U.S. new home sales hit record low, housing prices plunge, outlook gloomy as foreclosure farce continues

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EDITOR’S RANT: HOW STUPID DO YOU HAVE TO BE TO NOT KNOW THAT HOUSING IS IN THE TOILET AND GOING LOWER? They won’t fix foreclosures, they won’t fix title, they won’t help investors and they won’t help homeowners. They admit that housing drives the economy, that consumer spending comprised 70% of our GDP, the unemployment is absurdly high and under-stated, that credit is gone, savings are low, and that nobody has any money. They know the banks won’t lend either precisely because they don’t like the prospect of appraisals on property being sustained nor the prospects of people keeping their jobs. And they know that there are literally millions of homes on the market and waiting to be on the market and that millions more will be in the pipeline if we don’t stop this foreclosure farce.

Somehow they managed to compute projections that would show improvement in new home sales. Who did they think would buy them? New home sales and existing home sales  in volume and price are still headed down. Any reasonably knowledgeable person on the street will tell you that. But the spin doctors were saying otherwise and THAT is what caught the eye of Wall Street. The reality of our economy receding to third world status where the people with money have a moat and gates and guard dogs is somehow eluding “economists” — but not all of them. Many predicted this drop of 16.9% and are still predicting further drops.

This is what happens when you spin an entire society and an entire economy into vapor. The housing boom was a securities boom, with collateral damage equivalent to the gross, and as yet unreported profits of off-shore entities and on shore entities from what Wall Street calls securitization and derivatives. There were no derivatives involved because the paper referred to fictitious transactions. And so there was no securitization, not the least corroborated that they didn’t bother to transfer the toxic paper trail for fear of revealing their culpability.

Everyone is scared to death to simply tell the truth. Recently a man died at the age of 52. He was an evangelical christian and he was a legal scholar. He wrote a book called the Collapse of American Justice in which he argued that the rule of law (the foundation of American society) had been replaced by the misrule of politics. His name is William Stuntz and nobody ever heard of him. Yet he spoke the truth which could be even more sensationalized by media than the lies they are currently spewing out to the public — but then they wouldn’t be playing ball with the megabanks and the government and they might not get access to leaked information that was (a) intended to be leaked and (b) false. The book by  Stuntz is mostly about criminal defendants, but considering the fact that borrowers are the ones being characterized as criminals by the misuse of politics, it applies quite neatly. I wonder if anyone will read it.

The correction is clear an unambiguous. Correct the false transactions, returning the investors and homeowners as closely as possible to the position they were in before the lies were told and the money flowed like Niagara Falls. But in order to do that, we  must give up the myth that there is nothing wrong with the megabanks and that they should be allowed to survive after financial genocide conducted on a world scale that was previously unimaginable.

Wed Mar 23, 2011 1:11pm EDT


* New home sales drop 16.9 pct to record low
* Median home price lowest since December 2003
* Months’ supply of homes highest in six months
Lucia Mutikani
WASHINGTON, March 23 (Reuters) – Sales of new U.S. homes sank to a record low in February and prices were the weakest since December 2003, showing the housing market slide was deepening.
The Commerce Department said on Wednesday sales of new single-family homes dropped 16.9 percent to a seasonally adjusted 250,000 unit annual rate, the lowest since records began in 1963, after a 301,000-unit pace in January.
Despite the surprise plunge in sales, economists did not believe a new downturn in the housing market was underway. “We do not believe the housing sector is on the verge of renewed contraction. Rather, we continue to expect the recovery in housing to be disappointingly and frustratingly slow,” said Michelle Girard, an economist at RBS in Stamford, Connecticut.
An oversupply of homes exacerbated by an increasing flood of properties falling into foreclosure is frustrating recovery in the housing market. The housing market has remained on the periphery of the broader economy’s expansion.
However, residential construction has declined to about 2.3 percent gross domestic product from a peak of about 6 percent in 2005, so analysts do not see the sustained weakness in housing derailing the economic recovery.
But it has the potential to slow growth as plummeting home values erode consumer confidence and hurt spending.
Sales last month plunged to all-time lows in three of the four regions and surprised economists who had expected them to edged up to a 290,000 unit rate.
The weak data weighed on home builder shares such Toll Brothers and pulled U.S. stocks down. Prices for U.S. government debt were marginally lower, while the dollar up against a basket of currencies.
Compared to February last year sales dropped 28 percent.
A report on Monday showed a steep drop in sales of previously owned homes in February, with prices tumbling to a near nine-year low.
INSTANT VIEW-US new home sales at a record low in Feb


Analysts are optimistic home sales will pick-up from their
current depressed levels in the spring, but caution persistent
declines in house prices could hold back recovery.
The median sales price for a new home plunged 13.9 percent
last month to $202,100, the lowest since December 2003.
Compared with February last year, the median price fell 8.9
“The decline in the home prices is a function of the
imbalance in the housing market, where there is a particular
concentration of distressed properties in the market,” said
Michelle Meyer, an economist at Bank of America Merrill Lynch
in New York.
“The fact that home prices are falling more will keep
people on the sidelines.”
Foreclosed properties typically sell well below market
value, giving builders stiff competition and forcing them to
hold back on new construction.
At February’s sales pace, the supply of new homes on the
market rose to 8.9 months’ worth, the highest since August,
from 7.4 months’ worth in January.
There were 186,000 new homes available for sale last month,
the smallest supply of home since 1967.
Despite lean inventories, new home sales will likely
continue to bounce along the bottom for a while until the glut
of previously owned homes is whittled down. New home sales
account for less than 10 percent of overall sales.
According to the National Association of Realtors, new home
prices have been running 45 percent higher than existing home
prices, a premium that is historically about 15 percent,
indicating previously owned homes are selling well below the
cost of construction.
Separately, the Mortgage Bankers Association said
applications for home loans rebounded 2.7 percent last week.
Neil Stempleman

30 Responses

  1. […] U.S. new home sales hit record low, housing prices plunge, outlook … […]

  2. The settlement that comes out of the gathering of the 50 State Attorneys General will do absolutely nothing to benefit anyone who was harmed by these Bankers, Brokers, Underwriters, etc., etc.

