Archive for November, 2010
As much as I’ve seen a lot of financial services industry misconduct at close range, sometimes even a cynic like me is not prepared for how bad things can be. And mortgage abuse is turning out to be one of those areas.
I’ve been in contact for over the last six months with attorneys involved in foreclosure defense. Unlike the foreclosure mills, which seem to coin money, the attorneys on this front are either laboring pro bono or making considerably less than they could in other lines of work. They also can back up their views with depositions and trial transcripts.
One thing they stress is that a significant number of their clients facing foreclosure has made every single mortgage payment. . Read that again.
Now how can that be? How can that square with the banks’ assertion that in every instance, their foreclosures were warranted, that the borrower was hopelessly behind?
It’s actually very simple. It’s called servicing errors and fraud. And whether by mistake or design, when a borrower gets caught in the servicer hall of mirrors of compounding fees and charges, there is no way to appeal and pretty much no way out.
Let’s look at how this begins. A payment is credited as being late. It might actually legitimately be late, the borrower might have neglected to send it in on time. Or the bank might have been slow to process it. That might be simple queuing meets bad controls, or it might be deliberate. Servicers have been found to delay posting checks to incur late fees. Unless the borrower incurs the cost of sending mail via a service that provides proof of time of delivery, the bank can always claim the payment arrived late.
Let’s say the late fee is $75. It will be charged against the next month’s payment. But the borrower doesn’t know that he owes more that month. He gets a mortgage coupon and sends his regular payment in.
Now the servicer starts playing the sort of tricks practiced elsewhere in retail banking. Under the terms of the loan and Federal law, monthy payments are to be applied to principal and interest first, fees second. But the bank applies it to fees first. This makes his second month come up short. He gets charged a fee for insufficiency, and perhaps a late fee too.
Once the borrower has had two late fees, the servicer is often required by the pooling and servicing agreement to get a broker price opinion (BPO). This is a typically $250 exercise in form in which a broker drives by, takes a couple of pictures of the house, and offers a guesstimate of what it might be worth.
Many servicers double dip and also charge the BPO to the borrower as well. So the fees and arrerage charges and interest charges are compounding at a faster rate now.
It takes a remarkably short amount of time for pyramiding fees to add up to a few thousand dollars, unbeknownst to the borrower, until he gets a call from the servicer, or worse, a foreclosure notice.
This is where it gets even better. Even when the borrower hires an attorney, it is remarkably difficult to get the servicer to disgorge its records showing the borrower payment history and its fees and charges. I’ve also been told by attorneys that the reports are difficult to decipher and reconcile with the borrower’s records of payments that have cleared his account. So unless the attorney is tenacious, or has been down this path before, he may not realize that the borrower isn’t nuts when he says he was late only once, maybe twice at most, and doesn’t understand how they bank is now foreclosing.
In the first part of the Senate Banking Committee hearings on mortgage modifications and foreclosure, Diane Thompson of the Consumer Law Center and Professor Adam Levitin forcefully disputed the banks’ claim that all foreclosures were warranted. Each pointed to servicer driven foreclosures as well as consumers being instructed by their serivcer to become delinquent so as to qualify for a mod program, being led to believe they would qualify (and even encouraged to use the money saved to pay down other debt), then either foreclosed upon while the mod was under consideration, or denied the mod and foreclosed upon. And to add insult to injury, homeowners who are denied “permanent” mods are not only charged the difference between their reduced payments and their regular amount due, but they are charged late fees, which per our example above, compound in nasty ways.
Thompson, who defends borrowers herself, estimates that servicer-driven foreclosures represented about 50% of the cases she handled. The attorneys I have been dealing with put the estimate even higher, for the simple reason that servicer errors also led to refis that failed.
Remember how this pattern would have worked pre-bust. Borrower finds out from servicer that he is, for reasons he cannot fathom and cannot get the servicer to explain, $4000 behind on his mortgage. He can’t swing that now, and if he only pays part of the overdue amount down, it will quickly compound back up to a big bad number. So sooner or later, his only way out is a refi.
I had always assumed cash-out refis (where the borrower took out a mortgage on a refi that was bigger than his previous mortgages) were to pay down credit card debt, invest in home upgrades, or fund consumption. But at least a portion of those refis were to pay off the mortgage to prevent a foreclosure due to an inabilty to make up for a major arrearage. And some of those were servicer induced.
This pattern of servicer abuse is far from new. I hope readers will watch the second installment of the Senate Banking Committe hearings on the mortgage mess (the Senators were quite entertaining in their first go on this topic), this Wednesday at 9:30 AM. One of the witnesses, Kurt Eggert, law professor at the Chapman University School of Law, must feel like a Cassandra. He was writing about subpime origination fraud in 2002, and in a 2007 article, “Limiting Abuse and Opportunism by Mortgage Servicers,” goes through a sad and familiar litany of servicer misconduct: attempting to foreclose when borrowers were current (!), not giving borrowers time to get current, charging late fees when payments were made on time, improper force-placed insurance, and chicanery with escrow funds. As Eggert pointed out:
Late fees on timely payments are common when consumers are making payments through a ankruptcy plan. Moreover, some servicers have added false fees and charges not authorized by law or contract to their monthly payment demands, relying on borrower ignorance of the exact amout owed…Some servicers may add a fee by conducting unnecessary property inspections, having an agent drive by even when the borrower is not in default, or conducting multiple inspections during a single period of default to charge the resulting multiple fees….
