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Rock the system

zogger (617870) writes | about 5 years ago

The Almighty Buck 16

Isn't this interesting, 60 million mortgages might be unable to be legally foreclosed on. .."MERS as straw man lacks standing to foreclose, but so does original lender, although it was a signatory to the deal. The lender lacks standing because title had to pass to the secured parties for the arrangement to legally qualify as a "security." The lender has been paid in full and has no further legal in

Isn't this interesting, 60 million mortgages might be unable to be legally foreclosed on. .."MERS as straw man lacks standing to foreclose, but so does original lender, although it was a signatory to the deal. The lender lacks standing because title had to pass to the secured parties for the arrangement to legally qualify as a "security." The lender has been paid in full and has no further legal interest in the claim. Only the securities holders have skin in the game; but they have no standing to foreclose, because they were not signatories to the original agreement. They cannot satisfy the basic requirement of contract law that a plaintiff suing on a written contract must produce a signed contract proving he is entitled to relief."

HAHAHAHAHA! This should sure make things a lot more sporting in this big economic game of musical paper chairs! Nothing like a little legal "jubilee" to clear the decks! They wanted highly con-plex contracts, they got them, but it seems maybe in their haste to accrue megaprofits via fractional reserve poof money creation, then added on usury, combined with deliberately lowballing risk and using hedging and so forth to sell all that upstream paper, they forgot some of the more *relevant legal niceties*. The fine print, the cornerstone of capitalism, *is* the fine print!

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Money As Debt (1)

chill (34294) | about 5 years ago | (#29648005)

I thought that English Common Law was changed, back before the U.S. even came into being, to allow the transfer of notes like these allowing for the sale of debt? There is probably more in the details, but it looks interesting.

If you haven't seen it, Money as Debt 2 is out. []

Re:Money As Debt (1)

countertrolling (1585477) | about 5 years ago | (#29648239)

Screw youtube and their little 10 minute segments. Here it is in one piece [] , the way god meant it to be.

Re:Money As Debt (1)

Qzukk (229616) | about 5 years ago | (#29652125)

I thought that English Common Law was changed, back before the U.S. even came into being, to allow the transfer of notes like these allowing for the sale of debt?

My understanding of the problem is that nobody has the note anymore: it was shredded and the pieces given to lots of different people. This MERS company from the article theoretically knows who all of these individual people are and assumed that they could represent all of them at once without actually representing any individual possessor of a piece of the note, but the Kansas Supreme Court ruled that Captain Foreclosure cannot appear without their powers combined.

The article writer is apparently deliriously optimistic due to the closing of the article:

But 60 million mortgages with fatal defects in title could give aggrieved homeowners and securities holders the crowbar they need to exert some serious leverage on Congress - serious enough perhaps even to pry the legislature loose from the powerful banking lobbies that now hold it in thrall.

when the obvious solution is that Congress will declare that Captain Foreclosure can be summoned on a whim by anyone and worry later about what permitting people to foreclose on properties without the matching note will do to society. Or MERS will just tell the people who hold the pieces of the note that they're going to have to get together and go to court themselves then figure out how to divide the house they get themselves.

BTW, good video, though "signing over" a check is a notable exception to the author's "notable exception" of checks being a promise to pay that you can't transfer. And the fact that the author repeatedly sticks universal healthcare in as a way for the government to create money.

Nice. Wait, what? (1)

spun (1352) | about 5 years ago | (#29648065)

So the people who actually made the loans walk away with no liabilities? They made loans to people they shouldn't have, then repackaged and sold those loans to people who should know better, using unenforceable contracts, and they get to keep their profits? Meanwhile, either the homeowner or the greedy idiot who bought the repackaged debt gets the shaft.

While I like the idea of the greedy idiots getting stuck with this, it seems to me that the con men who packaged up and resold the debt should be held to account.

It goes beyond that (1)

zogger (617870) | about 5 years ago | (#29650459)

Homeowners who are still in good standing with payments need to know they are not being party to fraud (which they could be), or if they are really paying who they should be paying. If it was me, I'd stick the payment in an escrow account and demand legal written overwhelming proof from whom you have been paying the money to to prove that they indeed are the rightful recipient, and if they are not, sue/demand for the return of the payments you have previously made.

Just sayin...and then maybe no one can prove who owns it, but you being the occupant would count for something, the judge might just declare you the owner!

    If I buy a car with payments from Smiling Jack, and a week later Honest Bob shows up to collect the payments, I'd want better proof than Honest Bob's sayso. Something a judge could look at. If he ain't got it, and smiling jack can't prove he owns the car either anymore...fat city!

