State court ruling deals blow to U.S. bank mortgage system

My my, that changes the ballgame now doesn't it.

The highest court in the state of Washington recently ruled that a company that has foreclosed on millions of mortgages nationwide can be sued for fraud, a decision that could cause a new round of trouble for the nation's banks.
The ruling is one of the first to allow consumers to seek damages from Mortgage Electronic Registration Systems, a company set up by the nation's major banks, if they can prove they were harmed.
Legal experts said last month's decision from the Washington Supreme Court could become a precedent for courts in other states. The case also endorsed the view of other state courts that MERS does not have the legal authority to foreclose on a home.
"This is a body blow," said consumer law attorney Ira Rheingold. "Ultimately the MERS business

MERS CEO R.K. Arnold Leaving Company

http://www.zerohedge.com/article/mers-ceo-rk-arnold-leaving-company

Are the banks using Arnold for the fall guy?
The banks themselves are responsible for the inception of MERS, not Arnold.
They were trying to cut a fat rat and did so it seems for close to a decade, until their house of cards fell down.
Now it seems there are 65 million homes that don't have titles that can be traced.
The mortgage investment banks single handedly fried a 400 year old system that worked without a fault for it's intended purpose, by using a system that they created, that only worked in theory to hide what they were doing.
Stealing America blind.
I see the mafia got picked on and I ask myself why. The investment banks have done way more damage to this country than the mafia ever has, and rather than arrest them our governmennt protects and rewards them.
I can't wait to hear what Karl has to say about this.



Is the biggest fraud in the history of the US housing market about to come unglued? If so, take our prediction of a $100 billion total in future BofA rep and warranty reserves and triple it.

From the WSJ:

The chief executive of the privately-held Mortgage Electronic Registration Systems, or MERS, is planning to leave the company and an announcement could come within days, according to people familiar with the matter.

The company has been under fire by Congress and state officials for its role in the mortgage-document crisis. The firm's board of directors has met in recent days to address the fate of the company and its chief executive, R.K. Arnold, the people said.

Arnold and other MERS executives didn't respond to requests for comment. A MERS spokeswoman Friday declined comment. Arnold, a former U.S. Army Ranger, has served as the CEO and president of Merscorp Inc., the parent company of MERS, since 1998 and has been with the company since its inception 15 years ago, according to a corporate biography.

MERS was built by Fannie Mae (FNMA), Freddie Mac (FMCC), and several large U.S. banks in 1996 as an electronic registry of land records. That created a parallel database to facilitate the packaging of loans into securities that could be sold and re-sold without being recorded in local county courthouses, reducing costs for banks. The company's name is listed as the agent for mortgage lenders on more than 65 million home loans.

But the company's practices have begun to receive heavy scrutiny from state prosecutors and federal regulators, particularly in light of foreclosure-document problems that surfaced last fall. State and federal lawmakers have begun to consider bills that would make it harder for banks to use or foreclose on properties through MERS.

AP IMPACT: Lawsuits target bank system that bypassed perhaps billions in mortgage fees

http://finance.yahoo.com/news/AP-IMPACT-Bypassing-county-apf-2154143184.html?x=0&sec=topStories&pos=2&asset=&ccode=

Ah, a new chapter in the never ending saga of the Mortgage Investment Banking Industry.
As if it wasn't enough for the Investment Banks to have to deal with regarding fraudulent foreclosures as well as Mortgage Securities fraud, they are now being sued in 17 States for MERS failure to pay County Recording Fees.

Counties complained about the lost revenue after MERS was implemented, but they rarely tried to challenge the new way of doing business. Now, three years after the housing crash and two months after allegations that some banks submitted fraudulent documents to foreclosure courts, every aspect of the nation's mortgage machine is under scrutiny.

Two lawyers in Reno, Nev., have filed suit in 17 states alleging that banks cheated counties out of billions of dollars. In Virginia, a lawmaker has asked the state's attorney general to investigate MERS over its failure to pay recording fees. And everywhere elected officials and class-action lawyers turn, the back-office procedures of MERS are being called into question.

The suits were filed in California, Nevada and Tennessee and 14 undisclosed states where the cases are still under court seal. Hager and Hearne chose the states because their laws allow what are called false claims suits, in which citizens can take legal action against companies that may have cheated the government.

