- This MERS problem is crippling the banksters’ plan to foreclose properties. All American should take advantage of this and kick the banksters’ ass. Look people, these snakes have enslaved you, your family, your children’s children … till forever. Why do you take this crap from these criminals. What they have done is against the law and totally fraudulent. It is the intentional collapse of America and destruction of the middle class.
- Those of you thinking of buying a foreclosed property is simply out of you mind. Unless the banksters can proof that they hold the title-deed to your property, you should not continue paying the mortgage or allow them to foreclose on you. The simple fact is, they have taken trillions of dollars from American taxpayers. The amount stolen can payoff all residential mortgages several times! It is pay back time for the banksters!
“A California bankruptcy court, following landmark cases in other jurisdictions, recently held that this electronic shortcut breaks the chain of title, voiding foreclosure. The logical result could be 62 million homes that are foreclosure-proof.”
Over 62 million mortgages are now held in the name of MERS, an electronic recording system devised by and for the convenience of the mortgage industry. A California bankruptcy court, following landmark cases in other jurisdictions, recently held that this electronic shortcut breaks the chain of title, voiding foreclosure. The logical result could be 62 million homes that are foreclosure-proof.
In a Newsweek article a year ago called “Too Big to Jail: Why Prosecutors Won’t Hit Wall Street Hard in the Subprime Scandal,” Michael Hirsch wrote that we were unlikely to see trials and convictions like those in the savings and loan scandals of the 1980s, because fraud and blame have been so widespread that there is no one to single out and jail. Said Hirsch:
“The sad irony is that in pleading collective guilt, most of Wall Street will escape whipping for a scheme that makes Bernie Madoff’s shenanigans look like pickpocketing. At the crest of the real-estate bubble, fraud was systemic and Wall Street had essentially gone into the loan-sharking business.” “Unfortunately,” he added, “prosecution of fraud is the only way you’re going to get reform on Wall Street.”
Sure enough, a year later we got a banking reform bill that was so watered down that Wall Street got nearly everything it wanted. The too-big-to-fails, rather than being whittled down to size, have grown even bigger, circumventing antitrust laws; and they are being allowed to carry on pretty much as before. The Federal Reserve, rather than being called on the carpet, has been given even more power; and the Consumer Protection Agency — the main part of the bill with teeth – has been put under the Fed’s watchful eye. Congress and the Justice Department seem to have bowed out, leaving no one to hold the finance industry to account.
But the best laid plans even of Wall Street can sometimes go awry. In an ironic twist, the industry may wind up tripping over its own Achilles heel, the Mortgage Electronic Registration Systems or MERS. An online computer software program for tracking mortgage ownership and rights, MERS is, according to its website, “an innovative process that simplifies the way mortgage ownership and servicing rights are originated, sold and tracked. Created by the real estate finance industry, MERS eliminates the need to prepare and record assignments when trading residential and commercial mortgage loans.” Or as Karl Denninger puts it, “MERS own website claims that it exists for the purpose of circumventing assignments and documenting ownership!”
MERS was developed in the early 1990s by a number of financial entities, including Bank of America, Countrywide, Fannie Mae, and Freddie Mac, allegedly to allow consumers to pay less for mortgage loans. That did not actually happen, but what MERS did allow was the securitization and shuffling around of mortgages behind a veil of anonymity. The result was not only to cheat local governments out of their recording fees but to defeat the purpose of the recording laws, which was to guarantee purchasers clean title. Worse, MERS facilitated an explosion of predatory lending in which lenders could not be held to account because they could not be identified, either by the preyed-upon borrowers or by the investors seduced into buying bundles of worthless mortgages. As alleged in a Nevada class action called Lopez vs. Executive Trustee Services, et al.:
“Before MERS, it would not have been possible for mortgages with no market value . . . to be sold at a profit or collateralized and sold as mortgage-backed securities. Before MERS, it would not have been possible for the Defendant banks and AIG to conceal from government regulators the extent of risk of financial losses those entities faced from the predatory origination of residential loans and the fraudulent re-sale and securitization of those otherwise non-marketable loans. Before MERS, the actual beneficiary of every Deed of Trust on every parcel in the United States and the State of Nevada could be readily ascertained by merely reviewing the public records at the local recorder’s office where documents reflecting any ownership interest in real property are kept. . . .
