Bain Decision Brings Us Back to Reality

People are asking in emails and calls why I think this decision from Washington State is so basic and decisive. So here is my answer.

If MERS was right, then there would be no point to having a statutory scheme for recording of deeds and mortgages. Let’s take a simple example, if MERS was named on the deed as the Grantee by a real person who was selling the property as Grantor. So far so good. Everything is in order if the deed is recorded in the county recorder’s office in the same county as where the property is located.

So you decide you would like to make an offer to MERS for purchase of the property. MERS says we don’t own the property and you say but the recorded deed says you are the owner and the statute says that makes you the owner. MERS says no, we are not the owner we are just a nominee for a succession of owners. You’ll have to figure it out for yourself.

So you go to a lawyer and you say I want to buy this property and I went to the owner of record, but they say they have no power to sell it because they don’t own it. So who owns it? The lawyer makes some calls and is finally told that on the MERS data files the owner is XYZ Corp. He looks into the title record and finds no evidence of any XYZ Corp. nor that they ever had an interest or stake in the property.

So the lawyer goes back to his client and tells the prospective buyer, well, they have identified XYZ Corp as the owner and here is their telephone number. And ask “how do I know they are the owner if there is nothing in the title record? Are we to simply take the word of someone at MERS? IS that the way title works in this state?”

So the lawyer thinks for a minute and says well, MERS says they will sign off if XYZ signs off and XYZ is willing to show an assignment from MERS to XYZ that hasn’t been recorded yet. But you are still concerned. “We are still taking the word of someone at MERS that XYZ Corp is the owner. I guess if we get a deed  or assignment of deed from MERS that helps but isn’t something wrong here?”

The lawyer does some research and finds out that MERS is designed to pass around the title to the property by way of an unsecured database and that neither MERS nor XYZ can actually be trusted source of title without their being a final order from a judge declaring the rights of the stakeholders. But then he gives you the bad news. You are just a prospective purchaser who has no interest in the property so you cannot get that order from a court. It must be MERS or XYZ and they refuse to do that. But the good news is that they have accepted your offer to purchase the property.

Head scratch. The lawyer is saying that you must have a final order from a judge which can be certified and recorded in the county recorder’s office and you don’t have the right (standing) to go get that order and the “sellers” refuse to participate in that strategy, for whatever reason.

So you go to your local title insurance company and find out that that sure, they will issue a policy, but the policy will exclude off-record transactions so if there are any claims that are different than what is represented in the MERS or XYZ documents, the problem is yours.

So there you are, ready to buy the property, you have a willing “Seller” and no certainty or insurance that you can get title.

THAT is exactly what the statutory scheme for recordation of title instruments is all about. It creates certainty without all the steps above and it provides a free marketplace where people can trust that they are getting what they think they are buying. The same holds true for mortgages. So you want to pay off your mortgage now? Go to MERS and start at the top of this blog and work your way down again. That is why the decision in Washington is so important and why it is the only right decision to make.

46 Responses

  1. If the placing of notes and dots in a trust and then selling derivatives (disregarding that it may have happened conversely) did not accomplish an actual sale of the notes and their collateral, the right to enforce the notes by the trust would need to be contractual and is that even possible – to separate ownership of a note from the right of enforcement? If it is possible, does it materially change the ‘essence’
    or operation of a note? Like turn it into a contract ish v. promissory note / non-negotiable? A party owning the note could authorize an agent or a poa or what not to enforce on its behalf, but that is not the same thing, because an agency or poa does not separate the note from enforcement rights. (an act of a legitimate agent or a poa which does not exceed its agency or poa is the act of the principal, even though the agency or poa must be disclosed – and as to a neg instrument, I just read as I’ve said that failure to so identify the status on the endorsement makes the agent or poa liable on the instrument)
    I get confused by the bandying of the words “true sale”. What is a true sale and where is this rule found and to whom does it factually apply? Are these things about which we are still shooting in the dark?
    Naysayers and negative nabobs, please don’t bother. These are legitimate questions and while it may be clear to some, it is far from clear to me and others. Who actually has rights of enforcement and by what vehicle, i.e. written agreement, if these are not true sales?
    If they are true sales to a trust, it makes sense that the trustee would be the party to enforce the rights of the trust beneficiaries (again,tho, this depends on whether or not the trust bens have the right themselves to enforce the notes and dots, which they would if a true sale of the notes and dots, right? but are they – really?) But what document affords the sec’n trustee this right to act for the investors, to enforce their rights? In the deal with a homeowner and a lender/ beneficiary, it is the dot which creates that right for the dot trustee – to act at the behest of the dot ben. I do not believe that these sec’n trustees took on that duty, the duty to enforce for the investor/beneficiaries, for one reason because the trustees made it a point in the psa’s to disclaim any warranty on the loans at issue or any duty to examine them. (Not speculating – I’ve seen it) . I don’t think these trustees, aka big institutions or their affiliates, wanted this job. I think they mostly just lent or sold the use of their names as trustees for pr. That probably isn’t illegal (?), though inherently misleading. Is no written agreement necessary because the relevant trust law gives a sec’n trustee this right and or duty? Don’t believe that one, but I admittedly don’t know. And if the law does, could they disclaim it in a written agreement if they were so inclined? If enforcement is not available to a secn trustee as a matter of fact, then whom and how?
    If it’s the servicer, why not fork over the governing docs? They cry
    “judicial economy” and demand a right not evidenced. **
    Most of us here cannot answer these questions, and obviously I can’t. I wish someone who could would. That gang is glad I’m not younger. I’d either go off snooping or hire the talent, I swear.
    Oh, wait! None of this matters because it all comes down to alleged
    possession of bearer notes by anyone including the secn trustee and a perception that one in poss of a bearer note is either entitled and has the collateral instrument or is entitled to an assignment of the collateral instrument. Bah humbug. Unfortunately, none of this will help anyone without answers. And dcb went and complicated it by noting that a thief who has enforced the note cannot yet legitimately mark the note “paid”, unless a thief may about which I have no idea. Maybe he can and then the noteowner must go after the thief instead of the payor. Rather like that one.
    When the note is in the possession of one who is not its holder, and that non-holder in possession gets an assignment of the dot, there has been bifurcation.
    ** This is what Arizona, for instance, says about agency:

    AZ 44-101. Statute of frauds

    6. Upon an agreement for leasing for a longer period than one year, or for the sale of real property or an interest therein. Such agreement, if made by an agent of the party sought to be charged, is invalid unless the authority of the agent is in writing, subscribed by the party sought to be charged.”
    I guess if one is not provided the agency agreement, one can’t know if it’s been put in writing pursuant to this statute.
    observations only of a lay person.

  2. Whatever happened to all those actions filed by the counties and states? Here is a new one filed on 8/2/12.

    http://www.msfraud.org/law/lounge/elpaso-v-mers-scheme_8-12.pdf

    El Paso Counties Attack MERS Scheme
    Each of the Defendants has conducted and/or participated in the conduct of the MERS Enterprise’s affairs through a pattern of racketeering activity in violation of RICO, 18 U.S.C. § 1962(c), by engaging in numerous acts of mail fraud and/or wire fraud.