The suits allege that by privatizing public records, MERS enabled banks to circumvent American property law and bypass the counties' fee and paperwork requirements, costing billions of dollars in lost revenue over more than a decade. MERS says its process is legal, and that the fees are not required under its system.

Fannie Will Hold Servicers Responsible for Robo-gate REO Losses

http://www.nationalmortgagenews.com/dailybriefing/2010_210/fannie-will-hold-servicers-1021905-1.html?ET=nationalmortgage:e451:11255a:&st=email&utm_source=editorial&utm_medium=email&utm_campaign=NMN_Daily_Briefing_102910

Fannie is publicly stating they're going to eat the cost, the banks are going to.

Fannie Mae, which has temporarily suspended certain REO sales because of the foreclosure-gate scandal, plans to hold its servicers responsible for increased carrying costs on these properties, industry sources told
Moreover, the GSE has already come up with a loss estimate on what that cost might be: upwards of $150 million, said one REO manager close the situation.

As National Mortgage News went to press, a company spokeswoman had not returned two telephone calls about the matter.

"Over the past 45 days, there's been a lot of fall-out from this scandal," said a source close to Fannie. "When a property gets pulled off the market, that results in the carrying cost becoming greater. Lawns need to be cut and houses need to be cleaned. It can add up."

The low estimate on what Fannie might lose is $50 million, sources said.

So Much For Bank Claims That Nothing is Wrong with Foreclosures: 4450 Foreclosures Halted In NYC Due to Inaccuracies

http://www.nakedcapitalism.com/2010/10/so-much-for-bank-claims-that-nothing-is-wrong-with-foreclosures-4450-foreclosures-halted-in-nyc-due-to-inaccuracies.html

Lol please be sure to read the third comment down, it's priceless.

LJR says:
October 24, 2010 at 7:29 pm
Response from a Banker:




After the dramatic multi-state foreclosure halts by three major servicers, GMAC, Bank of America, and JP Morgan, over the use of improper, “robo signed” affidavits, the new party line from these banks and others who also used robo signers, like Wells Fargo, is that this was a mere “technical” problem, that they had reviewed ten of thousands of pending foreclosures and claimed the underlying information and processes were sound.

A review by the New York Daily News indicates otherwise. Note that New York is a judicial foreclosure state. Be sure to read down to the sentence I boldfaced

Tuesday, October 19, 2010RULING BY THE LAW! SUPREME COURT Judge In New York, Dismisses WACHOVIA BANK Foreclosure Attempt with Prejudice! No Right to Foreclose - No Note or Debt - Lacks Standing to Foreclose!

http://sherriequestioningall.blogspot.com/2010/10/ruling-by-law-supreme-court-judge-in.html


Paging little Timmy or big Ben
EMERGENCY...line 1

The SUPREME COURT OF New York ruled Wachovia Bank has NO Standing Nor Right to Foreclose, did not Provide Note nor Debt to the judge!

EXCERPT:
Plaintiff has not provided a copy of an alleged servicing agreement between Plaintiff and Wells Fargo Bank, N.A. A vice president of Wells Fargo Bank, N.A. has provided what purports to be an affidavit of facts, however it is not clear that they are authorized to do so.
Additionally the subject mortgage was allegedly modified by Defendant Vargas and yet another entity known as Americas Servicing Company (“Wells Fargo Bank, N.A. doing business as America’s Servicing Company).
The Plaintiff herein lacks standing to bring this action. The purported assignment assigned the mortgage but makes no mention of the debt or note. (Kluge v. Fugazy, 145 2d 537, 536 N. 2d 92 (2d Dept., 1988); U.S. Bank, N.A. v. Collymore 68 A.D.3d 752, 890 N. 2d 578 [2d Dept., 2009]).
Under the circumstances Plaintiff has failed to establish that it is entitled to the relief sought and the complaint is dismissed with prejudice.

Will Bankers go to jail for foreclosure-gate?

http://curiouscapitalist.blogs.time.com/2010/10/19/will-bankers-go-to-jail-for-foreclosure-gate/

There is no doubt that the perpetuation of fraud went all the way to the top seats of the banking industry.
They made MERS, they knew it didn't retain documentation for all of those loans. It was designed not to for easier fraud practice.
You can't resell a mortgage 4 or 5 times if there was easy investor access for a loan look up.


More and more, Foreclosure-gate is looking like the housing bust's Enron.