Moreover, servicers can frustrate any attempts to sort out which fees are genuine. On McCormack v. Federal Home Loan Mortgage Corp., when the borrower challenged Chase Manhattan Corporation’s insistence on collecting disallowed attorneys’ fees and mortgage payments that had been cured in a bankrutpcy, the servicer subjected the borrower to what the court called “a barrage of totally meaningless and in fact misleading printouts” that was “”truly egregious and outrageous conduct”. The servicer repeatedly promised to correct its errors, but did not do so.
Servicer bad conduct is a long-standing problem, but in a rising housing market, no one much cared if the banks were effectively stripping borrower equity to pad their profits. And perhaps even worse, many people are still inclined to trust banks when they trot out their party line. Recall the bunk their representatives offered with touching shows of concern in the pre-Thanksgiving Senate and House hearing on the mortgage mess: their policies are pro-consumer, they don’t make money on foreclosures (!), any problems are “mistakes” and they of course correct them as soon as they become aware of them. The over-decade long record of persistent servicer abuses shows this spin to be pure fabrication. The sooner the media and the public learn to assume banks are liars until they offer solid evidence to the contrary, the better off we will all be.
Robert Wenzel tells Lew Rockwell tales of the incestuous bankocracy.
Obama’s Mother worked for Tim Geithner’s Dad, who headed micro financing in Asia, when she started micro financing in Asia for the Ford Foundation. So Geithner will be at the Treasury as long as he wants to be. Hank Paulson, not a deep thinker, rarely noticed the money supply, but paid close attention to his own and his friends’ immediate bonuses. Bernanke made sure that the amount of fresh money printed was equal to expected Wall Street bonuses. Arrogant and ignorant, Bernanke says the best thing about his job is not having to go through airline security like the rest of us. These members of the power elites may default on all federal debt. Or, more likely, Bernanke will burn up the presses printing debased dollars while he fearlessly fulfills his hyperinflation mission.
Every generation or so, a major secular shift takes place that shakes up the existing paradigm. It happens in industry, finance, literature, sports, manufacturing, technology, entertainment, travel, communication, etc.
I would like to discuss the paradigm shift that is occurring in politics.
For a long time, American politics has been defined by a Left/Right dynamic. It was Liberals versus Conservatives on a variety of issues. Pro-Life versus Pro-Choice, Tax Cuts vs. More Spending, Pro-War vs Peaceniks, Environmental Protections vs. Economic Growth, Pro-Union vs. Union-Free, Gay Marriage vs. Family Values, School Choice vs. Public Schools, Regulation vs. Free Markets.
The new dynamic, however, has moved past the old Left Right paradigm. We now live in an era defined by increasing Corporate influence and authority over the individual. These two “interest groups” – I can barely suppress snorting derisively over that phrase – have been on a headlong collision course for decades, which came to a head with the financial collapse and bailouts. Where there is massive concentrations of wealth and influence, there will be abuse of power. The Individual has been supplanted in the political process nearly entirely by corporate money, legislative influence, campaign contributions, even free speech rights.
This may not be a brilliant insight, but it is surely an overlooked one. It is now an Individual vs. Corporate debate – and the Humans are losing.
• Many of the regulations that govern energy and banking sector were written by Corporations;
• The biggest influence on legislative votes is often Corporate Lobbying;
• Corporate ability to extend copyright far beyond what original protections amounts to a taking of public works for private corporate usage;
• PAC and campaign finance by Corporations has supplanted individual donations to elections;
• The individuals’ right to seek redress in court has been under attack for decades, limiting their options.
• DRM and content protection undercuts the individual’s ability to use purchased content as they see fit;
• Patent protections are continually weakened. Deep pocketed corporations can usurp inventions almost at will;
• The Supreme Court has ruled that Corporations have Free Speech rights equivalent to people; (So much for original intent!)
None of these are Democrat/Republican conflicts, but rather, are corporate vs. individual issues.
For those of you who are stuck in the old Left/Right debate, you are missing the bigger picture. Consider this about the Bailouts: It was a right-winger who bailed out all of the big banks, Fannie Mae, and AIG in the first place; then his left winger successor continued to pour more money into the fire pit.
What difference did the Left/Right dynamic make? Almost none whatsoever.
How about government spending? The past two presidents are regarded as representative of the Left Right paradigm – yet they each spent excessively, sponsored unfunded tax cuts, plowed money into military adventures and ran enormous deficits. Does Left Right really make a difference when it comes to deficits and fiscal responsibility? (Apparently not).
What does it mean when we can no longer distinguish between the actions of the left and the right? If that dynamic no longer accurately distinguishes what occurs, why are so many of our policy debates framed in Left/Right terms?
