Mortgage, mortgage, who's got the mortgage....

[Telarus]

I like the fact that this reporter actually uses the word chaos with the correct context:

http://www.huffingtonpost.com/2009/09/22/whos-got-the-mortgage-pro_n_294169.html

Oh, this is a good quote too:

In dismissing 14 foreclosure cases in 2007 based on a lack of proper documentation, a federal judge in Ohio admonished the lenders, stating their argument that "'Judge, you just don't understand how things work'...l

Also, Democratic House Member Marcy Kaptur of Ohio is urging people to squat in their own homes....

http://www.kaptur.house.gov/index.php?option=com_content&task=view&id=355&Itemid=1


[Both of these via the Black Sun Gazette.]

[Cain]

I've been advising friends in the states who are in financial trouble that, if things should get that bad, they should squat in their own homes too.  Asking for the note is an awesome tactic though, for exactly the reasons described, and I love whoever thought of it.  Bureaucratic ju-jitsu of that sort is awesome, and I fully approve.

[Requia ☣]

Even if you lose the court system is slower than molasses, and an appeal is only 600$, so you can drag it out even longer.

[Cain]

Actually, Matt Taibbi has more on this

http://trueslant.com/matttaibbi/2009/09/22/landmark-decision-massive-relief-for-homeowners-and-trouble-for-the-banks/

A landmark ruling in a recent Kansas Supreme Court case may have given millions of distressed homeowners the legal wedge they need to avoid foreclosure. In Landmark National Bank v. Kesler, 2009 Kan. LEXIS 834, the Kansas Supreme Court held that a nominee company called MERS has no right or standing to bring an action for foreclosure. MERS is an acronym for Mortgage Electronic Registration Systems, a private company that registers mortgages electronically and tracks changes in ownership. The significance of the holding is that if MERS has no standing to foreclose, then nobody has standing to foreclose – on 60 million mortgages. That is the number of American mortgages currently reported to be held by MERS. Over half of all new U.S. residential mortgage loans are registered with MERS and recorded in its name. Holdings of the Kansas Supreme Court are not binding on the rest of the country, but they are dicta of which other courts take note; and the reasoning behind the decision is sound.

via Landmark Decision: Massive Relief for Homeowners and Trouble for the Banks http://www.globalresearch.ca/index.php?context=va&aid=15324

This is a potentially gigantic story. It seems that a court has ruled that about half of the mortgage market has been run as a criminal enterprise for years, which would invalidate any potential forelosure proceedings for about, oh, 60 million mortgages. The court ruled that the electronic transfer system used by the private company MERS — a clearing system for mortgages, similar to a depository, that is used for about half the mortgage market — is fundamentally unreliable, and any mortgage sold and/or transferred through MERS can't be foreclosed upon, at least not in Kansas.

Coincidentally I'd been working on something related to this all day yesterday. All over the country, lawyers are contesting foreclosures because of similar chain-of-custody issues. I have some material about this coming out in my next Rolling Stone story, so I can't get into this too much, but suffice to say the lenders and the banks were extremely sloppy about their paperwork (at best — there is a fraud angle as well) and jammed up the system with missing and/or mismarked mortgage notes. Since a sale isn't legal unless there's full transfer of the physical note, a lot of the sales of mortgage-backed securities were not entirely legal, since the actual notes were often not transferred.

Nothing like waking up in the morning and finding out a whole sector of the economy is completely screwed. Are these good times or what?

Although this particular case pertains to MERS, non-MERS mortgages were often even worse. Anyway I have more on this coming next week.

The Yakuza were heavily involved in fraudulent property dealings in Japan which helped contribute to the recession there, by the way.  The idea that part of this was undertaken as a form of organised crime is not surprising at all. 

[Reginald Ret]

HAHAHAHAHAHAHAHAHAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA

sob

[Cainad (dec.)]

I have a relative who works in real estate; he's told me about this. I think it's fucking awesome. Why give money to a group that has no legal proof that you owe them anything?

[Template]

Unexpectedly favorable turn of events.

This story answers questions I had when the crash started.  I remember reading something suggesting that nobody knew who exactly held a particular note, only that the given debtor had defaulted.  Wondered why something like this hadn't started THEN.

Maybe it did, but I imagine many defaulters couldn't get that level of lawyering.  Took long enough.