    Ask yourself what happened to the other 50 or so settlements (Consent Decrees) that these same Banks signed off on back in 2007, 2008,2009 and even 2010. You do remember those out of court settlements, don’t you.

    I’ll tell you what happened, they weren’t worth the paper they were written on and neither will this new one. This is all just grandstanding, showboating and stalling for time until the politicians can figure out someway to let these money lending whores off the hook without causing a revolution.

    Oh, that ‘s right, nobody remembers the last agreement these whores signed off on so by the time Congress divides up the booty from this agreement with the AG’s from around the Country nobody is going to remember this one either.

    It all a big joke people and it’s being played on us. Nothing these politicians say or do is in the interest of the common folk. Mark my words here today: Nothing good will come out of this next round of penalties impossed on the Banks, nothing good for those who were harmed by them, and that’s for sure but don’t take that to the bank………………………

    53 months and still holding, still standing and still in the fight…

  3. Defense attorneys are hugely lacking – they do not know what they are doing.

    No apolgies – I agree – Oh do i agree! This business takes 10 to 20 years to get your arms around. Its all I have ever done…poor pitifull me.

    But to get a first class education and risk it on losing your license. I can hear attorneys crying out (Screw this)

  4. MSoliman,

    That post was from me — and it was a typo — meant NOT behind the eight ball.

    Apology for typo.

    Defense attorneys are hugely lacking – they do not know what they are doing. .

  5. usedkarguy – Very informative posts. Thank you. Outside of the AG “settlement” issues — and government lack there of investigation — attorneys are behind the eight-ball.

    Attorneys ARE behind the eight-ball. I spoke to the FDIC’s cousel last week and …..DEFINITLY NOT BEHIND THE EIGHT BALL………


    (I wish there was one attorney out “OPPOSITION” that could tackle what I am saying )



  6. How can the Sherman act involve member banks under the FDIC repudiatory rights handed to them by congress? Come on ! D’Oensche Doctrine would void the 1886 law


  7. In a September 30, 2009, case against Nomura heard by District of Massachusetts Judge Richard G. Stearns. The presiding judge Sterns dismissed the securities class action lawsuit that had been filed by purchasers of mortgage pass-through certificates against Nomura Asset Acceptance Corporation, certain of its directors and officers, the eight mortgage trusts that had issued the certificates, and the offering underwriters who had supported the 2005 and 2006 public offerings of the certificates. Certificates’ Broad Judge Stearns held that plaintiffs lacked constitutional standing to assert claims against eight trusts having lacked standing to assert claims against the underwriter defendants that had supported offerings only with respect to the five trusts from which the plaintiffs had not purchased securities. Judge Stearns dismissed the claims against the five trusts and the associated offering underwriter defendants.

    Expert opinion – This is where many of the attorneys are confused and many lay person are claiming that the note was sold more than once.

    Every security offering contain common stock owned by the management or directors of the bank sponsoring the mortgages or deed for bond held in a trust.

    The common shares are held exclusively by the directors and the SPE is where the preferred shares are offered to investors. The preferred shares do not concern my testimony (untill Fannie and freddie enter – cannot do) nor do the Pooing and Servicing agreements.


    Are the loans actually sold into a trust?
    Who are the creditors the QSPE or the SPE?
    What source are the dividends paid from?
    Who is the obligor?
    What class of stock is Fannie Mae alleging to purchase?
    Why is a Pooling and Servicing Agreement worthless?
    What is the ONE cited instrument in transfer deed that causes?

    Name the three distinct levels of accrual for which no judge can recite “Did you or did you not make the payments?”


    (Mail us for the answers’)

  8. usedkarguy

    “Theft by conversion”. This shoud allow us to file some additional criminal charges. Let me know if you have additional information.

  9. cubed2k

    Let me know your findings. I believe there is violation of the Sherman Anti Trust Act.

  10. IAN, I have it downloaded.
    e-mail me and I can send it to you.


  11. Brian Davies- the Maiden Lane info has been “removed” from the scribd link. Any ideas on where I can find it? Alot of the Bear Stearns loans listed on the ML I II &III are commercial from what I remember- was this report home mortgages?

  12. usedkarguy.

    “I’m going off on a tangent here……
    If what Mary says is true about the consorteum that IS Wells Fargo, their should be a cause of action under the FTC and trademark laws relative to intent to deceive/unfair competition/anti-trust/Sherman Act. I’m working on it, but no time right now. see FTC vs. Cement Institute.”

    I don’t know.

    Glen Beck, I used to like his show, but since I saw that show I mentioned, no more. I see the truth know that he does not know, and he always claims in his past shows to check what he says, to verify it. Well it has been verified. So sorry Glen Beck you are another paid hack reading a prompter. It’s show business as Obama and the rest of them.

    The society at upper levels of law and justice and executive is simply “what you can get away with”.

    And they have been doing so for awhile now. Well, I ain’t gonna take it anymore.