“After MERS, . . . the servicing rights were transferred after the origination of the loan to an entity so large that communication with the servicer became difficult if not impossible. . . . The servicer was interested in only one thing – making a profit from the foreclosure of the borrower’s residence – so that the entire predatory cycle of fraudulent origination, resale, and securitization of yet another predatory loan could occur again. This is the legacy of MERS, and the entire scheme was predicated upon the fraudulent designation of MERS as the ‘beneficiary’ under millions of deeds of trust in Nevada and other states.”
MERS now holds over 62 million mortgages in its name, including over half of all new U.S. residential mortgage loans. But courts are increasingly ruling that MERS is merely a nominee, without standing to foreclose on the collateral that makes up a major portion of the portfolios of some very large banks. It seems the banks claiming to be the real parties in interest may have short-circuited themselves out of the chain of title entitling them to the collateral.
Technicality or Fatal Flaw?
To foreclose on real property, the plaintiff must be able to produce a promissory note or assignment establishing title. Early cases focused on MERS’ inability to produce such a note, but most courts continued to consider the note a mere technicality and ignored it. Landmark newer opinions, however, stress that this defect is not just a procedural but a substantive failure, one that is fatal to the plaintiff’s case.
The latest of these decisions came down in California on May 20, 2010, in a bankruptcy case called In re Walker, Case no. 10-21656-E–11. The court held that MERS could not foreclose because it was a mere nominee, and that as a result plaintiff Citibank could not collect on its claim. The judge opined:
“Since no evidence of MERS’ ownership of the underlying note has been offered, and other courts have concluded that MERS does not own the underlying notes, this court is convinced that MERS had no interest it could transfer to Citibank. Since MERS did not own the underlying note, it could not transfer the beneficial interest of the Deed of Trust to another. Any attempt to transfer the beneficial interest of a trust deed without ownership of the underlying note is void under California law.”
In support, the judge cited In Re Vargas (California Bankruptcy Court);Landmark v. Kesler (Kansas Supreme Court); LaSalle Bank v. Lamy (a New York case); and In Re Foreclosure Cases (the “Boyko” decision from Ohio Federal Court). … The court concluded:
“Since the claimant, Citibank, has not established that it is the owner of the promissory note secured by the trust deed, Citibank is unable to assert a claim for payment in this case.”
The broad impact the case could have on California foreclosures is suggested by attorney Jeff Barnes, who writes:
“This opinion . . . serves as a legal basis to challenge any foreclosure in California based on a MERS assignment; to seek to void any MERS assignment of the Deed of Trust or the note to a third party for purposes of foreclosure; and should be sufficient for a borrower to not only obtain a TRO [temporary restraining order] against a Trustee’s Sale, but also a Preliminary Injunction barring any sale pending any litigation filed by the borrower challenging a foreclosure based on a MERS assignment.”
While not binding on courts in other jurisdictions, the ruling could serve as persuasive precedent there as well, because the court cited non-bankruptcy cases related to the lack of authority of MERS, and because the opinion is consistent with prior rulings in Idaho and Nevada Bankruptcy courts on the same issue.
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- The banksters have committed massive fraud in mortgage lending and have compounded the fraud via MBS and CDOs, worthless fraudulent toxic derivatives, worldwide. They have ‘raped’ the sheeple via the District of Criminals (DC), the bought up politician snakes. Trillions of dollars of bailouts, loan guarantees… have been given to these Illuminist banksters who caused the economic collapse. Hopefully, this ForeclosureGate will wake the sheeple up!
The Mortgage Securitization Scam
The foreclosure crisis has set its sights on MERS, the Mortgage Electronic Registration Systems, which files almost all of the foreclosure actions in behalf of lenders. The problem never anticipated by lenders is that the company has no legal standing to do such things. In addition they broke the law by not requiring a notarized document of transfer of title signed by the seller and buyer. That is because they did not own the loans.
