It Started Again In America

[Bloo Loo]

The newswires are humming over the decision today of Bank of America to halt all forclosures in all 50 states.

this is becuase of the public unearthing of REMICS (MBS trust conduits), having no legal title in proof.

It transpires the REMICS also have been selling MBS and taking the money...something they are entirely unempowered to do.

so, it seems, many of our pension funds and banks, holding already impaired MBS and CDOS, well, they may be worth nothing, were missold by people that had no title and no legal right to sell..

better send them back to the originating banks.

This is more than just bankers unable to recover from bad mortgages, its the mess of repaying investors who bought nothing at all.

scamsters the lot.

check zero hedge and Denninger, or just google for links.

Im going for a beer.

[Redcellar]

Any links friend? I'd love to know more.

If it's true then many banks will go to the wall. They don't and never will have the money to repay, if even half the bad loans were forced back with refunds required.

I used to work for one such bank, subprime major lender in US. They thought they had planned for the end of it.

[South Lorne]

This is more than just bankers unable to recover from bad mortgages, its the mess of repaying investors who bought nothing at all.

scamsters the lot.

....were GS involved in selling these pieces of 'investment'....?.....could lead to charges of fraud for any banks selling these packets...what about the Credit Rating Agencies...surely they would take a hit if this is proven...?...

[Bloo Loo]

Any links friend? I'd love to know more.

If it's true then many banks will go to the wall. They don't and never will have the money to repay, if even half the bad loans were forced back with refunds required.

I used to work for one such bank, subprime major lender in US. They thought they had planned for the end of it.

just google it.

here is a new one

http://online.wsj.com/article/SB10001424052748704657304575539963605720860.html?mod=googlenews_wsj

[Bloo Loo]

....were GS involved in selling these pieces of 'investment'....?.....could lead to charges of fraud for any banks selling these packets...what about the Credit Rating Agencies...surely they would take a hit if this is proven...?...

ALL the merchant banks were involved it it.

ALL the big banks did it.

ours too, and we also had SIVs or other off balance sheet "conduits".

[leicestersq]

Any links friend? I'd love to know more.

If it's true then many banks will go to the wall. They don't and never will have the money to repay, if even half the bad loans were forced back with refunds required.

I used to work for one such bank, subprime major lender in US. They thought they had planned for the end of it.

Which bank did you work for?

It seems that the originators of these mortgages never did the paperwork they needed to do to legally sell the mortgages on. Then, because the mortgages were based on fraudulent information, the documentation was destroyed. Instead MERS, an electronic system was used to change ownership.

No one bothered to check to see if this method of changing ownership was legal, which in many states it isnt.

It seems to me that millions of mortgagees in the US may actually have free homes. And in the greatest reverse distribution of income ever, a lot of banksters have got a load of bonds worth sweet Football Association.

[Bloo Loo]

Which bank did you work for?

It seems that the originators of these mortgages never did the paperwork they needed to do to legally sell the mortgages on. Then, because the mortgages were based on fraudulent information, the documentation was destroyed. Instead MERS, an electronic system was used to change ownership.

No one bothered to check to see if this method of changing ownership was legal, which in many states it isnt.

It seems to me that millions of mortgagees in the US may actually have free homes. And in the greatest reverse distribution of income ever, a lot of banksters have got a load of bonds worth sweet Football Association.

nah, they wont get free homes...these things have to be unwound back from the investors (our pension funds and banks) through the REMICS back to the original servicers...who are still collecting..or not, the payments.

course, if people DO end up keeping their McMansions...then I think there WILL be civil difficulties.

[South Lorne]

...seems to be affecting current sale exchange contracts

http://weblogs.sun-sentinel.com/business/realestate/housekeys/blog/2010/10/ask_a_real_estate_pro_will_the_1.html

Ask a real estate pro: Will foreclosure freezes affect my home purchase?

By Paul Owers October 8, 2010 07:00 AM

Louis Spagnuolo of WCS Lending in Boca Raton answers reader questions about the housing market. To ask a question that Louis may answer next week, click here.

Q: We recently purchased a new home that originally was foreclosed on and then sold to us by Bank of America. With all the news about banks suspending foreclosures, could this have any impact on us?

[Frank8]

Any links friend? I'd love to know more.

...

Try this one for size.

http://market-ticker.org/akcs-www?singlepost=2196166

What an effing mess.

Edited October 8, 2010 by Frank8

[Redcellar]

nah, they wont get free homes...these things have to be unwound back from the investors (our pension funds and banks) through the REMICS back to the original servicers...who are still collecting..or not, the payments.

course, if people DO end up keeping their McMansions...then I think there WILL be civil difficulties.

Agreed, won't be for free. The trail would be as follows:

Buyer borrows from bank and gives to developer/previous owner

Bank packages and sells mortgages to investment funds etc --- breaks down here

Investment fund thinks it owns assets

So worst case, the bank and the mortgagee still have an agreement and the bank is still holding the loan. They owe people below them for selling something they shouldn't.

