MERS has 60% of mortgages, 0 employees???

[mooncliff]

Very often "cheap" turns out to be very expensive.

http://www.washingtonsblog.com/2010/...s-it-have.html

[thriftyandboringinohio]

Re: MERS has 60% of mortgages, 0 employees???

Thanks for posting, mooncliff. I read every word and it is a real eye opener.

It seems the FIRE companies found the legal system of making and recording enforcible legal deeds, notes, and titles to be an annoyance and an expense so they just stopped using them and operated totally outside the system.

The article is one big highlights reel, but this is my favorite bit:

The mortgage industry has premised its proxy recording strategy on this separation despite the U.S. Supreme Court’s holding that “the note and the mortgage are inseparable.”

To me, that looks like a bad strategy.

[Starving Steve]

Re: MERS has 60% of mortgages, 0 employees???

Thanks for posting, mooncliff. I read every word and it is a real eye opener.

It seems the FIRE companies found the legal system of making and recording enforcible legal deeds, notes, and titles to be an annoyance and an expense so they just stopped using them and operated totally outside the system.

The article is one big highlights reel, but this is my favorite bit:



To me, that looks like a bad strategy.

Please explain to me why, "a note and a mortgage are inseparable"? How can a trust-deed be a clear-title? This is legal mumbo-jumbo. I don't tolerate legalese, higher math, computer models, econometrics, "experts say", "scientists say", faith, "full-faith and credit", nor Greenspanese.

I am beginning to wonder about my stocks in Canada. Stock certificates used to be issued, and one could take them home to keep with their gold. But now, we get book-entries just like in the United States. This happened around 1980. It was a little thing, and only idiots like Starving Steve worried about stock certificates. And anyway, the SEC and SIPIC would guarantee the stoxx if push-came-to-shove. (Even I got roped into this faith!)

As this His Magesty's Ship, Titantic sinks, some of the debris floating by us is labeled, "SIPIC" and "faith" and maybe "full-faith and credit", "SEC regulation", "book-entries", "higher-math", "trust-deeds", and "derivatives". God-knows what floats by us next, as we freeze in the water..............

When I was a young kid, I used to talk to old people who lived and invested during the 1930s, and they would say to me that things got so bad that they lost all faith in the capitalist system. This was said to me in Duluth, in Winnipeg, in Regina, and in San Jose, California.

In Minnesota, people got so hungry that they ate Spam during the Depression, and they learned to acquire a taste for it, too.

[goodrich4bk]

Re: MERS has 60% of mortgages, 0 employees???

Here's what I know as a California attorney specializing and bankruptcy, real property security and commercial law. Whoever holds the note is owed the debt for which the note is evidence. Because the mortgage secures that debt and none other, the mortgage follows the note. One cannot hold, by proxy or otherwise, the beneficial interest in a mortgage and claim the right to foreclose on that beneficial interest unless one holds the note as either the original payee or an assignee (the initial assignee or any subsequent assignee in the chain of written assignments) of the original payee.

[ThePythonicCow]

Re: MERS has 60% of mortgages, 0 employees???

Please explain to me why, "a note and a mortgage are inseparable"?

Well, we probably cannot successfully educate someone on this thread in these matters. Those who want to learn what the pieces of this puzzle mean, what they are called, and how they fit together can best lean by searching the web for explanations that they find useful.

Perhaps a simple analogy will be useful, however. When we pawn a valuable at the pawn shop, say a gold watch, the pawn shop holds that valuable watch until we repay the debt, with interest. If we don't repay in the time period initially agreed to, then the pawn shop owner now owns the valuable, and can sell it, or use it or whatever, as they want. This compensates them for the money they lent us and didn't get back.

When we mortgage our house, it's more complicated, because we get the use of the valuable property while the debt is outstanding. So instead of temporarily handing over the security property to the lender, we (the borrower) only hand over document letting them take (foreclose on) the property if we don't make payments.

That is, along with the note (the debt instrument, the IOU) we also give the bank (the lender) a mortgage or deed of trust.

In some states, it is a mortgage and in those states, the lender can foreclose on your property (described in the mortgage) if he takes those two documents to a judge and convinces the judge you are not making payments, even after receiving the legally required notices.

In other states, it is called a deed of trust, and the lender can foreclose on your property by having the third party, called the "trustee" (usually a title company), sell the property on the court house steps (without a judge) after the legally prescribed delays and public notices.

Try a Google search for "mortgage, deed of trust" to get started. However each of us will have to manage our own learning here, as there are enough variations, details, terms, and complications that no one explanation will be useful for a wide number of readers.