MERS Fraud Impact On CMBS: Up To $280 Billion Per Barclays

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Wed, 10/27/2010 - 14:16 | 681022 Turd Ferguson
Turd Ferguson's picture

Just like BLS BS numbers, something tells me that these "fraud impact" numbers will only be adjusted and re-stated higher and higher as time goes by.

Off-topic but since I've been asked to update my short-term opinion on PM prices: After today's action, I fully expect gold to trade down to or slightly below 1300 by Friday or overnight Sunday. If it does, BUY. Buy with both hands. It may fiddle-faddle around through the "big announcement" next week but, once that noise is behind us, the trend up will begin again. The typical Q4 runup awaits. I still expect $1500 to print on or before 12/10/10. 

Wed, 10/27/2010 - 14:34 | 681086 unum mountaineer
unum mountaineer's picture


Wed, 10/27/2010 - 16:11 | 681383 Turd Ferguson
Turd Ferguson's picture

Probably see it trade under 23, maybe even to 22.50

If so, BUYBUYBUY. The Comex, particularly in silver, is broken. Period.

Wed, 10/27/2010 - 14:36 | 681094 mikla
mikla's picture

Just like BLS BS numbers, something tells me that these "fraud impact" numbers will only be adjusted and re-stated higher and higher as time goes by.


Just look at Greece -- that's exactly what they do.  Report small, then keep inching them higher, until people are so tired of the updates that they no longer pay attention.  Just avoid the shock value, and you're good.

Ditto for getting the public to now be de-sensitized to TRILLION.  That was such an obscenely unreal number only a couple years ago, that Paulson asked for $700B (later $800B) because he wanted an "obscenely large number".

Ditto for how banks report their losses -- they have been bankrupt since 2007, but they can keep adjusting their reported losses "upwards" every time there's some room to do so, each time the Fed gives them reporting headroom.

Wed, 10/27/2010 - 14:11 | 681023 sweet ebony diamond
sweet ebony diamond's picture


You are quite the chef.

Wed, 10/27/2010 - 14:13 | 681032 unwashedmass
unwashedmass's picture


You know, at this point, we need to start talking about the mutual fund managers -- at our friendly TBTF banks selling the inhouse funds -- who are "capitalizing on this buying opportunity in financials"....

and indicting a few of them......

cause let's face it, the banks are just unloading the crap stocks on the mutual fund investors who are left....

the ones who believe the "invest for the long term mantra"...

a couple of indictments would be a good thing for all.

Wed, 10/27/2010 - 14:22 | 681062 GlassHammer
GlassHammer's picture

"invest for the long term mantra"

Because risk decreases the longer you invest.


Wed, 10/27/2010 - 14:22 | 681064 Mitchman
Mitchman's picture

If they didn't indict the Orange Guy from Countrywide, who will they indict?

Wed, 10/27/2010 - 14:26 | 681069 GlassHammer
GlassHammer's picture

But the Orange Guy had a bunch of fruity friends so he got away with it.

Wed, 10/27/2010 - 14:20 | 681053 akat
akat's picture

  I noticed FDIC head Bair proposed a 'global fix' involving a 25% discounted refinance, to try and fix the mortgage security mess.  I imagine this is just an opening attempt and they may change the numbers or put different conditions on it.  But I think this shows that higher ups in government may know what is going on, although they won't tell the public this.  I am curious what people think as to whether this would fix the problem?  I guess it would to an extent, but if some of these loans have been packaged and sold multiple time, then I not so sure that can be fixed.  Talk about a slow motion train wreck, that is this unrecognized and immense fraud. 

Wed, 10/27/2010 - 14:36 | 681091 kaiserhoff
kaiserhoff's picture

Sheila is getting desperate. They can no longer handle the failed banks with the old self-insured system.  It's like a failing condo project.  Every default puts more cost and pressure on those left standing.

On the other hand the 25% solution is pure BS.  You can't just tear up thousands of contracts because things aren't going your way.  That would get Barry's black ass impeached for sure.  The times, they are a changin'.

Wed, 10/27/2010 - 16:52 | 681513 JLee2027
JLee2027's picture

Refusal to secure the Border is grounds enough to impeach.

Wed, 10/27/2010 - 22:07 | 682199 StychoKiller
StychoKiller's picture

Per a previous article on Social Security, the Govt Accountants are actually factoring in and relying on illegal immigrants to "contribute" to Social Security's solvency, is it any wonder then that the Govt is dragging its feet on Border enforcement?