Only the owner of the loan can file. Thus, many of the titles are now subject to fraudulent conveyance. This means that foreclosure proceedings could be subject to legal challenge. Another question is could the foreclosures done since 2007 be nullified? How could a settlement be arrived at in a few months when there are millions of homeowners involved. The banks, which obviously deliberately broke the laws, will be responsible for fines and settlement with injured parties could cost them more than $10 billion. While this scenario moves forward the banks still are acting like goons and violating laws, to get people out of homes.
The question is who has the loan paper and that is the note-holder. He or they are the only ones with legal standing to request a court to foreclose and evict. That all changed with the coming of MBS, mortgage backed securities. Loans were bundled into tranches or REMIC’s, a vehicle designed to hold the loans for tax purposes. These mortgages were cut into bits and pieces to satisfy the different tastes and needs of investors. During this process the note was not signed over to the bondholders, because the mortgage may have been split into pieces and no one could know which part would default first. Therefore the MBS held the note.
The MERS system was a bridge and repository for these mortgages, a shadow holder owned by lenders and Fanny Mae and Freddie Mac. The system located mortgages and was involved in the altering of mortgages. The upshot was a broken chain of title. When that happens the mortgage note is no longer valid. The borrower does not know who to pay and so pays no one. Then come the foreclosure mills and that led to falsification of documents to assist the lender, which is fraud. These actions expedited foreclosures and evictions and that was all the lenders were interested in.
There is no question a massive fraud took place. It was identified by the title insurance companies who the lenders are trying to blame this criminality on. The result was the banks went around the title insurance companies and used foreclosure mills, when the title companies wouldn’t play ball.
The banks terrified that they had gotten caught tried to ram through Congress the Interstate Recognition of Notarizations Act to protect themselves and their criminal acts. The scum in the Senate and House used voice votes to pass the bill and because of the massive complaints the President pocket vetoed the measure. He also knew the bill would have been identified as unconstitutional.
The bottom line is the banks had no legal right to foreclose and evict. That means the evicted can get their homes back. The new buyers are screwed because they have no legal standing because the banks sold them a house they did not own. The fraud committed by the foreclosure mills, at the behest of the banks, puts all foreclosures into question and even the status of those homeowners who are currently paying mortgages. That means if homeowners all stop paying their mortgages, they could end up owning their homes.
This is a mega crisis far bigger than Bear Stearns and Lehman, but not as big as what we will see in the future when the CFTC, LBMA, Comex, GLD and SLV are taken down in their gold and silver scam. The heart of these criminal acts is anchored in securitization and the scam that it was. We have been demanding criminal action for three years and no one will listen. It was only recently that civil suits have been entered into. We don’t get it. Do we still have a legal system?
This problem can only worsen the problems in the housing sector. About half of homebuyers really qualify to own homes. False appraisals on about 50% of homes littered the landscape just two years ago. Half of the first-time homebuyers didn’t even buy homes, which cost the taxpayers about $15 billion. Inventory over hang is now in the realm of years not months, as homebuilders continue to increase new homes at the rate of 600,000 a year. What can they be thinking of with a further 20% correction ahead? Foreclosures are now 1 in 12 of all mortgages. Four years ago it was 1 in 100. For sure home prices have not bottomed.
It could be the mortgage market is dead and all the bondholders are sunk. If that is the case the financial structure is close to collapse. We were in the brokerage industry for years and we never saw such criminality. The banks that pulled this off are virtually unregulated. Some writers believe there will be hundreds of billions in losses and they are correct, unless the government and the Fed bail them out.
Then there are the subprime and ALT-A loans issued over the past two years that are beginning to be reset. Half will go under and Fannie and Freddie guaranteed those loans. This will put further downward pressure on housing prices. All in all it looks terrible and we see no easy way out. Is it any wonder investors are buying gold and silver bullion, coins and shares.
You cannot tell the players without a program. That fits perfectly in all endeavors, particularly journalism. Last week in the FT Martin Wolf wrote apiece titled “why America is going to win the global currency battle.” What he forgot to tell you is that he is a member of the Bilderberg Group, whose mission is a One-World bank and government.
