Legislating Theft

Via Atrios, The MERS Protection Act:

The [Grifting h/t kdog] industry is seeking legislation that would effectively affirm MERS's legality and block any bill that would call into question what MERS does. MERS has spent more than $1 million in lobbying since fall 2008, when lower courts around the country began to rule against it. But MERS had kept its name under the radar until the recent uproar over foreclosures revealed broad problems in mortgage paperwork.

How much you wanna bet that the incompetent and corrupt Treasury Secretary Tim Geithner supports this?

Speaking for me only

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    You're too kind... (5.00 / 1) (#1)
    by kdog on Fri Nov 19, 2010 at 03:08:31 PM EST
    no hat tip required for stating the obvious:)

    Got my RS and read the latest from Taibbi you linked to the other day...wow.  The courts were our last and only hope.  The inequality under the law displayed in Jax left even my overly cynical jaded arse speechless.

    They're all in on it, BTD... (5.00 / 0) (#2)
    by Anne on Fri Nov 19, 2010 at 03:12:49 PM EST
    they hold hearings and rail at banksters and servicers and act dumbfounded when they find out what's going on, and then they let the same people committing these crimes convince them that the ONLY way to keep this thing from blowing up and starting another economic earthquake is to make it all go away.

    I shouldn't say that it's all of them (see D-day on his interview with Brad Miller), but there are far too many who are just being led around by the nose and doing the industry's bidding because they don't want to have to deal with it - and besides, it's easier to get a job making a ton of money if you're accommodating to your possible future employer, right?

    David Dayen has a post up on this subject that's instructive; he raises the question of whether there are consitutional issues related to the whitewash.

    From the post:

    There's no question that making MERS legal would solve a lot of problems for the industry. The question is, can they do it? Here's who Eunjung Cha and Dennis talk (authors of WaPo article) to about that:

    • The CEO of MERS, R.K. Arnold;
    • The deputy executive director of the American Securitization Forum, an industry group who just put out a white paper that claimed MERS was valid and legal (one which Adam Levitin said in Congressional testimony focused on the wrong issues entirely);
    • Ira Rheingold of the National Association of the Consumer Advocates, but only to get a quote on why it would be a bad thing if this happened.

    You can argue about whether creating a federal land title system would be viable, as Rep. Marcy Kaptur and John Taylor of the National Community Reinvestment Coalition wrestle with in the article. You need to argue over whether it's legal to take away the land title system that has existed in this country for over two centuries. Eunjung Cha and Dennis don't bother to do that, because, well, I guess some lobbyist said it was legal.

    I do find it interesting who's doing the lobbying for MERS:

    Lobbyists working for MERS include people who were prominent legislators or federal officials: former U.S. representative Bob Livingston and his former chief of staff, Allen Martin; John M. Duncan, assistant secretary of the Treasury for legislative affairs in the George W. Bush administration; and Arnold Havens, a former general counsel at Treasury.


    I eagerly await the next article from Eunjung Cha and Dennis, when they mention that there's dubious Constitutional claim for the federal government to take control of the state land title system, that the pooling and servicing agreements have standards above that of state or federal law and would not be affected by this ruling, that securitization is governed by New York state trust law and that foreclosures by a patchwork of state laws, and that the entire scheme by the lobbyist class is completely unworkable.

    I think it's a safe bet that Geithner isn't losing any sleep over whether legaizing the actions of MERS is the right thing to do...

    The hearings and the railings (5.00 / 1) (#9)
    by Zorba on Fri Nov 19, 2010 at 05:10:18 PM EST
    and the gnashing of teeth and rending of garments are all Kabuki theater to make us think that they are "doing something" to protect the average homeowner.  In reality, they're all prostitutes.  And relatively cheap ones, at that.

    It's constitutional (none / 0) (#3)
    by Big Tent Democrat on Fri Nov 19, 2010 at 03:20:52 PM EST
    and figuratively xriminal.

    But the federal government certainly has the power to do this.


    I'm shaking my head (5.00 / 3) (#4)
    by TeresaInSnow2 on Fri Nov 19, 2010 at 03:29:03 PM EST
    It only cost them $1 million to buy a total screwing of this country's citizens?  My are our Democratic and Republican politicians cheap!

    I told my husband, we will never borrow money again.  If we can't pay cash, we don't need it.  And yes, that includes housing.  Thankfully we own our current house outright.  I only wish the majority of others could say the same.

    It all comes down to the whole (5.00 / 2) (#5)
    by CST on Fri Nov 19, 2010 at 03:42:24 PM EST
    "personal responsibility" argument.  They can crow all day about how homeowners have a "personal responsibility" to pay their mortgages.  But no one ever acknowledges the personal responsibility the banks had to follow the law with regard to those mortgages.

