“What’s happened is that, almost overnight, we’ve switched from democracy in real-property recording to oligarchy in real-property recording. There was no court case behind this, no statute from Congress or the state legislatures. It was accomplished in a private corporate decision. The banks just did it.”

-Christopher Peterson, a law professor at the University of Utah, on the “wholesale transfer of mortgages to a privatized database” and why it’s no coincidence more Americans are being foreclosed upon than any time since the Great Depression.

>

The quote above is from an article in the January 2012 Harper’s. It’s ostensibly about the ongoing battle between Homeowners and Bankers (PDF is online at Scribd, Think Tank, but not for long).

The print edition is illustrated with the artwork of Amy Casey (Housing as a Recurring Dream (Nightmare), previously showcased here)

What makes the article so remarkable is it has one of the most powerful anti-MERS arguments I have ever read in the mainstream media. In addition to the quote above, there is this:

At the heart of the clouded-title problem is a Virginia-based company, recently much in the national news, called Mortgage Electronic Registration Systems. MERS was created in 1995 as a privately held venture of the major mortgage-finance operators, chief among them the government-sponsored mortgaging entities Fannie Mae and Freddie Mac. Its stated purpose was to manage a confidential electronic registry for the tracking of the sale of mortgage loans between lenders, which could now place loans under MERS’s name to avoid filing the paperwork normally required whenever mortgage assignments changed hands. No longer would the traffickers in mortgages have to document their transactions with county clerks, nor would they have to pay the many and varied courthouse fees for such transactions. Instead, MERS was listed in local recording offices as the “mortgagee of record,” the in-name-only owner, a so-called nominee for the lender, so that MERS would effectively “own” the loan where the public record was concerned, while the lenders traded it back and forth.

This centralized database facilitated the buying and selling of mortgage debt at great speed and greatly reduced cost. It was a key innovation in expediting the packaging of mortgage-backed securities. Soon after the registry launched, in 1999, the Wall Street ratings agencies pronounced the system sound. “The legal mechanism set up to put creditors on notice of a mortgage is valid,” as was “the ability to foreclose,” assured Moody’s. That same year, Lehman Brothers issued the first AAA-rated mortgage-backed security built out of MERS mortgages. By the end of 2002, MERS was registering itself as the owner of 21,000 loans every day. Five years later, at the peak of the housing bubble, MERS registered some two thirds of all home loans in the United States.

Without the efficiencies of MERS there probably would never have been a mortgage-finance bubble.

After the housing market collapsed, however, MERS found itself under attack in courts across the country. MERS had singlehandedly unraveled centuries of precedent in property titling and mortgage recordation, and judges in state appellate and federal bankruptcy courts in more than a dozen jurisdictions—the primary venues where real estate cases are decided— determined that the company did not have the right to foreclose on the mortgages it held.

In 2009, Kansas became one of the first states to have its supreme court rule against MERS. In Landmark National Bank v. Boyd A. Kesler, the court concluded that MERS failed to follow Kansas statute: the company had not publicly recorded the chain of title with the relevant registers of deeds in counties across the state. A mortgage contract, the justices wrote, consists of two documents: the deed of trust, which secures the house as collateral on a loan, and the promissory note, which indebts the borrower to the lender. The two documents were sometimes literally inseparable: under the rules of the paper recording system at county court-houses, they were tied together with a ribbon or seal to be undone only once the note had been paid off. “In the event that a mortgage loan somehow separates interests of the note and the deed of trust, with the deed of trust lying with some independent entity,” said the Kansas court, “the mortgage may become unenforceable.”

MERS purported to be the independent entity holding the deed of trust. The note of indebtedness, however, was sold within the MERS system, or “assigned” among various lenders. This was in keeping with MERS’s policy: it was not a bank, made no loans, had no money to lend, and did not collect loan payments. It had no interest in the loan, only in the deed of trust. The company—along with the lenders that had used it to assign ownership of notes—had thus entered into a vexing legal bind. “There is no evidence of record that establishes that MERS either held the promissory note or was given the authority [to] assign the note,” the Kansas court found, quoting a decision from a district court in California. Not only did MERS fail to legally assign the notes, the company presented “no evidence as to who owns the note.”

