bubbleinfo.com

From cnbc.com – click here for the similar on-line version.

Here’s my 2-part MERS settlement. 1. Have the banks fund Sheila’s “foreclosure claims commission” to dole out settlements to those who were harmed, and 2. Have the servicers pay all the back recording fees owed (or settlement).  MERS is then allowed to continue operations and be required to record all transfers/pay the fees.

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From HW:

If local governments succeed in the fight against how banks have recorded the transfer of mortgage notes through the Mortgage Electronic Registration Systems, home loans could become as expensive as credit cards, K&L Gates Partner Laurence Platt said Wednesday.

At the last panel of the Mortgage Bankers Association summit on the future of mortgage servicing, Platt and Adam Levitin, an associate professor at Georgetown University Law Center, discussed the validity of MERS. The company was created by major lenders to become the single title holder of a mortgage as the owners of the note made transfers back and forth through securitization.

This, Platt said, was a solution to “antiquated filing systems” at the local level. In Chicago’s Cook County, for example, it can take up to a year for a lender to receive a recorded mortgage back at the time of foreclosure, prepayments and other actions.

But local jurisdictions such as the states of California and Virginia are fighting to void foreclosures completed where the lender lays claim to the enforceability of the credit – meaning if the lender can use MERS to prove it has the right to foreclose – on two basis, Platt said.

One, MERS replaces the fees lenders used to pay to local governments for recording these notes, and these governments are claiming the banks still have to pay fees for the transfers. Second, Platt said, they are trying to score political points, which will only end up hurting borrowers in the future.

“My biggest concern is that local jurisdictions are enacting laws that change the centuries old law on recorded assignments in their locales, and that would void all mortgages in their jurisdiction,” Platt said. “But Virginia didn’t require assignments in the past. So, if that law passes, you will not be able to foreclose in the commonwealth in Virginia. It’s turning real property law on its head.”

But Levitin pointed out the inaccuracies and full-out holes in the MERS system. In cases he looked up, often the investor or the servicer on the MERS system did not match what was on the note.

“MERS ceases to track transfers once the loan is moved into another system,” Levitin explained.

Platt admitted there were issues with the system, but he warned that scoring short-term political points could be the end of affordable housing.

“They are making secured credit unenforceable,” Platt said. “If you think you’re going to get 4% mortgages on unsecured loans, you’re wrong. You’re going to get credit card rates. MERS was designed to make it easy to transfer assignments in modern economics.”

Hat tip to AL for sending this along from the ocregister.com:

NEWPORT BEACH – A husband and wife were arrested Thursday morning and face charges of illegally living in homes as squatters.

Chris Wayne Duncan, 42, and Robin Ann Duncan, 36, both of Newport Beach, were each charged with one felony count of conspiracy to commit second-degree burglary, second-degree burglary and unauthorized entry of a dwelling, according to the Orange County District Attorney’s Office.

Chris Duncan is accused of finding properties that were in foreclosure and vacant. In September 2010, prosecutors allege, the Duncans drafted a fraudulent lease of 10 Hidden Pass – a foreclosed and vacant property in Newport Coast – and then broke in and illegally moved in.

According to the District Attorney’s Office, the couple claimed to be renters of the property and had utilities turned on in their names to give the appearance of legitimate tenancy.

In October, when an appraiser went to the property as part of the process of short sale, the Duncans changed the locks and kept the appraiser from entering the home, prosecutors said. The couple is accused of telling the appraiser that they were legal renters and that the owner should contact the Duncans directly.

According to the District Attorney’s Office, the owner then contacted the Newport Beach Police Department, which investigated the claim and arrested the Duncans.

The Duncans are each being held in lieu of $25,000 bail. An arraignment date is pending.

If convicted, the couple faces up to three years in state prison.

Incredible ski footage by Andrew Whiteford at Jackson Hole – click on “full screen” icon next to HD:

Late 2010 from Andrew Whiteford on Vimeo.

She doesn’t say it specifically, but this should be the first step in resolving the MERS/robo-signing debacle with well-rounded settlements for all – from MND:

Federal Deposit Insurance Corporation (FDIC) Chairman Sheila C. Bair called today for a “foreclosure claims commission” to address complaints from homeowners who have been harmed by flaws in the foreclosure process.  This was one of several improvements suggested by Bair, an outspoken critic of the servicing industry, at a “summit” on Mortgage Servicing for the 21st Century sponsored by the Mortgage Bankers Association (MBA).