    Right (none / 0) (#6)
    by Ga6thDem on Fri Nov 19, 2010 at 03:49:29 PM EST
    It's never a two way street with them.

    It should be clear (none / 0) (#15)
    by cal1942 on Sat Nov 20, 2010 at 01:42:45 AM EST
    that only the little people are required to be moral and responsible.

    It's always been that way.


    I've changed my tune... (none / 0) (#8)
    by kdog on Fri Nov 19, 2010 at 05:09:45 PM EST
    somewhat...I was down on my fellow proles for buying houses they couldn't afford till you scratch the surface of what has gone down the last ten years, the last thirty years...not blameless, to be sure...but in a society based in large part on property rights, clear title is as important as it gets.  It's so f*cked you could make a strong  argument to default title to the occupant where there is any doubt, gamblers need to take their beef up with the house that conned 'em and the regulators who failed them.  

    and the banks' personal responsibility (none / 0) (#10)
    by BackFromOhio on Fri Nov 19, 2010 at 06:59:49 PM EST
    to charge the right owner/customer for debts that are validly due on the proper property. The is the reason the law requires certain niceties -- so suing an individual isn't wholly arbitrary.  Up is down and science is bunk since 2000.

    How can responsible people pay for (none / 0) (#13)
    by Militarytracy on Fri Nov 19, 2010 at 10:41:41 PM EST
    a house that nobody can tell me clear title still even exists on...or that servicers don't have to prove clear title on on request of the borrower or the investors?  I can spend thirty years paying for nothing that is mine.  The whole MERS system is a POS and nothing of more worth than trash.  Without due process there is no reason to go through all these phucking motions month after month....paying in a huge chunk of your income for what?  For all I know I'm doing nothing greater here than glorified renting.

    Precisely the point (5.00 / 1) (#17)
    by BackFromOhio on Sat Nov 20, 2010 at 11:05:16 AM EST
    I was making; anything else is arbitrary and is possible only in the absence of the rule of law.

    With all the bad software i've written (5.00 / 1) (#11)
    by ruffian on Fri Nov 19, 2010 at 10:33:18 PM EST
    why couldn't I have written some that helped mortgage bankers fleece a few million people? Then I'd be rich enough to hire lobbyists too. Instead I'm one of the fleeced.

    States will hate it because counties will hate it. (none / 0) (#7)
    by Maryb2004 on Fri Nov 19, 2010 at 04:16:20 PM EST
    Buried in the middle:  "There's also concern among state officials that such a bill might permanently remove some of their power over property law and place it within federal jurisdiction."

    What they really mean by power is the stream of revenue that they are entitled to for transferred mortgages that have to be recorded.  

    A book entry system makes a lot of sense from a practical point of view.  But MERS is not DTC.    

    Yup (none / 0) (#14)
    by Militarytracy on Fri Nov 19, 2010 at 10:43:34 PM EST
    It is estimated that millions of dollars of unpaid fees to our broke counties for transfers exist hidden within the MERS system.

    I'm too outraged to phucking type (none / 0) (#12)
    by Militarytracy on Fri Nov 19, 2010 at 10:34:19 PM EST

    A Little Play on Reagan's words (none / 0) (#16)
    by cpa1 on Sat Nov 20, 2010 at 08:52:32 AM EST
    I'm from Wall Street and I'm here to help you.

    A little history (none / 0) (#18)
    by Rojas on Sat Nov 20, 2010 at 11:14:41 AM EST
    The rising tide of paper that was choking mortgage loan productivity in the early 1990s provided the impetus for an industry task force to recommend the establishment of MERS in an effort to eliminate the need to prepare and record assignments. MERS would allow mortgage lenders and servicers to cooperate to reduce or eliminate their paperwork burdens and bring a higher level of efficiency to secondary market sales and trades between trading partners. Because secondary market transactions involving the sale of both beneficial rights as well as servicing rights generated a flood of paper mortgage loan assignments, MERS took up the task of providing an alternative to using paper for tracking these transfers between trading partners.

    Rick Scogg, president of Aurora Loan Services, Aurora, Colorado, says his company saves hundreds of thousands of dollars a year. "We have already benefited and will benefit considerably more in the future," he says. "We buy and sell servicing frequently. When we buy portfolios, there are payoffs and foreclosures the next day and therefore there is a delay in the lien-release process [for non-MFRS loans. With MERS, we don't need to get attorneys to correct these, and that saves us thousands of dollars a year.

    "Truly, the foreclosure and release process is the biggest pleasant surprise for us," Scogg says. "It has had a major impact on our efficiency after acquisitions."