Hat tip to everyone who sent in the MA court ruling on foreclosures, which should expedite settlement talks – here’s an excerpt fromcnbc.com:
95 percent of troubled borrowers currently do not contest their foreclosures, Paul Miller of FBR tells me. He sees this less about the specific case as the perception of this case:
“If you see more and more of these headlines, many people might look at this and say ‘I can get my house free and clear if I just contest the foreclosure and get a favorable judge that sides on my side. All of the sudden I have a free mortgage.’ That’s not what’s going to happen in this case,” Miller said in an interview. He believes these two homes will eventually go to foreclosure.
In fact, this Massachusetts case may not be exactly as the headlines are screaming.
The American Securitization Forum, immediately after the ruling, put out a statement saying, “The ASF is pleased the Court validated the use of the conveyance language in securitization documents as being sufficient to prove transfers of mortgages under unique aspects of Massachusetts law.
Importantly, unlike the lower court, tithe Court also said assignments of mortgage can be executed in blank, as long as a complete chain of transfers can be shown through the applicable deal documents.” ASF says those documents were not introduced in the lower court and that the lower court would have ruled otherwise if they had.
“The ASF is confident securitization transfers are valid and fully enforceable,” concludes the ASF’s Executive Director, Tom Deutsch.
Hat tip to David for sendingthisalong, from USA Today:
Steven and Tamara Gewecke are three years behind on their mortgage payments, but they’ve fought off foreclosure. The Minnesota couple refinanced in 2006 to start a business. It failed. Debts mounted. The Geweckes went bankrupt and failed to win a loan modification. But they bought time.
In 2009, the Geweckes filed a lawsuit to block their foreclosure. At the heart of their case is this question: Who owns their mortgage?
They allege the investor trust that claims to doesn’t because there’s no proper record of the mortgage’s transfer to the trust. Their complaint also alleges that the mortgage didn’t get to the trust until 18 months after the trust closed to new loans. If US Bank, the trustee, can’t prove ownership, it can’t foreclose, the Geweckes say.
The Geweckes want a loan modification so they can stay in their home of 16 years. Their current loan has an adjustable 9.25% interest rate. They owe more on the house than it’s worth.
They’re not looking for a “free ride,” says Steven, 40, who works in marketing. Neither do they want to pay off one firm and then face a future claim by another. They also hope their case will send a message to mortgage companies that they must obey rules, too.
“I understand that if you don’t make your payments, you’ll lose your home,” says Tamara Gewecke, 41. “But make sure you do it right. Make sure you’ve got your paperwork done.”
This is brilliant – rather than regulate or bailout MERS, these three are pushing to cut them off. If lenders want to sell loans to Fannie/Freddie/FHA, they’ll have to find another way to track them other than MERS, and pay recording fees every time they sell or transfer the loan. FromHW:
Three congressional representatives recently introduced a bill into the House that would gradually phase out the use of Mortgage Electronic Registration Systems,commonly called MERS, within the government-sponsored enterprises as well as Ginnie Mae.
The Transparency and Security in Mortgage Registration Act of 2010, also known as H.R. 6460, would prohibit Fannie Mae and Freddie Mac from purchasing or acquiring any new MERS mortgage deal of six months after its enactment.
MERS allows lenders to track individual mortgages through an electronic tracking and holding system. According to MERS, the firm holds legal title to a mortgage as the loan owner’s agent and is sometimes granted the authority to enforce foreclosure. The firm has been at the epicenter of foreclosure-gate and under scrutiny for wrongful foreclosure.
Under the bill, Fannie and Freddie would also be prohibited from new lending or investing in securities consisting of MERS mortgages for six months.
After the six-month time period expires, “MERS shall not be the named mortgagee or mortgagee of record on any mortgage owned, guaranteed, or securitized” by the GSEs. If at the six-month deadline, Fannie and Freddie still hold loans with a connection to MERS, the agencies will assign those loans to a servicer or holder, the bill states.
Ginnie Mae would be subject to the same timelines and similar terms as Fannie and Freddie under Transparency and Security in Mortgage Registration Act of 2010.
“[T]he association may not newly guarantee the payment of principal of or interest on any trust certificate or other security based or back by a trust or pool that contains, or purchase or acquire, any MERS mortgage,” the bill states.
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?
Hat tip to daytrip and geotpf for sending this along, fromthe WSJ:
OKEECHOBEE COUNTY, Fla.—Patsy Campbell could tell you a thing or two about fighting foreclosure. She’s been fighting hers for 25 years.
The 71-year-old retired insurance saleswoman has been living in her house, a two-story on a half acre in a tidy middle-class neighborhood here in central Florida, since 1978. The last time she made a mortgage payment was October 1985.
And yet Ms. Campbell has been able to keep her house, protected by a 105-pound pit bull named Dodger and a locked, rusty gate advising visitors to beware of the dog.
“They’re not going to take this house,” says Ms. Campbell. “I intend to stay in this house and maintain it as my residence until I die.”
Ms. Campbell’s foreclosure case has outlasted two marriages, three recessions and four presidents. She has seen seven great-grandchildren born, plum real-estate markets come and go and the ownership of her mortgage change six times. Many Florida real-estate lawyers say it is the longest-lasting foreclosure case they have ever heard of.
You know by now that the banking lobbyists must be working overtime trying to convince Congress to sweep the MERS debacle under the rug. This video doesn’t have the answers, but at least it brings the issues to the forefront. The best is a quote by Thomas Jefferson at the 4:50 mark:
(Hat tip to the Coto Housing Blog where I saw this)
This is the first case that I’ve seen of a deed-in-lieu-of-foreclosure.
Hope we see more of them, maybe they are the answer to the robo-MERS-gate problems. The banks could do cash-for-deed-in-lieus, instead of spending big money on attorneys?
Importantly, unlike the lower court, tithe Court also said assignments of mortgage can be executed in blank, as long as a complete chain of transfers can be shown through the applicable deal documents.” ASF says those documents were not introduced in the lower court and that the lower court would have ruled otherwise if they had.
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