  3. With regards to GSE repurchase agreements, what authority does a subservicer have to collect from the borrower after said repurchase. The subservicer has a liability to the GSE acting as master servicer via written agreement. That written agreement is trash after repurchase. No subsequent assignment of servicing rights can occur if the agreement is trash. There would be nobody to have authority to collect for the benefit of xxxx. Servicing and collection rights are recognized as a distinct asset only when contractually separated from the instrument at the time of sale according to rules promulgated by fasb. Without the offsetting liability to somebody, the servicing and collection rights can’t be recognized as an asset. These rights are sold and transferred in their own secondary marketplace separate from the loan. Without an underlying servicing contract as a consequence of loan repurchases, does the servicing asset go poof? Is the borrower obligated to honor payment requests from an entity claiming to be the servicer for a loan that has been repurchased from a GSE? I’m thinking not if the collecter is claiming to derive its capacity from a servicing agreement.

  4. The Internet knives must be coming out for Living Lies–even my comments WITHOUT links are awaiting moderation…

  5. Check out my favorite part of MERS’ weak and pathetic response to the Bain decision:

    “As we have maintained consistently, MERS is an agent of lenders and their successors and assigns. In fact, the opinion written by Justice Tom Chambers states: ‘nothing in this opinion should be construed to suggest an agent cannot represent the holder of a note. Washington law, and the deed of trust act itself, approves of the use of agents.’ The opinion also states: ‘MERS notes, correctly, that we have [the Court has] held ‘an agency relationship results from…consent by one person that another shall act on his behalf…’’”

    Apparently MERS has a reading comprehension problem–the two quotes above are regarding agency law in general, NOT MERS in particular. It’d be like a murderer issuing a press release in his defense saying “The judge’s order said that owning guns is permitted by the laws of this state,” as if that because owning guns is legal, murder with a gun is therefore also legal. WRONG! Go back and read it again ya bastards–especially the paragraph directly below the one YOU cited:

    ” But Moss also observed that “[w]e have repeatedly held that a prerequisite of an agency is control of the agent by the principal.” Id. at 402 (emphasis added) (citing McCarty v. King County Med. Serv. Corp., 26 Wn.2d 660, 175 P.2d 653 (1946)). While we have no reason to doubt that the lenders and their assigns control
    MERS, agency requires a specific principal that is accountable for the acts of its agent. If MERS is an agent, its principals in the two cases before us remain unidentified.12 MERS attempts to sidestep this portion of traditional agency law by pointing to the language in the deeds of trust that describe MERS as “acting solely as a nominee for Lender and Lender’s successors and assigns.” Doc. 131-2, at 2
    (Bain deed of trust); Doc. 9-1, at 3 (Selkowitz deed of trust.); e.g., Resp. Br. of MERS at 30 (Bain). But MERS offers no authority for the implicit proposition that the lender’s nomination of MERS as a nominee rises to an agency relationship with successor noteholders.13 MERS fails to identify the entities that control and are
    accountable for its actions. It has not established that it is an agent for a lawful principal.”

    Washington SuCo’s got your number, MERS!

  6. Check out MERS’ weak and pathetic response to the Bain decision:

    http://www.mersinc.org/media-room/press-release/298-mers-statement-on-washington-supreme-court-ruling

    My favorite part:
    “As we have maintained consistently, MERS is an agent of lenders and their successors and assigns. In fact, the opinion written by Justice Tom Chambers states: ‘nothing in this opinion should be construed to suggest an agent cannot represent the holder of a note. Washington law, and the deed of trust act itself, approves of the use of agents.’ The opinion also states: ‘MERS notes, correctly, that we have [the Court has] held ‘an agency relationship results from…consent by one person that another shall act on his behalf…’'”

    Apparently MERS has a reading comprehension problem–the two quotes above are regarding agency law in general, NOT MERS in particular. It’d be like a murderer issuing a press release in his defense saying “The judge’s order said that owning guns is permitted by the laws of this state,” as if that because owning guns is legal, murder with a gun is therefore also legal. WRONG! Go back and read it again ya bastards–especially the paragraph directly below the one YOU cited:

    ” But Moss also observed that “[w]e have repeatedly held that a prerequisite of an agency is control of the agent by the principal.” Id. at 402 (emphasis added) (citing McCarty v. King County Med. Serv. Corp., 26 Wn.2d 660, 175 P.2d 653 (1946)). While we have no reason to doubt that the lenders and their assigns control
    MERS, agency requires a specific principal that is accountable for the acts of its agent. If MERS is an agent, its principals in the two cases before us remain unidentified.12 MERS attempts to sidestep this portion of traditional agency law by pointing to the language in the deeds of trust that describe MERS as “acting solely as a nominee for Lender and Lender’s successors and assigns.” Doc. 131-2, at 2
    (Bain deed of trust); Doc. 9-1, at 3 (Selkowitz deed of trust.); e.g., Resp. Br. of MERS at 30 (Bain). But MERS offers no authority for the implicit proposition that the lender’s nomination of MERS as a nominee rises to an agency relationship with successor noteholders.13 MERS fails to identify the entities that control and are
    accountable for its actions. It has not established that it is an agent for a lawful principal.”

    Washington SuCo’s got your number, MERS!

  7. Trespass Unwanted

    After investigation I am finding both Freddie and Fannie part of the game. Another reason why DeMarco will not side with home owners.

  8. JG said:

    “A couple reasons. I believe they are actually using the assignments to assign the notes, despite the fact that 1) MERS under no theory could do this and 2) despite the fact it has been admitted in a case I linked here that the language regarding the note in the assgt of the deed of trust is merely
    “surplusage” (I beg to differ – there’s intent).”

    I totally agree. These assignments always say that they are assigning BOTH the DOT/mortgage AND the note. In my case, the document purporting to do so was titled “Corporation Assignment of Deed of Trust/Mortgage.” It mentioned the assignment of the note almost as an afterthought. Clearly, MERS and its members are doing/have already done no less than turning inside out the principle that “the mortgage follows the note.” They are trying to make the note follow the mortgage by assignment of the DOT/mortgage.

    As you said, JG, there is no theory that allows this AND there is no property authority (Restatement, statute, Carpenter v. Longan/general case law) that allows this. However, it is happening all the time and happened in my case. I pointed all of this out repeatedly to my judge (who was actually the bank’s judge), and in his final order against me, he agreed with me that “the mortgage follows the note” but said in the same breath that MERS could legally assign only the DOT to the bank–DESPITE the fact that in discovery, MERS ITSELF said that MERS could NOT assign the note and if MERS can’t assign the note and the note is essential while the DOT is incidental, then MERS can’t assign the DOT either! It was a stunning contradiction, and one that made me ultimately decide NOT to appeal because I did not know how to explain the problem any more clearly and knew that the appeals court would gloss over it and/or talk out of both sides of their mouths just like the bank’s judge did.