In many ways, American society is increasingly less married to this dynamic: Party Affiliation continues to fall, approval of Congress is at record lows, and voter participation hovers at very low rates.
There is some pushback already taking place against the concentration of corporate power: Mainstream corporate media has been increasingly replaced with user created content – YouTube and Blogs are increasingly important to news consumers (especially younger users). Independent voters are an increasingly larger share of the US electorate. And I suspect that much of the pushback against the Elizabeth Warren’s concept of a Financial Consumer Protection Agency plays directly into this Corporate vs. Individual fight.
But the battle lines between the two groups have barely been drawn. I expect this fight will define American politics over the next decade.
Keynes vs Hayek? Friedman vs Krugman? Those are the wrong intellectual debates. Its you vs. Tony Hayward, BP CEO, You vs. Lloyd Blankfein, Goldman Sachs CEO. And you are losing . . .
This short commentary was conceived not to be an exhaustive research, but rather, to stimulate debate. There are many more examples and discussions we can have about this, and I hope readers do so in comments.
But my bottom line is this: If you see the world in terms of Left & Right, you really aren’t seeing the world at all . . .
Forbes has a couple of articles that are interesting,
Working on the assumption that Wikileaks is deception, what would be the purpose of damaging say a Bank of America or JP Morgan or maybe even the Federal Reserve?
Sacrifice certain entities for a greater goal of __________?
Honest distributor of leaked data or a clever PsyOps front, one can not deny that whatever it is, Wikileaks does share some unique information with the world (as to how it is interpreted is a different story). Yet for the most part, the bulk of the organization’s recent exposures have focused on the US military and away from the private sector, and thus away from that which is really important in today’s world: money (of a paper representation thereof). Which is we read with interest in the latest Julian Assange interview with Forbes’ Andy Greenberg that next on the docket of Wikileaks disclosure is not some facebooky look into the gossip world of international espionage or the foreign service, but something far more tangible and relevant: “A Big US Bank.”
From the interview:
These megaleaks, as you call them that, we haven’t seen any of those from the private sector.
No, not at the same scale for the military.
Yes. We have one related to a bank coming up, that’s a megaleak. It’s not as big a scale as the Iraq material, but it’s either tens or hundreds of thousands of documents depending on how you define it.
Is it a U.S. bank?
Yes, it’s a U.S. bank.
One that still exists?
Yes, a big U.S. bank.
The biggest U.S. bank?
When will it happen?
Early next year. I won’t say more.
One needs to ask whether this is what we need: after all the US public already has enough public data to convict the executives of all the banks for numerous consecutive life sentences as is. It almost seems that nothing short of photographic evidence of some very (in)famous bank CEOs have underage sex while filming snuff movies, dressed in drag, killing puppies and recording their market manipulation conversations with Brian Sack will even rattle the Rip van Winkle formerly known as Eric Holder. But then again, we can hope…
As for Assange’s reason for coming to public with the bank exposition:
What do you want to be the result of this release?
[Pauses] I’m not sure.
It will give a true and representative insight into how banks behave at the executive level in a way that will stimulate investigations and reforms, I presume. Usually when you get leaks at this level, it’s about one particular case or one particular violation.
For this, there’s only one similar example. It’s like the Enron emails. Why were these so valuable? When Enron collapsed, through court processes, thousands and thousands of emails came out that were internal, and it provided a window into how the whole company was managed. It was all the little decisions that supported the flagrant violations.
This will be like that. Yes, there will be some flagrant violations, unethical practices that will be revealed, but it will also be all the supporting decision-making structures and the internal executive ethos that cames out, and that’s tremendously valuable. Like the Iraq War Logs, yes there were mass casualty incidents that were very newsworthy, but the great value is seeing the full spectrum of the war.
You could call it the ecosystem of corruption. But it’s also all the regular decision making that turns a blind eye to and supports unethical practices: the oversight that’s not done, the priorities of executives, how they think they’re fulfilling their own self-interest. But it’s also all the regular decision making that turns a blind eye to and supports unethical practices: the oversight that’s not done, the priorities of executives, how they think they’re fulfilling their own self-interest. The way they talk about it.
While we refuse to pass judgment on Assange’s character, and his motivations, it appears that he may have finally figured out that to enact change in a country, you have to go not after the politicians or even the military industrial complex. After all both of those are puppets for the moneyed interests. One has to go after the very heart of the financial oligarchy. Money always has made the world go round, never more so than in the US currently. Perhaps Assange can redeem himself of all attacks on his persona if he does succeed in disclosing something that is beyond mere watercooler talk and actually leads to at least one major prosecution. After all, the US’ own regulatory and enforcement mechanisms are corrupt beyond repair, and completely unable to do so on their own…
(and yes, we certainly hope it is not Lehman Brothers, although the bank in question is most certainly going to get the Lehman treatment. The question is who will benefit from this disclosure, and now that Goldman’s FICC desk is no longer the gold mine it used to be, there are some suggestions)
It’s now in the books. And even the pumpers are having problems with this one. Then there’s Ireland and now France, which are raiding pensions. The banksters have managed to – thus far – get every nation to kneel before them and perform an obscene act. Who will stop them? Anyone? Does it stop only when everything collapses – when all that we hold dear and have had is gone? We’ll discuss… you decide.