The plan according to Fed Chairman Ben Bernanke is for the Fed to continue purchases of Treasury debt and to allow further monetization, which means higher inflation. He tells us inflation officially is too low and unemployment is too high. He doesn’t see either changing much. We believe both are headed higher. The global currency battle has been going on for years – it’s just it was almost never discussed. The US was happy to tolerate deliberately misaligned, depreciated currencies because it kept US inflation down and foreigners continued to buy US debt, no questions asked. Obviously things have changed.
The monetization is supposed to promote stability, job growth and to conquer deflation. Mr. Wolf says, “To put it crudely, the US wants to inflate the rest of the world, while the latter is trying to deflate the US.” Mr. Wolf believes the US must win, since it has infinite ammunition in a machine that can create money and credit endlessly. Just a minute, if the IF does that, it most certainly will lead to hyperinflation, where no one would want the US dollar. Europe and China want deflation. The problem is if that happens the entire system will collapse. They obviously want to get the problem over with and have a depression. The US obviously is not ready for that, because it would dethrone the dollar as the world reserve currency, a condition that would cost America its imperial status. We find it of interest as well that the US is encouraging further debt among US and foreign consumers to offset trade imbalances, when they know the results in Japan over the last 18 years following such a policy was unsuccessful if not disastrous. Presently, they are again trying to push that upon Japan and China as well – the same old unsuccessful Keynesianism.
China already has its own credit bubble, distortions, imbalances and inflation having mimicked the US model. In spite of higher interest rates, speculation and inflation are at high levels.
You cannot indefinitely aid and abet a flawed policy, even though that policy allowed you to live far beyond your means. These inflationary pressures emanating from the US cannot be managed and other nations have realized this and that is why this weekend the G-20 is meeting in S. Korea to try to bring an end to currency warfare. We believe the meeting will be another non-event.
Not only are these US policies creating inflation worldwide, but also they are in part responsible for the increases in gold, silver and commodity prices. A battle has been in progress for the past 18 months – the dollar verses gold. In spite of a dollar rally gold has won hands down and the world doesn’t realize it yet and probably won’t for some time to come. There is much less confidence in the US dollar and as long as we have quantitative easing and inflationary expansion, the confidence will deteriorate. The dollar is no longer king. Gold has assumed its position. That is why currency without gold backing is doomed to failure. It is not only privately owned central banks, but government owned ones as well. The temptation to create money and credit is too great. That is why gold backing has always been necessary. If we didn’t have fiat currencies we wouldn’t have an over-liquefied, speculative financial world. Nor would we have booms and busts to enrich the rich on Wall Street. The ability to recycle our excesses through global currency markets and back into our markets is coming to an end. Foreigners want an edge. They are deliberately reducing the value of their currencies, which is an exercise in futility at this point in the cycle. All that will do is add to the dollar inflation already having descended on these economies. All they are doing is trying to successfully function within a dying system.
The US economy cannot live without stimulus. The inflation created by this policy is not going to be allowed to be dumped into other countries, and as a result will manifest itself in the American economy. The risk of holding dollars increases with each passing day. Dollar weakness will cause foreigners to dump dollars back into the US economy, keep its own currency low and push these nations to accumulate gold as they are currently in the process of doing. The day of reckoning for the dollar is in process and it is going to be very unpleasant for dollar holders.
- The world is definitely going back to the gold standard. Competitive devaluations, currency war proves that no fiat currency is of any intrinsic value. Fiat currencies are a fraud perpetrated by Iluminist central banksters. They know their system is coming to an end. A global monetary crisis is likely weeks away.
Hold on to Gold, U.S. Government and Banks are Lying on Unemployment and Mortgage Fraud
Predicting ongoing waves of mortgage delinquency, illiquidity and bank insolvency, 321gold’s Bob Moriarty envisions a temporary financial holiday followed by a return to the gold standard. While he finds several solid investment opportunities among mining equities, he says the safest strategy is having “a $20 U.S. gold piece in your right hand and a 1 oz. gold bar in your left.” In this exclusive interview with The Gold Report, Bob explains how the U.S. government “is lying” about unemployment figures and banks “are lying” about supposed mortgage reviews that find no fraud involved and recommends investors have “a triangle of investments”—the most important of which are physical precious metals.
The Gold Report: Bob, give us your perspective on what’s happened since we last talked with you in July. First off is the announcement last month that the U.S. ‘officially’ emerged from the recession in August 2009.