  9. @BSE, correction the bank was acquired a year later via this link’s comment.
    page 3
    =============================
    As of November 6, 2009, National City Bank, then PNC Financial’s other bank subsidiary, merged with and into PNC Bank.
    =============================
    http://www.sec.gov/Archives/edgar/data/1008932/000090342309000912/pnc-40appa1_1130.htm

    My comment was:
    @BSE
    Thanks for that info about Fannie Mae.
    My home was stolen for the ‘benefit’ of Fannie Mae by lawyers representing PNC.

    The judge was told that Fannie Mae purchased the home at a foreclosure sale and that the tenant needed to vacate the premises.

    PNC bought out National City Mortgage, and most of their ‘so called’ performing loans are probably loans they don’t have a right to collect on, because National City Mortgage did not assign any of their DOTs to PNC before they left.

    I mentioned the SEC links here…

    The big hole for PNC is that in that year’s time, they should have worked on moving over the beneficial interest of the loans from NCM to PNC.

    So PNC is like a MERs foreclosing on loans acting like an assignee of the mortgage without having a documented interest in the chain of title.

    That’s how my home was stolen. They did a substitution of Trustee and that law firm stole the property. When I contacted the Trustee on the DOT, I was informed that they were also a client of PNC. So the Client aspect was more important to the Trustee than abiding by Trust Law and performing their fiduciary duty for the DOT. Things not allowed in the DOT that the Trustee was supposed to thwart, were ignored and the transfer to the substitute happened behind the scenes.

    The bank (a strawman that can’t speak, eat, drink, sleep, or think) had employees that created the money to pay them both (Trustee and Substitute Trustee) out of thin air.

    With that thin air money, those supposed legal people helped that bank. After a year, they sold the home, via Quicken Loans and the phone number for Quicken on the paperwork as 1-800-xxx-MERS.

    Trespass Unwanted, a divine spark of the One Infinite Creator, a creator, a true creditor.

  10. @BSE, taking E Tolle’s comment into consideration here is what the links were pointing to, in the top of the document in the Background section.
    http://www.sec.gov/Archives/edgar/data/1008932/000090342309000243/pnc-40app_0311.htm
    This link has 46 pages, but this is the paragraph of interest.
    =================
    On December 31, 2008, PNC Financial acquired National City Corporation (“National City”). National City, headquartered in Cleveland, Ohio, was one of the nation’s largest financial holding companies. At September 30, 2008, National City had total assets of $143.7 billion and total deposits of $95.6 billion. National City Bank, National City’s principal banking subsidiary, continues to operate through an extensive network in Ohio, Florida, Illinois, Indiana, Kentucky, Michigan, Missouri, Pennsylvania, and Wisconsin. Prior to its acquisition by PNC Financial, National City also conducted selected consumer lending businesses and other financial services on a nationwide basis. Its primary businesses included commercial and retail banking, mortgage financing and servicing, consumer finance, and asset management.
    ================
    National City Corp, including the Bank was acquired by December 31, 2008.

  11. I again ask this question…. In the face of D Bank paying $200 million to settle the FHA bad loans for MortgageIT and similar FNMA loan put backs…..if FNMA is in dispute with BofAm, DBank etc for loans made through 2005 and 2008, HOW on earth can FNMA go to court to sue the borrower who’s loan may have been poorly underwritten and may be included in these suits???

    Can’t the borrower say we have to wait until FNMA mitigates its losses via the MortgageIT’s and DBs etc???

    If FNMA is actively seeking equitable compensation for their losses from other sources how can they also foreclose for the house????

    Seems like the borrower should have a stay until FNMA has reviewed or filed all the suits agains the intermediaries.

  12. In this case, the borrower asserted the affirmative defense of inadequate consideration against the bank. The bank admitted it would not pay for an assignment of a dot, which is actually generally true (think it”s on pgs 8 & 9). What gets paid for is the note which includes the right to an assignment of the collateral instrument. The banksters nonetheless
    put “10 dollars and other good and valuable consideration” in the assgt, right? Why do they do this? A couple reasons. I believe they are actually using the assignments to assign the notes, despite the fact that 1) MERS under no theory could do this and 2) despite the fact it has been admitted in a case I linked here that the language regarding the note in the assgt of the deed of trust is merely
    “surplusage” (I beg to differ – there’s intent).
    When a court sees such an assignment, there is a reasonable impression that the assignee has paid consideration for the assgt of the dot (some courts actually think this is also an assgt of the note, though they skip any analysis of MERS’ ability to assign a note). The courts believe money has changed hands for the assignment of the deed of trust, which we know has not occurred. Assgts of the coll instrument don’t require funds. This case exposes the ruse: the willful misimpression both on public record and to the judiciary that money is changing hands for an assgt of the dot, and further, that MERS as the alleged beneficiary or even nominal ben is the recipient of those funds.
    Here is another interesting case. Started reading it but stopped at the foot note on page 1. Many of us have become aware of a few things regarding MERS, like that it is on its 3rd iteration (formation) of MERS and the facts regarding MERS v MERSCORP. MERS, the computer program, is named as ben onour deeds of trust, but it is MERSCORP, a separate entity, which professes to do anything at all in regard to the dot’s.
    Taking e tolle’s advice, I will try to link th ecase separately.

  13. E Tolle funny
    and the brief done, ill keep yall’ posted. ill say this devine timing never worry god has your backs.

  14. Folks, wordpress moderation, at least here on LL, isn’t necessarily a human attended event….if it senses too many links or other parameters (spamlike) its little digital sphincter tightens up and sets your comment to the side. Neil once said he has 25K emails in his inbox….that should give you an idea of how long it will be for him to get around to approving your comment.

    In the mean time, never include more than two outside hypertext links per comment. And if that wasn’t the culprit, simply rearrange your comment, so as to fool the cyber-moderator. Otherwise, by the time it takes for a live moderator to fix your post, we will have all been foreclosed on. Which, I have no doubt, is the end game for TPTB.

  15. @BSE

    Trespass Unwanted, on August 18, 2012 at 7:10 pm said: Your comment is awaiting moderation.

    I’m still waiting too. I guess if it’s done within 24 hours that’s a good thing. 🙂

  16. @Trespassunwanted

    Waiting to see your post with SEC links

  17. moderation – LOL

  18. @BSE
    I responded to your post, but I provided two SEC links, within the response. It’s awaiting modification right now.

    Trespass Unwanted, by divine right (Jure Divino), in One’s own right (in jure proprio)

  19. @BSE
    Thanks for that info about Fannie Mae.
    My home was stolen for the ‘benefit’ of Fannie Mae by lawyers representing PNC.

    The judge was told that Fannie Mae purchased the home at a foreclosure sale and that the tenant needed to vacate the premises.