Similar cases were brought before courts in Idaho, Massachusetts, Missouri, Nevada, New York, Oregon, Utah, and other states. “It appears that every MERS mortgage,” a New York State Supreme Court judge recently told me, “is defective, a piece of crap.” The language in the judgments against MERS became increasingly denunciatory. MERS’s arguments for standing in foreclosure were described as “absurd,” forcing courts to move through “a syntactical fog into an impassable swamp.”
(emphasis added)

I was so thrilled with this piece, I subscribed to Harper’s Magazine thru Amazon ($10)

>

Source:
Stop payment! A homeowners’ revolt against the banks
Christopher Ketcham
Harpers, January 2012
http://harpers.org/archive/2012/01/0083752

Category: Foreclosures, Legal, Real Estate, Really, really bad calls

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

40 Responses to “Clouded Title: The Gross Illegality of MERS”

  1. dpharris says:

    In theory, what MERS does for mortgages was supposed to be the same thing that DTCC does for stocks/bonds.

    The problem is in implementation MERS is not the DTCC. MERS is as Judge William Young wrote, “the Wikipedia of Land Registration Systems.”

    People probably wouldn’t be so upset about MERS if the banks had done something like actually bother to go get the deed registry laws change in order to make it legal to register mortgages electronically. Which – by the way – is what the securities industry did back in the 1970′s to set up the DTCC.

    Related reading:

    And Now, Blech, Mortgage Lawsuits
    http://dealbreaker.com/2011/12/and-now-blech-mortgage-lawsuits/

    Two Faces: Demystifying the Mortgage Electronic Registration System’s Land Title Theory
    http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1684729

    The Depository Trust & Clearing Corporation: About DTCC
    http://www.dtcc.com/about/business/index.php

  2. AHodge says:

    amen
    and while i also agree it is foolish to blame Fannie freddie for most of the crisis
    lets remember-among their other contributions
    they were key founders of MERS at the creation
    and are now major shareholders

  3. No doubt they were a contributor — MERS being their biggest sin. They also bought lots of securitized junk, and then in 2005 started buying subprime as well.

    My pushback is against “Congress made banks make bad loans to poor people” — that is the false meme

  4. John Adamson says:

    So we live in an increasingly lawless society?

    With respect Barry – “So what else is new?”

    The Constitution is toilet paper and the law is increasingly a facade. It’s like Rome under Augustus – a lawless empire posing under the familiar forms of a republic.

    Secured bond holders thought they had legal rights when GM went bust. That was trumped by the “greater good” theory.

    You and I believe we have the Bill of Rights to protect us. “Bleep that!” according to Obama. He asserts the right to kill anybody anywhere – American citizen or not – under the guise of “protecting us from terrorism.” Due process is now a quaint concept if the “Big Boys” (political or monied) find it inconvenient.

    Bottom line – this crap will get a lot worse before it gets better.

    P.S. Don’t piss off the wrong people with this blog. Somebody will use the “law” to shut you down one way or the other. The First Amendment will go the way of the 5th Amendment. You might be giving “material support to terrorists by demoralizing the public.”

  5. BennyProfane says:

    Harpers is “mainstream media”?

  6. AHodge says:

    i agree– and say that govt in all its actions
    including dereg and low rates as well as FF– did not “cause” more than 30% of the crisis
    this is partly because i think housing even in its broadest definition did not cause more than 70% of the collapse
    there was
    non housing securitization collapse for auto loans, bank loans, comm’l real estate etc
    other derivatives with fake values, fake insurance and other fake assets funded by real debt
    the state and local funding collapse
    insolvent broke bank funding panic, collateral questions and lending shrinkeage
    global trade finance collapse
    commodity and stock market boom bust-only modestly driven by low rates

  7. AHodge says:

    i will say about your above and the FF role, as you cite harpers approvingly (were they your underlines?)

    QUOTE facilitated the buying and selling of mortgage debt at great speed and greatly reduced cost…..

    Without the efficiencies of MERS there probably would never have been a mortgage-finance bubble. UNQUOTE

    i think this is an overstatement, MERS was only about the collateral…
    BUT if you add the FF automated, lying underwriting input, commoditizing by fake insurance parts
    it could read
    Without MERS and other FF phony trading and insurance “efficiencies” there would have been much less of a mortgage-finance bubble.
    thats some more blame than yours?

  8. AHodge says:

    i forgot FF screen based prepayment adjustment calculations
    they actually got all the bozo buyside to believe in?

  9. chris58 says:

    Barry,

    Great article.

    As dpharris notes above Christopher Peterson has published his thoughts before (ssrn.com).

    The real burr in the saddle is that those paying attention know all too well the criminality and are unable to effect change.

    And every time someone says no crimes were committed is just another reason to realize that the rule of law means nothing to those we elect.