  13. That would be great…it would be a comedy of ‘justice’ if the banks bicker about settling with the AG for $30 million or more hoping to drag the settlement out to hit a statue of limitations on some of the allegations and end up p’ing off so many other agencies that are standing in line to get some settlement for their part of the economy screwed over that the banks end up paying out individual federal and state settlements of $30 million a piece!

    I remember the Massachusetts case where the lawyers were so bold that when told they could not get clear title because they should not have the house, they moved the case to the Supreme Court of Massachusetts with the complain that (in so many words) the judge was only supposed to decide whether they should have clear title, not whether they should have the house.

    For being so ‘bold’ as to think they can commit fraud, and put stolen property on their books and call it an asset and give themselves high five and pay themselves huge bonuses, I hope each agency, investor group, and retirement plan, and more will just say ‘forget it!’ I’m not waiting, hey bankers you need to be talking to me too! Put me on the schedule or I’ll see you in court, and there’s enough evidence in the public and private to give me what I’m asking for plus triple damages so you’d better schedule an appointment. Ta da!

    Light and Love,
    Trespass Unwanted, life, allodial, corporeal, free, freeman, alive, live born, born alive, whole blood, in jure divino, in jure proprio



  15. usedkarguy

    Very informative posts. Thank you.

    Outside of the AG “settlement” issues — and government lack there of investigation — attorneys are behind the eight-ball.

    Time to inform the attorneys — of what is a facade. Foremost, servicers cannot “modify” loan contracts without identifying the current creditor/lender. And, trusts/trustees are NOT lenders and NOT creditors – and cannot reform a new mortgage loan contract. Of course, no servicer can do the same in it’s own name.

    If attorneys do not get this — we are losing the battle.

    Just informed an attorney (known) today of the above — his answer — “I did not know.” Now he does.

    Trust/trustees are not the creditor/lender — and while they may have a say as to granting reformation — they cannot do the reformation.

    Time to get on the ball.

  16. Economists surprised – Expected Rise. B.S. they are on the Banksters payroll.

    Unemployment High
    Gas Prices High
    Food Prices High

    With Economists like this no wonder we are in big trouble.

    Maybe the Economist took Viagra and Expected something else to rise. They were misquoted

  17. A good Bankster is a Jailed Bankster.

    We are going Broke The poor Suckers who are making their payments days are numbered. They wont be able to sustain the payments.

    Food and Gas Payments going up Do the Math.


    Foreclosure vote could rock the banks
    Posted by Colin Barr
    March 24, 2011 6:33 am

    The big banks face fresh scrutiny of their handling of the mortgage mess – from their own boards, no less.

    Shareholders at Bank of America (BAC), Citigroup (C) and Wells Fargo (WFC) could vote this spring to compel their audit committees to investigate the banks’ mortgage and foreclosure practices, and report back by fall.

    Dislikes the micromanaging
    The votes will come despite much eye-rolling from the banks, which have tended to be less than forthcoming on the subject. Bank of America and Citi petitioned regulators to keep shareholders from voting on the proposal, which is sponsored by the New York City pension funds led by city comptroller John C. Liu. But the Securities and Exchange Commission ruled this month that the votes must go on.

    “An independent examination of bank foreclosure practices is needed to reassure shareholders and protect pensioners and taxpayers,” said Liu, a Democrat who has been pushing since last fall for bank boards to wake up and investigate. “Regrettably, the banks have failed us on this and even went so far as to try and kick us off the ballot, but the shareholders have prevailed.”

    The New York funds say they own $1.7 billion worth of stock in BofA, Citi, Wells and JPMorgan Chase (JPM). Its shareholders won’t vote on the New York proposal but will vote on a similar one. Wells initially opposed the New York proposal as similar to one its shareholders were already voting on, but took up the New York measure after the other one was dropped.

    Though shareholder proposals rarely pass, the votes will give investors a chance to voice their dissatisfaction with the banks’ handling of the housing crisis. If adopted, the proposal would oblige boards to evaluate the banks’ legal compliance, policies and procedures, staffing adequacy and financial incentives.

    The banks have come under fire on all of those fronts over the past six months, with the robo-signing scandal showing the big mortgage servicers regularly flouted state laws in part because their staffing was so thin. Some observers say it could cost tens of billions for the banks to fix their paperwork problems, even if state attorneys general don’t manage to impose a $20 billion penalty on the industry.

    The banks’ ineptitude and willingness to bend the rules have led to unnecessary foreclosures that hurt people, damage communities and reduce the public trust, if that’s possible, in bailed-out financial institutions. But as usual, the banks haven’t been cowed by their poor performance.

    Citi, for instance, argued before the SEC that it shouldn’t have to let shareholders vote on the proposal, because doing so would “micromanage the company by probing too deeply into matters of a complex nature upon which shareholders, as a group, would not be in a position to make an informed judgment.”

    This from an outfit that took, all in, more than $300 billion of assistance from the government during the financial crisis, and recently approved a compensation package that would reward execs over the next two years even if earnings fall from 2010 levels. Lots of informed judgments have been made there, no doubt.

    BofA, for its part, argued it had “substantially implemented” the proposal by releasing a mishmash of foreclosure and mortgage information over recent months. But the NYC funds responded that “the fact that the company’s existing internal controls and reviews did not discover any irregularities with its foreclosure processes, until such irregularities became highly publicized in the press, highlight the need for an independent review of the company’s internal controls related to loan modifications, foreclosures and securitizations.”

    Both Citi and Wells Fargo have included the proposal in the proxy statements they mailed to shareholders, with the caveat that management is hard set against it — with Wells warning that adopting it could “distract our efforts to cooperate with reviews undertaken by our federal banking regulators.” Uh huh.