    PNC bought out National City Mortgage, and most of their ‘so called’ performing loans are probably loans they don’t have a right to collect on, because National City Mortgage did not assign any of their DOTs to PNC before they left.

    I have the SEC filing links, and PNC Bank bought out National City Bank and then a year later filed the SEC filing for taking over the mortgage servicing side.
    http://www.sec.gov/Archives/edgar/data/1008932/000090342309000243/pnc-40app_0311.htm

    http://www.sec.gov/Archives/edgar/data/1008932/000090342309000912/pnc-40appa1_1130.htm

    The big hole for PNC is in that year’s time, they should have worked on moving over the beneficial interest of the loans from NCM to PNC.

    So PNC is like a MERs foreclosing on loans acting like an assignee of the mortgage without having a documented interest in the chain of title.

    That’s how my home was stolen. They did a substitution of Trustee and that law firm stole the property. When I contacted the Trustee on the DOT, I was informed that they were also a client of PNC. So the Client aspect was more important to the Trustee than abiding by Trust Law and performing their fiduciary duty for the DOT. Things not allowed in the DOT that the Trustee was supposed to thwart, were ignored and the transfer to the substitute happened behind the scenes.

    The bank (a strawman that can’t speak, eat, drink, sleep, or think) had employees that created the money to pay them both (Trustee and Substitute Trustee) out of thin air.

    With that thin air money, those supposed legal people helped that bank. After a year, they sold the home, via Quicken Loans and the phone number for Quicken on the paperwork as 1-800-xxx-MERS.

    Trespass Unwanted, a divine spark of the One Infinite Creator, a creator, a true creditor.

  20. @ johngault,
    You are right to correct my statement, I was referring to my own DOT and that’s how it was written.
    Property was given to the beneficiary as collateral for the Note, I was labeled the Borrower, the beneficiary chose who would be Trustee until the Note was paid for and the beneficiary was called the Lender.

    When I see the writing on the wall, it’s really stupid that I was the Creditor and let them put in a document something like, for the purpose of this document the Lender is National City Mortgage, and is also the beneficiary, or something to that effect.

    It’s like we played some role playing game and I jumped in without knowing the rules and played the game like everyone else was playing – and they didn’t know the rules either.

    We live, we learn.

    Trespass Unwanted, a free and independent state, a state of life, a state of concience, a people

  21. @Zurenarrh, Thank you. I had to leave the blog for a while to affect the matrix in other areas, specifically the EyeAreEss. I guess when we think we are powerless, we do nothing, but if we know we are powerful, we can creatively defeat the biggest beasts there are. I remember watching the movie 9, and those were just animate dolls that had a piece of the soul of their creator. They awaken something very destructive, but they also defeated it.

    That EyeAreEss beast has harmed many, and I guess it was time for it to put it’s claws on me, and I responded back to that ‘voluntary’ system and let them know in some very creative ways, that what was happening to me was not ‘voluntary’.
    Laughing out Loud now.
    I pay attention to everything and one day I saw a bank rubber stamp a number on the front of a check I deposited. I learned I could write on the face as long as I didn’t deface the payee, payment amount, signature line, etc..with all that space … inside the box … I learned I can tell anyone I want that ‘I don’t want to do something’ I’ve been doing. If it’s truly voluntary, why would I want to write that I’m doing it by force?

    Their system is set up to make everything an agreement, even if it’s by force. The EyeAreEss has bypassed the judicial system and has oppressed many and send the monthly bill as a ‘Your Agreement’.

    I can’t give any more details than given. I know more about the ‘legal’ aspects of this world than the average Joe. I have the Black’s Law dictionary and can speak legalese when I need to.

    The system of control is crumbling, and people unaware will get pretty scared because it’s all they know and things unknown make people fearful and fearful people do stupid things.

    The control is crumbling. Can people really be grown up and socially mature if no one is controlling them? That’s the next test, because if they act like animals, there are cages already built to put them in.

    Trespass Unwanted, corporeal, life, free

  22. I’d bet a lot the true contingent (plus known) liability for those buy-backs is not being carried on B of A or anyone else’s balance sheet.

  23. re: the article on repurchases from bse. To keep up with the flow of loan purchases from banks, say, FNMA and FHLMC instituted what is called “delegated underwriting”. They did this years ago, back to the 80’s or maybe even before. The banks were given the guidelines for loan programs, thick manuals in fact. The banks, using their delegated (approved) in-house underwriters, were allowed to underwrite the loans (the agencies did not undewrite the loans), but to the specs of the agencies’ loan programs.
    When a bank underwriter signed off on a loan approval, it signified that the loan met the guidelines. When there was a crisis of a whole lot of loans, the banks would call on pmi co’s to use their delegated underwriters, also. At one time, when pmi was largely implemented on loans over 80% ltv (before they started doing the 80/20 or what not),
    pmi underwriters only saw a loan file to sign off that the pmi co. would insure the high loan to value loan. Used to be limited to 95% ltv.

    The agreements between the agencies and the banks, etc. provided that the banks, etc. had to repurchase any loans bought by the agencies which were found to not comply with the underwritng guidelines set forth by the agencies, in the “repurchase agreement”.
    First payment default probably triggered repurchase regardless of qualification pursuant to the guidelines. Private investors, as they were called, (not one of the agencies) often required that a loan be
    “seasoned” for two months before the private investor (RFC, say)
    would take it off the originator’s hands as they were most definitely not interested in haggling over first payment defaults buy-backs.
    In the 80’s brokers started popping up. The banks and the larger loan companies were allowed by the agencies to accept loans from those brokers and correspondents. The b’s and c’s were largely distinguishable by their net worths. Some of the correspondents may have been privy to their own delegated underwriting, but if so, I’d hazard the banks and larger loan co’s required seasoning before purchasing. Each of the agreements between the banks, etc and the b’s and c’s had a repurchase agreement. Problem is, the b’s if not the c’s couldn’t perform because they didn’t have the funds or the wherewithall, and this was known to the banks, etc. who had required financials, etc.
    The agencies had a contractual right long ago to demand repurchase of non-qualifying loans. How this might have been impacted by
    securitization, I don’t know. Maybe, probably even, not at all. If the agencies are just now getting around to enforcing those buy-back provisions, it’s an outrage. I’d be interested in knowing if this contractual obligation’s enforcement is something new. By not enforcing, the agencies are eating the losses at the expense of the taxpayers, which once more puts the banks on Welfare. B of A is complaining? And complaining about repurchasing loans which performed for two years, as if their heinous business plan and practices did not give rise to the inability now? Doesn’t matter even if not; they’re bound. B of A’s argument is that okay they didn’t follow guidelines, but the borrower paid for two years, two whole years so that should relieve them of their contractual obligation?! Anything else the taxpayer can do for them? It’s particularly bull when the guidelines were ignored day in and day out for years.
    No one better listen to those complaints. They’re crap. We really can’t sit for this one. Shouldn’t we think of something to do before it’s too late?