  10. Greg0658 says:

    I watched Margin Call (movie – 2011) yesterday – my fav quote fits in here – its what we wanted .. to do more __
    http://www.imdb.com/title/tt1615147/quotes?qt=qt1576853

    I liked the movie .. and understand your world better now .. 2nd fav quote:
    “John Tuld (top dog): There are three ways to make a living in this business: be first, be smarter, or cheat.”

  11. VennData says:

    ‘… In 2009, Kansas became one of the first states to have its supreme court rule against MERS. In Landmark National Bank v. Boyd A. Kesler, the court concluded that MERS failed to follow Kansas statute: the company had not publicly recorded the chain of title with the relevant registers of deeds in counties across the state…”

    Kansas is clearly anti-business. If you do ANYTHING that decreases the profits of an American business you are anti business … unless you are a Republican.

    St

  12. Petey Wheatstraw says:

    Is there any doubt that MERS was a criminal enterprise from its inception? (insert legal transfer of title/note statutes here).

    Is there any doubt that MERS was created to launder bad loans via the securitization process, and as part of a more wide-ranging criminal enterprise involving a chain of players that included mortgage originators, ratings agencies, and banks?

    Is there any doubt that robo-signing was a felony fraud and perjury fest?

    The crime spree that is MERS is stunningly obvious. It is becoming more obvious, by the day, that the criminals behind it are above the law.

  13. Bill Wilson says:

    “My pushback is against “Congress made banks make bad loans to poor people” — that is the false meme”

    I’m in full agreement with that statement. Plenty of middle and upper class white people from the suburbs borrowed beyond their means or tried their hands at house flipping. It disgusts me that a housing mania that gripped the entire country can be blamed on minorities.

  14. fhblaste says:

    http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1684729

    http://www.occ.treas.gov/news-issuances/news-releases/2011/nr-occ-2011-47h.pdf

    First Link is good legal description of the MERS fraud, second link is the CONSENT ORDER where fraud is agreed to be “corrected”

    Wanted to know if MERS was used in Comm. Realestate loans as well???

  15. fhblaste,

    with..”Wanted to know if MERS was used in Comm. Realestate loans as well???”

    see some of..

    http://search.yippy.com/search?input-form=clusty-simple&v%3Asources=webplus-ns-aaf&v%3Aproject=clusty&query=MERS+Commercial+Real+Estate

    ~~

    Petey,

    with..”The crime spree that is MERS is stunningly obvious.”, and the rest…

    One might think that MERS was a text-book example for a RICO-prosecution, no?

  16. Bill Wilson says:

    “Kansas is clearly anti-business. If you do ANYTHING that decreases the profits of an American business you are anti business … unless you are a Republican.”

    That’s a nice quote by VennData. It amazing how the rule of law is declared anti-business as soon as it cuts into someones profits. They ignore the economic damage that is caused by a corrupt system.

    I disagree with the “unless you are a Republican” part. Republicans who uphold the rule of law to the detriment of corporate profits are declared to be RINO’s by right wing extremists like Rush Limbaugh. I agree with Jon Huntsman’s views on TBTF. He doesn’t comply with Republican orthodoxy.

    http://economix.blogs.nytimes.com/2011/12/01/the-huntsman-alternative/

  17. bear_in_mind says:

    @dpharris: You stated, “People probably wouldn’t be so upset about MERS if the banks had done something like actually bother to go get the deed registry laws changed in order to make it legal to register mortgages electronically.”

    I think that’s a gross over-simplification of the issues at-hand:

    1) Wittingly or not, I think you provide aid-and-comfort to the Banksters. While we cannot definitively know the minds of the financial institutions when they created MERS, your statement suggests bothering to change the deed registry laws was just a simple oversight. Well, gaw-lee and aw shucks! C’mon now. They well knew what they were doing with MERS, and fully understood that changing deed registry laws would have brought unwanted attention and scrutiny.

    2) The use of MERS allowed the circumvention of (est.) billions of dollars in local property transfer fee revenues. This chicanery amounts to a de-facto wealth transfer mechanism from our communities to the coffers of financial institutions. Did citizens or municipalities vote on this new form of corporate welfare?

    3) Most salient, financial institutions flouted the rule and intention of law by utilizing MERS to fast-track foreclosures, regardless of whether they were the rightful lien holder or not.

    4) Finally, MERS broadly masked or diffused legal responsibility of the financial institutions. The implication is the onus of investigating mistakes or wrong-doing shifted to individuals and municipalities, both of which are typically under-capitalized and under-resourced to mount a successful challenge to these financial behemoths.

