JP Morgan announced today that it is no longer going to use the now infamous Mortgage Electronic Registration System (MERS). You can read the short AP release here
Really? Isn't this decision about 62,000,000 mortgages late JP? What?
Do you really think you can distance yourself from the system that enriched you and yours for the past decade and which resulted in the ruination of the global economy and the personal lives of tens of millions of people? Really?
Not going to happen.
Millions of the 62,000,000 home sales whizzed from quaint mortgage brokers offices into the MERS blizzard of mortgage transfers on their way through your raters, who fudged, and into your coffers to be polished, shined, sliced, diced, sold and shorted, Mr. Dimon, don't have proper paperwork trails. Today, notes are lost and no one can figure out if there is, without a doubt, the ability to produce a free and clear title.
Exiting MERS is a joke, JP. MERS is chained around your neck until everyone who has been unjustly harmed by the sociopathic system of RoboMortgages is made whole.
BUYER OF FORECLOSED OR ANY PROPERTY BEWARE!
UPDATE I:
UPDATE: MERS responds to JP Morgan Chase:
10/13/2010
MERS Response to J.P. Morgan Chase Statement
JP Morgan Chase is a valued member of MERS. They currently have their correspondent loans registered on the MERS® System. They do not, nor have they ever, registered their retail loans on the MERS System. As members of MERS and for loans registered on the MERS System, banks have the option of foreclosing in their own name, or MERS foreclosing for them. JPMC has chosen to foreclose in their own name, which is a common decision that is allowed under the structure of MERS.
WARNING: Freddie and now JP/Chase will attempt to hide MERS involvement. Only a few homes foreclosed and being foreclosed did not get entered via MERS.
UPDATE II: Chase wriggling:
"Chase doesn't register retail-originated loans with MERS. Many of the correspondent loans we purchase are already registered on MERS as are some of the loans that we service for investors," says spokesman Tom Kelly
.
Well, Tom, quick question: What percent of the mortgages that landed in JPM Chase's mortgage portfolio were written by Chase and by Correspondent Loan Officers?
I'd venture to say more by the Correspondent's. Here's the definition for Correspondent:
Correspondent Mortgage Lenders
Correspondent mortgage lenders originate and fund loans in their own name, then sell them off to larger mortgage lenders, who in turn service them, or sell them on the secondary market. The loans can be underwritten by the correspondent mortgage lenders, but the loan programs are usually based on terms approved by the larger mortgage lender, or “sponsor”. Correspondents usually have a array of products from different sponsors, and act as an extension for those larger lenders. In other words, a small correspondent mortgage lender may resell Wells Fargo products and/or Countrywide products under their own name.
Nice slide, JP Morgan Chase, but YOU ARE OUT! You are neck deep in MERS processed mortgages and you know that's not a good thing because you don't have a NOTE or a TITLE. In short, you have worthless paper. Good thing TARP bailed out the TBTFs. Now what?
UPDATE III: If you are underwater and bought at the height of the housing boom, you may have been a victim of APPRAISAL FRAUD. This Anchorage Alaska case proves how collusion took place between all the parties involved in a house sale:
that really should be posted.
This makes a strong case that those who bought a house at the height of the housing boom may have been hoodwinked to pay inflated prices. So, if they are now underwater, there might be recourse if fraud like you will read below can be proven.
The Republicans aren't screaming about this because, as in this case, the perps are probably Republicans:
Anchorage Alaska
I have been saying for a couple of years that the fraud had to be a collusion between all those who touch a mortgage. This case proves that point.
Check this real estate fraud case in Anchorage Alaska:
Lockard, a licensed real estate investor and the lead defendant pled to 64 counts and was sentenced to 70 months and ordered to pay 2.5 million in restitution.
Lockard also admitted the forfeiture allegation in an additional count, forfeiting his interest in $116,000 held in an investment account under his name.
Charles Carlson, a licensed real estate appraiser, was sentenced on July 11, 2009, to 24 months and to pay restitution of $2,360,185.