  24. trespass at 11:55:

    ” what we did, we created it by being grantor, and then we were ‘called’ a borrower, and we put our property in the trust and gave
    it to the beneficiary.”
    Have to disagree, just on this one. We gave it to the trustee who holds it in trust, with no interest of his own in the trust asset.
    But you are right. If there is no beneficiary, there is no dot. Don’t know why this would not be true. It’ll be interesting to see how this plays out in WA. Willl the banksters argue that under some theory
    they come up with, the party identified as the lender in the dot is
    the beneficiary? Don’t know what else they could argue. But even so, even if that argument prevailed, that leaves them with all the assignments not done and which can’t be done at this date.

  25. usedkarguy – boy, don’t want to do this, but I’m not sure you’re perception of Obama is the right one. ‘Don’t want to’ because this is not the place, and two, I’m not well-versed which even I know makes my opinions vulnerable. Having said that, I’ll dare say I think it’s about Israel and Palestine and the U.S.’s historical deference to one. What does it make me if I say I’m sick of that battle and how I feel it influences U.S. policy? Whatever it makes me, I guess I’m guilty. It looks to me like it’s become sacrilege to even intimate the word “compromise” and when Obama has participated and sought resolution to a very, very old contest, he is branded this or that by the side which has benefitted from the U.S.’ policy all these years.
    Obama may have feellngs about the colonialism of Africa and Asia, but he is not unAmerican. If a president of this country is to have influence, why must it be limited to a small parcel of land on the Dead Sea?
    Can one think that situations akin to the situation visited now on the middle and lower classes, the 99, has not visited itself on other countries before now? If Obama dares acknowledge any such thing, he is branded a traitor. Unfortunately, his apparent deference now to the tbtf’s instead of Main Street tends to support his being branded as such. Here’s optimism, which I can acknowledge some would call something else: I think some of the resignations are because they know if he gets re-elected, their heads are going to roll. If I’m wrong,
    I’ll quickly change my mind about the man.
    Btw, some of us don’t want the nuke waste at Yucca. Reid may well be this or that, but he has fought that fight for Nevada staunchly.

  26. By Rick Rothacker

    Aug 14 (Reuters) – Government-owned Fannie Mae and Freddie Mac are stepping up efforts to find bad home loans that they can force mortgage lenders to buy back from them, providing an increasingly bigger headache to banks.

    The government-controlled companies are squabbling with banks over who should bear the burden of losses from the housing crunch, in particular loans made between 2005 and 2008, when the market was at its frothiest.

    Fannie Mae and Freddie Mac’s efforts will translate to higher mortgage losses for banks in the coming quarters. But the end of the fighting may be in sight. Fannie Mae, the larger of the two finance companies, is more than halfway through its review of loans to try to sell back to banks and is mainly focusing on that four-year period, a source familiar with the matter said.

    Fannie Mae and Freddie Mac buy mortgages from banks and bundle the loans into bonds that get sold to investors. The loans are supposed to have met guidelines to be eligible for bundling. The two mortgage giants guarantee the packaged bonds.

    Historically, Fannie Mae and Freddie Mac have taken banks at their word when they said loans were eligible. If later there were problems (because the borrower’s income was not properly verified, for example), then Fannie Mae and Freddie Mac could ask banks to buy back the mortgages at face value and absorb any losses.

    Those repurchase requests are increasing as Fannie and Freddie apply more scrutiny. Both companies have hired more staff to comb through loans and determine which can be sold back to banks.

    In the second quarter, outstanding repurchase requests at Fannie Mae grew by 20 percent to $14.6 billion from the first quarter, according to a filing last week.

    Banks can argue about whether they really did follow guidelines, but the impact of buyback requests on lenders is clear. Bank of America Corp, Wells Fargo & Co, PNC Financial Services Group Inc and others set aside more money in the second quarter to cover repurchase requests.

    Fannie Mae and Freddie Mac say they are trying to recover as much money as possible for taxpayers after receiving more than $188 billion of government support during the housing crunch. They have since repaid about $45 billion.

    Banks believe Fannie and Freddie are nailing them on technicalities. If the two companies bear down too hard on lenders, banks could originate fewer mortgages, further pressuring the housing market.

    That may already be happening. Bank of America has reduced its mortgage lending and is no longer selling most loans to Fannie Mae. And Fannie Mae and Freddie Mac’s regulator is concerned enough that it is thinking of changing the repurchase process to press the companies to look at loans before agreeing to guarantee or purchase them.

    A suffering housing market hurts Fannie Mae and Freddie Mac as well.

    “It’s an interesting legal dance and business relationship dance that Fannie and Freddie are playing,” said Joseph Buonanno, a lawyer at Hunton & Williams who specializes in mortgage and capital markets issues.

    NUMBERS SWELLING

    In addition to repurchase requests from Fannie and Freddie, the banks also face possible losses from loans sold to private investors and those that were insured by bond insurers, who say they shouldn’t be on the hook for inappropriately underwritten loans.

    Generally, banks’ disputes with Fannie Mae and Freddie Mac have to be worked out loan by loan. The government-owned companies’ efforts to craft broad settlements with banks, most notably Freddie Mac’s deal with Bank of America announced in January 2011, have come under criticism.

    The inspector general at the Federal Housing Finance Agency, which regulates Fannie Mae and Freddie Mac, said there were questions about how Freddie came up with its settlement figure, which may have cost taxpayers billions of dollars.

    Since then, Freddie Mac has not entered into any new agreements. This year it started reviewing more loans for possible defects, which “may result in higher repurchase requests,” according to a quarterly securities filing.

    Fannie Mae in January 2011 also reached a settlement with Bank of America, but it only covered Countrywide-related repurchase requests that were in the works as of September 2010. Bank of America bought subprime lender Countrywide Financial in 2008.

    In recent securities filings and earnings conference calls, Bank of America complained about the repurchase demands: Many requests came for loans that were fine for at least two years before going bad.

    The bank said the borrowers’ ability to make payments for that length of time shows the loans went bad because the economy went south and not because of the quality of the underwriting.

    But Fannie Mae and Freddie Mac say if the banks failed to meet the guidelines, they have no case. Underwriting guidelines are an important protection since banks make loans but Fannie Mae and Freddie Mac take the credit risk.

    In its filing, Fannie Mae said more than 2 percent of loans acquired between 2005 and 2008 resulted in bank repurchase requests, compared to less than 0.25 percent of loans acquired after 2008.

    Freddie Mac had outstanding repurchase requests of $2.9 billion at the end of June, down from $3.2 billion at the end of March but up from $2.7 billion at the end of December, according to its latest quarterly filing.

    MORE COMING

    Bank of America wasn’t the only bank to see an increase in repurchase requests. In a report last week, Bernstein Research analyst John McDonald said unresolved claims with Fannie and Freddie rose to $17.3 billion from $14.3 billion at seven banks he covers, reflecting a rise in demand and slower resolution of existing claims.