Anyway, back to the banks, I don't even think they deserve any profits beyond which real money they had in the first place to loan. I think fractional reserve poof creation of up to 90% of the principle, then charging interest on top of *that*, is the biggest unethical congame out there, and has drastically driven up the price of the most important purchase most folks ever make, and created a class of really wealthy folks who *don't deserve to be*. They ain't done nuthin for all that loot except shuffle electrons and some paperwork around for one day, but you got to labor for 20 to 30 *years* to "pay them back" for all that "hard work". And tomorrow they get to do it again to someone else, and the day after that, and...

    I know it's legal, but it's pretty dang shady and unethical to the extreme, and been going on for a long time now. I don't like when the private Fed does it, nor the lesser banks. That people get trapped in these loans and pay them for thirty years is part of the mass multigenerational economic ..well, brainwashing. Heck, I don't think they even have that "fraction" for the fractional reserve loan, your *real* downpayment covers that. They are loaning you your own money back to you, plus interest on a much larger sum now, if you got a ten percent or larger downpayment, because YOU got to really have that cash to start with.
As to no liabilities, so far, nope, they are getting away with it. Hopefully though, some mass fraud cases could be brought. There's enough smart lawyers out there now who are proly really interested in seeing what can be done with this whole mess.

Me, I'd just like to see it go away, start from scratch again, with a new caveat, you cannot loan which doesn't exist or you don't own, and for money to go back to being representative and portable fractions of your produced wealth, not credit.

Re:It goes beyond that (1)

spun (1352) | about 5 years ago | (#29650765)

Look at rates of home ownership over time. In 1900, the average rate of home ownership was about 10%. 90% of people rented. It was easy access to credit that put people into homes, created by the 'fractional reserve poof.'

You do know that fractional reserve lending goes back a lot further than the Fed, right? It started with goldsmiths. They would keep gold safe in their vaults for people, and give them a piece of paper stating that they could redeem said paper for X amount of gold.

Paper is a heck of a lot lighter than gold, and people started trading the slips of paper instead of going to get the gold and hand it over. People almost never came to get the gold. People also started going to the goldsmiths for loans. As the goldsmith only had to hand out a piece of paper, it was pretty easy for them.

The goldsmiths realized they could give out more paper than they had in gold As long as everyone didn't decide to come in and redeem those slips at the same time, they were fine. Yes, they were essentially lending title to the same asset over and over to different people, but they were assuming the risk personally, back in an age when debtor's prisons were real and nasty places. A bank run back then would have resulted in the defaulting banker being sold into slavery.

You see, even the gold standard was built on fractional reserves. There was never enough gold in America or any other country to cover all the notes against that gold. If everyone had gone in with their paper dollars and demanded a dollars worth of gold, there would not ever have been enough to cover it. The Fed just cut the extraneous metal out of the loop completely. It had always been nine tenths imaginary, so why have it at all?

Re:It goes beyond that (1)

chill (34294) | about 5 years ago | (#29652259)

Heh. I linked "Money as Debt 2" in a different post. You just quoted a section of The Money Masters [] , with the description of fractional reserve goldsmiths and lock houses. Another excellent piece of educational video, by the way.

I'm not sold on a gold-based currency for a couple of reasons.

First, guess who has all the gold? The big boys of the Fed, IMF, US Treasury, World Bank, Chinese Bank, etc. How is that different than now?

Gold-backed currency, as you pointed out, doesn't preclude fractional reserve policies unless you limit it to physical gold currency. Good luck with that!

Most people don't realize that when we had a gold-backed currency, so did every other major nation. Gold was fixed at $35 / ounce, whereas it now floats freely as a commodity. Unless you get ALL the major players -- The U.S., EuroZone, China, Brazil, India, Russia, Japan and a few others to agree to a fixed price per ounce of gold, it just won't work. Arbitrage, baby!

Re:It goes beyond that (1)

countertrolling (1585477) | about 5 years ago | (#29653355)

I'm not sold on a gold-based currency for a couple of reasons...

One of them should be, contrary to what the film says, gold has NO intrinsic value whatsoever other than the convenience it can provide as a means of exchange, but anything that's mutually agreed upon can provide that, even paper. Gold, like diamonds is just another racket, or religion, if you will. Somewhere in there I saw "You can't eat gold". No matter what you use, it still boils down to good old trust. What is your word worth? Straight up barter is the only way to avoid that issue.

