real estate

Snippets From the 50 State Mortgage Settlement

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mersAs expected, states were strong armed by the administration and have agreed to a $25 billion, 50 state mortgage fraud settlement with five banks for robo-signing and mortgage fraud. According to the Wall Street Journal:

The agreement covers five banks: Ally Financial Inc., Bank of America Corp., Citigroup Inc., J.P. Morgan Chase & Co. and Wells Fargo & Co. Together, the five firms handle payments on 55% of all home loans outstanding, or about 27 million mortgages, according to Inside Mortgage Finance.

While the banks pony up $25 billion, they are the ones who made out like bandits.

About $5 billion would be cash payments to states and federal authorities, $17 billion would be pegged for homeowner relief, roughly $3 billion would go for refinancing and $1 billion would be paid to the Federal Housing Administration.

MERS Leaves the Field

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By Numerian
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How the banks could inflict such damage on the country’s home title and mortgage registry system would take another investigation by Congress to determine – assuming Congress was interested.
The Mortgage Electronic Registration Systems company (known as MERS), which has been at the center of legal problems affecting the securitization of home mortgages and foreclosures, has given up one of its principal corporate objectives. It is now instructing its members to cease foreclosing on residential properties in the name of MERS, and to begin immediately to register all assignments of mortgages with local county recorders of deeds. (Image)

The whole purpose of MERS when it was established in 1996 was to by-pass the county recording process, and the billions of dollars of fees that banks and mortgage companies would have had to pay to comply with state and local real estate laws. MERS operated on a legal assumption that it could have its cake and eat it too, by acting as an agent for its member banks in their real estate transactions, but also acting if necessary as a principal in its own name when it came to assigning mortgages and foreclosing on properties.

Apocalypse When? Decline and Fall (Maybe) January 17, 2011

Michael Collins

For at least ten years the large US banks have been selling a product – the residential home mortgage – with a fatal legal flaw that renders it uncollateralized. Numerian

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Apocalypse When? Round Up of Massachusetts Supreme Court Decision on ForeclosureGate, US Bank N.A. v Ibanez - Around 1995, the big bank lenders established their own rules for handling the various steps of issuing a mortgage. They knew well the contract laws of the states in which they operated. But they had bigger plans. They wanted to bundle up thousands of mortgages and sell them as Mortgage Backed Securities (MBS). To do that, they needed an electronic system (MERS) that could bundle mortgages and sell them repeatedly to investors here and overseas. Never mind that state law required specific documentation at every step, including documentation to prove a specific owner of the property. When banks resold the MBS product, as it were, they were interested in churn and more money, not tagging a specific mortgage with the latest MBS owner.

Oops! The big banks screwed up big time. Bankruptcy courts at the state and federal level are used to adherence to contract law and court rulings. Most people in foreclosure struggle to pay for representation if they go to court. Many settle out of court. But the Show Me the Note movement, in and out of court, has a powerful ally - the Ibanez decision.

Round Two of the Housing Bust

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After more than a year of a housing bust, and eight months of a credit crunch, its hard to believe that the real estate market could get much worse. With suburbs turning into ghost towns, major Wall Street banks going under, and people losing their homes right and left, you would naturally think that we must be near the bottom.

And yet, if you look at the raw numbers you realize that the real estate market could get much worse. In fact, it is likely to get much worse in the coming years.

You don't have to believe me. Look at the numbers for yourself.