Bob Moriarty: My one-word answer to that is “rubbish.” If the government had said we emerged from the recession in August 2009 and went into an official depression, I would have to agree. If you read John William’s Shadowstats.com, the real unemployment rate in the U.S. today is 22.5%. You cannot have the end of a recession with 22% unemployment.
TGR: Do you think it’s because the government is using different definitions for what causes a recession?
BM: Exactly. Another term for it is “lying.”
TGR: But economists are the ones that made the announcement.
BM: So? They’re lying. The government changed the definition to make the numbers go down in the same way that it provided no cost of living adjustment (COLA) for Social Security. Anybody who’s been to a grocery store knows we have price inflation. Prices are going up—period. According to the government, they’re not.
TGR: But if the government is manipulating this, why did it come out with no COLA increase right before an election? Manipulation again?
BM: The government’s not manipulating; it is lying. It used to be the government lied on occasion; now, it’s lying about everything. We absolutely do have price inflation. Those who don’t realize it haven’t bought food or gasoline in the last year; anyone who has bought food and gas knows we have inflation. But the government has some vested interest in paying out as little as possible for Social Security, so it can say, ‘Oh, we’ve got no inflation.’ The government is lying.
TGR: Let’s move on to another interesting bit of information. Several banks have declared a moratorium on housing foreclosures because, on reviewing their documentation, they found they lacked proper authorization.
BM: It’s not true. They did not review the documentation to find out there was fraud involved. People took them to court and got others to admit—and this goes back almost a year—that the banks had people signing 10,000 documents a month, swearing that they’d reviewed foreclosure documents and determined they were all accurate.
There are two separate issues here. One is that there was fraud in virtually every mortgage issued in the U.S. over the last 10 years, since the Management Information Retrieval System (MIRS) was set up. When you go to a bank and borrow money on a house, you sign a document with a ‘wet’ signature; that is, your physical signature—not a copy of a signature, but your physical signature. Whoever holds the mortgage is supposed to go down to the local town hall and record it every time there is a change of ownership in the mortgage. It used to be that you would have a stack of paper half an inch thick for everyone who had a mortgage. MIRS put all that it into electronic format and threw away the paper. A ‘wet’ signature is required to repossess a house in 23 states. You have to be able to prove there was an agreement between the person taking the mortgage out and the person holding the mortgage. Those papers no longer exist. You get into so much fraud here. The banks had people, public notaries, signing that they’d witnessed people reviewing these documents and it was fraud. People were being foreclosed on that didn’t even have a mortgage.
The second issue is that 45% of the mortgages in Florida are under water. What are those people going to do? Bank of America comes out and says it’s going to stop foreclosures over the whole country and 45% of mortgage-holding Floridians just decided not to pay their mortgages. If these mortgages aren’t repaid—and they won’t be—the banks can’t sell the houses. They are stuck. When you slice and dice the mortgage, who owns the house? People who went through foreclosure two years ago still have the legal right to sue those who foreclosed on their houses because they were committing fraud. There will be cases like that where people will no longer be able to buy or sell a house because they won’t be able to get title insurance and, without title insurance, they can’t get a mortgage. There is no simple answer. The mortgage situation is far worse than anybody imagines. There is no simple solution; the government can’t buy its way out.
TGR: Extrapolating from there, you’ve said the banks will wind up having to close in a sort of “financial holiday.”
BM: If everybody goes without paying their mortgages, how can the banks stay open? But if banks forgive the mortgages, we still have people living in houses they can’t afford. A depression or recession should be a cleansing event; ultimately, what happens is the government gets involved and does what is politically popular. The government, literally, is bribed by all these big banks—Goldman Sachs, JP Morgan, Bank of America, etc.—their campaign contributions are bribes for votes to benefit them. Instead of the banks paying for their stupidity, the cost is transferred to the taxpayers.
TGR: Let’s play this out. People can’t pay their mortgages and the banks are either illiquid or insolvent. Do the banks go under, or does the government do another bailout?
BM: The government bails them out, the same way Zimbabwe did—by printing money. Certainly, you see it in the price of gold. At $1,323, the gold price is patently absurd. That’s not the price of gold—it’s the price of the dollar. Everybody believes the Fed is going to print more money, move into quantitative easing 2 (QE2) and destroy the dollar. Well, we’re so close to hyperinflation, riots in the street and banks closing that it’s crazy.