Won't happen. Unwind as Bloo Loo says, with all the lovely legal costs associated, or Obama changes the law in some way.

[DabHand]

I liked it where l read the servicers were fraudulently taking the house in foreclosure (they can't they don't hold title, that SHOULD be held by the holder of the security) and then selling it off, pocketing the cash without even informing the security holder.

I also liked it were l read the servicers were forging court documents, to speed things up don't you know.

I also liked it where l read that now purchasers of forclosed homes..oh you know any of those many millions over the last few years could end up finding that they don't actually own the property as it wasn't the foreclosing entity's to sell!

American scams are just so big, crass and in your face greedy it takes your breath away. I guess these boyz thought they would never get found out.

[Redcellar]

I liked it where l read the servicers were fraudulently taking the house in foreclosure (they can't they don't hold title, that SHOULD be held by the holder of the security) and then selling it off, pocketing the cash without even informing the security holder.

I also liked it were l read the servicers were forging court documents, to speed things up don't you know.

I also liked it where l read that now purchasers of forclosed homes..oh you know any of those many millions over the last few years could end up finding that they don't actually own the property as it wasn't the foreclosing entity's to sell!

American scams are just so big, crass and in your face greedy it takes your breath away. I guess these boyz thought they would never get found out.

I think we are all seeing why these so called 'revolutionary' packages weren't done before. Could it be they were so complicated that they would always cause these legal problems. They were heralded as revolutionary and amazing at the time.

I wonder if the smart ar*es who invented these are feeling quite so smart now? Probably all minted, but not smart.

[Georgia O'Keeffe]

I think we are all seeing why these so called 'revolutionary' packages weren't done before. Could it be they were so complicated that they would always cause these legal problems. They were heralded as revolutionary and amazing at the time.

I wonder if the smart ar*es who invented these are feeling quite so smart now? Probably all minted, but not smart.

i imagine being minted is the only concern, who cares if you are thought of as smart. Clearly it hasnt happened by accident, it was only 20 years ago the same sort of stupidity practically took Lloyds down, people have short memories when theres a way to make a fast buck, they can quickly develop amnesia if you pay them enough.

I have to say i struggle to see how these can be unwound, i bet theres practically no manageable trail, if people get free property out of it, thems the breaks

Edited October 8, 2010 by Tamara De Lempicka

[leicestersq]

nah, they wont get free homes...these things have to be unwound back from the investors (our pension funds and banks) through the REMICS back to the original servicers...who are still collecting..or not, the payments.

course, if people DO end up keeping their McMansions...then I think there WILL be civil difficulties.

Bloo Loo,

I am hoping you are right and I am wrong.

If there is no valid mortgage agreement in place, then I dont see how anyone can foreclose someone who is sitting in a house. The home occupier is going to end up taking ownership.

I havent looked into the mechanics of it deeply, but here in the UK we have Land Registry. They keep a single electronic case of ownership, so you can go there to find out who the real owner is. As they have no vested interest in the sale, I cant see how something like this can happen in the UK.

In order for the bank in the US to take ownership, it has to provide proof that it has ownership of the mortgage. The reason for this scandal is that that documentation has been wilfully destroyed, and if so, I dont see how any court can legitimately foreclose on anyone. Unless the mortgagee were of course, to have a copy of the original mortgage documentation. I wouldnt be surprised if more than a few septic tanks not only have this paperwork, but accidently use as evidence against themselves leading to their own eviction.

Edited October 8, 2010 by leicestersq

[South Lorne]

Bloo Loo,

I am hoping you are right and I am wrong.

If there is no valid mortgage agreement in place, then I dont see how anyone can foreclose someone who is sitting in a house. The home occupier is going to end up taking ownership.

I havent looked into the mechanics of it deeply, but here in the UK we have Land Registry. They keep a single electronic case of ownership, so you can go there to find out who the real owner is. As they have no vested interest in the sale, I cant see how something like this can happen in the UK.

In order for the bank in the US to take ownership, it has to provide proof that it has ownership of the mortgage. The reason for this scandal is that that documentation has been wilfully destroyed, and if so, I dont see how any court can legitimately foreclose on anyone. Unless the mortgagee were of course, to have a copy of the original mortgage documentation. I wouldnt be surprised if more than a few septic tanks not only have this paperwork, but accidently use as evidence against themselves leading to their own eviction.

...view from America....

http://weblogs.sun-sentinel.com/business/realestate/housekeys/blog/2010/10/ask_a_real_estate_pro_will_the_1.html

With all the news about banks suspending foreclosures, could this have any impact on us?

A: It certainly could. Since these foreclosure freezes are unprecedented, many judges are surmising that they may have to vacate the foreclosure judgments and start all over. To compound matters, lawyers have begun circling the wagons to petition the courts to put foreclosed homeowners back in their properties until this is resolved. That brings into question title insurance implications and possible claims. At this juncture, it’s impossible to determine how this is going to play out. Stay tuned.

Edited October 8, 2010 by South Lorne

[Mikhail Liebenstein]

Any links friend? I'd love to know more.