    BofA and JPMorgan Chase will surely do the same when they send out their proxies. Getting a hearing on the mortgage mess is surely a small victory, but don’t think for a second that just getting on the ballot is going to make the banks behave.

  19. MERS Tells Servicers to Stop Foreclosing in Their Name
    By: David Dayen Thursday February 17, 2011 7:04 am

    Since MERS is owned by the big banks, this has the effect of MERS telling itself to stop existing. But it’s quite significant. In a memo to its members (the member banks who own it), MERS announces that their name should essentially be taken out of all foreclosure operations. Over the past several months, the inclusion of MERS in foreclosure documents, despite not having a material stake in the loan, has generated multiple lawsuits, many of which showed that MERS cannot foreclose, including a recent case in bankruptcy court in New York. That may have been the tipping point. Here’s the relevant language in the release:

    1. MERS is planning to shortly announce a proposed amendment to Membership Rule 8. The proposed amendment will require Members to not foreclose in MERS’ name. Consistent with the Membership Rules there will be a 90-day comment period on the proposed Rule. During this period we request that Members do not commence foreclosures in MERS’ name. If a Member determines that it will commence a foreclosure in MERS’ name during this 90-day period, two weeks advance notice must be given to MERS to permit verification of the appointment and current status of the Certifying Officer proposed to participate in the foreclosure. No foreclosure may be processed in MERS’ name without first obtaining this verification. We encourage Members to bring foreclosures only in the name of the holder of the note, in the name of the trustee or the servicer of record acting on behalf of the trustee.

    2. MERS Members shall have a MERS Certifying Officer (also known as MERS Signing Officer) execute assignments out of MERS’ name before initiating foreclosure proceedings. Assignments out of MERS’ name should be recorded in the county land records, even if the state law does not require such a recording (see MERS Membership Rule 8).

    You may recall that the MERS “Certifying Officer” is really just an employee at one of the member banks who MERS magically turns into a certifying officer whenever asked. They have over 20,000 certifying officers despite having a skeleton staff, and none of those certifying officers get any compensation or benefits from MERS. The memo details a new method for appointing a certifying officer to pull off these assignments out of MERS’ name, and promises new safeguards on that policy. They also tell members in the memo to “ensure the accuracy of the information” in the foreclosure documentation they use (good luck with that), and to conduct a review of its employees who have been designated as certifying officers, ensuring that they have the proper training to carry out responsibilities.

    This essentially gets MERS out of the foreclosure business. It has been ruled that they lack standing to foreclose one too many times. So there’s this attempt to after-the-fact get MERS out of the process by assigning mortgages out of MERS’ name – and paying the recording fee – to essentially allow for a quick exit.

    But I don’t know if this does anything, outside of provide a small boost in recording fees to local governments, to clean up MERS’ legal problems. As Barry Ritholtz notes:

    Keep in mind, that MERS has always been a legal fiction, simultaneously principle and agent. The courts are increasingly recognizing this, and finding they do not have any standing to bring foreclosure actions […]

    I expect we will continue to see a ongoing reduction in the role of MERS over the next several quarters.

    What follows will either be its eventual dissolution, and replacement with a legal entity — or retroactive legislation making its reckless illegality somehow legal. Watch Congress closely for signs they are rolling over for this.


    21 Comments Spotlight Tags: foreclosures, foreclosure fraud, judicial branch, servicers, MERS
    Related Posts
    •Comptroller of the Currency Announces MERS Investigation November 18, 2010
    •MERS’ R.K. Abandons Sinking Ship January 23, 2011
    •MERS CEO R.K. Arnold Bolting? January 21, 2011
    •MERS-y, Mercy Me: The Sewer Drain at the Bottom of the Housing Market October 17, 2010
    •County Recorder in Massachusetts Goes After MERS December 1, 2010
    21 Responses to “MERS Tells Servicers to Stop Foreclosing in Their Name”
    janeeyresick February 17th, 2011 at 7:37 am 1There’s a great article in today’s Huffington by L. Randall Wray on the Bankruptcy Court decision which includes a link to the decision which he says is a great read, and indeed it is. The judge basically comes down on MERS and says in so many words, “just because you say it’s so, doesn’t make it so.”

    Also interesting today from the Wall Street Journal an article about Big Banks facing fines for the actions of the servicers.

    (I tried to post the links unsuccessfully, sorry!)

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    Watt4Bob February 17th, 2011 at 7:44 am 2“If a Member determines that it will commence a foreclosure in MERS’ name during this 90-day period, two weeks advance notice must be given to MERS to permit verification of the appointment and current status of the Certifying Officer proposed to participate in the foreclosure.”

    The way I read that;

    If you want to foreclose in our name, you have to give us time to arrange for a patsy to sign the forged documents necessary to prevent us being laughed out of the courtroom.

    Is there anybody left in this country who is stupid enough to claim they are a Certifying Officer for MERS?

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    earlofhuntingdon February 17th, 2011 at 7:55 am 3This looks rather a lot like a shell game, with no pea.

    Taking MERS out of the equation is probably a good thing; it seems to add no value other than to facilitate how its “member banks” avoid complying with applicable state laws. Those relate, in part, to recording mortgages and disclosing the actual owners of interests in real property, paying the fees that maintain the system that documents land ownership, and performing the necessary administrative tasks that keep promissory notes and mortgage grants together so that the mortgage debt remains secured by a primary interest in the underlying property.