Simon Black Advocates Leaving America As The “Most Effective” Way To Fight The Battle With “The Mob-Installed Government Beast”
And now for some very provocative, “out of the box” views: Simon Black, better known as Sovereign Man, presents some disturbing thoughts which are sure to get the broader spirits elevated. Instead of continuing to fight what some see as a losing ideological battle with a government which no longer even remotely represents the broader population’s interests, Black says simply to walk away: “When you think about it, what we call a ‘country’ is nothing more than a large concentration of people who share common values. Over time, those values adjust and evolve. Today, cultures in many countries value things like fake security, subordination, and ignorance over freedom, independence, and awareness. When it appears more and more each day that those common values diverge from your own, all that’s left of a country are irrelevant, invisible lines on a map. I don’t find these worth fighting for…The government beast in your home country feeds on debt and taxes, and the best way to win is for bright, productive people to move away with their ideas, labor, and assets. This effectively starves the beast and accelerates its collapse. Then, when the smoke clears, you can move back and help rebuild a free society.” Perhaps Black is right and this is the best, and possibly only, non-violent way to fight the political-financial plutocracy?
From Sovereign Man
Tell me if you think it’s worth fighting for
Date: November 29, 2010
Reporting From: Katoomba, New South Wales, Australia
In 43 BC, over 2,000 years ago, warring consuls Antony, Lepidus, and Octavian were duking it out with each other over control of Rome following Julius Caesar’s assassination the prior March.
Each had legions at his disposal, and Rome’s terrified Senate sat on its hands waiting for the outcome.
Ultimately, the three men chose to unite their powers and rule Rome together in what became known as the Second Triumvirate. This body was established by a law named lex Titia on this date (give or take depending on how you convert the Roman calendar) in 43 BC.
The foundation of the Second Triumvirate is of tremendous historical importance: as the group wielded dictatorial powers, it represents the final nail in the coffin in Rome’s transition from republic to malignant autocracy.
The Second Triumvirate expired after 10-years, upon which Octavian waged war on his partners once again, resulting in Mark Antony’s famed suicide with Cleopatra in 31 BC. Octavian was eventually rewarded with rich title and nearly supreme power, and he is generally regarded as Rome’s first emperor.
Things only got worse from there. Tiberius, Octavian’s successor, was a paranoid deviant with a lust for executions. He spent the last decade of his reign completely detached from Rome, living in Capri.
Following Tiberius was Caligula, infamous for his moral depravity and insanity. According to Roman historians Suetonius and Cassius Dio, Tiberius would send his legions on pointless marches and turned his palace into a bordello of such repute that it inspired the 1979 porno film named for him.
Caligula was followed by Claudius, a stammering, slobbering, confused man as described by his contemporaries. Then there was Nero, who not only managed to burn down his city but was also the first emperor to debase the value of Rome’s currency.
You know the rest of the story– Romans watched their leadership and country get worse and worse.
All along the way, there were two types of people: the first group were folks that figured, “This has GOT to be the bottom, it can only get better from here.” Their patriotism was rewarded with reduced civil liberties, higher taxes, insane despots, and a polluted currency.
The other group consisted of people who looked at the warning signs and thought, “I have to get out of here.” They followed their instincts and moved on to other places where they could build their lives, survive, and prosper.
I’m raising this point because I’d like to open a debate. Some consider the latter idea of expatriating to be akin to ‘running away.’ I recall a rather impassioned comment from a reader last week who suggested that “leaving, i.e. running away, is certainly not the proper response.”
I find this logic to be flawed.
While the notion of staying and ‘fighting’ is a noble idea, bear in mind that there is no real enemy or force to fight. The government is a faceless bureaucracy that’s impossible attack. People who try only discredit their argument because they become marginalized as fringe lunatics.
Remember John Stack? He’s the guy who flew his airplane into the IRS building in Austin, Texas earlier this year because he had a serious philosophical disagreement over tax issues.
While his ideas may have had intellectual merit, they were immediately dismissed due to his murderous tactics. Violence is rarely the answer, and it often has the opposite effect as intended, frequently serving to bolster support for the government instead of raising awareness of its shortcomings.
Unless/until government paramilitaries start duking it out with citizen militia groups in the streets, this is an ideological battle… and it’s an uphill battle at best.
Government controlled educational systems institutionalize us from childhood that governments are just, and that we should all subordinate ourselves to authority and to the greater good that they dictate in their sole discretion.
You’re dealing with a mob mentality, plain and simple. Do you want to waste limited resources (time, money, energy) trying to convince your neighbor that s/he should no not expect free money from the government?
You could spend a lifetime trying to change ideology and not make a dent; people have to choose for themselves to wake up, it cannot be forced upon them. And until that happens, they’re going to keep asking for more security and more control because it’s the way their values have been programmed.