If it's true then many banks will go to the wall. They don't and never will have the money to repay, if even half the bad loans were forced back with refunds required.

I used to work for one such bank, subprime major lender in US. They thought they had planned for the end of it.

http://www.zerohedge.com/article/bank-america-halts-foreclosures-all-50-states

[Bloo Loo]

Bloo Loo,

I am hoping you are right and I am wrong.

If there is no valid mortgage agreement in place, then I dont see how anyone can foreclose someone who is sitting in a house. The home occupier is going to end up taking ownership.

I havent looked into the mechanics of it deeply, but here in the UK we have Land Registry. They keep a single electronic case of ownership, so you can go there to find out who the real owner is. As they have no vested interest in the sale, I cant see how something like this can happen in the UK.

In order for the bank in the US to take ownership, it has to provide proof that it has ownership of the mortgage. The reason for this scandal is that that documentation has been wilfully destroyed, and if so, I dont see how any court can legitimately foreclose on anyone. Unless the mortgagee were of course, to have a copy of the original mortgage documentation. I wouldnt be surprised if more than a few septic tanks not only have this paperwork, but accidently use as evidence against themselves leading to their own eviction.

As I understand it, the servicor continued to collect the mortgage payments , but paid them to the REMIC less fees.

Its after the REMICS that the trail is destroyed in many cases.

I cant see that the mortgage payer had to send his payments anywhere else at any time...I mean..these MBSs were traded as cattle in the markets...some may have changed hands many times a day??

[Redcellar]

Bloo Loo.

Back to the original question in the post of when will TARP2 begin?

Well it can't can it. TARP is Troubled Asset Relief Program, yet this is about there being no assets! You can't buy something from banks that doesn't exist, and that's the whole problem here isn't it. No paperwork to prove who holds the titles.

I guess they could just inject cash directly, but that's not really what TARP was meant to do, and could be seen as inappropriate given there are no assets to support the loan.

[Democorruptcy]

It will all be contained.

[Bloo Loo]

Bloo Loo.

Back to the original question in the post of when will TARP2 begin?

Well it can't can it. TARP is Troubled Asset Relief Program, yet this is about there being no assets! You can't buy something from banks that doesn't exist, and that's the whole problem here isn't it. No paperwork to prove who holds the titles.

I guess they could just inject cash directly, but that's not really what TARP was meant to do, and could be seen as inappropriate given there are no assets to support the loan.

Im sure they'll find something to relieve themselves on.

[Mikhail Liebenstein]

Bloo Loo.

Back to the original question in the post of when will TARP2 begin?

Well it can't can it. TARP is Troubled Asset Relief Program, yet this is about there being no assets! You can't buy something from banks that doesn't exist, and that's the whole problem here isn't it. No paperwork to prove who holds the titles.

I guess they could just inject cash directly, but that's not really what TARP was meant to do, and could be seen as inappropriate given there are no assets to support the loan.

They'll just create a "Where's My Asset I Know I Put Somewhere",   "Dog Ate My Asset" or "My Assets In The Post" Relief Scheme for banks without any assets to be relieved.

[RufflesTheGuineaPig]

Unless the original document have been destroyed (and I imagine they are kept carelfully filed away) then the banks will end up sitting dow with the people they sold the MBSs etc to along with a roomful of lawers, and they will sort it out between them.

It's a lot of paperwork requiring an army of peopl to sort the documentation, but given the money involved, they WILL be able to resolve it.

Of course, it's doesn't take a genius to work out that a couple of pounds or C4 (or commercial equivilent) in the right office will destroy all the paper copies.

Just as well America isn't a country full of government/corporate hating rednecks where explosives are easily accessible. Oh, wait...

[OnlyMe]

So much for MBS coming back to save the market, up year to date but collapsing this quarter with the only significant buyer being the govt through Fannie and Freddie ******it.

The latest scandel over title keeping and outright fraud is really going to help this secondary cesspit, not.

http://www.reuters.com/article/idUSN3028938220100930

UPDATE 2-US mortgage bond issuance leaps year to date

NEW YORK, Sept 30 (Reuters) - U.S. mortgage-backed securities issuance jumped in the first nine months of 2010 from the same period a year earlier as credit markets loosened up and investors' risk appetite improved, a keenly watched survey showed on Thursday.

Thomson Reuters said U.S. mortgage-backed securities issuance totaled $328.2 billion through the third quarter, up from $207.2 billion in the same period a year earlier, a rise of 58 percent.

However, activity slowed in the third quarter.

"At $91 billion, third quarter MBS activity in the U.S. is at the lowest quarterly level since the fourth quarter of 2009," said Matthew Toole, an analyst in the deals group at Thomson Reuters.

"Also, 95 percent of new issuance this year has been driven by government-sponsored enterprises Fannie Mae, Freddie Mac and Ginnie Mae," he said.

Issuance of bonds backed by companies other than Fannie Mae FMNA.OB and Freddie Mac (FMCC.OB) has virtually come to a halt as investors refuse to buy securities backed by loans where payments are not guaranteed.