    MERS seems to do none of those things; rather it facilitates avoiding them, all within an opaque corporate structure that hides which banks and bank executives, administrators and lawyers are the real actors involved here.

    What taking MERS out of the equation in this fashion seems to do is pixie dust away the harm it and its “member banks” and the Wall Street securitization machine have already done.

    It doesn’t solve paying the billions in unpaid recording fees from earlier transactions that went unrecorded. (Anyone not aware that every state is operating under excruciating budget constraints, raise your hand.) It doesn’t disclose who has valid mortgage liens on much of the residential real estate in America.

    Most importantly, it does nothing to cure intentional and knowing past failures to maintain minimum records, steps that severed the legally mandated ties between the promissory notes – which record the debt borrowers owe the banks – and the mortgage agreements – which, together, give the lenders a secured interest in the real estate. It’s that which gives them a valid right to foreclose for non-payment on the notes.

    This “action” by MERS seems to be the bankers’ Hail, Mary pass. If MERS exits stage right, perhaps the audience of borrowers, judges and prosecutors will ignore its studiously inept performance and allow this play’s directors to continue their show.

    A related matter, of course, is that taking MERS out of the play’s production does nothing to address the egregious terms in mortgages and loan documents, and the more egregious ways in which those are administered, which generate exorbitant fees from current and troubled borrowers alike.

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    earlofhuntingdon February 17th, 2011 at 8:05 am 4Lest anyone forget, MERS was created to facilitate a trillion dollar business: issuing and trading “mortgage backed” securities. The value of those securities is dependent on and directly tied to two things, one of which MERS was sold as facilitating, which it actually failed to do: administer notes and mortgage agreements in such a way as to keep valid the right to foreclose on troubled debtors.

    The other, equally large problem, is that a large percentage of the loans that were thrown willy nilly into the securitization process were rated “investment grade” when in fact underwriters hadn’t a clue whether they were worth the paper they were no longer written on, and were actively discouraged from finding out. But nothing to see here, move along….

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    earlofhuntingdon February 17th, 2011 at 8:14 am 5MERS is acting as if it were an alcoholic trumpeting its decision to stop drinking, something it’s doing only because every liquor bottle within reach is empty.

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    janeeyresick February 17th, 2011 at 8:51 am 6http://www.huffingtonpost.com/2011/02/16/occ-settlement-foreclosure-investigation_n_824357.html

    This story is “Bank Regulators Pushing for Modest Settlement with Banks over Improper Mortgage Practices” by Shahien Nasiripour. Over 1000 comments, many of them about the lack of criminal prosecutions by the Justice Department. The anger coming off the pages is palpable.


    Food prices going up, unemployment through the roof, people losing their homes to fraudulent processes, governors trying to strip and dismantle unions, big businesses conspiring to threaten and cyber-stalk citizens and journalists, austerity for the people, tax breaks for the wealthy, dismantlement of the New Deal . . . the jig seems to be pretty much up for the USA in terms of government of for and by the people. We have government of for and by the Mega Corps and their representatives, facilitated by all three branches of the government.

    Not too much longer to go before a tipping point will be reached with the masses right here in this country. I don’t know about you, but I am feeling a major shift in the zeitgeist.

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    David Dayen February 17th, 2011 at 9:16 am 7In response to janeeyresick @ 6
    look above, I have something on this.

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    eCAHNomics February 17th, 2011 at 4:46 pm 8What follows will either be its eventual dissolution, and replacement with a legal entity — or retroactive legislation making its reckless illegality somehow legal. Watch Congress closely for signs they are rolling over for this.

    Isn’t that more accurate?

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    jpe12 February 17th, 2011 at 4:56 pm 9In response to janeeyresick @ 1
    His second sentence is completely wrong and tells us that either he didn’t read the opinion or did and didn’t understand it. (because the vast majority of the opinion is dicta – except for the part that finds that MERS can seize the house – it expressly doesn’t hold _anything_)

    That he misunderstands very, very basic stuff suggests you read him skeptically.

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    ThingsComeUndone February 17th, 2011 at 5:01 pm 10Will MERS now have to pay the filing fee on every home sale they were involved in? With interest added in several states might not be hurting for cash so much if that happens.
    Yes I know its a dream but if MERS doesn’t have standing then they never had standing and states are broke.
    States can go after MERS and big corporations or they can call in the National Guard like they are threatening to do in Wisconsin.

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    ThingsComeUndone February 17th, 2011 at 5:10 pm 11If Congress helps MERS we should demand a special prosecutor and a RICO investigation after all the Lobbyists do connect the two with cash and making criminal acts legal after the fact links them all together in a criminal act.

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    earlofhuntingdon February 17th, 2011 at 5:11 pm 12In response to jpe12 @ 9
    A wing and a prayer. Collateral legal issues in this case, having to do with the limited reach of bankruptcy court decisions, are what permit the lender to foreclose on this specific property.

    The opinion remains persuasive and its arguments about the legal consequences of MERS’s structure and conduct will be adopted by other courts. That’s why the banks controlling MERS want their creature to fade into the shadows.

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    Watt4Bob February 17th, 2011 at 5:29 pm 13In response to ThingsComeUndone @ 11
    Not to mention the fact that ex post facto law-making is forbidden by our constitution.

    Not that they’ve been paying much attention to their constitutional duties lately.

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    earlofhuntingdon February 17th, 2011 at 5:34 pm 14In response to Watt4Bob @ 13
    The prohibition on ex-post facto laws only prevents the state from making an act criminal after the fact, when that act was not criminal at the time it was done.