One of the amazing developments of the unraveling of the financial crisis has been the fact that there have been so few people we can actually point to and say without a doubt that guy or gal is a crook. Yes, Bernie Madoff and his fellow ponziers, but they were only flushed out by the financial crisis. They didn't really cause it. The Bear Stearns hedgies beat their case. The mastermind of AIG's demise Joe Cassano looks to have made a clean getaway. Lehman's Dick Fuld is still in the clear. Goldman and just last week Countrywide's executives had to pay out large fines. But none of them are headed to jail. John Paulson and other hedge funds that help construct CDO debt bombs and bet against them, haven't even been forced to give some of their winnings back. I can't think of anyone of any real consequence who is facing hard time.

Thanks to foreclosure-gate that may soon change.



Read more: http://curiouscapitalist.blogs.time.com/2010/10/19/will-bankers-go-to-jail-for-foreclosure-gate/#ixzz12uaSn9k6

CNBC: How Deep Does It Go?

http://market-ticker.org/akcs-www?post=169029

MSM had you been doing your job of investigative journalism, this situation
could never have made it this far.
But you never raised one question in all of these years as to the legality in the mortgage industry's use of MERS.
The question is: Who paid you to keep your mouth shut?

HERE IT COMES FOLKS - WATCH THIS CAREFULLY, ESPECIALLY AROUND 3:30 ONWARD.

Now add to this that it is being reported that JP Morgan/Chase - one of the founders of MERS - has walked away from it. If the legs under that stool get kicked out all of the MBS trusts created using this mess are recognized as being invalid and over $6 trillion dollars of this crap, including a whole lot of Fannie and Freddie paper along with virtually all private-label MBS - all blows up at once.

No, The Fed can't contain that, and neither can the Government. Not in their wildest dreams can they put a cork in the litigation alone, say much less the rest

Here Is Your Chance To Check If You Are The Victim Of Mortgage Fraud

http://www.zerohedge.com/article/here-your-chance-check-if-you-are-victim-mortgage-fraud


Wondering if you are one of those suckers paying a mortgage in limbo, with all the payments due to some non-existent mortgage noteholder getting retained at the servicer banks? Well, if you can spare 3 minutes then "Where's the Note" is for you. The website, which is on the verge of a viral break out, has a simple message: "Whether you are facing foreclosure, have an underwater mortgage, or are just a concerned homeowner, it’s important that you contact your bank and demand to see the original note on your mortgage. It only takes a few minutes using our free online tool." Quick, simple and easy. And in a few days your mortgage bank will have no choice but to tell you if they do in fact have your original mortgage note. And if not - welcome to cost-free living, courtesy of MERS and millions of rushed and fraudulent mortgage note assignments. Yes, it will mean the end of the GSEs, but it will also mean the accelerated write downs on thousands of MBS tranches which will rapidly collapse into insolvency (there is only so much Mark to Unicorn can cover up) and eventually take the insolvent TBTFs banks with them.

From Where's the Note's mission statement:

Citigroup Call On Implications On Foreclosure Crisis: "Just The Tip Of The Iceberg"

http://www.zerohedge.com/article/citigroup-call-implications-foreclosure-crisis-just-tip-iceberg

Looks like Citigroup is actually addressing the real issues with it's shareholders about the devastation they're facing.
All of them need to start doing it
Now I want to see crime prosecution.
No hand slap fines, it's time to demand jail time.
These people knew what they were doing.
And just like I said only newly built homes will be a safe bet.
They will record that title at the county court house like they were supposed to have been doing, rather than to have used MERS

Yesterday, Citigroup's homebuilding team hosted a call with investors in which the guest speaker was Adam Levitin, an associate professor of law at Georgetown University. Far from providing the "all green" call participants had desired, Levitin said that what we have recently seen and heard in the news is “just the tip of the iceberg” and that the foreclosure halt may well cause a "systemic problem", as was suggested on Zero Hedge when the news of the Florida's court involvement was first made public (here and here) a month ago. And since by now everyone knows what the key tension points in this potentially massive development are, we will cut straight to Levitin's somewhat unpleasant conclusions:

"Our speaker predicted that more and more lenders are likely to stop their foreclosure processes in both judicial and non-judicial states. He also expects more states’ attorney generals to get involved. At the federal level, it is possible than banking regulators might step in as there is legal and reputational risk for the banks involved. Ultimately, if these issues do in fact escalate, the Administration may try to broker some sort of settlement. If such deal brokering does take place, Levitin believes that “some payment” will be exacted from the lenders and servicers. As for Citi's official take on Fraudclosure here are the key issues:

Issues Concerning Affidavits
Issues Concerning Tax and Trust Laws
Issues Concerning Title Insurers
Issues Concerning MERS

MERS (Mortgage Electronic Registration Systems) functions as a centralized electronic registry of mortgages and tracks ownership of mortgages. MERS allows mortgage ownership to change hands efficiently and relatively quickly since it is electronic and allows all parties to forgo making a filing in local land records. Indeed, MERS was designed to function as a substitute for local land records.

