Comments on: Mortgage Electronic Registration Systems Loses Legal Shield

By: What a Tangled Web Mortgage Securitizers Weave… | The Big Picture

What a Tangled Web Mortgage Securitizers Weave… | The Big Picture — Sun, 25 Oct 2009 13:04:34 +0000

[...] Mortgage Electronic Registration Systems Loses Legal Shield (September 23rd, 2009) [...]

By: telez_one

telez_one — Mon, 28 Sep 2009 05:28:47 +0000

I think the Court got it right, but for all the wrong reasons. It is not the agency issue. The agency is clearly established in the mortgage instrument, as it says there that MERS acts as Nominee for the Lender. That’s agency. It is also not a split (between the security instrument and promissory note) issue, as there is no split. MERS either does have the right to the entire mortgage or not, which depends on the fact whether the current lender has been properly assigned the mortgage. In other words, MERS can only have standing, if the current owner has standing. And that is the central issue.
In a typical situation, you have the original lender, who sells the mortgage to the new owner the next day after the closing (only to retain servicing rights) and MERS, who is the nominee of the new lender or any current lender. The new lender is a group of investors, who hold shares of a pool that has this mortgage as well as many other mortgages. Let’s call them “Pool Investors.” Now, the original lender is out of the picture, as he sold all his rights. That leaves us with the “Pool Investors” and MERS. MERS’ rights are derived fom the rights of the Pool Investors. So, in order to properly foreclose, the Pool Investors must show that they have been properly assigned the mortgage at issue. But the problem is: there is never an assignment from the original lender or any subsequent lender to the Pool Investors. You only have assignments from one servicer to another. But servicers have no rights to the mortgage. MERS, as Agent, cannot assign any right to the Principal either. It only works the other way around. Therefore, the only way to obtain standing is poduce a valid assignment from any of the lenders to the Pool Investors. And that is not easy to say and even more difficult to accomplish.

By: Gretchen Explains MERS For You | The Big Picture

Gretchen Explains MERS For You | The Big Picture — Sun, 27 Sep 2009 12:37:50 +0000

[...] Mortgage Electronic Registration Systems Loses Legal Shield (September 23rd, 2009) [...]

By: Battle Royale with cheese « Clueless Numpty Review

Battle Royale with cheese « Clueless Numpty Review — Thu, 24 Sep 2009 17:18:01 +0000

[...] perspectives on MERS: Mortgage Electronic Registration System Loses Legal Shield [ Barry Rtitholtz ] Has a MERShole opened up? [ Karl Denninger [...]

By: A Victory For Homeowners « The Financial Physician

A Victory For Homeowners « The Financial Physician — Thu, 24 Sep 2009 10:46:50 +0000

[...] Mortgage Electronic Registration Systems Loses Legal Shield [...]

By: bergsten

bergsten — Thu, 24 Sep 2009 03:37:42 +0000

I had a scary thought too…

What happens if/when you pay your mortgage off? How do you insure clear title?

By: JusTryinTaMakeIt

JusTryinTaMakeIt — Thu, 24 Sep 2009 02:36:59 +0000

Does this issue have an implication on the ultimate debtholders (security holders) ability to demand payment when a property is sold? Or when a junior debtholder (i.e. second or third mortgage holder) forecloses on a property???

By: Simon

Simon — Wed, 23 Sep 2009 23:31:32 +0000

Another giant step towards communism in America. It’s just lovely.

I mean I’m actually in favor of the ruling. In a way it’s what has to happen. A compulsary debt jubilee and a huge transfer of wealth from the haves to the havenots. I mean in a way its far tidier then what people like Marc Faber see coming down the line in a decade or two.

Econmically it makes sense.

The finance industry as a whole failed to do its job and allocate capital properly.

The organisations that originated the loans made bad bets

The people who bought the securitized loans made bad bets

The banks made the bets out of greed.

The banking industry have co-opted the tax-payer, the majority of whom have said loans, to underwrite those loans through the Treasury and the Fed as lenders of last resort. This is not any sort of workable form of capitalism.

The people who took the loans are part of the productive class. Free them of the loans and they will surely start spending money elsewhere. This would be a huge boost to the economy.

Why shouldn’t those who failed to invest in productive assets with sustainable futures lose all their money? I mean they will anyway this would just far cleaner quicker and cheaper and get the economy going again much sooner to the benefit of those who produce.

By: carping demon

carping demon — Wed, 23 Sep 2009 21:50:43 +0000

@DD

To whom would Kansas state judges be pandering? Just wondering.

By: vachon

vachon — Wed, 23 Sep 2009 21:27:08 +0000

Ghaaa! I argued this very point with my county’s recording department. The *$@^ idiots insisted on recording mortgages under MERS instead of the actual lender.