Too Big to Fail Bankstas and the Financial Collapse: Bethany McLean, author of ‘All the Devil’s are Here” CSPAN Interview
cannot wait to read this book
Courtesy of CSPAN
Reminder: IT IS HAPPENING AGAIN RIGHT NOW, REGULATORS ARE IGNORING THE FORECLOSURE FRAUD AND FAILURE OF TBTF TO DELIVER THE NOTES TO THE TRUSTEE, THE MBS ARE PUTBACKS WAITING TO HAPPEN.…
For more on the imminent collapse and why, see Naked Capitalism, Yves Smith today- ‘Why MERS needs to be taken out and shot’
the idea of passing a Federal statue to solve MERS’ growing state-level problems is a huge stretch. As the latest report of the Congressional Oversight Panel noted,
In the absence of more guidance from state courts, it is difficult to ascertain the impact of the use of MERS on the foreclosure process. The uncertainty is compounded by the fact that the issue is rooted in state law and lies in the hands of 50 states judges and legislatures.
We’ve been told that Constitutional scholars have said that repeated Supreme Court decisions have found real estate transactions to be beyond the reach of Commerce clause, and hence not subject to Federal intervention. So the idea that MERS can be legitimated by Congress appears far-fetched.
But what are the problems with MERS? The focus so far has been on its questionable legal standing, but its operational failings are every bit as serious.
Although critics have provided a number of arguments against MERS, the most fundamental relate to MERS’ claim that it acts as mortgagee of record….
And see NC again for Tom Adams on why failure to transfer notes is a serious problem for the TBTF:
(…) Based on my review, Countrywide failed to comply with the terms of the agreement for the delivery of the mortgage notes. In addition, importantly, the trustee also failed to comply with the terms – it was required to certify it had the mortgage notes at closing and then certified annually that it had safeguarded the mortgage loan documents as required by the PSA.As a result, if Countrywide actually failed to deliver all of the mortgage notes to the trustee, as the judge describes in the Kemp case, then
(1) This is a problem for the trustee proving it has standing for foreclosures or bankruptcies, as in the Kemp case,
(2) It seems like investors in the certificates issued by CWABS 2006-8 would have a good case to pursue claims against both Countrywide and the Bank of New York, as trustee, for failing to perform as required under the agreement,
(3) By stating that the notes had been delivered and certifying all of the notes had been received, Countrywide and the trustee seem to have misrepresented the transaction to investors, by creating the impression that the trust had secured the collateral, and
(4) The trustee’s annual certification under Reg AB that the mortgage loan documents were safeguarded and secured may open the parties up to additional liability for misrepresentation to investors, despite the fact that three-year statute of limitations may have expired for misrepresentations made in the offering statement for the transaction.
I tracked down the pooling and servicing agreement in the Kemp case from CWABS 2006-8 to make sure it did not have any unique exceptions to delivery. It did not. Section 2.01 of the PSA requires the Depositor (CWABS) delivery of the note to the trustee with all intervening endorsements as follows:…read it all!