Although MERS was designed to enhance efficiency in the mortgage assignment process, Levitin argued it may not conform with the law. “Slowly but surely” courts are issuing decisions which “cast validity on the MERS process.” Although ~60% of mortgages list MERS as the “nominee” which owns the mortgage, a handful of recent court cases have ruled that MERS has no standing in foreclosure actions either because (1) physical paperwork must be transferred when a mortgage is assigned by one party to another or (2) MERS has no true economic interest in the mortgage in question since it collects no payments from the borrowers.

The MERS Edifice Quavers....

The MERS Edifice Quavers....

http://market-ticker.org/akcs-www?post=168845

Busted by the kids in class!
The "finer minds of government swilled garbage" as well as the "talking heads" of MSM need to take note here!
How pathetic is it that the "law school kids" can see the full illegality
of the MERS operation when our own elected officials are either to cowardly to openly admit it or either to stupid to see it.
Either way it's the blind leading the blind rather than representing their own constituents against the fraud of the mortgage banking industry.
Heads should be rolling at this point.
When the average American can understand an issue that their representatives are refusing to discuss, out of fear of reprisal that their campaign funds will be cut off by the banking industry, it's time to change the rules of donation as well as lobbying.
Money cannot be ever considered more important than "the People", and yet it obvious that the decision that our elected officials have made.

And threatens to crumble into dust....


Yes, this is a draft. But it is coming from a law school's scholarly paper mill - not exactly the sort of place you want to ignore. A few good cites will set the table for those willing to dig into what's really not that hard to understand...

In the mid-1990s mortgage bankers decided they did not want to pay recording fees for assigning mortgages anymore.11 This decision was driven by securitization—a process of pooling many mortgages into a trust and selling income from the trust to investors on Wall Street. Securitization, also sometimes called structured finance, usually required several successive mortgage assignments to different companies. To avoid paying county recording fees, mortgage bankers formed a plan to create one shell company that would pretend to own all the mortgages in the country—that way, the mortgage bankers would never have to record assignments since the same company would always “own” all the mortgages.

12

What do you call an artifice designed to evade the payment of taxes - which these fees are?

They incorporated the shell company in Delaware and called it Mortgage Electronic Registration Systems, Inc.13

Even though not a single state legislature or appellate court had authorized this change in the real property recording, investors interested in subprime and exotic mortgage backed securities were still willing to buy mortgages recorded through this new proxy system

.14

What do you call selling something to someone that claims an ownership right as an inherent part of the bargain - indeed, it's the only consideration that is offered in exchange for money, yet the state legislatures have not ratified this as proper, and in fact the county and state legislatures say it is not?

Because the new system cut out payment of county recording fees it was significantly cheaper for intermediary mortgage companies and the investment banks that packaged mortgage securities. Acting on the impulse to maximize profits by avoiding payment of fees to county governments much of the national residential mortgage market shifted to the new proxy recording system in only a few years. Now about 60% of the nation’s residential mortgages are recorded in the name of MERS, Inc. rather than the bank, trust, or company that actually has a meaningful economic interest in the repayment of the debt.15 For the first time in the nation’s history, there is no longer an authoritative, public record of who owns land in each county.

Oh yes there is. It's at the county, where it always was.

Both the MERS-as-an-agent and the MERS-as-an-actual mortgagee theories have significant legal problems. If MERS is merely an agent of the actual lender, it is extremely unclear that it has the authority to list itself as a mortgagee or deed of trust beneficiary under state land title recording acts. These statutes do not have provisions authorizing financial institutions to use the name of a shell company, nominee, or some other form of an agent instead of the actual owner of the interest in the land. After all the point of these statutes is to provide a transparent, reliable, record of actual—as opposed to nominal—land ownership.