Re:It goes beyond that (1)

spun (1352) | about 5 years ago | (#29656625)

No, the unfortunate thing is that gold DOES have intrinsic value. It's uses in industry are myriad, especially high tech. If you want to use gold as a basis of currency, then the industrial and currency uses will be fighting each other. As the economy expands, we need more gold to represent it. This means that when the economy is growing, industrial processes that use gold will be getting more and more expensive. Using gold in more industrial processes will have the effect of reducing the money supply.

History (1)

zogger (617870) | about 5 years ago | (#29658203)

I know I am in the minority here on this, but I'm betting that gold and silver will remain as the ultimate form of universal money well past the life spans of anyone reading this today. There's just too much history behind it and there are too many people on the globe from the fattest of cats to the peonists of serfs who still value it.

I completely recognize all the arguments against it, and I also completely accept all the history and status quo for it. I am just too practical to ignore both of those things. So I weight them against each other...hmmm

I run a simple mental experiment. I take joe blows middle middle class existence, look at his house and garage. In a big economic crash, he starts out with what was (tens of) thousands of dollars in "investments" in this or that, from his furniture to his clothes to his car to whatever (I am excluding the actual house, just all the stuff, also excluding anything that isn't handy, anything that is stored elsewhere, physically and/or electronically, because there are about zero real guarantees for actually accessing that stuff, or it having any worth even if you did. Those are *promises*, that's all, birds in the bush,not stuff in hand. Even stocks, most people don't even actually hold the real certificates.)

OK, the first thing people do after the first five minutes panic and realizing their life has just changed radically, they think of "selling their stuff" to "get more cash" so they can "go get what they need".

OK, right off the bat you can see how dumb this is on several levels. First, everyone and their cousin leroy will be trying to do the same thing, meaning all those expensive things are now a glut, and no one wants them, they want other than that, all the TVs and ipods and second cars and luxury designer clothing and extra this or that and all the furniture and foolferal. Happens all over, down through history. They want to quick cash out, but at the same time everyone else is, and still are thinking in terms of the latest local fiat currency as money. Except now, it ain't worth much, neither their crap, nor their fiat. They waited way too long, and also "invested" wrong in the first place. People just will not invest in what they NEED until well after the fact of needing it.

(side issue: I saw a picture a few years back that was *profound*, could have been a life magazine cover from the old days. Dudes in India in some flood ravaged little town, frantically waving US C notes in the air at the video reporters who were riding in with some gov people (not Indian rupees, US "money" as they perceived it to be of higher worth to store wealth apparently, and not even their gold either, for a different reason, the US bux were expendable fast) in exchange for *anything* at all. Those C notes or promises were worthless there, you couldn't buy a clean drink of water or a sandwich with a C note then, because a clean drink of water or bread or bread stuffing was unobtanium. And the government wasn't showing up with anything except to swing by for a looksee to see how bad it was. Like the first few days of the US katrina response, just useless really)

Anyway, all these folks now trudging from pawnshop to yardsale to flea market in this economic downturn are trying to get rid of their previously oh so valuable stuff, so they can go get better and more useful stuff. Riches to rags really quick. The pawnshop guys in particular will have DVD players and musical instruments and TVs stacked to the roof, they ain't gonna want any more of that stuff even for five cents. BUT, you waltz in with a single shiny coin, well, they haven't been seeing many of those things lately, so you will be getting top transfer swap value, way ahead of the line there, guaranteed. I've tried it, they perk right up even before they will for jewelry. It just "is", is all, so I ain't gonna fight that. And it's because in our society, most people don't hold them. But enough *do*, and them that does will continue to want that. They go from x value to ten times (whatever) x value fast, compared to the "worth" of the stacks of all the other doo dads comparatively speaking from just a few days previous. What used to be one plasma TV to one coin ratio, say, is now 1/20th of a plasma Tv to one coin, or even more lopsided.

A few other things will go up dramatically in value, gravity water filters, canned goods, tanks of propane, gas cans full of gas, tools to retain ownership of same, gardening tools, medical supplies, always a biggee in any crash around the planet, practical howto books as opposed to bodice rippers, etc. Valuable artworks become cheap commodity items as well, many an eggs and veggie dinner from some farmer was bought during ww2 in europe by refugees with a valuable painting that previously was "worth" a years pay. Antique "valuable" furniture was busted up and burnt in fireplaces to keep from freezing. Gold and silver coins though...are still kicking around just fine today from back then. Heh, same with all the hidden buried rifles that great grandpops buried in the garden, they are all still out there too, even in the socialist "civilized" nations. Some people remember or learn from history. But the tradeable worth changes drastically, on all that stuff, including the coins, so you have to be prepared to be flexible and to always keep your priorities straight.

