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JPMorgan Stops Using MERS, Next Up: Everyone Else (And Don't Forget CMBS)
JPMorgan Chase's CEO says the bank has stopped using the electronic mortgage tracking system used by major financial institutions. Lawyers have argued in court proceedings that the system is unable to accurately prove ownership of mortgages. And after the effective foreclosure moratorium is about to cripple the RMBS market, here comes the collapse in CMBS.
From the AP:
JPMorgan Chase's CEO says the bank has stopped using the electronic mortgage tracking system used by major financial institutions.
Lawyers have argued in court proceedings that the system is unable to accurately prove ownership of mortgages.
JPMorgan Chase & Co. and other banks have suspended some foreclosures following allegations of paperwork problems in thousands of cases.
JPMorgan's CEO, Jamie Dimon, made the announcement in a conference call Wednesday to discuss the bank's quarterly earnings.
The Mortgage Electronic Registration System, or MERS, acts as a trading house for millions of mortgages. Lawyers for homeowners say the system lacks the required paper trail to prove mortgage ownership in foreclosure proceedings.
Luckily for JPM, Jamie Dimon sees a dramatic reduction in charge-off expectations. Elsewhere, S&P is expected to chime in any minute that the rating agency is very confident that very rich life on Mars is about to be discovered, and to be bailoutishly persuaded vis-a-vis Earth, confirming the AAA rating of the US.
Unluckily for MERS, which as we said a few days ago when we said that "MERS Enters Self-Preservation Mode" after it issued a totally hollow self-defense press release, this is game over. For all those who bought a $25 stamp allowing them to certify a title transfer: lucky. You will be able to sell it for $0.25 on Ebay very soon.
This also means that the CMBS market, which has so far avoided scrutiny, is about to unwind, once everyone puts MERS Commercial assignments into question.
h/t Karl Denninger
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Ah who cares. DJI is up 100+ points. The only thing that will stop the stock market rise at this point is a nuke to Ben's printing press.
this is too funny. the house of morgan invented mers and is still one of the stockholders.
im givin' props to jamie. he made it to the exit before anyone else. no doubt he sees the handwriting on the digits and is shorting the appropriate vehicles.
the house of morgan will be there to pick up the pieces from the mess they helped create. works every time.
My response is SO.
Mostly irrelevant. The promissory notes most probably resides in the REMIC without recourse.
The loan servicer is the money changer for the Real Estate Mortgage Investment Conduit.
http://www.irs.gov/pub/irs-pdf/p938.pdf
Sorry, still nobody that has "standing" to foreclose, certainly isn't the loan servicer.
More smokescreens.... sorry MERs is the not the problem and robo-signers are not the problem. The problem is the only plaintiff that can start a foreclosure action is the holder in due course.
It might take a while for that to be figured out -- they'll banter about foreclosures and such, but it'll come. Just like we spent half of 2007 and most of 2008 talking about how subprime was contained and it really didn't impact banks viability. Until suddenly it did because liquidity dried up in about a nano second. The banks will keep trying to deflect and throw some hail mary's but they'll need to be bludgeoned to death before they get their next bailout.
Well, I agree with you there, why would JPM let the cat out of the bag and let everyone know they lack "standing" to foreclose, when they receive revenue for such actions.
Deflect is a good word, don't admit to the problem, admit to a problem that is correctable. Hope all the attention is on the smoke instead of the fire.
Wouldn't you agree that's kind of JPM's style. They sort of walk in like their "shit doesn't stink" (for lack of a better analogy) and hope no one takes a whiff. Plus, they'll definitely be pitching the "world's gonna grind to a halt angle." I think this was act one in that play...but I would bet this is gonna be way harder to get out of than they anticipate and/or would hope.
I don't see any easy fix and yes you could have clouded titles for many many years. Matter of fact, I don't see how you even buy a foreclosure with title insurance at this point, let alone without.
Everything will most probably grind to a halt. Depends on how many homeowners realize no holder in due course will show up, typically.
I have a MERS and a JP Morgan on mine. Winner!
Directing attention to the smoke is the script. Likewise with Citi's conference call admissions posted yesterday. Everybody acts like they're all just slowly waking up and trying to figure it all out and then slowly moving through the actions that appear consistent with that charade.
"Hey, we were as surprised and disappointed as anybody! We feel your pain--it's hurting us, too. Look at our balance sheets!" This, of course, deflects attention from the real issue of fraud and neglect that willingly created and fed the system.
