Next week, we’re going to make predictions for the new year, and the MERS/robo-signing/securitizations could play a role in the 2011 market – and your predictions?
Here’s the link to the latest article about BofA’s woes; and an excerpt:
Richard Bove, analyst at Rochdale Securities, believes the issue will continue for the next four to five years.
“It’s going to be like a tobacco or an asbestos situation,” Bove says, arguing court battles will continue evolving for some time at plaintiffs test courts to find successful strategies and Bank of America and other institutions work to find off the evolving challenges.
The MERS/robo will be a gold mine for attorneys – but will it erode homebuyer confidence? Or end up being a nothing-burger (like ARM recasts, etc.) because the government will spend whatever it takes to avoid a potential meltdown?
Bank of America has a great excuse – “hey, you made us buy Countrywide!”, which could be the clincher that makes the government wave the magic wand (again) and make it all go away.
Or could the MERS legal issues gain enough steam to over-run the system?
Would the specifics about MERS/robo affect your home buying/selling decisions?
Another example of how this country is run by deal-makers:
Bank of America will pay $137 million to settle allegations from state and federal securities regulators that it defrauded buyers of municipal bond derivatives, the U.S. Securities and Exchange Commission announced on Tuesday.
Making absolutely nothing-except money. The money changers really need to be reigned in.
I think banks will continue to bribe elected officials and also continue to sweep problems under the rug.
It’s a sad situation… Gov is acquiring private property with the help of banks by devaluing the dollar.
Stay away from stocks too according to this guy:
http://www.marketwatch.com/story/10-reasons-to-shun-stocks-till-banks-crash-2010-12-07?pagenumber=1
Robo – whether he is right or wrong i do not care. Anyone who only bashes but doesn’t provide an alternative path is worthless. If he is so insightful, what’s his plan??? Even if it’s “put cash in the mattress” at least it is an alternative to be discussed.
Jim, the securitization problem is huge and is unsettled law. Having the notes turn into unsecured debts would be beyond messy. MERS? I want my county to get the fees that MERS should have paid according to California Law.And I want MERS dissolved, the questions about valid title that have been raised are disquieting and every time a new deposition is taken things look worse… I do know both agents and buyers who are refusing to look at REO properties because of the potential problems. Personally I am comfortable with REO’s from portfolio lenders and would be fine with an REO from any source if the price were discounted enough to make a quiet title action worthwhile.
MERS won’t go away easily because Congress can’t just legislate away the problem given that property is clearly a state’s issue. Achilles’ heel, that.
tj, not so sure about that. The Supreme Court hasn’t found many limits on Federal power. It’s a case I’d like to see, though.
I spent a couple hours the other day re: a mistaken MERS report that tied me to two foreclosures back in 2005 right after closing on my new home. The biggest loan is with Bank of America…oh joy! Everything is faxed over. Let’s see if someone there can actually read…
Not sure how much impact MERS will have on potential buyers but mortgage rates have been rocketing higher since QE2 started. We’ve seen 50 basis points since the beginning of November. That might start effecting buyers somewhat but people probably won’t notice until we see 5+% again. Maybe we get a little panic from the fence sitters. Oh know rates are going higher better get in soon.
http://www.bankrate.com/funnel/graph/Default.aspx?cat=2&ids=1,-1&state=zz&d=180&t=MSLine&eco=-1
The biggest problem with MERS is not with the delinquent homeowner’s. They are treated as pesky “gnats” which can be dealt with a flyswatter.
The big problem is with investors when they find out that “put backs” are barred by a little known statute, The Uniform Fraudulent Transfer Act which sets one or four year statutes of limitations on transferor’s liability for fraudulent mortgage assignments. Most if not all originators [mortgage companies like those in Orange County] were insolvent and are now defunct.
Interpreting the UFT act is quite complicated based upon the possible outcomes from various scenarios as to when the transfer of the mortgage was made [normally when the assignment of the mortgage note was recorded] but under MERS that date is unknown. Then, there is the interplay of who received the transfer [i.e. insiders like Countrywide to B of A] or outsiders like the GSE’s. And lastly, the time determinate is placed into the mix as to when the originator became insolvent.
This leads to quite a witch’s brew. The end result being unsecured notes of dubious value