    ~B-I-M

  18. dead hobo says:

    BR rhapsodized:

    What makes the article so remarkable is it has one of the most powerful anti-MERS arguments I have ever read in the mainstream media.

    reply:
    ———
    Nice to see you’re still living the dream. The courts still disagree and I don’t think they give a shit about what Harper’s thinks.

    http://www.legalnews.com/muskegon/1137818/

    Summary: populist courts follow the mob. Supreme courts follow the law. MERS 1 Ritholtz/Harpers 0.

    ~~~

    BR: There is a pretty broad split between court decisions, and by my reckoning, they have been running about 3 to 2 against MERS.

    I would love to see a full table of all decisions at all levels of courts, if someone can direct me

  19. AtlasRocked says:

    BR: “My pushback is against “Congress made banks make bad loans to poor people” — that is the false meme.”

    Please, for the love of Pete, as you read this don’t assume I think the WHOLE CRASH was due to loans to poor people, OK?

    But none other than Barnie Franks stated loans to those that can’t afford them was wrong. Can you reconcile your complete dismissal of this as an issue, and Barnie’s assertion that it was a problem?

    * snip *

    ~~~

    BR: Because the data says the opposite. Anecdotes are not evidence; selective quote are not proof.
    You imply that we can determine the cause of complex problems by quoting politicians?
    You continue to perpetrate the big lie . . .

  20. Transor Z says:

    dpharris has it right. Give the devil his due: MERS is a clever innovative idea abysmally executed. MERS began as nothing more than a registration system assigning a unique identifier to every mortgage so that you could track the mortgage/commercial paper as it moved from holder to holder, each entity likely assigning their own in-house account number.

    Here’s the next Massachusetts case to watch after Ibanez: Eaton v. Fannie Mae, argued on October 3, 2011. The link to the briefs is here:
    http://www.ma-appellatecourts.org/display_docket.php?dno=SJC-11041

    One SJC justice referred to MERS as a “straw” in oral argument. The central question is whether the historical Massachusetts requirement that mortgage and note be reunified prior to foreclosure is still good law. MERS mortgages were clearly on everyone’s mind.

    Hopefully we’ll get a decision in first quarter of 2012. Stay tuned!

  21. DeDude says:

    So another sin of the rating agencies, they pronounced MERS sound when it wasn’t. Seem to be most of what they are doing; pronouncing things to be sound when they are not.

  22. digistar says:

    Barry,

    Keep up this important, excellent work!

    My fellow comment makers,

    As an alarmed layman, I find comfort (some) and enlightenment here, reading your posts. Thanks for your technical knowledge, your belief in the way our democracy is supposed to work and your explanation of the many ways law is/has been undermined.

  23. dpharris says:

    @ bear_in_mind

    I suppose I could have been more clear in my internet sarcasm/snark:

    I not a lawyer, but I in agreement with you that whether by criminal/unethical intent or just gross incompetence, neglecting to do “something like actually bother to go get the deed registry laws change in order to make it legal to register mortgages electronically” is to quote Joe Biden, “a BFD”.

    My main intent was to

    (1) link to the excellent work of Chris Peterson and commentary of Matt Levine

    and (2) advocate my opinion that we should support getting a properly modernized system built and put in place. I would hate for popular opinion (or rather informed opinion) to get caught up in what happened and lobby for a complete return to the (safe but inefficient) dark ages of local regulations/registries and paper filings.

  24. Sechel says:

    Without MERS there probably could not have been a mortgage crisis. it would have been too laborious to securitize all those mortgages. Who would have thought back in 1997 what was being created…

  25. philipat says:

    Other than the Forclosures issue, I also wonder what percentage of Americans with a mortgage actually understand WHO hold the title deed to their property?

  26. philipat says:

    And, therefore how/will they be able to access same when the mortgage is paid down and/or prove ownership?

  27. attobuoy says:

    MERS: A highly efficient system for converted secured debt into unsecured debt.

  28. attobuoy says:

    MERS: A highly efficient system for converting secured debt into unsecured debt.

  29. LifeOnMars says:

    > BR: My pushback is against “Congress made banks make bad loans to poor
    > people” — that is the false meme

    You’re right Barry, it was the Clinton administration that worked on that:

    “Fannie Mae, the nation’s biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits….