Is MERS Commercial About To Break The CMBS Market?

http://www.zerohedge.com/article/mers-commercial-about-break-cmbs-market

Yes the MERS black hole just got deeper.
The question is: Has the FED already bought up some the the commercial loans handled by MERS?
They do have a Red Roof Inn already on their books.

The irresponsible actions by MERS are rapidly becoming the stuff of folklore: from their direct and indirect involvement in every fraudclosure, to the president himself falling for what appears to be a MERS agent with a split signature personality, to MERS just-released refutation of it ever having done something wrong, the hammer on MERS seems to be preparing to fall with a resounding thud. Yet with everyone focusing on MERS' involvement in the residential mortgage space, pundits have ignored that "other" space where MERS made the possibility of outright robosigning fraud a distinct possibility - commercial real estate. For specifics one has to go back 7 years in time, to July 28, 2003, and read the following press release from the company titled: "MERS Liberates Commercial Marketplace From Assignments" in which we read that "MERS announces the release of its latest product, MERS® Commercial, designed to eliminate the repurchase risk and costs associated with preparing, recording and tracking assignments for the commercial mortgage-backed securities (CMBS) marketplace." Ah yes, how convenient for MERS to come to the CMBS market with a "time saving" yet fraud facilitating product, at precisely the time when various CMBS issues would start propagating and flooding the market with hundreds of billions of commercial real estate securitizations. Which begs the question: if residential mortgage foreclosures are being halted and if the very fabric of the MBS securitization architecture is put into question, when will someone ask whether MERS® Commercial allowed such pervasive title fraud as is now apparently ubiquitous in the residential space, to take the CMBS space by storm, and how many billions in dollars will Banc of America Securities, Bear Stearns (d/b/a JP Morgan), GE Capital Real Estate, GMAC Commercial, John Hancock and Wells Fargo be forced to buy back loans that were fraudulently certified.


Reading through the MERS press release:

The adoption of MERS?

http://www.mersinc.org/news/details.aspx?id=243


Who made these decisions and were the taxpayers asked or told?

8/23/2010
Municipalities and States Adopt MERS® System to Ease Foreclosure, Vacant Property Registration
Boston, Los Angeles, Connecticut and Virginia allow the MERS® System
as an alternative to existing proprietary registries

RESTON, Va., Aug. 24, 2010—This month, the City of Los Angeles joined the Commonwealths of Virginia and Massachusetts, and the State of Connecticut, in accepting the MERS® System as an alternative to the City’s registry of foreclosed properties and property preservation contacts for vacant properties.

“Many law enforcement agencies and municipalities already use the MERS® System on an informal basis to find a loan’s servicer and identify the companies responsible for maintaining vacant properties in their area,” said R. K. Arnold, President and Chief Executive Officer of MERSCORP, Inc. “By formally allowing lenders and property preservation companies to use the MERS® System as a suitable location to store this information, the City of Los Angeles can save money and the time it takes to find the data.”

Current MERS members can use the system to register the identity of the property preservation company responsible for maintaining vacant properties, which are frequently in foreclosure. The MERS® System can track both residential and commercial properties.

“Maintaining residential vacant properties in foreclosure is important to prevent blight and to protect property values,” said Doug Guthrie, General Manager of Los Angeles Housing Department. “We’re able to see these benefits more quickly while saving on the city budget by partnering with MERS, whose system is immediately available and already in use by many property preservation companies.”

In foreclosure controversy, problems run deeper than flawed paperwork

http://www.washingtonpost.com/wp-dyn/content/article/2010/10/06/AR2010100607227.html?waporef=obinsite

You can't sell without a clear title, and who in their right mind would buy unless you could provide one?

Millions of U.S. mortgages have been shuttled around the global financial system - sold and resold by firms - without the documents that traditionally prove who legally owns the loans.


Now, as many of these loans have fallen into default and banks have sought to seize homes, judges around the country have increasingly ruled that lenders had no right to foreclose, because they lacked clear title.

These fundamental concerns over ownership extend beyond those that surfaced over the past two weeks amid reports of fraudulent loan documents and corporate "robo-signers."

The court decisions, should they continue to spread, could call into doubt the ownership of mortgages throughout the country, raising urgent challenges for both the real estate market and the wider financial system.

