This is so blatant it pretty much sums up how the rule of law is dead in this nation.
The mortgage industry is clearly guilty of years of gross criminal actions. All efforts to follow proper transfers of title and ownership were simply abandoned as mortgages were bundled for resell in what eventually collapsed as a bubble, since it was just that, a ponzi scheme scam.
Now the banks have been guilty since 2008 of ignoring all legal requirements in states nationwide for proper paperwork and procedures on foreclosures. They have been shown again and again to have criminally produced foreclosure documents that are signed en mass, by rote, by people who not only do not research and insure their validity, they do not even read the documents. There is no time to do so, they are processing so many in what is essentially a sweatshop operation of massive fraud.
Only a handful of Attorney Generals nationwide have shown any willingness to actually investigate these crimes and take action against the criminals and protect the offended homeowners.
Now the Justice Department under Obama’s Attorney General has made it crystal clear that, just like the war crimes of the Bush/Cheney administration, they are going to sweep these crimes under the rug as fast as possible, with slap on the wrist settlements, leaving the criminals free of any consequences of their massive crime spree, and leaving the homeowners without recourse to legal protection under the law that requires the banks to PROVE by accurate paperwork just who owns a mortgaged property.
Matt Tabbi, who has written extensively and with harsh truth on the triumph of the criminal corporate class in America over the past decade, is unrelenting in his reporting on the stark and tragic fact that Obama has decided whose side he is on, and it is NOT the side of the American People or the homeowners who are the victims of these crimes: Obama Goes All Out For Dirty Banker Deal.
A power play is underway in the foreclosure arena, according to the New York Times.
On the one side is Eric Schneiderman, the New York Attorney General, who is conducting his own investigation into the era of securitizations – the practice of chopping up assets like mortgages and converting them into saleable securities – that led up to the financial crisis of 2007-2008.
On the other side is the Obama administration, the banks, and all the other state attorneys general.
This second camp has cooked up a deal that would allow the banks to walk away with just a seriously discounted fine from a generation of fraud that led to millions of people losing their homes.
The idea behind this federally-guided “settlement” is to concentrate and centralize all the legal exposure accrued by this generation of grotesque banker corruption in one place, put one single price tag on it that everyone can live with, and then stuff the details into a titanium canister before shooting it into deep space.
This is all about protecting the banks from future enforcement actions on both the civil and criminal sides. The plan is to provide year-after-year, repeat-offending banks like Bank of America with cost certainty, so that they know exactly how much they’ll have to pay in fines (trust me, it will end up being a tiny fraction of what they made off the fraudulent practices) and will also get to know for sure that there are no more criminal investigations in the pipeline.
The fix is in. The plutocratic corporate oligarchy has won. The revolution is over. The American people are just sheep, being fleeced left and right.
The tragedy is, this will be a short term pyrrhic victory. Why? Because these forces are in the process of destroying the livelihoods, jobs, manufacturing sources, and consumer engine of a middle class with money to spend. They will win short term. But in a few years, they will discover you can only juggle the books and live on cash to balance them for so long.
Eventually, it will all come crashing down into either another massive wave of Recession, or, as Paul Krugman has tried to warn, a Second Great Depression.
New York Attorney General Eric Schneiderman on Tuesday was kicked off the committee leading the 50-state task force charged with probing foreclosure abuses and negotiating a possible settlement agreement with the nation’s five largest mortgage firms, according to an email reviewed by The Huffington Post.
Schneiderman was one of roughly a dozen state attorneys general leading the talks with the five companies, alongside representatives of the U.S. Department of Justice, the Department of Housing and Urban Development and other federal agencies. The government launched the negotiations in the spring after widespread reports of foreclosure irregularities, such as so-called “robo-signing” and illegal home seizures, emerged.