    ‘Fannie Mae has expanded home ownership for millions of families in the 1990′s by *reducing down payment requirements*,” said Franklin D. Raines, Fannie Mae’s chairman and chief executive officer. ”Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market.” …

    In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980′s.”
    http://www.nytimes.com/1999/09/30/business/fannie-mae-eases-credit-to-aid-mortgage-lending.html

    @Transor: “MERS is a clever innovative idea abysmally executed.”

    Spot on.

    ~~~

    BR: I appreciate you hunting down a quote that supports your erroneous narrative. But prey tell, WHY CANNOT YOU FIND FACTS THAT SUPPORT YOUR TALE?

    I can find quotes pro & con on any and every issue. Why is it so challenging for you to see the significant of facts, other than they disagree with your preconceived notions?

    #FAIL

  30. Stan Klein says:

    I don’t recall where I saw this, but back in the mid-1990′s when MERS was being set up the perpetrators presented it to a meeting of county clerks and other local mortgage registration officials. They were told it was flatly illegal and would not work. They ignored the opinion of those experts and went ahead anyway.

    There are also lawsuits in some states under laws allowing citizens to sue for recovery of fraud against government agencies claiming that banks that used MERS defrauded states and localities out of hundreds of millions of dollars of recording fees.

    There were also court decisions to the effect that MERS kept the ownership of mortgages secret, preventing homeowners from contacting their mortgage holders to renegotiate the mortgages. One purpose of mortgage recording is to make the owner of the mortgage a matter of public record so the homeowner knows who they are.

  31. Al Bergette says:

    Bear_In-Mind, well put.

    This MERS FUBAR is a HUGE clusterfuck.

    I will impeed the Real Estate market from recovering because there will be millions of homes that potential buyers will stay away from because there is no clear audit trail of ownership. Title Insurance will be hard to get on these homes.

    For all the anti-filing-with-Recorder-of-Deeds; pro-MERS suckholes out there, FU!

    Your ilk decimated centuries of property ownership history to make a buck in faux investment instruments.

    Ala Kelso, look for this to be ruled in the Federal Courts in favor of the suckhole banksters.

    ‘Cause as the sign reads “Justice. See Judge For Rates.”

  32. bdw says:

    MERS is the agent for lender and its successors and assigns = permanent agent who has destroyed any meaning in county land records. Check MERS membership rule 8, recently revised in July 2011, which no longer allows members to foreclose in MERS’s name. That is a clear admission that the Master Agent MERS purports to be has been discovered by enough judges that maintaining that fiction will be too expensive.

    The document recording fees and transfer taxes avoided or absconded with are just slices in the pies that MERS allows it members to keep.

    Prof. Peterson’s analysis turned me onto this basic fact: MERS pays no money for the lien it claims to hold against million of people’s homes through mortgages or deeds of trust. Before they changed their own rules, MERS used that lien to take away people’s property. What is an entity that gets something for nothing?

  33. Sechel says:

    The aspect of MERS that nobody is talking about is the large sums of money this has cost bond investors and local governments. Areas such as New York have mortgage recording taxes and when a refinance is done via MERS and masqueraded as a modification the local government is cheated out of revenue its legislatures have voted on. By extension, by making mortgages more refinanceable than they otherwise should be, the value of the prepay option goes up, and the price of the mortgage goes down. The bond investor is not long this option, and while the MERS refinance has been going on for some time, it’s not at all clear to me that prepayment models and investors fully value how much they are at risk. On the flip side every time a mortgage is refinanced, the home owner saves a little and the lender earns a whole new set of fees.

  34. Blissex says:

    «People probably wouldn’t be so upset about MERS if the banks had done something like actually bother to go get the deed registry laws change in order to make it legal to register mortgages electronically.»

    Perhaps, but electronic title registration without paper backup is a big deal, especially if by a private entity with no disclosure.

    Keeping public, material records of land ownership is a practice supported by literally thousands of years of experience, because land ownership is a big deal, and every possible fraud and counterfeiting has been tried every possible time.

    The reason MERS has been created was simply to create massive low-tax or tax-free capital gains by securitizing mortgages, and thus upfronting their repayment streams as capital gains. A way to life-changing riches for the traders involved, and nothing, and surely not the law, was allowed to stop that, with the enthusiastic support and complicity of retail house speculators who just wanted an endless stream of tax-free capital gains to effortlessly retire in comfortable luxury.

  35. Blissex says:

    «One might think that MERS was a text-book example for a RICO-prosecution, no?»

    You cannot declare whole segments of the economy, enthusiastically supported and endorsed by voters who care for nothing but tax-free capital gains, to be criminal rackets, even if they are criminal rackets, and everybody knows that.