Holli Stroud, a title company loan closer, was sentenced on June 25, 2009, to 18 months and to pay restitution of $403,733.60.
Keith Facer, a licensed real estate agent, was sentenced on May 29, 2009, to 16 months and to pay restitution of $221,065.24.
Don Murray, a licensed real estate agent, was sentenced on May 19, 2009, to 21 months and pay restitution of $493,868.77.
Cerise Sanders, a loan originator, was sentenced on May 19, 2009, to 12 months and one day.
Jonathan Ruf, was sentenced on May 28, 2009, to 12 months and one day and to pay restitution of $1,066.390.
Gary Paterna. Mr. Lockard’s father-in-law, was sentenced on May 18, 2009, to three days in jail and pay restitution of $1,162,884.86.
Alaska State Mortgage, a local mortgage company, was sentenced on May 13, 2009, to a fine of $91,478.53.
The defendants pled to a total of 64 counts charging conspiracy, wire fraud, bank fraud, and false statements to a financial institution.
The key for those who bought at the height of the housing boom and now are underwater could be here:
inflated the appraisals and falsified loan closing paperwork.
Those who bought these houses did so with inflated values. What's their recourse? It should be a mortgage rewrite with a reputable Mortgagee and receipt of damages from the scammers.
(There's a story that shines some light on what happened. It's John Doe's story below)
ALSO, you might want to read A History of MERS, to understand why there are not paid employees of MERS Inc. Simply M i n d B o g g l i n g !!
Also, sometimes the REC button is at the end, when a diary is a bit long. But do share this with anyone you know who has been or is facing foreclosure, K?
BACK TO MY JP MORGAN CHASTISEMENT:
I'm no quant, but I think that makes your securities worthless because you have lost proof of an equity position on millions of homes, ie, your Mortgage Backed Securities you hoisted onto the taxpayers of America. You swine.
You have a Mortgage Record with no transaction trail for the Original Mortgage signed by the Mortgagor. Good work! You're paid too much.
So now JP Morgan is walking away from MERS, and Freddie Mac has told it's servicers not to mention MERS
How convenient. Good luck selling this to Justice.
I would like to speculate and write pure conjecture.
I think someone needs to speak to the laypeople.
Here's the speculative story, not necessarily facts, but an effort to explain how we might have gotten into this horrible mess:
The economy was heading for the tank after Enron and WorldCom. A long heralded dream of the ever persistent deregulation crowd came true: Kill Glass-Steagall
Apparently, some of the grandchildren of the 1920s Masters of the Universe wanted their chance to play loose with the hearts, minds, and dollars of the Middle Class.
Bada bing. Money began growing on trees. We can thank Milt Friedman's disciple, Alan Greenspan, in part, for this.
0% Credit Cards, home equity uping $25,000+/yr, 2nd, 3rd Mortgages, ReFis. Anyone, even my dog Bruzer could get a mortgage.
It was the Roaring 2000s.
The Spending Cheerleader told us to go out and spend, and that everyone could have a new home because we are a Home Owner Society:
You see, there was a need for affordable housing. Bush addresses this, but rather than providing a Federal Housing Program, the PRIVATIZE EVERYTHING crowd came up with what we now call predatory lending for new homes.
Well, he sure spotlighted the American Dream which has now morphed into the American Nightmare for millions of families who have literally lost their homes.
And for some bittersweet comic relief: What's a poor realtor to do? He's reduced to running Foreclosure Bus Tours. Well, it might be a great way to get out of the cold, meet some new friends, and have lunch. Check for them in your area. Hey, maybe you can visit your former home and leave a note:
How did this all happen. Well, one thing is for sure, it couldn't have happened without MERS.
MERS was started by the American Land Title Association (ALTA) in 1996. However, the shareholders and Board of Directors of MERS is a who's who listing of all the major players (Country Wide has been replaced with Bank of America) that made billions during the housing boom. And if damages need to be paid, that's a good thing, as Martha would say.