Practical and universally recognized tangibles that relate to necessities as opposed to luxuries will always be worth something, good times to heinous times, "promises", especially todays electronic promises, can float away on the historical winds. Whoops, server got unplugged...

Precious metals are still part of the mix, simply because of their long standing use for money. It just "is". I sincerely doubt they are going away, indistrial uses or not, and I think they should always be part of your tangibles "portfolio". I'd cover all the eating and drinking and keeping warm action first of course, but once it got down to you still had some surplus fiat handy, I'd still smack a few hard money things away as well, just because of history.

    I have priorities for discussing survival, they are this way: water, food, shelter, security, and I see the oldest form of universal money to have a subchapter there under "security". It's the least on my top-list, but it's still there and still way ahead of the unimportant things, which most people "invest" in. I don't even *consider* all that unimportant stuff to have much value at all, and that's why I never "invest" much in them.

Not to say we live mean or in a rathole or with cheapo crap, on the contrary, the bulk of our furniture is one of a kind custom pieces, either her ladyships grandfathers custom pieces, or stuff I built, which is less pretty but still utilitarian. Goofy stuff though, shelving units, lamps, TVs, this computer I use, yada yada, all mostly used and bought with function in mind. The package looks good though. In fact, I am really looking around, together we only own two pieces of new stuff, the mattress, and the chair I am sitting on that she got me as a gift so that I could fit to my oversized home made desk thing I cobbed together. It's a little high off the floor for me, and big, it really is CEO sized, and even though I was using a chair we had, she went ahead and got me some adjustable boss action lardass sized chair that went up high enough. Heh, I still need some cushions on it to keep from sliding around in it. Everything else though, cheap or free but still good enough. A few appliances we bought new, half and half here, freezer, fridge, stove, washing machine, dryer, etc. But that's all just low end practical stuff, function again. I wouldn't pop twice as much to have stainless steel for looks over painted enameled steel for instance. I put that saved loot into tools or whatever instead.

I've been through many hard times in the past to think it just won't happen again, or be even worse. And I've lost some to "stored promises", but never lost nuthin to real stored practical and useful wealth, including the round and shiny.

Re:Nice. Wait, what? (1)

mcgrew (92797) | about 5 years ago | (#29658013)

It's worse than that. They made loans hoping the debtor couldn't pay. While the price of the property is rising, the bank is collecting mortgage payments. Debtor gets 2 months behind, BAM the bank won't accept anything less than all delinquent payments plus fees, making it nearly impossible for the homeowner to catch up. They then foreclose and sell the home for a profit, plus the payments the foreclosed mortgageholder has paid.

In the unlikely even that (nah, never happen) housing prices actually fall, they have insurance that pays them in full. They can't lose.

Except somehow they "lost" and managed to garner bailout money from the feds. Nice racket they have.

One can only hope (1)

countertrolling (1585477) | about 5 years ago | (#29648121)

That this could lead to a prohibition against the transfer of ANY contract without the signature of all parties involved. This would especially help in regard to IP law. A nice little uprising over this would be very cool.

disclaimer: Not a call for violence (1)

countertrolling (1585477) | about 5 years ago | (#29648319)

By "uprising", I mean I hope people will note this and tell the banks(government) to go screw. No shots need be fired, except in self defense of course..

Re:One can only hope (1)

visible.frylock (965768) | about 5 years ago | (#29654107)

Thank you.

For a contract to be enforceable by any court in the US, it should be required that the contract is signed by all signatories in the presence of the court, the original housed by the court, and scans hosted by the court. They can put up a bunch of torrents if they want (checksums to ensure no backdoor crap), and plenty of orgs will gladly mirror it.

No implied contracts. There's a word for that, it's called Statute or Constitution. And even those are bad enough these days.

The other shoe drops (1)

Marxist Hacker 42 (638312) | about 5 years ago | (#29648855)

I wondered why Chase was so eager to refinance my first I thought it was just good marketing (refinance this guy before he goes somewhere else at 3 points less than he's paying), but now I see that there's a secondary reason as well, to get themselves on the paperwork as mortgage primary holder.

Related (1)

RM6f9 (825298) | about 5 years ago | (#29651869)

I saw something on this awhile back, a talk-show guest gave up the secret to forestalling foreclosure: when in court, 3 little words: "Produce the note." Very often, even if the note hadn't been shuffled into hyper-leveraged hell, even if the original lender was the party attempting to foreclose, production of the original physical document was not possible in timely enough fashion to satisfy the court.
Result? Judgment in favor of defendant, foreclosure dismissed.

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