    As the history of telecoms immunity for domestic spying demonstrates, the government can legislate away liability for past crimes and civil wrongs. By abusing its discretionary powers to prosecute, it can also insulate bad actors from the consequences of their conduct.

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    OldFatGuy February 17th, 2011 at 5:35 pm 15In response to jpe12 @ 9
    His second sentence is completely wrong and tells us that either he didn’t read the opinion or did and didn’t understand it.

    His second sentence is:

    He explicitly acknowledged that this ruling sets a precedent that has far-reaching implications for half of the mortgages in this country.

    From the ruling:

    The Court recognizes that an adverse ruling regarding MERS’s authority to assignmortgages or act on behalf of its member/lenders could have a significant impact on MERS andupon the lenders which do business with MERS throughout the United States. However, theCourt must resolve the instant matter by applying the laws as they exist today. It is up to thelegislative branch, if it chooses, to amend the current statutes to confer upon MERS the requisiteauthority to assign mortgages under its current business practices. MERS and its partners madethe decision to create and operate under a business model that was designed in large part to avoidthe requirements of the traditional mortgage recording process. This Court does not accept theargument that because MERS may be involved with 50% of all residential mortgages in thecountry, that is reason enough for this Court to turn a blind eye to the fact that this process doesnot comply with the law.

    from you:

    (because the vast majority of the opinion is dicta – except for the part that finds that MERS can seize the house – it expressly doesn’t hold _anything_)

    From the ruling:

    Therefore, the Court finds that the Assignment of Mortgage is not sufficient to establish an effective assignment of the Note.

    Therefore, the Court finds that Movant has not satisfied its burden of showing that U.S. Bank, the party on whose behalf Movant seeks relief from stay, is the holder of the Note.

    The Court agrees with the reasoning and the analysis inBoulouteandAlderazi, and theother cases cited herein and finds that the Mortgage, by naming MERS a “nominee,” and/or“mortgagee of record” did not bestow authority upon MERS to assign the Mortgage.

    The Court finds that the record of this case is insufficient to prove that an agencyrelationship exists under the laws of the state of New York between MERS and its members.

    This Court finds that MERS’s theory that it can act as a “common agent” for undisclosedprincipals is not support by the law. The relationship between MERS and its lenders and itsdistortion of its alleged “nominee” status was appropriately described by the Supreme Court of Kansas as follows: “The parties appear to have defined the word [nominee] in much the sameway that the blind men of Indian legend described an elephant – their description depended onwhich part they were touching at any given time.”Landmark Nat’l Bank v. Kesler , 216 P.3d158, 166-67 (Kan. 2010).

    Sounds to me like the court did make several findings regarding MERS…

    That he misunderstands very, very basic stuff suggests you read him skeptically.


    The Ruling: http://www.scribd.com/doc/48827432/In-Re-Agard-48750818-US-Bankruptcy-Court-New-York-Memorandum-Decision

    The article: http://www.huffingtonpost.com/l-randall-wray/new-yorks-us-bankruptcy-c_b_824167.html

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    OldFatGuy February 17th, 2011 at 5:51 pm 16Now rather than getting into a pissing contest over whether or not this ruling does or doesn’t actually “set a precedent,” why not just explain ourselves in plain English.

    I read the ruling to say that in the specific foreclosure before the court the Bank had the authority to foreclose this house. But he went further, specifically pointing out that he had held up many, many other cases that wouldn’t be decided like this one and would depend on the legal authority of MERS to foreclose.

    And then he spent several pages concluding that he finds that unless specific evidence arises in those other cases, that generally MERS does NOT have standing and therefore can’t foreclose.

    Reading all of that together it seems to me logical to conclude then that although THIS case may not be the precedent setting case, it sets the precedent for him to decide those other future cases he’s been holding which will set a precedent that he does ackknowledge would have national implications.

    Reading the article, that’s basically what I got out of the article as well.

    What is wrong about that analysis??

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    maa8722 February 17th, 2011 at 5:58 pm 17In response to OldFatGuy @ 16
    Nothing’s wrong there.

    Having worked in a big bank and seeing some hijinks there, I enjoy seeing that pot get stirred now that I’m gray and retired. Keep up the good work.

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    earlofhuntingdon February 17th, 2011 at 6:17 pm 18In response to OldFatGuy @ 16
    Formally, court decisions only bind the parties involved in that decision.

    Courts have a hierarchical structure, with lower courts subject to rulings made by higher courts. Precedent makes a decision binding on later decisions by the same court or courts inferior to it in the same jurisdiction, when the facts of later cases are sufficiently close to the facts in earlier cases.

    Courts in one jurisdiction are not obligated by precedent to follow the decisions of another jurisdiction. Different jurisdictions could be state courts in Kansas and Ohio or the federal district or circuit courts in New York and Virginia. Decisions from other jurisdictions, however, can have persuasive authority: their arguments, rather than binding precedent, can convince another court to follow their decision.

    As a general rule, state courts determine state law, federal courts determine the meaning of federal laws. Bankruptcy cases involve state and federal laws combined. There’s a specific rule that prohibits a bankruptcy court from acting as an appeal’s court and changing the decision of a state court on state law-determined matters that affect the bankruptcy estate. That’s the limitation here, which allows the lender to foreclose in this case.

    This bankruptcy court went out of its way to give itself and all other courts an analysis of the legal consequences of MERS conduct which is devastating to MERS and the banks that act through it. It doesn’t affect the foreclosure in this case. But the reasoning is highly likely to be adopted by other state and federal courts.