Wed, 10/27/2010 - 14:37 | 681097 SDRII
SDRII's picture

Isnt that something like $1-$2T or 10% of GDP

Wed, 10/27/2010 - 14:45 | 681120 eatthebanksters
eatthebanksters's picture

40% is what's needed at a minimum

Wed, 10/27/2010 - 14:25 | 681068 detersbb
detersbb's picture

We are at the threshold of entering the Bannanna Republic Dictatorship here.  If there is not a vigorous effort to prosecute millions of people here engaged in perpetuating this fraud up to and including former presidents, vps, secertary of treasuries of the US and congress, and the JUDICIARY.  Unless and until the rule of law is adhered to we are not a country, only an area under the rule of anarchy (rule by corporations including the US Government 28 USC 3002 15(a).  I have had it. 

Wed, 10/27/2010 - 14:44 | 681112 Cognitive Dissonance
Cognitive Dissonance's picture

We are at the threshold of entering the Bannanna Republic Dictatorship here. 

May I suggest that we are at the threshold of recognizing that we long ago entered the Banana Republic Dictatorship here. 

Wed, 10/27/2010 - 14:52 | 681151 Max Hunter
Max Hunter's picture

"The high office of President has been used to foment a plot to destroy the American's freedom, and before I leave office I must inform the citizen of his plight."
--John F. Kennedy, at Columbia University, 10 days before his assassination.


This country has gone down the shitter at an explosive speed since the murder of Kennedy.. Anyone believing the "lone nut" theory needs their head checked.

Wed, 10/27/2010 - 15:26 | 681257 Coast Watcher
Coast Watcher's picture

Sorry, but that's a Bogus quote. Kennedy never visited Columbia University in November '63. Ten days before his assassination he was in the Oval Office.

Not that I disagree that the lone gunman explanation is just as bogus, if for no other reason than that man with that rifle could never have made those shots.

Wed, 10/27/2010 - 15:00 | 681178 legerde
legerde's picture

Hey CD.  <offtopic>  I saw that you asked to see your note.  Total runaround for at least 2 weeks now?   I asked too and have had silence in return.   Ive hired a lawyer.

We really need to organize by state since state laws usually deal with property laws.

I have finally come to grips with the ethics of my participation in the situation.  These "deadbeats?" have a legal argument that either works or it doesn't.  I think I understand the argument and I think it probably works.  If "all men are created equal", then the argument works whether you are a "deadbeat" or not.  It really doesn't matter. 

But like you said about "burning down the door".  I dont think they are going to respond to my requests until I stop paying.  So I have that lawyer to discuss the situation in full prior to embarking down the stop paying path.

I am anxious to hear updates on your situation.


Wed, 10/27/2010 - 15:06 | 681191 legerde
legerde's picture

The lawyer is shocked because its very unusual for her to have a client that has some fiat and is not currently in litigation.

Wed, 10/27/2010 - 15:12 | 681211 Cognitive Dissonance
Cognitive Dissonance's picture

The first lawyer I talked to was so thoroughly captured by the system (meaning the system must be real and legal because the system has/is working) that I immediately saw that I would be fighting my lawyer's vested interest if I engaged her.

I talked to a second lawyer today that doesn't make all or even most of her bread and butter from real estate, but does have a lot of experience with real estate. She sounds like she might be willing to discuss heresy. We are physically meeting next week.

Wed, 10/27/2010 - 15:17 | 681226 legerde
legerde's picture

Yes, finding the right lawyer is tricky.   May I ask what state you are in? 

My lawyer seems to get it.  She is currently preparing for me a description of what is required by the laws of my state:

* Transferring and Recording Title

* Failure to Notify and Record Title

* Definition of Holder in Due Course

* What is my states position on MERS

* Any current case law on MERS in my state

After we have a thorough understanding of these items, we will know exactly what to ask the bank to provide in terms of proof. 

Wed, 10/27/2010 - 17:00 | 681524 JLee2027
JLee2027's picture

Nice that she gets her self-education paid for by you. Don't just give blanket permission to be billed for that, discuss how many hours you are willing to pay considering future clients will benefit from this and don't have to pay it.