    Fifth Third Bancorp said last month that Fannie and Freddie have indicated that toward the end of the year they plan to start requesting loan files for any loan that is not performing. Requests for files are a precursor to making a repurchase request.

    PNC has also noted requests for more loans that performed for a significant amount of time. US Bancorp has said Fannie and Freddie have increased their loan sampling sizes.

    Fannie Mae spokesman Andrew Wilson said the agency is enforcing its contracts and treats all lenders consistently.

    “Fannie Mae has not changed its criteria for evaluating loans for potential repurchase. What changed was the volume of loans from 2005-2008 that did not meet our standards and therefore must be repurchased by lenders,” he said.

    Freddie Mac emphasized that it works with lenders and gives them time, for example, to find missing documents. Lenders are nevertheless required to honor their contracts, said spokesman Michael Cosgrove.

    “We have an obligation to taxpayers to be good stewards of their investment,” he said.

    In his research note, McDonald said he believes the cost of repurchase requests will be manageable for banks but are likely to be a drag on earnings and companies’ net worth, or book value, for 2012 and 2013.

    Housing Finance Agency is expected to announce new repurchase request standards for new loans by September. In a letter to Congress last month, acting director Ed DeMarco said the agency is developing requirements that would shift the review of loan sales to the time of the sale and give lenders more certainty that they won’t have to buy back loans that have performed successfully for a period of time.

    “While this will result in greater scrutiny of performing loans near the time of origination, the intent is to reduce the risk for the Enterprises and lenders alike,” DeMarco wrote in the July 31 letter.

  27. Trespass,
    Your 11:55 post is great! Good to hear from you again!

  28. My Know your MBS from the ABS…Know how the second note yield is created…synthetic…What are you paying on the note if it is derecognized…

    The Not-for profit entity is not a party , but collateral…Know what the triggers are for recognition…Know why we are moving over to a freehold estate method of mortgaging… Understand why goodwill is in excess of 10 times the note…understand phantom income…

    Differentiate the common stock from the negative pledge . . .know how accretion is a great defense … . learn everything about a zero coupon bond …then find out why the agencies Fannie and Freddie have no standing . . .non participating certs v direct endorsements . ..

    Examine close the interplay of the TRS and depositors…know the significiance of the debtor to the obligor, and to the second obligor to the creditor. ….best case law at the moment “claims brought for Waste” and contr. tort feasors…

    Discover why Mers Corp is the best argument you have – embrace it ! . . . Know why the foreign banks offset the US Banks (TBill v LIBOR ) . . . knonw your COF ….

    Find out why the funds go off shore into specialty purpose enterprise accounts . . .And ask your local debt collector about the uniform recording method used for the last 10 years

    http//.www.foreclosurealternative./wordpress./com

    And ask and ask and ask ….

    DISCLAIMER – not an attorney and for informational purposes only. Not for purposes of advice and always call an attorney for legal information regarding your rights.

  29. Plaintiff, commonly known as the mortgagor and herein the household is mislead and now held to losses from the Defedants offer of acceptance for conventional mortgage financing as follows: ‘

    Defedants induced the title holder into something that may or may not be withheld by the United States governments that is known to be the future of housing. This may also be the case where the anticipated revocation of fee simple title is under way under a uniform instrument and covenants that reduce the states sovereignty over real property laws to mere recording jurisdiction.

    Fee simple title held by the estate, under the jurisdiction of states such as Oregon, Washington and California will not hold in the long term as American homeowners are reluctantly discovering. This theory is predisposed to MersCorp controversy, debt collections agencies appointed as Federal Financial agents with authority of color and badge, to the fact the banks liabilities transferred consumer’s equitable interests into shares of a Special Purpose Entity.

    Where a mortgage is abated in favor of equity, the equity transferred by economic conversion mark the transaction a bonefide sale of legal title rather than an enforceable mortgage obligation or conventional mortgage indebtedness.

    Allegations are supported by evidentiary and sustained fact charging the major banks with using tax payer insured lines of credit to acquire legal title to properties throughout this nation. Thereafter they perfect title in a cooperative entity “SPE” while moving the off balance sheet burdensome liabilities.

    Lenders are banks and non banking affiliates who structure their balance sheets to capitalize on the cost of funds the can access independent of the Fed. This fact allows a bank to create a value ten times (10:1 ratio) the value of the mortgage note they received from the alleged title holder and debtor.

    Plaintiffs’ claims are failing nationwide in spite of the obvious errors and omission or willfully misleading and materially unenforceable foreclosure procedures used from state to state,

    Plaintiffs will continue to fail in arguments for a wrongful foreclosure under a deal structure that calls for repurchasing back the title under a nominee Mers Corp as a condition precedent to initiating a foreclosure. Mers Corp satisfies a basket of sins that includes transferring title back to the estates alleged borrowers without the burden of disclosing the need for Reconveyance or disclosing the borrowers is a grantee before it is a grantor under a conventional mortgage foreclosure procedure.

    As if an unanticipated benefit to have emerged, beyond the architect’s imagination, is the Mers Corp role as a nominee. So mistaken is the mis-joinder of claims that the judicious fails to see Mers Corp as the only means for granting legal title back to the household under reverse repurchase and sale.. Where the household proclaims MersCorp has no standing, it is obvious why these matters end up as an abandonment of title.

    Registerclaims@live.com

  30. @usedkarguy,
    knowing that corn is GMO; I’d rather it in the gas tank that in me.

    There is a ‘light’ behind the decision to do some things that appear to be against the ‘light’.

    Trespass Unwanted, a light, a divine spark of the One Infinite Creator

  31. @johngault,

    I posted about a Deed of Trust with no beneficiary on this blog. Can’t find the post, but the gist of it is the Trust itself can only exist if there is a trustee, and beneficiary.

    The beneficiary must assign the property in the trust to another before abandoning the trust.

    If a trust has no beneficiary, there is no one to transfer the assets of the property granted.

    The trustee cannot own the property in the trust…the trustee cannot also be a beneficiary.

    So a trust with no beneficiary is unenforceable.

    A grantor can create a trust and be removed from all access to it.

    That’s what we did, we created it by being grantor, and then we were ‘called’ a borrower, and we put our property in the trust and gave it to a beneficiary.

    We thought it was part of the financial transaction, but being the true creditor – knowing that money is created when you sign a document for that amount of money – the property was paid for at the creation of the debt when we signed the promissory note.

    They took the note from the room, and we put our property in the trust and named someone a beneficiary.

    We were ignorant of the financial aspect of things, and their education system kept us ignorant.

    Since there has to be a document that was signed where the property was yours, like the Warranty Deed, then without a beneficiary to the trust, the property has to revert back to the original owner.

    Think of it like this.