ALTA is both a standards setting organization for the real estate industry, including title insurance, as well as lobbying for laws and regulations.
Which is why I was surprised to learn ATLA launched MERS with the finance and support of all the players. I didn't find this nugget until recently, even though I have been following MERS since the summer of 2008. I was really surprised.
Now I am worried about the validity of everyone's titles for homes purchased since 1999. Do take some time to go to your registry of deeds, or whatever it's called in your county and check your property's deed/file.
Many of the title companies in my area are out of business. What's the recourse if our title is screwed up? Can't sue a title company if they don't exist, can you?
Back in the old days, when it was people getting a mortgage from a bank for life, you could trust the Registry of Deeds to have stellar records. The integrity of that system was above reproach, the paper trail easily extracted from the Registry of Deeds, and prison sentences for misrepresenting records. It was quite straightforward.
MERS changed all that.
That ALTA, of all associations, was behind MERS is mind boggling to me.
The American Land Title Association knew full well of the complexities and variables that each state offered to the challenge of maintaining pristine title records for mortgaged properties that would have a new mortgage company often and sometimes even several in one day.
What was that all about?
The multiple changes of hands a mortgage underwent? If the purpose was to divorce a property from it's mortgage, it was a great plan. Stupid, but well done. Now what?
Foreclosures were rare in the olden days because homes weren't mass produced for a 'wholesale mortgage market'. Both JP Morgan and BoA have recently exited the wholesale mortgage market, btw.
I guess they have moved to the foreclosure market instead. Hindsight: 20/15
Or are they hoping to make a few more billion speculating on our foodwhich, if so, could cause millions to literally starve to death. It looks like they might be.
Or Life Insurance Policies? Nothing sinister about that?
Can no one or nothing stop them? What next? I shudder to guess.
ALTA should have FLAGGED this potential problem for all concerned in the blizzard of mortgage activity between 2000-2007:
Maintaining The Title History: John Doe's Story
John Doe is buying a home.
You and I, and ALTA all know that when John Doe decides to buy a house that the record is recorded in his county's Registry of Deeds (or some other name that records deeds) with John Doe's and the Mortgagee's name, let's call it ABC Bank on the Deed. Neither can sell the home without the other's permission. We could call it co-owned.
Using the MERS electronic mortgage highway changed things.
MERS was named as the Mortgagee/Trustee even though MERS wasn't the mortgagee/trustee. MERS was called an agent of the Mortgagee at the signing between John Doe and ABC Bank. But, what John wasn't aware of was that MERS would be the agent regardless of how many times John's mortgage, without John's permission, was sold and resold, and resold, and resold.
So when ABC Band sold John's mortgage to DEF Bank twenty minutes after JD left the signing, no record of that mortgage transfer was recorded at the Registry of Deeds. John at this point isn't sure who holds his mortgage.
What should have happened when ABC Bank sold JD's mortage to DEF Bank twenty minutes later was a notice sent to the registry of deeds (I know it's called many things in many states, btw) retiring the deed on hand (JD and ABC Bank) to be replaced with the new deed naming JD and DEF Bank.
Then when DEF Bank sells the mortgage to GHI Bank twenty minutes later the same notification should have been sent, and so on. And should this cost John anything? I don't think so. Did it cost homeowners anything? Good question.
Again, no notifications were sent each time JD's mortgage changed hands.
What was submitted to the Registry was a doc with JD and MERS as Trustee/Mortgagee/Lien Holder/Whatever and a seemingly hidden history of all those who may have owned the loan for twenty minutes or more.
Add to this, the snarled, garbled, even bizarre quantities of fees and charges that seem to defy any sort of logic or order, no one can prove that ABC was, in fact, paid off in full, or that DEF was made whole, so that when PQR TBTF ends up with the mortgage to bundle, that PQR TBTF has free and clear title.