But state prosecutors and federal officials are pressing to complete a proposed settlement with the five companies even though they’ve initiated only a limited investigation that hasn’t examined the full extent of the alleged wrongdoing, The Huffington Post reported last month. Elizabeth Warren, who until recently was a senior adviser to President Barack Obama and Treasury Secretary Timothy Geithner, told a congressional panel last month that government agencies may not have sufficiently investigated claims that borrowers’ homes were illegally seized.
on his blog Balkinization, Frank Pasquale quotes some of the amazing statements by officials who are basically saying shut up and let’s cover this up as fast as possible so as not to further injure these lending institutions. As far as they are concerned, any harm to the home owners and mortgage holders means nothing. Emphasis in the following, on what is the heart of this criminal situation.
One has to admire Ms. Wylde’s honesty. Other high officials have similar views, but act on them sub rosa.
As for the substance: I have little to add beyond what Mike Konczal and Yves Smith say. As Konczal puts it, “The trust and property law violations that are at the heart of this couldn’t be clearer. It’s a dot-your-I’s and cross-your-T’s kind of law. This abandonment reflects less a different way of setting up the financial markets than an outright corruption of the whole idea of rule-of-law.” To complement my last post: the dragnet ends at Wall Street, but the safety net of “too big to sue” status is stronger than ever. The contrast illustrates one of Bernard Harcourt’s theses: the energy that should be going into regulation of markets is instead channeled into tighter regulation of those harmed by them.
As property scholar Joseph William Singer shows, we risk violating an “anti-feudal principle at the core of American property law” if we fail to fully investigate and set right the frauds perpetrated during the subprime crisis.
The pooling of mortgages in gigantic pots that could then be sliced and diced for scamming investors, a process which now frequently makes it impossible to determine clear ownership and title and just what entity is holding the mortgage and has the legal right to act on their ownership of the note.
But there is more on top of that. It appears that the banks were also skipping all of the legally required paperwork and registration that state laws have in place to insure that proper transfer and documentation is legal and recorded. And every time the resellers of the mortgage notes skipped filling this paperwork, they also skipped paying a fee to the local government. Which means that on top of everything else they have defrauded local governments out of what is probably billions of dollars in lost tax revenues. Note the emphasis added in the following from one local government representative.
What is MERS?
Salt Lake County Recorder Gary Ott Describes it as “It smelled like it could be a scam from hell.”
The Mortgage Bankers Association created the Mortgage Electronic Registration Systems, or MERS, in the mid-1990s. It is a database that holds the names of the entities that have a financial interest in a particular mortgage, such as investment funds that bought bundles of mortgages called mortgage-backed securities. MERS is recorded on many property deeds of trust in Utah as the “beneficiary” of a loan taken out on a property even if that loan is sold and resold many times. MERS allows the actual loan owners to avoid paying fees every time a loan is sold.
In reality MER’s is a Tax Evading entity created by the major mortgage lender to avoid paying revenue to the Salt lake County recorders. Loans are sold or transferred at least 4 or more times. In the past the assignments of trust deed was recorded at the county recorders records office, so everyone knew who the note holder was. That cost about $30. Doesn’t seem like much until the look at the hundreds of thousands of times they didn’t pay the fee to our county recorder, and how much revenue that took out of the county property tax budget. County tax budgets need funded no matter what to run the county; so if they are short they increase the amount a home owner pays in millage for a property. You pay more tax even if the property value goes down the tax amount increases to cover the budget. They still need the same amount of money for the budget. If MER’S doesn’t pay their billions of dollars for recording fees the tax payer’s do pay that amount in increased taxes because the lenders are cheated the county. Simply stated if the county has more money you pay less in taxes.
MER’s was created to prevent the home owner from having anyway to know who the owner of the note on their mortgage is. They deliberately sever or split the security instrument from the note by saying MERS is the beneficiary (the one benefiting from the note) and that leaves the security invalid see. You home is not at risk any more. That is the law of the land!
See, U.S. Supreme Court decision in Carpenter v. Longan 83 U.S. 271 (1872)
” The note and mortgage are inseparable; the former as essential, the latter as an incident. An assignment of the note carries the mortgage with it, while an assignment of the latter alone is a nullity. “
So MER’S’s is a company created to defraud home owners and deprive the county of money and should be held as such by the courts when they try to say they have the right to foreclose. I say you “reap what you sow” and they deserve all the legal action we can bring on them as Americans!