    You buy a car, and you put it in a trust for me..rememer you bought it…A trustee controls how I can use the car, maybe even what days I can drive it. I walk away from the car without assigning ownership to anyone else. The trustee cannot take the car and use it…their job is to officiate the terms of the trust..If the beneficary doesn’t want it and didn’t sell it or assign it, you are still the owner of the car with no one wanting it, unless someone can show they bought it from the beneficiary before they left.
    HINT: No one can show ownership.

    The trust is null and void and unenforceable from anyone.

    No one can sign the beneficiary’s name and fake the assignment to them to keep you from getting the car back.

    I know nothing and if I think I know something I know nothing…I do not give legal advice because I do not know legal things.

    The trespass I suffered, there was no notice of default (I didn’t owe the thief any money), and there was no assignment of the dot to the entity that stole the property by power of sale.
    I provided the court case with details (not stating as fact but raising all the issues in layman’s terms that whoever was stating a claim of a loss of right was unsecured ).

    By their own laws, anyone with no paper trail to a right of property – ie. Statute of Fraud, is an unsecured creditor and FDCPA specifically states that an unsecured creditor cannot threaten to take property nor take property for payment of a debt.

    You see, they wrote enough laws on the books that in a circular fashion the laws support their self in protecting us from their unconscionable acts.

    But in their arrogance, they ignore the very things they want to enforce upon us, but it’s like a stick ball of rice…they try to toss it to ensnare us and are captured in their own trap.

    All foreclosures done by one who is not the beneficiary in the Deed of Trust are Fraud and void.

    The true owner of the property has been dispossessed by the judges.

    And a judge who agrees to hear a case has a duty to review everything accepted as evidence.

    If they are not going to accept the evidence, then they should state as much, but to accept the evidence and then not like how it is worded, so they want to rule for someone else because they got the ‘form’ right, is just plain stupid, barbaric and (b)ass-ackward.

    We do not judge others because by their deeds they judge their self.

    The divine spark in me knows what was done to me by the divine spark of a judge who ruled against me for the sake of a soul-less corporate entity that can never be present in court but always represented.

    They got caught in the paradigm and have lost their soul for the trespass of the soul.

    They took the ultimate spiritual test, and failed.

    It’s only property. I still have my life, and still have my soul.

    I love them because of who they are inside, but I am glad I am not them.

    You cannot trespass upon the free will of another on this free will planet without suffering the consequences of your actions.

    To think they did it for imaginary wealth. The very ones that promised them the riches of the world has devalued that illusionary wealth to the point where any judge or lawyer’s pension or stock portfolio will be worthless, and the money they sold their soul for is worth less and less as time goes on.

    In their vast ‘perceived’ intelligence, they made decisions that will judge them by their own signature…a contract…a judgment…against the Creator (and true creditor) of all the transactions.

    We created the ‘value’ at the moment we signed the promissory note and our energy was used to work for pieces of paper that we used to purchase food to provide us with energy to created more value in the things we did.

    Game over.

    A trust document cannot be interfered with by other parties. Only the parties involved in the trust can do things, and they are limited by the terms of that trust.’

    An assignment is naming a new beneficiary. The current beneficiary is the only person who can transfer their right to a new beneficiary. The Trustee is just supposed to administer the trust.
    If you have no beneficiary, and someone who is not the beneficiary is trying to enter into your trust deed and transfer the beneficial right to someone else to ‘establish’ a new beneficiary to keep the trust alive; then your ‘trust’ is void and unenforceable.

    http://www.nacrs.org/main.php?id=free_materials

    Has the Carlton Weiss trustee Handbook and that can help explain some of the inner workings of a ‘valid’ trust…including defining words and the power or lack there of of certain positions held in a trust.

    Stay true to who you are, inside.
    You are not your body.
    You are not your mind.
    You are not your experiences.
    You are more than all of that.
    Remember who you are, inside.

    You are powerful beyond your wildest imaginations.

    We have won this outside of our on separated court cases because we have provided the evidence, the truth, and the facts using the internet.

    The truth may be ignored, but it cannot be silenced.

    The ride will get interesting.

    The first shall be last, and the last shall be first.

    Trespass Unwanted, corporeal, life, a free and independent state, a people, sovereign, in jure proprio (In one’s own right), jure divino (by divine right)

  32. Romney has been gone from Bain for a long time. Any argument in favor of anything Obama does is superfluous.
    Dismantle the EPA chokehold on energy production and watch us grow! Get the NUKE waste to Yucca Mountain where is belongs (Harry Reid) and get the mining going in Wisconsin. Stop putting the corn in the gas tanks and develop compressed natural gas for the commuter. Easy infrastructure improvement to facilitate distribution. It’s all bullshit from either side. Don’t get me going. I warned you guys about this guy. OBAMA IS UNAMERICAN. He hate America because of the European (English, French, Dutch aka WHITE) colonialism of Africa and Asia.
    enough said. Hope you can Change your Future!

  33. reality is what ever is in the minds of bank attorneys….until the baloney arguments like “they can’t sue the attorneys while the case is ongoing” Badger Cab blah blah blah
    Debtors’ counsel: Yerrronnnerrr, that is, err, err. err, irrelevant. We’re suing for the fraudulent foreclosure blah blah blah….crimes are ongoing… blah blah blah….crime-fraud exemption…..blah blah blah…….”
    great judge!
    “……pursuant to the Debtors motion to disqualify ZZ LLP, …IT IS ORDERED that, for the reasons set forth on the record, the debtors’ motion to disqualify ZZ LLP shall be reserved until after the court’s decision on the pending motion to dismiss the debtors’ adversary complaint.”

  34. and if what I said at 7:03 is not true, then the bankster can explain to the court that the investor only bought a derivative that while connected to a mortgage – backed promissory note, didn’t accomplish the sale of the note itself.

  35. @louise – that seems to be NG’s theory of the crime. I was just starting to hum a neil young song “everybody’s going out and having fun. I’m a fool for staying home and having none. ” What kind of foo’
    stays home on Friday night? Apparently there are two of us! I was looking into ‘more definitive statement’ in regard to holder v hdc and found ‘more def stmt’ is under fed rule 12(e).
    Gonna blow it all out for at last a spell and listen to some Felix
    Pappalardi (rip).

  36. Do we know yet if the Depositor who sold the securities provided the warehouse line with the proceeds from the sale of the securities and funded the originated loans with it. Just wondering. Appears that the proceeds are given at the top and then make their way full circle without any one funding any new money to purchase the loans and eventually transfer them to the Trustee? Just wondering.

  37. Another area for possible need to know clearance for discovery: the guarantee. If you could establish thru the use of material judicially
    noticeable that your bankster, including FNMA, servicer, master servicer, or anyone involved with your loan routinely guarantees payment on notes, you have a right to know what amount has been advanced on the guarantee.
    I say this believing that any amt paid under the guarantee reduces the note dollar for dollar. The guarantee is a voluntary risk and imo a homeowner is not liable to the guarantor for anything. If payment is made pursuant to the guarantee, a note is not in default, so then, it’s not in default – get lost.