TGR: That brings us to gold. Central banks (CBs) in many countries are now buying and storing gold rather than selling it.
BM: Gold is money. You have a choice of holding your assets in yen, Swiss francs, euros, dollars or gold. Banks are doing what makes sense. They are called “reserves” for a reason. If you really need them, you fall back on your reserves. Countries are realizing they’re holding all this paper and, once they take a sniff of the paper, they realize it smells terrible. So, they want to hold some gold; it makes a lot of sense.
TGR: But is that just portfolio rebalancing, or do countries really want to get out of fiat currencies?
BM: They really want out of fiat currency. I have used the analogy of musical chairs for years; the banks and everybody else are playing musical chairs. The flaw is that the music is still playing, and they all think they’ll get a chair; but, if you look around the room, there are no chairs.
China is stuck with all this money. We have a currency war going on right now with China, Japan, Brazil and even the Swiss. Everyone’s trying to destroy their own currency so they can get a competitive advantage. When all currencies are destroyed, the only thing left is gold.
TGR: You are on record saying that, at some point, we will revert to the gold standard.
BM: The probability of the world going back to the gold standard is not 99%—it is 100%. When every fiat currency in the world has been destroyed, someone will pick up a $20 gold piece and say: “Hey, why don’t we use this?” We have $1,323 gold and $23.12 silver. We’re not at the top. Gold and silver are going much higher and fiat currencies are going much lower.
TGR: Some recent forecasts differ radically as to where gold is going. Kaiser Bottom-Fish Writer John Kaiser sees the gold price reaching well into the thousands, while Freemarket Gold & Money Report Publisher James Turk says $8,000 gold.
BM: You can’t forecast the price of gold in dollars because what you’re really doing is forecasting the price of the dollar. The chance of the dollar adding 3 zeros is about the same as adding 6, 9 or 12 zeros. The USD is going the way of the Zimbabwe dollar—and you can’t quote gold in Zimbabwe dollars because it approaches infinity.
Gold is going to retain its value. Gold will still be money when pieces of paper are something to slap on the wall or throw in the furnace to heat your house. Fiat currencies are going down. Let’s go back to the game of musical chairs. Everybody realizes there are no chairs, but they believe someone will bring a chair in and that they’ll be able to find it when the music stops. The music is stopping. The mortgage issue is not a minor financial issue—it is a catastrophic issue because there is no solution.
TGR: How does this situation play out in places like the U.S., Europe and Japan?
BM: The middle class is being destroyed in the U.S. There will always be rich and there will always be poor, but the middle class is being destroyed; and the middle class gives stability to a country. If you want to see what’s going to happen in the U.S., turn on the news from Spain, Greece, France or Japan. The truly interesting thing is—the government workers are the ones screaming about entitlements. And they’re going to be attacked by other government workers with bigger guns. This is the biggest financial problem in world history. The tulip-bulb mania, the South Sea India craze, the Florida land boom during the 1920s—those were all local. This is global. It affects everybody. . .and every bank in the world could close its doors.
You simply have to match income to outgo. We have two-and-a-half wars going on right now, and Obama and American Israel Public Affairs Committee (AIPAC) would love to start another. We can’t afford them; we stand to gain nothing. These wars are destroying the U.S. financially, which results in one bailout after another. Every great empire that has ever collapsed did so because it got involved in military adventurism. The wars, the military adventures the U.S. is involved in, are going to destroy the U.S. financially.
TGR: Given that you foresee a time when the financial system will shut down entirely, what’s your view on equity investing today?
BM: Investors should have a triangle of investments. To start with, the single most-important thing that investors should invest in would be something solid, tangible that they can hold in their hands. Of course, that would be physical gold, silver, platinum or palladium. Second, investors can choose between gold stocks, silver stocks, ETFs or other things. And third, once they get down to money in the bank, buying mortgages or something like that—those are very risky investments. The safest thing you can possibly have now is a U.S. $20 gold piece in your right hand and a 1 oz. gold bar in your left hand.
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