Government had been warned for months about troubles in mortgage servicer industry

http://www.washingtonpost.com/wp-dyn/content/article/2010/10/09/AR2010100904125.html

They were aware of the flaws, but they couldn't do anything about it, because they needed help with Fannie and Freddie.
So if they know about the flaws, which are created entirely due to MERS, what do they actually need help with regarding Freddie or Fannie?
MERS cannot foreclose on people and the service providers have not right to.
The MERS problem is not going to go away, just because the White House refuses to acknowledge it.
What the "People" want to know is, Is the White House going to force the Banks to eat all of those mortgages that Fannie and Freddie now can't trace a clean title to?
The way this article reads, government officials still have no idea that Fannie and Freddie are stuck permanently with all of those home loans, because the act of foreclosure does not belong to them and they have no legal recourse in furthering their ability to do it.


In recent days, amid reports that major lenders have used improper procedures and fraudulent paperwork to seize properties, some Obama administration officials have acknowledged they had been aware of flaws in how the mortgage industry pursues foreclosures.

But the officials said they could take only limited action to address the danger. In part, this was because they wanted lenders' help carrying out federal programs to modify mortgages that had fallen into default or were poised to do so.

New concerns about improper practices - such as those involving faked documents or "robo-signers" who signed tens of thousands of documents without reviewing them - have prompted the mortgage servicing arms of the country's largest banks to freeze millions of foreclosures. As momentum builds for a national moratorium, the administration has begun assessing the potential impact, examining the threat it could pose for the ailing housing market and the wider financial system.

There is no evidence so far that the specific abuses made public in the past few weeks were known to government officials. Nor is it clear whether they were aware that the process of the selling and reselling of mortgages among financial firms - which became extremely common and highly profitable during the housing boom - was raising legal questions about who actually owned the loans and had the right to foreclose if they went bad.

But government officials

BNY Mellon Launches eVault Service for Digital Mortgage Docs

http://www.housingwire.com/2010/07/30/bny-mellon-launches-evault-service-for-digital-mortgage-docs



BNY Mellon Corporate Trust (BK: 26.54 +0.30%) launched a new eVault service for its clients to receive, process and store electronic mortgage documents.

The service is the latest in the industry to provide deliver and secure storage for electronic documents. Xerox (XRX: 10.95 +1.96%) has its own MERS-compatible eVault system, introduced earlier this year.

BNY Mellon Corporate Trust is the corporate brand for The Bank of New York Mellon. The company said transforming paper-based processes into an all-electronic one boosts efficiency, creates transparency for participants to see data and exchange information and eliminates delays that come with physically mailing documents and manually entering data into computer systems allows faster delivery to the secondary market.

“We’re excited to be redefining the role of a document custodian through our introduction of eVault, a service that changes how mortgage documents are generated and handled,” Rick Stanley, executive vice president and head of structured credit at BNY Mellon Corporate Trust, said in a press statement. “Documents no longer have to be printed on paper to be signed, and they don’t have to be manually shipped or physically stored. By making the mortgage process fully electronic, eVault allows lenders to reduce their costs through automation.”

The eVault system integrates with the Mortgage Electronic Registration Systems (MERS), an industry-led initiative to identify and track individual mortgages and related information electronically.

The bogus propaganda that Congress better not buy

http://4closurefraud.org/2010/10/09/bankers-propaganda-letter-to-congressional-staffers-efforts-mortgagers-are-making-for-at-risk-homeowners/

America has actually been listening, and fully understand the lies that are being stated in this letter.
What Congress better understand is the fact that if there is anymore of their fully agreed upon collusion with the Mortgage Bankers, America will demand their arrest and trial for their compliance in this crime.

From Urban Dictionary: The term “pigs ass” is used in many situations. It is most commonly used when someone claims something is not true.

Here is a taste of the propaganda bombarding our elected officials daily. Refuse to let this deception continue undisputed and unrefuted. Please contact your US & State representatives with a copy of the predators’ drivel below and your rebuttal.

There is much work to do.

October 8, 2010

The Honorable XYZ

United States House of Representatives

Washington DC 20515

Dear Representative XYZ,

We are writing to set the record straight on the efforts mortgage servicers are making to assist
at-risk homeowners, as well as to address the issues that are being raised about the processing of documents for mortgages that are in foreclosure.