When you think about it, what we call a ‘country’ is nothing more than a large concentration of people who share common values. Over time, those values adjust and evolve. Today, cultures in many countries value things like fake security, subordination, and ignorance over freedom, independence, and awareness.
When it appears more and more each day that those common values diverge from your own, all that’s left of a country are irrelevant, invisible lines on a map. I don’t find these worth fighting for.
Nobody is born with a mandatory obligation to invisible lines on a map. Our fundamental obligation is to ourselves, our families, and the people that we choose to let into our circles… not to a piece of dirt that’s controlled by mob-installed bureaucrats.
Moving away, i.e. making a calculated decision to seek greener pastures elsewhere, is not the same as ‘running away’… and I would argue that if you really want to affect change in your home country, moving away is the most effective course of action.
The government beast in your home country feeds on debt and taxes, and the best way to win is for bright, productive people to move away with their ideas, labor, and assets. This effectively starves the beast and accelerates its collapse. Then, when the smoke clears, you can move back and help rebuild a free society.
I’d really like to know what you think– which is the right thing to do, stay or leave? What are you planning to do?
I would like to ask that you read the message below, with a slow eye, until it makes sense. Then read it again.
At the end of the day, M.E.R.S. is not a planet, it is a Corporation, born in Delaware, United States not too long ago. It doesn’t have tentacles, it can’t come out from under your bed at night, it is just a Tax ID number like you and me, staffed by Americans like you and me…. Again, it is just a group of men and women using telephones and computers to try to make a living – it is not a Death Star even though it seems like it – it is the psychology of the naming device. Don’t take the bait (wink). It is just a company.
Are you still with me people? M.E.R.S. is an Organization with people on a payroll paying Federally required taxes, it is a Company, an entity, just a place where people work, hoping to make more in revenue than it costs to produce their goods or services – whatever those may be. They don’t do anything. Personally I think this is fraud and so have spoken up to my Attorney General, Mr. Wassden of Idaho.
Can you imagine telling a jury that as a Corporation, you exist only so that others can claim that you are okay with listing your name to a County Recorders Office, to accept that on a Loan Packet it says you as a Company are okay with another Company listing your Company as a name only to allow….. ad nausiem… No, you are correct, it doesn’t make sense, see my point, there are no goods, there are no services: fraud.
That would be funny, call M.E.R.S. and ask what they do? Then ask what they sell. Record it, I am curious how they would answer.
“Uh hi this is M.E.R.S., can I help you?”
“What do you sell, what are your goods and services and how do I know that I need them, or don’t need them?”
“Uh, we allow you and your loan originator to tell your County Recorders Office, just once, that it’s okay to put our name down so that they can quasi-legally try to sell that which they just Recorded somewhere else in the World and hope they don’t get sued, investigated, or sent to Camp Snoopy as a result.”
“Cool, why would my Loan Originator and I want to buy this right to list your name on a bunch of pieces of important looking paper Sir?”
“Uh, uh, to help you save money on the ‘management’ of the loan, over the life of the loan”….”like the commercial, there is an egg-managment fee, and our fees are cheaper than it would cost your Servicer to record each time they sold that thing they are Recording with our name on it. To be honest, Sir, I am not really sure what we do here, but I have a nice computer and a cool desk and a Herman Miller $2,300 chair that spins around fast and looks neat.”
“What did you just say, something about management of my loan? What? Huh?”
“Yeah well we expect to save your Company $20 – $40 dollars per loan but the future holds no promises. It may be that we actually will be a toxic partner in all this, an accessory, perhaps and then be forced into bankruptcy. http://en.wikipedia.org/wiki/Accessory Ironically, costing you your home and your Servicer their home too, meaning, it could be that we help steal your home if we have too but as a result of our existence, we are then forced to give people back their homes, the same homes we never really owned or wanted in the first place. We were just cardboard, we just looked tough… Yeah, I am not really sure what we do here to tell you the truth, Sir,”
As a Corporation, M.E.R.S. must obey laws like Nike, Target, Louis Vuitton, USA, Chevron…. It has to file important documents throughout the year, to officially state how much money was received for allowing its name to be listed on the documents, yawn….
Snoopy just opened the mail and cashed the checks, he didn’t own the loan… does this makes sense? For me MetLife didn’t own the note, they just received my check, made sure the funds were there, distributed to my home City and State for taxes and then made payments TO the Trusts and other parties who had then packaged up the assets in the other Trusts and sold them as something else…… how many times does a fifty dollar bill change hands during its life…. gettin’ it?
Sold and resold and resold and never recording who owned the promise to be paid as it set sailed down the river of shady Fraud Street practices. Just stocks and other shiny things in pretty boxes with fancy ribbons, in Tiffany blue and Wall Street Red (I think I just made up a color)…. Absolute lunacy, unbridled greed is a dangerous beast.
I know what a big Mac looks like but a 10 Piece Chicken-McMortgage with extra sauce, what exactly does that look like? Think a pile of stocks, what does that look like? Its a Certificate with numbers on it and likely not even that anymore, it is an ‘account’ in a system somewhere.