Bair said that throughout the mortgage crisis “the most persistent adversary has been inertia in the servicing and foreclosure practices applied to problem loans,” and that prompt action to modify unaffordable subprime loans in 2007 could have helped to limit the crisis in its early stages.   Still, 18 months into an economic recovery and with hundreds of thousands of mortgage modifications completed, “mortgage markets remain deeply mired in a cycle of credit distress, securitization markets remain frozen, and now chaos in mortgage servicing and foreclosure is introducing a dangerous new uncertainty into this fragile market.”

Bair spoke, as she has several times in recent months, of misaligned incentives in the servicing business model which she said drove the origination of trillions of dollars of unaffordable subprime and Alt-A mortgages that triggered the crisis.  Now, she said, the fixed fee structure based on volume does not provide sufficient incentives to effective manage large volume of problem loans during a period of crisis.  “Mortgage servicers have remained behind the curve as the problem has evolved to include underwater mortgages and, now, foreclosure practices that sow confusion and fear on the part of homeowners and fail to fully conform to state and local legal requirements.”

This compensation structure drove automation, cost cutting, and consolidation to the point where the market share of the top five servicers has gone from 32 percent to almost 60 percent since 2000.  “When mortgage defaults began to mount in 2007 and 2008, third-party servicers were left without the expertise, the contractual flexibility, the financial incentive, or the resources they needed to engage in effective loss-mitigation programs.”

Responding to the crisis, Bair said, requires all parties involved to recognize that loss mitigation is not just socially desirable, it is wholly consistent with safe and sound banking and has macroeconomic consequences.  “The bottom line is that we need more modifications and fewer foreclosures. When foreclosure is unavoidable, we need it to be done with all fairness to the borrower and in accordance with the law. Only by committing to these principles can we begin to move past the foreclosure crisis and rebuild confidence in our housing and mortgage markets.

The foreclosure claims commission envisioned by Bair would follow the model used to settle claims arising out of the BP oil spill and the events of 9/11.  It would be set up and funded by servicers to address claims submitted by homeowners who have wrongly suffered foreclosure through servicing errors.  Bair said that many in the servicing industry will resist such a settlement because of the immediate financial cost, “but every time servicers have delayed needed changes to minimize their short-term costs, they have seen a deepening of the crisis that has cost them – and the rest of us – even more.”

From msnbc.com:

When is a grace period not really a grace period?

When you have to pay a $6 fee for using it.

Some Bank of America mortgage customers will receive an unwelcome Valentine’s Day gift when the bank’s policy for grace period mortgage payments changes on Feb. 14. Essentially, it means those customers will have six fewer days to pay their mortgage each month without facing additional fees.

Consumers who use the bank’s online payment tool, Mortgage Pay, will risk a $6 fee if they fund payments using another bank’s checking account and the payment falls during the final six days of the traditional 15-day grace period. Consumers who make payments from Bank of America accounts are not subject to the fee.

“Let me get this straight. They tell you that you have a grace period, (then) they say, ‘Oops, you only have half of it if you don’t bank with us,’” said Gail Hillebrand, a lawyer for Consumers Union who specializes in banking issues.  “That doesn’t seem fair. … This looks like a new ‘gotcha,’ and we have enough of those already.”

Hat tip to SM who sent this along from Marilyn at the ocregister.com:

A two-story house on the Seacliff Golf Course in Huntington Beach is the worst example of “malicious vandalism” of a foreclosed home that a top Realtor for bank-owned properties says he’s ever seen in Orange County.

The home, at 6581 Racliffe Circle in the guard-gated The Peninsula at Seacliff community, went back to the bank at $1,782,214 at a foreclosure auction last August after no one bid on it.

The roughly 3,000-square foot house now is undergoing about $250,000 in repairs, says broker Tom Moon of Pacific Moon Real Estate, who has the listing.

Among the destruction: Chemicals and cement were poured down drains, a Jacuzzi was left running for what may have been months, with most walls in the house splattered in mold, and a floor caved in from the weight of a huge pile of wet clothes and other junk.

The day I went by, workers in special bodysuits and masks doing mold remediation would not allow us into the house for safety reasons. As is typical with some foreclosed homes that are found stripped and trashed, the Realtor and the bank cannot prove who did the damage. And with a lack of eyewitness accounts in these cases, police rarely get involved.