    Appeals will eventually end up with state supreme courts for cases outside of bankruptcy and with the federal Supreme Court for cases in bankruptcy. But MERS and its banks don’t like the lay of the land or the momentum building up against them. Lobbying may not be sufficient to avoid the consequences of adverse court decisions. Hence, MERS’s decision to try and take itself out of the foreclosure loop. That will be a neat trick, given that it is involved with what, half the residential real estate mortgages done in the past ten years.

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    janeeyresick February 17th, 2011 at 7:06 pm 19In response to earlofhuntingdon @ 18
    And in Kansas, the State Supreme Court said MERS did not have standing in the Kesler decision, while the Federal District Court in a bankruptcy case said the opposite.

    No doubt I have my own biases, and I am just a layman, but the whole MERS construct to me is just a convenient fiction that does not accurately reflect the truth. Just as throwing up a straw buyer is seen as a fraud, I don’t see why throwing up a straw lender is not exactly the same thing. A straw buyer has no real interest in a property and is just a fictitious cover in order, often for nefarious purposes, to conceal the real circumstances and is paid just for providing their name. How is MERS any different?

    MERS seems to have been created for a specific purpose – to avoid recording laws and fees, which were seen as both an expense and an inconvenience. To all appearances, these large banks and players just decided in unison that they were too big to have to pay attention to state recording laws and fees or foreclosure laws like the rest of the riff raff do.

    We’re in a pretty sad state when American land titles and deeds can be thrown into disarray and chaos because of the hubris of the banking class

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    montymarket February 17th, 2011 at 9:52 pm 20It’s a crime what the banks are doing. If banks can get away with foreclosing without proper paperwork, what’s to prevent them from stealing assets in other more devious ways, now that the mechanism proves unpunishable? Expand the criminal enterprise further into passbook savings, for example.

    Applying the same shortcuts as in the foreclosure scam, a bank could simply claim that instead of $1000 in an account, the saver only has $900. What’s to stop them? Or auto loans. Hold a few monthly payments in reserve, claim the purchaser missed the payments, then repossess the car and re-sell it at a profit, while retaining the reserved payments.

    Some folks have had their homes taken even though they never missed a payment. The banks could expand to cars, boats, etc. Who would stop them?

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    KarenM February 18th, 2011 at 7:52 am 21Finally! At least one of the parties involved is beginning to deal with the actual Reality.

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  20. It seems the AG’s won’t let them off the hook so easily (save the four aforementioned Republicans). This mortgage fraud is going to split either party.

    Get your lawsuits filed quickly. Maybe a criminal complaint for fraud at the local level.

    I think it’s called “Theft by conversion”. I am convinced the OCC and FDIC are “in on the game”.

    U.S. regulator plans separate foreclosure settlement
    4:04pm EDT
    By Joe Rauch and Dave Clarke
    CHARLOTTE, N.C./SAN DIEGO (Reuters) – The main regulator for the largest U.S. banks is preparing to break from state authorities and settle with lenders over their foreclosure practices, according to a source familiar with the process, dashing hopes for a comprehensive settlement.

    About a dozen federal authorities and 50 state attorneys general have worked for months to reach a coordinated settlement that would let banks contain their litigation risk, help homeowners mistreated during foreclosures, and remove a cloud of uncertainty hobbling the housing market’s recovery.

    But the Office of the Comptroller of the Currency, impatient with infighting over the structure and shape of a coordinated settlement, is preparing to move on its own set of fines and business-practice fixes for banks, according to a source, who was not authorized to speak publicly.

    The OCC’s settlement could come in the next couple weeks, the source said.

    Such a settlement would likely be smaller in scope than a deal envisioned by other U.S. authorities forcing banks to pay about $20 billion — which would be used in part to help struggling homeowners — and to agree to reduce loan balances to keep borrowers in homes.

    But it could be bad for banks such as Bank of America Corp, Citigroup Inc and Wells Fargo & Co, leaving them open to lawsuits from investors and homeowners and to massive settlement demands from state authorities.

    Also, the OCC settlement is expected to give little relief to struggling homeowners, millions of whom are facing mortgages that are worth more than their homes.

    OCC spokesman Bob Garsson declined to comment.

    Analysts said multiple settlement agreements issued by federal and state authorities would be the worst-case scenario for the largest U.S. banks.

    “The banks would rather their multiple regulators come together and coordinate, but it just seems like that’s not happening,” said Jefferson Harralson, a bank analyst with Keefe, Bruyette & Woods Inc.

    The wide-ranging investigations into the industry’s foreclosure practices began last fall. Several large U.S. mortgage lenders temporarily suspended foreclosures amid allegations they improperly handled the home repossessions.

    Critics alleged the banks used so-called “robo-signers” — employees who reviewed hundreds of foreclosure documents daily without ensuring the documents’ accuracy.


    The OCC’s potential split is the latest symptom of the contentious, ongoing debate about how best to fix the U.S. mortgage market, and who should bear the losses for millions of foreclosed homes nearly five years after the housing market began to collapse.

    The authorities had hoped to reach a coordinated settlement that would fix servicing problems, penalize the banks, and help homeowners wrongfully foreclosed.

    Banks have wanted a quick, coordinated settlement because it could help contain the litigation risk facing the industry and allow them to start repairing the damage from the latest blow to the industry’s reputation.

    Treasury Secretary Timothy Geithner has also said such a settlement would help bring some certainty to the still ailing U.S. housing market.

    Last month, sources familiar with the investigation said the state attorneys general and representatives from the new Consumer Financial Protection Bureau were seeking to create a foreclosure fund financed by the banks with as much as $20 billion in cash. They were also seeking to require the banks to conduct principal writedowns on mortgages if the debt on a home is greater than the home’s market value.