When our loans were aggregated, they became shares which replaced Notes and Deeds, like trading currency for ‘ownership/stock’ in something that claims to have owned what was morphed. Like when the real estate agent turned into the banker who then turned into a wall street thief, who then turned into a securities sales representative in another Country who then was sold on the idea of owning a piece of the American Dream without really having to leave Norway or Sweden – the ultimate in virual experience.
Well, even the best crafted plans ……
So here’s a concept, let’s say that to have the American Dream Theme Park Experience, you have to have the experience in the Park, you cannot barter it abroad – you have to empty your cup here, no roadies. In other words, the note stays with the original investor, hold them to the same standard as the borrow – do not allow them to assign, sell, transfer – period – or AT LEAST NOT WITHOUT YOUR APPROVAL AND NOT WITHOUT PROPER CONTROLS IN PLACE.
Contracts and Notes need to work both ways, for both parties. Power (back) to the People. Gonna stop here, but again, M.E.R.S. is just a business model, Incorported and held to the same laws and standards – no free lunch.
So we are taking a field trip to learn about a ‘shell’ Corporation, established primarily as a ‘front’ to allow the securitization of America’s mortgages to be boxed, wrapped and sold around the World as “very solid investment grade solutions” for these “unstable and unpredictable and ever so sexy market turbulent times”. Think guy with unibrow on the commercial, so serious…. but you get the idea.
Remember all the bonuses the banksters on Fall Street were making just a few years back around the Holidays? So again, think of M.E.R.S. just like a cutout of a big tough guy that the Servicing Companies used to drive along with in their car (your loan). You know, like those “Big Guy” life size rag dolls that were once sold in California so women could feel safe in their cars and others could enter the diamond lane for instant carpool status. You know what I am talking about here, right?
Think of M.E.R.S. as that, just a cutout of a big tough (technology driven system) that was never supposed to be more than a (technology driven system), a deterrent something never meant to be challenged. But if challenged, not to worry, it sounds like MARS, is a technology driven system and therefore all knowing – when we now know that it is not. M.E.R.S doesn’t know anything, it never wanted to know anything, that was the point. It was like the 77 year old security guard at a mall, the big guy with a radio but no gun, a deterrent.
And if it ever was it would shown that really it was just a few people running a business model, making money, trying to follow the laws, and now, likely going to be investigated and sued like the others. I mean when the final data is collected, will M.E.R.S. really have saved the Servicers $20-$40? Maybe they will have cost them $20 – $40 Billion? ? ? We simply don’t know, back to my earlier point. How much is integrity in the market worth? Fund that and let’s get on with it.
A shell company listed in your Original Docs to avoid paying $20-$40 more per loan. A fee paid so to avoid having to do it the old way, the way that worked, the way that was actually designed NOT to be a Casino. The way that worked, the way that was…….. Yes it was boring, repetitive, but it also worked. At the rise of the American prosperity push of the 80s and 90s, banks were not casinos, your home loan in Idaho was not being bought by a small municipality in Finland as an investment grade instrument to protect the village in perpetuity. Our homes had not yet turned into Casino Chips….
Slick Rick from the NYC wasn’t selling your Home’s Note six times around the world, making bonuses, Christmas Cash and Commissions each time. Think gift giving (or selling) and then repackaging and selling again, you get the idea. . . in real estate terms think about the person who sold you your home, the agent, then informing a ‘BIG TIME INVESTOR’ that he/she knows of ten homes/loans that were just transacted and maybe he wants to be the owner of those notes (from behind the curtain). You starting to get it? Becky the Real Estate Agent morphs into Brian the Wall Street mortgage hooker, and in no time, your Note/Deed of Trust has just been super sized like a cow on a train, heading for a processing plant – from New York with love – suckers. Well, the joke is now on them.
Okay, what happens next is interesting and will be addressed in posts to come. From this I want you to know:
1. M.E.R.S. is not larger than you, it is actually not a place, a thing, or a person. It is some documents that were filed in the State of Delaware to allow your loan originator to list this Corporation in the County filings.
For this they take a fee. I am sure their inventory is low and must be a cash rich Company, at least for now. What was their cost of doing business, a $2.93 rubber stamp for the doc packets?
M.E.R.S. did have foresight to write about the possibility of going bankrupt. Yes, they filed an acknowledgement that business comes with certain risks, up to and including bankruptcy… my point is they knew they were operating a Casino…and things don’t always go as planned.
M.E.R.S. is not a software system when used tonight in this context, it is a company just like Vons, Ford, any company usa…..
Okay try this, the real people who own our mortgages don’t exist, I mean ultimately if your ‘Doc Package’ has M.E.R.S. on it, it might as well say MARS. It doesn’t mean anything except that they were involved in allowing your loan to be sold without registration, without a clean paper trail.
Think about this, your loan could be sold tonight, and might just, on an exchange far far away, and if you called MetLife and said “Who do I REALLY owe this promise to pay my $732,990 dollar note to, or ($73,292 note same/same), they would say don’t know, and the reason they won’t know is that what has happened over the past few years was never meant to happen.