Foreclosure Document Reviews

As we have said consistently, foreclosure helps no one, and it is the last thing our mortgage servicing companies want to have happen. That is why our members work hard every day with their customers who are behind on their mortgage to try to find a solution that avoids a foreclosure. This effort has produced dramatic positive results for homeowners. Mortgage servicers have completed 1.3 million loan modifications for homeowners thus far in 2010 and more than 3.7 million since 2007.

Unfortunately, there are circumstances when a modification or other potential solution such as a short sale is not possible and foreclosure proceedings must be undertaken. As has always been the case, no change in the terms of the loan will help a homeowner if they don’t have adequate income to make even greatly reduced monthly payments, or if they have no desire to remain in the home. If that is the case, a foreclosure must be pursued by the servicer.

We want to assure you that foreclosure is not initiated by servicers until many months of delinquent payments, after repeated attempts to work with the homeowner, and only when all other foreclosure prevention efforts have failed.

In several states, some mortgage servicers have

Statement by CEO of Mortgage Electronic Registration Systems (MERS)

http://4closurefraud.org/2010/10/09/statement-by-ceo-of-mortgage-electronic-registration-systems-mers-the-mers-system-is-not-fraudulent-and-mers-has-not-committed-any-fraud/

Right off the rip a false statement has been made.
MERS cannot track the mortgage.
In a Federal court in Oregon, in undesputable testimony to the court, it was stated on the record, that the MERS system could not transfer a promisory note.
MERS does nothing more than to hold the titles of all properties registered into it's program. They don't have the capabilities to be able to track the transfers upon sale or purchase, that was left up to companies like LPS, who as it turns out didn't actually track the loans or transfers of title either.

MERS helps the mortgage finance process work better. The MERS process of tracking mortgages and holding title provides clarity, transparency and efficiency to the housing finance system. We are committed to continually ensuring that everyone who has responsibilities in the mortgage and foreclosure process follows local and state laws, as well as our own training and rules

.”

Flawed Foreclosure Documents Thwart Home Sales

http://finance.yahoo.com/news/Flawed-Foreclosure-Documents-nytimes-3672305184.html?x=0&sec=topStories&pos=7&asset=&ccode=

They need to stop selling homes altogether, this problem is that deep.
Even if it's not a foreclosed home you ca not get a clear title on it through the MERS system.
The information is not there to be able to track it.

OCALA, Fla. — Amanda Ducksworth was supposed to move in to her new home this week, a three-bedroom steal here in central Florida with a horse farm across the road. Instead, she is camped out with her 7-year-old son at her boss’s house.

Like many buyers across the country, Ms. Ducksworth was about to complete the purchase of a foreclosed house when it suddenly went off the market. Fannie Mae, the giant mortgage holding company that buys loans from commercial lenders, is pulling back sales of homes that might have been foreclosed in bad faith.

“I gave up my rental thinking I would have a house,” said Ms. Ducksworth, a 28-year-old catering assistant. “Now I’m sharing a room with my son. What the hell is up with that?”

With home sales this past summer at the lowest level in more than a decade, real estate is ill-prepared to suffer another blow. But as a scandal unfolds over mortgage lenders’ shoddy preparation of foreclosure documents, the fallout is beginning to hammer the housing market, especially in states like Florida where distressed properties are abundant.

“This crisis takes a situation that’s already bad and kind of cements it into place,” said Joshua Shapiro, chief United States economist for MFR Inc., an economic consulting firm.

Three major mortgage lenders — Bank of America, GMAC Mortgage and JPMorgan Chase — have said they are suspending foreclosures in the 23 states where they first need a judge’s approval. They are also waving off Fannie Mae from selling any of the foreclosed homes whose loans they sold to Fannie.

Dylan Ratigan: property rights gone wrong

http://www.huffingtonpost.com/dylan-ratigan/property-rights-gone-wron_b_754586.html

When the answers don't come quick enough
And you can bet a lot of people are sweatin it righ now to
This is the reason why.

Finally, the last and most important why:

Why isn't the government dealing with it now?

Simply because it could reveal systematic criminal and civil fraud at the highest levels of America's banks and in its political corridors.

Why isn't the government dealing with it now?

Most mortgages in America are now backed by our government. And in order for a bank to get that backing from our government it must fill two criteria:

1. The borrowers must be verified by the banks and their agents as qualified.

2. Lenders must fill out paperwork accurately and make sure that when the home's title changes hands, so does the documentation.

But in the past two decades, a whole lot of the time, that never happened.

Why?