampires. If we are ever to see an end to years of walking dead banks and other financial institutions and the dominance they hold over US society, this might be the best hope. As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
goes to....
ARGeezer~! Wow; that's a surprise. Sven, next year...what a great competition this has been. Never underestimate their intelligence, always underestimate their knowledge.