We are in new waters… life jackets should be worn at all times. Remember, gills and fins. In my case my abuser, MetLife (FretLife) announced less than stellar earnings over the weekend, so it looks like all this hassel is catching up with them. Their stock is down 15% in as many days and well, like BP, they should put the cameras on themselves and give people back their homes.
Or if you would like, you may think of M.E.R.S as just an idea, and from the looks of things… not a very good one
Goodnight all. Glad I got that off my chest.. . thank you Angels, you know who you are.
City of Trees 11.28.2010 – Trevor Hitchin
UNIVERSITY OF CINCINNATI
Volume 78, No.4 Summer 2010
FORECLOSURE, SUBPRIME MORTGAGE LENDING,
AND THE MORTGAGE ELECTRONIC REGISTRATION SYSTEM
Christopher L. Peterson
……………..The loan is then assigned to a seller for
repackaging through securitization for investors. Instead of recording
the assignment to the seller or the trust that will ultimately own the loan,
however, the originator pays MERS a fee to record an assignment to
MERS in the county records. MERS’s counsel maintains that MERS
becomes a “mortgagee of record” even though its ownership of the
mortgage is fictional. 64
64. R.K. Amold, Yes, There is Life on MERS, 11 PROB. & PROP., July/Aug. 1997, at 32, 34.
When a mortgage loan is registered on the MERS System, it receives a mortgage
identification number (MIN). The borrower executes a traditional paper mortgage
naming the lender as mortgagee, and the lender executes an assignment of the mortgage
to MERS. Both documents are executed according to state law and recorded in the public
land records, maldng MERS the mortgagee of record. From that point on, no additional
mortgage assignments will be recorded because MERS will remain the mortgagee of
record throughout the life of the loan.
2010] FORECLOSURES AND MERS 1371
Although MERS records an assignment in the real property records,
the promissory note, which creates the legal obligation to repay the debt,
is not negotiated to MERS.65 Everyone agrees that MERS is never
entitled to receive a borrower’s monthly payments, nor is MERS entitled
to receive the proceeds of a foreclosure or deed of trust sale. MERS has
no actual financial interest in any mortgage loan. MERS does not even
provide lien releases of the mortgages it purports to own, instead
referring title attorneys, refinancing lenders, and consumers to the loan’s
servicer. 66 MERS’s revenue comes not from repayment of the loan or
the disposition of collateral, but from fees that the originator and other
mortgage finance companies pay to MERS. Once a loan is assigned to
MERS, the public land title records no longer reveal who (or what)
actually owns a lien on the property in question.
After a few years in business, MERS decided it could help mortgage
financiers pay even less to county governments by doing away with the
first assignment to MERS, and instead listing MERS as the mortgagee in
the original mortgage. Figure C provides a graphic representation of
sub prime mortgage loan origination where the parties record MERS as
the original mortgagee. Once again, MERS does not actually advance
any loan principal to the homeowner, does not have the right to receive
any payments from the borrower, and is not the actual party in interest in
any foreclosure proceeding. Nevertheless, the actual mortgagee pays a
fee to MERS to induce MERS to record the mortgage in MERS’s name.
By eliminating the reference to an actual mortgagee or the actual
assignee, MERS estimated it would save the originator an average of
$22.00 per loan.
67. MERSCORP, MERS Frequently Asked Questions, http://www.mersinc.orgl
why_mers/faq.aspx (last visisted June 9, 2004) (“[Y]ou’ll save $22 or more per loan when you specifY
MERS as the Original Mortgagee (MOM) of Record in the mortgage or deed of trust.”); Mullen, supra
note 19, at 65 (“The good news for companies embracing the system changes was that using MOM
[MERS as Original Mortgagee], as the practice has come to be known, provides an immediate cost
reduction of approximately $22 per loan.”). Early estimates suggest that the average cost reduction
when MERS acts as an “assignee” were between $15 and $17 a loan. LIPTON, supra note 26, at 2.
More recent estimates suggest that using MERS saves lenders and servicers approximately $40 over the
entire life of a mortgage loan. David F. Borrino, MERS: Ten Years Old, USFN, May 11, 2006,
http://imis.usfu.orglResources/ArticleLibrary/1733.aspx (last visisted July 13,2006).
Once again, MERS does not actually advance
any loan principal to the homeowner, does not have the right to receive
any payments from the borrower, and is not the actual party in interest in
any foreclosure proceeding. Nevertheless, the actual mortgagee pays a
fee to MERS to induce MERS to record the mortgage in MERS’s name.
By eliminating the reference to an actual mortgagee or the actual
assignee, MERS estimated it would save the originator an average of
$22.00 per loan
[From M.E.R.S. – It’s Not a Planet]
by Becky Akers
Talk about your nauseating charade!
John Pistole, Head Whore at the Transportation Security Administration (TSA) who admonishes outraged Americans to suck it up when his thugs strip-search little boys and traumatize pilots with near-rape, who spurns taxpayers’ shrieks that they shouldn’t have to risk cancer just to board a plane and shrugs at subjecting an entire generation to birth defects, also owns a soft side. And reveals it to his shock troops when he “Visits Airport to Buck Up Employees and Defend Tactics.”