What else can you do when you unexpectedly get busted? Besides taking your $144M in bonues to other banks, of course.
Good summary. Trying to act like it's no big deal. The market will figure it out.
Well it looks like SLOW TO THE PARTY Karl finally showed up. Now all of sudden he is saying what I have been saying all along... most probably the holder in due course either won't or can't show up.
Welcome to the party that happened started a few years ago.
All the parties(typically) that come to foreclose lack "standing" and are in fact "debt collectors" under the FDCPA, even the bloodsucking tick who claims to be an Attorney at Law who enters court to collect a "debt".
smiling. "slow to the party".
Karl even called gold a commodity and lumped it with corn.
A few years ago ....
That would be when "the party to the first part" disappeared ....
and legal descriptions of "REAL ESTATE" ceased to use the finishing sentence "enclosing a parcel of land of approximately X acres"
...we spent half of 2007 and most of 2008 talking about how subprime was contained and it really didn't impact banks viability. Until suddenly it did because liquidity dried up in about a nano second.
There is a very real risk that CASH buyers, who now account for 35% of real estate transactions, represent the only true remaining liquidity in the market, and are now refusing to partcipate because of the title issues. IOW, the liquidity is drying up right now.
Mortgage purchase applications down 8% this week. 31% off of last year.
Hell yeah! This will take the market up a hundo !
A False Flag Watch has been issued for the entire United States of America. A false flag watch means conditions are favorable for the development of a false flag terror event. Stay tuned to the state controlled media for further updates.
Bernanke was a deer in the headlights is mid '08 and now he's a certified lunatic
Paper is so yesterday. Hope and (loose) change is the currency of the future. Happy delusions everyone. Remember, it's only real if your believe it is.
Let's see how this pans out after the elections. SERIOUSLY. If this has any legs, Celente's bank holiday will fit nicely between Thanksgiving and Christmas.
Banks are declining not a good sign with the Mkt up. Divergence anyone?
JP Morgan stops using MERS!
This is the headline of the year.
It is morally comparable to the captain of the Titanic grabbing the first lifeboat just as the iceberg has hoved into view.
MERS is toast now. All RMBS will have to be put back to the major banks. Either they get TARP II (and TARP III) or trillions of backdoor benbucks - or they are toast too.
S&P 666 here we come (again).
Sir, I fear you live in Reality. Must be lonely there. I see S&P at 6666. I love LaLaland.
Not yet. Modern economies are credit driven. 50% of the US mortage market seizing up is a unprecedented contraction of credit. Dollars will become scarcer and dollar priced assets (including stocks will be sharply priced down).
Medium-term, a few years away, depending on Treasury response (no prizes for guessing unprecedented QE), will turn the dollar onto its hyperinfaltionary path. 6666 and more then....
+100 for wintermute. "JP Morgan Stops Using MERS" is the headline of the year, at least, thus far. More biggies coming soon.
It just struck me that I hit the lotto. Dad took out a Cuntrywide mortgage in June 2007. Died in July 2009. Sister and brother wanted nothing to do with the house or the mortgage. I moved in, took a good look at mortgage docs and found all kinds of defects (sadly, dad was a lawyer, but he was old and slipping) and stopped paying it. Anyhow, BofA (FKA CW) starts foreclosure March, 2010. Nothing since. Checked docs at County Clerk's office, found robosigned assignment of mortgage (MERS to BAC) and not much else.
They are not going to proceed, though if they do, I have multiple defenses. Then it hit me today. If they can't produce the note (I'd give it a 95% probability that they can't), they've clouded title and I have a lawsuit. Time to start paying the property taxes on my free house.
I think I can finally start celebrating, then start the numerous repairs to the property I've been putting off. At the very worst, I'm thinking a 20-35% principal reduction unless they want to pay lawyers for the next seven years. Thanks, banksters, you ass-holes. Somewhere, my Dad is smiling, thinking, "I taught that kid well."
Why pay anything? I don't think your creditor or ex-creditor will exist in a few months. They are all going down.
Oh, I'm with you 10000%. Not paying a nickel. BofA is absolutely toast, because they own the Cuntrywide portfolio. CNBC is talking about the underlying issues of the mortgage and the note and MERS right now.
This is fun!
Agreed :-) and yes - pay property taxes to keep the county happy.
The banks have basically turned your mortgage into a unsecured loan. You still owe someone money but can't take the property if you don't pay.