In late 2009, John became unemployed because of the Economic Meltdown caused by the Wholesale Mortgage industry. Would John have lost his job, if there had been no meltdown? Maybe not.
But John falls behind on his mortgage and receives a foreclosure notice but has no luck finding the right people to talk to. One day a Sheriff shows up and tosses John and his family to the curb.
A year later, John hears on the news that the Foreclosure Process was flawed and maybe even illegal.
Who owes John what? Who owns John's home which is still vacant? Does John have recourse?
END OF JOHN DOE'S STORY
And this is the problem you hear on the news this week. Where is there a true Property Title? Last year it was "Where is the signed Note?" Both are problems
MERS was a clever electronic mortgage highway, but it was also a Straw Man used to avoid the tedious and fee ridden system of registering the paperwork with the Registry of Deeds each and every time the Mortgage was sold/changed hands.
And in this I find something seemingly sinister. ALTA certainly knew better. Freddie and Fannie certainly knew better. Hell, I knew better.
Filing with the Registry just isn't all that costly. It's nickles, not even dimes. But the Masters of the Universe didn't want to spend those nickles.
And ALTA didn't stand up and tell them they had to.
Why didn't ALTA notify all of the Registries of Deeds about MERS, what they planned to do, and set up the Registry's to accept the electronic transfer information? Sure, the Registries would have needed to print out and file a lot of stuff, but they would have been paid to do so via Registry fees. Again, hindsight: 20/15
As my wise dad used to say: Ask why invites a lie.
Can we suspect that everyone knew better than to alert the Registries of Deeds?
And this doesn't quite pass the smell test either.
MERS made everyone and anyone working with mortgages it's agents.
Having anyone working on a mortgage also an Agent of MERS made what could have been translucent opaque. The turn over rate of personnel, even the complete closing of banks has caused unbelievable confusion. It certainly doesn't speak of MERS, or those working with MERS, innocence.
And this MERS Announcement bulletin, Number 2003-02, dated 5/16/2003, is certainly questionable. Why hide the name of the originator? Really?
And what recourse is there for millions of homes that don't have clear title records?
What if MERS simply goes away, goes bankrupt? Will the shareholders that include Bank of America, Freddie, Fannie, and the major mortgage players pay the damage?
And what are the damages? All of the unemployed? All those who have lost homes? All those who may not have a true, clear title for their property? I don't think there is enough money anywhere to cover the pain, suffering, and loss that has been caused by this hair brained scheme.
If I a mere citizen, not a Master of the Universe, saw through this system in the summer of 2008, I find it quite curious, to put it mildly, that others were unaware.
I can only imagine the excitement and anticipation of these same Masters of the Universe when the Gramm–Leach–Bliley Act (GLB), also known as the Financial Services Modernization Act of 1999, (Pub.L. 106-102, 113 Stat. 1338, enacted November 12, 1999) is an act of the 106th United States Congress (1999–2001) signed into law by President Bill Clinton
opened the door for the convergence of banks, investments, and insurance under one roof.
I would guess that they called ATLA and, with a little help from their quants, convinced innocent ATLA that all would work out just fine.
Sadly, one could suspect that the Masters of the Universe had their fingers crossed behind their backs.
So, do yourself a favor and go to where your property records are kept in your area and ask to see the file for your property.
MUST READS TO KEEP UP WITH THE MORTGAGE FRAUD IN YOUR AREA:
Justice Department - Mortgage Fraud
http://searchjustice.usdoj.gov/...
Justice Department - Foreclosure Fraud
http://www.ojp.usdoj.gov/...
FBI Mortgage Fraud/Schemes - Beware of Reverse Mortgages, btw
http://www.fbi.gov/...
http://4closurefraud.org
http://www.msfraud.org/
And a fascinating history of the MERS system that made the housing crisis possible:
http://webcache.googleusercontent.co...
Even President Obama's property was RoboSigned!
http://4closurefraud.org/...
AND maybe that will be a good thing.