    Those demands went beyond what some other regulators, including the OCC, thought was appropriate.

    OCC acting head John Walsh has said the bank regulator probe found “critical deficiencies” in the industry’s foreclosure practices, but said only a small number of homeowners have been wrongly evicted.

    In a sign of growing tensions among the authorities, on March 3, state attorneys general sent banks aspects of a proposed settlement endorsed by some federal agencies but not the OCC or the Federal Reserve, the main banking regulators involved in the discussions.

    The 27-page document proposed changes to how the mortgage servicing industry operates and advocated reducing loan balances for struggling borrowers as a way to help them avoid foreclosure.

    Republican lawmakers and some state attorneys general have slammed that 27-page document, calling it an abuse of power.

    (Reporting by Joe Rauch and Dave Clarke; editing by John Wallace, Gary Hill)

  21. What made anybody think that the powers that be were going to tell you the truth? The all lie. Eventually, the people making more than a million and less than 10 million will be fleeced. Just a little fearless forecast there. I think I need to post the Wikipedia definition of fascism again.

    “Fascism is a radical, authoritarian nationalist political ideology. Fascists seek to organize a nation according to CORPORATIST perspectives, values, and systems, including the political system and the economy. They advocate the creation of a totalitarian single-party state that seeks the mass mobilization of a nation and the creation of an ideal “new man” to form a governing elite through indoctrination, physical education, and family policy including eugenics. Fascists believe that a nation requires strong leadership, singular collective identity, and the will and ability to commit violence and wage war in order to keep the nation strong. Fascist governments forbid and suppress opposition to the state. Don’t live in fantasyland.

  22. dodododo , you have to go in Chase Web and click
    the Corelogic link (what is my home worth ) you will be surprise , how much Corelogic send you under water. I was 30% more under water than Zillow.Nobody stop this joke’s

  23. cubed: I like Beck in so many respects, but, like everyone else, he chooses to ignore the banking/mortgage issue.

    I’m going off on a tangent here……
    If what Mary says is true about the consorteum that IS Wells Fargo, their should be a cause of action under the FTC and trademark laws relative to intent to deceive/unfair competition/anti-trust/Sherman Act. I’m working on it, but no time right now. see FTC vs. Cement Institute.

  24. All four AGs objecting are Republicans.

    The guys (one lady) — want to really talk MORALs?? How about you just do your job and put the criminals where they belong — jail.

  25. FOUR Attorney Generals are objecting to any 50 state settlement that includes “principal write-down” due to “Moral Hazard” issue. The four AGs are from Florida, Texas, Va and SC See below

    State Attorneys General Fear Moral Hazard In Proposed Federal Bank Settlement
    March 24th, 2011

    While the attorneys general of all 50 states are in agreement that something must be done about last year’s robo-signer debacle in order to compensate homeowners who were harmed by the incident and restore faith in the nation’s lenders, some AGs believe that the proposed settlement plan issued by the group will create a serious “moral hazard” that will “reward those who simply choose not to pay their mortgage.” The AGs believe that the “reward” – loan principal reductions to the tune of $20 billion for underwater borrowers – does not have a close enough link to the documentation issues that originally created the robo-signer crisis in the first place[1].

    Tom Miller, who is the leader of the investigation and AG in Iowa, pointed out that the proposed settlement is simply an “opening bid in the negotiations,” as bank regulators, members of Congress and a group of AGs have all raised objections to the proposal already. Miller emphasized that “we are trying to shift the servicing industry from a dysfunctional one to a functional one” in an interview. Critics of the proposal say that the settlement plan reaches beyond the appropriate scope of government enforcement of lending practices and that strategic defaults are likely to occur in higher volumes should the settlement be enforced in current form[2]. Currently four AGs, Pam Bondi (FL), Greg Abbott (TX), Kenneth Cuccinelli (VA) and Alan Wilson (SC) have expressed their concerns about the settlement publicly via a letter to Miller.

  26. “Median home price lowest since December 2003”

    WELL, I’m afraid my home price which I paid in 2000, is below that. Paid 350k, now it’s maybe 220K so it’s back to 1995 levels.

    All right Glen Beck, should I honor my contract and pay on this 350k “Promise To Pay” note. Well, you jack wagon????

    “Promise to Pay” actually means “Promise to Produce”. So I have to produce, work, for the next 30 years on the note. ummm, doesn’t sound to good when you put it that way.

  27. I just yesterday punched in the addres of MY f/c home and looked on Zillow for the property value of MY home (yes I said MY home). We were never underwater when we owned the home. The people who bought MY home almost a year ago paid $80,000+ more than we ever had a loan for. Well according to Zillow they are now underwater. Yes, I know Zillow’s reputation, but none the less. How could my home’s value increase $153,000 (according to Zillow) in less than two months? There was an offer made on MY house one and a half months after we were kicked out. The realtors made a good killing on MY home.

  28. The reality of our economy receding to third world status where the people with money have a moat and gates and guard dogs…..

    Priceless commentary Neil. I’m not sure what I’d do without a daily does of your severly cogent thought process. Thanks.

  29. It is amazing. I work in resort rentals now and everyday I have realtors and appraisers come in to get keys to one of the rentals that are up for short sale or bank owned. They all give their little up beat opinions on how the market is showing a little improvement and blah blah blah. I sit there thinking to myself, yea right. I guess the foreclosure price has not dropped in a day and that is cause for celebration. However, they are instructed to put on their smiley faces and have an upbeat positive attitude and things will get better. More brainwashing.

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