In a non-recourse state I wonder if they can legally come after you at all for the debt at that point.
How about I keep the estate open (there are no assets of any real value) until the IRS forces me to close it, if they can. There's absolutely no recourse against me. I don't own the house and the debt was not mine. Basically, I'm a tenant in interest? Adverse possession clock is running. Only 8 year and 9 months to go. LMAO.
Jaime Dimon declares MERS JPM's "Fabulous Fab" Tourre...
Dimon: "We've got to have a fall guy."
"I've got to find somebody, a victim when the time comes or I'll be it."
"Let's give'em MERS..."
Not "MERS", he said "throw them those faggoty hair stylists and Mexican cleaners. That'll please the teabaggers too."
"Let's give'em the gunsel."
Dimon's lines are really Sam Spade from the Maltese Falcon...
This is an interesting read. Evicted folks move back into home they were evicted from, on the advice of their lawyer. After it has been sold at auction and renovated.
http://www.housingwatch.com/2010/10/12/evicted-family-breaks-in-to-own-h...|main|dl8|sec1_lnk1|177136
Renovated, no less, with new granite countertops! That's gotta suck for the new owners . . . oh, the realty company that "invested" in it. The squatters claim that $25k in payments were not credited and the usual forged documents and issues of standing were present.
Their lawyer is eager to tee off on everybody. Go go go.
These people aren't going anywhere for a long time.
This is about the time that the new "owners" of the house hire a thug with a baseball bat to re-evict the former owners just like at the beginning of the movie Pacific Heights.
Help me out here, what is keeping JPM et al from just shoving the costs on to Fannie and Freddie?
The banks originated the MBS - they have to buy them back from investors.
The "investors" are government (taxpayer) backed Fannie and Freddie. Who is going to demand the money back from the banks with Fannie and Freddie?
Using Karl for news. Great.
BUY JPM
MERS is the Matrix equivalent of the spoon.
"There is no Spoon."
We are now going to see whether the joint orgasmic experience of Dodd and Frank really works, since there now is surely potential bankruptcy in the air. Crappy balance sheets just got far worse and the amount of potential litigation (not from homeowners but from holders of the toilet paper) could be astronomical.
OH, wait a minute. The FinReg Bill hasn't yet been fleshed out. The faceless bureaucrats, to be named later, maynot have their fiefdoms established.
What to do? What to do?
It'll play out thusly: One big bank will be sacrificed a la WaMu (Ben: "Jamie, which bank do ya want for pennies on the dollar?" Jamie: "Hmmm, I dunno, maybe Citi? Naw, gimme BofA!").
The remainig TBTF banks will be hit with big fines -- probably one or two POMOs worth.
Then we'll move on.
Case closed. And cases closed.
And of course the sidebar ad when I came to this page:
"Coldwell Banker
A move in real estate never looked THIS GOOD!
Dream on ->"
Don't worry about the MBS market. Uncle Ben will buy it! He'll eat anything!
diana_olickSo, does anyone know who they use now, and are they doing legitimate transfers? Or is this just another shell in the game?
So JPM quit crack for meth back in 2008...
Jamie announces today JPM is quitting crack...
Now we know where Jamie's puppet Obummer gets his disingenuous behavior... at the end of every puppet string pull...
Ayup. If the title insurance cos. are uncomfortable with writing for purchases of foreclosures, who will buy foreclosures?
As we know, a very large percentage of all home sales in the U.S. (particularly in the worst-hit states) are foreclosures and REOs.
That's why I anticipate a very large paper band-aid will be placed on the problem; and that right soon.
And the hits just keep on rollin' on this nonstop music mix
ummm, I re-financed thru Chase last winter, it was a Fannie backed loand and after it closed, I got notifications from MERS...gotta go back and read those things...so did Fannie or Chase use MERS?
I'm not behind on my mortgage but I am underwater. I got a USDA Loan brokered by my local bank but on the deed of trust, fidus financial is listed as the lender and MERS is listed as the acting nominee for the lender and it's succesors and assigns, but my loan is owned by JPM Chase.
I guess I should be asking Chase if they have the note?
JPMorgan Chase's CEO says the bank has stopped using the electronic mortgage tracking system used by major financial institutions.
Only because they found that they can create (oops...RE-create) the documents at will for $9.95 at the quickie document mill.
Funny that they've decided to quit using what is essentially a shell company in which they're a major shareholder. What next? "JP Morgan stops using JP Morgan."
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