    There are two types of criminal rackets: those run by insiders, and then TARP is enacted for them, and those run by outsiders, and RICO applies to them. This is elementary sociology/anthropology.

  36. Blissex says:

    «And every time someone says no crimes were committed is just another reason to realize that the rule of law means nothing to those we elect.»

    The conclusion is ridiculous. Why do «we» keep re-electing them? The same people who voted for TARP, for PATRIOT, for Guantanamo, …

    The rule of law means little to nothing to voters, and the elected duly take note of that and represent the will of voters (which is not the same as public opinion…).

    The rule of the constitution and of law is replaced by two principles far more popular with voters: tax-free capital gains, and security at any cost to someone else.

    Real American voters are not babes in the woods, who continue to re-elect the same frauds because they don’t understand that they are frauds; they re-elect them precisely because they are frauds, as long as they deliver a slice of the fraud to their voters.

    Continuing the comment on rackets, at some point (1940-1970) labor unions enjoyed the protection from the law and became rackets because they promised voters more salary and less work. Then voters abandoned unions because at some point (1980-2020) they got seduced by Wall Street firms promising more capital gains and less tax (and more work and less salary for someone else…), and they got protection from the law from voters and became rackets.

    What matters to most USA voters is not whether something is a racket or not, but whether it is racket giving them their cut of the loot, or not. If the racket gives them a cut of the loot (no matter how illusory) USA voters will shield “their” rackets from the law.

    My usual quotes from Tocqueville and Gingrich:

    http://xroads.virginia.edu/~HYPER/DETOC/1_ch13.htm
    «Consequently, in the United States the law favors those classes that elsewhere are most interested in evading it. It may therefore be supposed that an offensive law of which the majority should not see the immediate utility would either not be enacted or not be obeyed.
    In America there is no law against fraudulent bankruptcies, not because they are few, but because they are many. The dread of being prosecuted as a bankrupt is greater in the minds of the majority than the fear of being ruined by the bankruptcy of others; and a sort of guilty tolerance is extended by the public conscience to an offense which everyone condemns in his individual capacity.»

    http://classwebs.SPEA.Indiana.edu/bakerr/v600/a_new_look_at_environmental_poli.htm
    «If you have a society where almost every middle class person routinely fudges the law, that’s telling us something. We have laws that matter-murder, rape, and we have laws that don’t matter. Speed limits are an example. Why would you think that a regulatory, process-oriented bureaucratic model would work?
    The first thing that every good American says each morning is “What’s the angle?” “How can I get around it?” “What does my lawyer think?” “There must be a loophole!” Then he proceeds to work the angle, and the bureaucracy spends its time chasing that and writing new regs to stop him. America is the most incentive-driven society on the planet.»

  37. Greg0658 says:

    good one Blissex@6:53am … not sure how to proceed … but .. consciousness change

    (gonna transcibe pic of my chalkboard list from the bankster topdog quotes day)
    reality what a concept
    blessed need a curse .. societies need a reboot from time to time (they don’t have to be ugly)
    Matrix.0 – Utopia (didn’t work – people hated the blahness)
    sooo it’s what you wanted
    “The lion’s only lookin’ for something he can sink his teeth into” http://www.azlyrics.com/lyrics/faithhill/iwantyou.html
    Elmo sings “Sunny day, sweep’g the clouds away .. on Elmos way, to where the air is sweet. Can you tell him how to get .. how to get to Sesame Street. how to get to Sesame Street.”

  38. DeDude says:

    @Blissex;

    “The reason MERS has been created was simply to create massive low-tax or tax-free capital gains by securitizing mortgages, and thus upfronting their repayment streams as capital gains. A way to life-changing riches for the traders involved”

    Could you details this a little more for those of us that are not in the business?

  39. Stan Klein says:

    One thing MERS did was to hide the identities of the holders of predatory mortgages. I have long suspected that MERS was part of a major scam involving those mortgages.

    Many of the predatory mortgages were sold as “adjustable rate” but the only adjustment was continuously up. In my view those mortgages were deliberately designed to go into default and foreclosure. You can’t keep raising the rate on a loan without hitting a point where the borrower can’t pay.

    I’m curious about how much money was made betting in the derivatives market that the mortgage securities would become worthless. And I’m especially curious if any of the people who made that money influenced the terms of those predatory mortgages to help ensure that the bonds would crash.

  40. Futuredome says:

    If F/F didn’t do it, the banks would of. Once the animal spirits were tapped, the mortgage bubble was unstopable.

    Also remember, F/F were private enterprises and backed with public money.