    When FNMA is after us, how is this? Is it that FNMA is by implication saying it has repurchased the note it had securitized? Or is it that FNMA is claiming under some (allegedly) delegated right such as agency? What? Need more definitive statement!
    These are lay opinions / thoughts and not legal advice.

  38. Thank you Neil, you said it 4 years ago in Santa Monica.

    So if we can go for damages, would that include everyone involved in the transaction from origination until current day?

    Thank you.

  39. @jordana – yes, that’s a good question, imo. That’s why one might want to pore over the WA decision to see what, if anything, might apply to other states, your state. Probably a lot of WA’s decision was based on WA-specific statute, and God bless their legislators. The decisions which hold otherwise in other states have to be attacked, even if it ultimately means an attack on legislation in those states (which is not to suggest that decisions which actually followed the law in a state as written may be undone). A daunting task, but if we’re to return to the rule of law, it has to be done. Laws which were enacted while we were sleeping in furtherance of the MERS and WS scheme have to be done away with. But, those laws need to be looked at very carefully by those interested to see if they were misapplied or misconstrued by courts in the first place and to otherwise look for faulty logic. For instance, in a case I was reading recently, a court found that MERS was this or that and so necessarily had to do X. Even if the court were right that MERS was this or that, it did NOT lead to a conclusion that it was necessary for MERS to do X.

    “ms” said on another post today that we’re not peasants. Great, true, but there would be no doubt in my mind that I’VE at least been a peasant if the law says a nominee and its principal may not be named in the same instrument, as he said. I don’t know that that’s true, but if it is, seems like a rather large issue to overlook. Well, despite our best efforts, I guess we can’t catch everything. Ms holds the key: ms is the one who made the statement. Please tell us the source of that averment!

    An attorney has commented that since MERS is not the beneficiary in WA, the note and dot still sit with the original lender with all those
    mongo problems for the banksters. I readily agree about the note, but not so sure about the dot. If MERS is not the ben, then no ben was named in the dot. And if that’s true, what does this mean? We touched on this last year, think it was. Maybe there isn’t a dot, unless a court can by following the law, including the statute of frauds, find that the lender named in the dot is the ben. There’s no doubt that is the legislative intent of a trust deed, but is that intent enough?

  40. What has struck me is the fact that the district court in Washington felt it necessary to ask the Supreme Court of Washington whether or not the law says what it clearly says. That tells you how cowed the federal courts are. I mean, would the district court have to certify to the Supreme Court if the statute against murder REALLY means that murder is illegal? Of course not–the law is clear.

  41. Speaking of Bain… No the same, I know but this is important too.

    Bain Closes U.S. Plant, Forces Workers to Train Chinese Replacements
    By Eamon Murphy
    Posted 3:38PM 08/17/12 Posted under: Money and Politics, Jobs
    41103010160
    Bain Capital
    Throughout this presidential election cycle, we’ve heard attacks on the business practices of Bain Capital, the private equity firm co-founded by Mitt Romney in 1984. Most recently, a political action committee that supports the re-election of President Obama released an ad featuring Joe Soptic, a former steelworker who lost his job, and hence health insurance for himself and his family, after the closing of the Bain-owned plant where he worked. Soptic’s wife subsequently died of cancer; in the ad, he blames Bain and Romney for the fact that she didn’t get care in time to detect and treat her disease.

    “I don’t know how long she was sick,” Soptic says, “and I think maybe she didn’t say anything because she knew that we couldn’t afford the insurance.”
    http://www.dailyfinance.com/2012/08/17/romney-bain-closes-us-plant-workers-train-chinese-replacements/

    The ad’s veracity has been questioned (and defended), but evidence of Bain’s deleterious impact on workers continues to surface.

    In the most recent news in that vein, The Guardian reports that Bain has for months been dismantling and shipping to China, “piece by piece,” a car parts plant, of which it is majority owner, in Freeport, Ill. — even as it requires the workers to train personally their Chinese replacements, who have been flown in by management.

    “It’s not easy to get up in the morning, training them to do your job so that you can be made unemployed,” Bonnie Borman told the paper. Borman, 52, has worked at the Sensata auto sensors plant for 23 years. She has three children and predicts that soon, “I am going to be competing for minimum wage jobs with my own daughter.”

    Although Romney left Bain around the turn of the century — pinpointing the exact year is difficult, which has itself become a source of controversy — he maintains financial ties to the company, receiving millions of dollars annually in profits from buyout and investment funds. Which means that Romney stands to gain if Bain’s plan to cut costs at Sensata by eliminating U.S. jobs succeeds in increasing profitability.

    Needless to say, such an arrangement strikes the company’s current employees as deeply unjust. “I understand business needs to make a profit,” Tom Gualrapp told The Guardian. “But this product has always made a ton of money. it’s just that they think it is not enough money. They are greedy.” Gaulrapp, 54, is a 33 year veteran of the plant, and says that homelessness “is a real possibility” in his near future.

    Bain has already quadrupled its initial 2006 investment in Sensata, The Guardian says. The closing of the Freeport plant will cost the city 170 well-paying jobs, further damaging an already enfeebled economy. The process of transferring the machinery to China will be complete by the end of the year.

    Still, the workers are keeping up the fight to save their livelihoods. Having already hand-delivered a letter asking for Romney’s support to campaign headquarters in Madison, Wis., they’re now planning to protest at the Republican National Convention, to be held in Tampa, Fla., at the end of the month.

    Attacks on Bain Capital have been controversial: Democrats including Newark Mayor Corey Booker, Massachusetts Gov. Deval Patrick, and former President Bill Clinton have expressed their discomfort with the way the Obama campaign has impugned the morality of the private equity business.

    But the critiques are starting to gather momentum as the human toll of Bain’s business practices becomes increasingly obvious: Writing about the deal that left Joe Soptic embittered and bereft, Bloomberg’s William D. Cohan (no socialist; a former investment banker, in fact) asks, “Is there any fairness in a system where a group of people can borrow a bunch of money to buy a company and pay themselves millions of dollars in dividends and fees, while the company itself ends up bankrupt and its employees lose their jobs, health insurance and pensions?”

  42. But again, this is in WA and other states, eg. MN, have upheld MERS both statutorily and in court. I’m reading a lot of comments about AZ and CA. So, the problem will always be, how will it all play out in the long haul if each state is destined to go its own way?

  43. Kristin Bain v. Metropolitan Mortgage Group, Inc., et al.
    Case Number – 86206-1

    http://www.courts.wa.gov/appellate_trial_courts/coaBriefs/index.cfm?fa=coabriefs.briefsByTitle&courtId=A08&firstLetter=B

    Amicus of Homeowners’ Attorneys

    Amicus of Nclc

    Amicus of Our

    Amicus of Wba

    Bain’s Reply to Response

    Plaintiff’s Opening Brief

    Response Brief of Regional Trustee Services Corp

Leave a Reply

%d bloggers like this: