Wednesday, August 24, 2011
For want of a shoe a horse was lost...
And, as Judge Melvin S. Hoffman, U.S. Bankruptcy Court Judge for Massachusetts recently determined, for want of a legal transfer a foreclosure was lost.
Critically, as the judge noted, the PSA provided that for a MERS mortgage such as this, assignments of mortgages did not have to be prepared or delivered to the buyer of the loans. As is endemic with most securitized mortgages, the participants in the securitization did not deliver and record any assignments documenting such transfers, instead, relying on the internal MERS registration system. Throwing this provision back in the lenders’ faces, the judge basically thumbed his nose at the entire securitization industry saying “you can’t have your cake and eat it too” — rendering his bomb-shell ruling that the mortgage itself (as opposed to the underlying loan) was never transferred through the securitization system from entity A, B, C, to Deutsche Bank, and that MERS had always held, and never relinquished, “legal title” to the mortgage. Accordingly, the judge held, Deutsche Bank was never the owner of the mortgage in the first place, could not foreclose in its name, and its foreclosure sale was null and void.His Honor has essentially called into question the entire transfer process withing MERS. Now comes the "for want of a horse a rider was lost" part. What is the status of the securities that Deutsche Bank created with mortgages it never owned? This illustrates why the Banksters and the feds are working so hard to eliminate NY AG Schneiderman. It also show why it may not do them any good as long as capable judges sit on the bench.
Subscribe to Posts [Atom]
Post a Comment