Or so coos the New York Times. “As John Pistole strode through Concourse B of Ronald Reagan National Airport on [Tuesday, Nov. 23,] one of the busiest travel days of the year, flanked by airport employees, a news media handler [sic for ‘propagandist you and I fund’] and a reporter, a bewildered traveler looked up and wondered aloud: Is a celebrity flying through?”
Could the Times pay this pornographer, pimp and pedophile any higher compliment in our star-obsessed culture? Meanwhile, had its reporter “flanked” Hitler as he reviewed the ranks, we would doubtless read of a “6-foot-3” hunk “with pale blue eyes and a slow, Indiana” – or Austrian, as the case may be –“timbre,” a charmer who “can seem folksy and warm” thanks to “his dry sense of humor.” Just an all-around great guy if we overlook his unfortunate habit of shoving folks into ovens then and porno-scanners now.
Actually, neither the Times nor its fellow-travelers in the corporate media consider the latter an unfortunate habit. No, we dissidents are the unfortunates who just don’t get it, as theTimes implies with its careful phrasing of the punishment awaiting us when we “opt-out” of the porno-scanners: “…the agency’s new pat-down procedure, which many passengers say feels invasive and inappropriate.” Of course, it isn’t really. We wimpy wackos who can’t take a little sexual assault to secure the ol’ Homeland merely perceive it as “invasive and inappropriate.”
Alas, that perception may explain why poor John has “been maligned on Twitter.” The insults a hero suffers for trying to “[keep] travelers safe”! But being a patient and compassionate dictator, the sort who imposes his will by brutal force instead of by forceful brutality, John seizes the moment to teach us, to lead by example: “My hope is that, whatever people want to call me, they recognize that we’re simply doing everything we can to work with people to provide the best possible security,” he said, perhaps even blinking back the tears today’s feminized slime shamelessly shed. “I have to try to assess what are the risks being posed and what steps we can take to provide the best possible security, while recognizing the privacy issue.”
Who knew John even glimpsed “the privacy issue,” let alone “recognized” it?
But let us vanquish such un-Amerikan reflections lest they detract from Our Ruler’s triumphal progress through Reagan National! “…he was greeted in the airport by T.S.A. employees, whom he fist-bumped and thanked for their hard work, and who beamed and thanked him back. “
John’s driving you to the john, isn’t he? Take my advice and grab a barf-bag on your way back: you’re gonna need it.
“‘Thank you for standing behind us,’ said the woman checking IDs [sic for ‘said the Nazi just doing her job of sorting victims as they step off the trains and who is therefore innocent no matter how many atrocities the higher-ups order her to commit’]. Later, two young T.S.A. officers approached him to say, ‘Thanks for everything you’re doing for us, dealing with all this media stuff.’”
If you didn’t get it before, learn the lesson now: there is nothing abnormal about government agents’ groping between your legs or leering at your naked daughter. Presuming otherwise means you have fallen for all “this media stuff.”
If you like your perverts highly recommended, John’s your deviant. “John O. Brennan, Mr. Obama’s top counterterrorism adviser” warbles, “[John’s] somebody who has always impressed me, as well as others, for being exceptionally unflappable, a straight talker, a clear talker…” Ah, so that’s why he’s calling the TSA’s sexual assaults “pat-downs”: he’s a straight talker! And those who quibble when one of John’s goons “inva[des] … an old woman’s personal space” [Times-speak for “sexually molests and humiliates an elderly taxpayer”] simply don’t enjoy John’s “understanding of the nature of the threat that we face, the evolving nature of it and the creativity these terrorist groups bring to the effort…” Only John and Our other Rulers “understand what we need to do to guard against it.” So shut up and spread your legs, you traitorous ingrate, you.
Funny that our straight talker would cite “last year’s unsuccessful Christmas Day bombing attempt, when a would-be terrorist boarded a plane with a bomb sewn into his underwear,” as justification for nationwide sexual assault. You might think John would remember – or fear that we remember — the many holes in that false-flag story, such as afather who repeatedly snitched on his son and whom authorities just as repeatedly ignored, or the mysterious man smooth-talking the wannabe terrorist’s way onto the plane without a passport as other passengers watched. But no. John calls installing the porno-scanners with punitive sexual assaults for those who refuse “an easy decision” thanks to the Underwear Bomber. And all the while, the Times blithely continues cooing.
Remember as a child hearing for the first time about Hitler and his 12 million victims? Remember your shock that a whole nation cooperated with an obvious madman, your incredulity that rational people swallowed the Nazis’ nonsense and acquiesced to torture, rape, hate and humiliation, concentration camps, mass murder? Remember thinking you would never in a million years understand how anything that grotesquely evil and demented could possibly happen?
Bet you understand it now.
November 29, 2010
Becky Akers [send her mail] writes primarily about the American Revolution.
Copyright © 2010 by LewRockwell.com. Permission to reprint in whole or in part is gladly granted, provided full credit is given.
[From Pistole as Puffball]