Wed, 10/27/2010 - 16:11 | 681381 litoralkey
litoralkey's picture

As you are facing at the street level view, Ive come to the conclusion the following phrase has surpassed it operational capacity:

"United States legal system capacity"

United: for how much long?

United States legal: Resurgence of 10th Amendment arguments, states declaring bk, etc

legal system: When trillions are on the table, we do not have a legal system, we revert to the biggest gun system of possession.

system capacity: Florida, California, Arizona, Nevada and Michigan have surpassed capacity... the system has surpassed capacity in the philosophical sense of ancient terms of 'justice'... tbd what happens.

Not enough judges, not enough courtrooms, not enough mediators, not enough back office staff, not enough , just not enough.



Wed, 10/27/2010 - 21:04 | 682081 alien-IQ
alien-IQ's picture

"Going to trial with a lawyer who considers your whole life-style a Crime in Progress is not a happy prospect."

Hunter S. Thompson

Wed, 10/27/2010 - 14:25 | 681071 kaiserhoff
kaiserhoff's picture

"in order to bail out a few worthless asset managers..."

Mein godt, the truth hurts.  The REIT connection wasn't that obvious at first, but it should have been.  Nice summary.

In related happy news...  Anyone have a take on what's going on with deficiency judgements?  We should be getting a few in by now.  It would be interesting to see how the courts interpret those.  Even in the so-called non-recourse states, I expect plenty of claims based on a whole host of exemptions.  This is a bottom feeders paradise.

Wed, 10/27/2010 - 14:37 | 681099 Paul Bogdanich
Paul Bogdanich's picture

The final betrayal of the electorate by the politicians will get started after the new congress seats.  They will go for a "global" solution that will strip the elecorate of their property rights and perfect the bank's MERS musings.  At least it will be on the Republicans heads this tiem so maybe eventually people will get a clue that both of these parties are two faces of the sme animal.  So if someone ever says to you that what we need is a third party just tell them, "Third?"  How about a second party.

Wed, 10/27/2010 - 17:01 | 681537 JLee2027
JLee2027's picture

You cannot strip property rights, that's at the state level. There would be an armed revolt over it and I wouldn't give the banksters a chance versus an armed and angry property owner.

Wed, 10/27/2010 - 14:45 | 681119 Mad Mad Woman
Mad Mad Woman's picture

I feel that Barclay's numbers are a little on the low side. It is much higher than that. It has to be. How many times were the same securities re-packaged & sold? How many times did MS repackage that one security?

This is going to be VERY HUGE.

Wed, 10/27/2010 - 14:49 | 681142 johngaltfla
johngaltfla's picture

Fraud doesn't matter as long as Benron is willing to print dollars to buy the crap. And that's all they will buy is CMBS and 10 year notes.


Watch and see.

Wed, 10/27/2010 - 14:52 | 681152 shortus cynicus
shortus cynicus's picture

I propose putting MERS database in some steal frame building that suddenly collapse due to

fire from some burning trash cans.


This higher emergency situation motivates congress to pass a bill declaring all MERS transactions legal. Chaos must be avoided at any price!

Just by accident, the firm where all banks outsourced storing paper versions of IOUs will be also located in this building.

Problem fixed.

Last hint: please do not report in MSM that this building collapsed before it collapses.

Wed, 10/27/2010 - 14:56 | 681165 chistletoe
chistletoe's picture

a friend of mine suggested that

the smithsonian Museum of History and Technology

ought to have a working model of the french guillotine on display ...

Wed, 10/27/2010 - 15:02 | 681181 gloomboomdoom
gloomboomdoom's picture

I am ready for the junks

Ron Paul is a DEAD WRONG DOOMER. Here is proof...

Ron Paul said he will run for president in 2012 if the dollar collapses (It won't. I promise), so that he can be in place to disassemble the FED and restore the republic

Ron Paul better hope he gets the "Collapse" in 2011. Looks like the FED is jaw boning and is starting to get religion to save the dollar. I really wanted Ron to run. Looks like the worst is behind for the economy though"

got it? The market already knows about "Foreclose Gate". Guess what? NOBODY CARES! People don't want to let it go. Expect it to be swept under the rug after next weeks election.

No "Double-DIp". No nothing! Nothing is coming! There is no "Second Collapse" in store for the US economy. 2008 was a ounce in a CENTURY type event. You will not see that type o f drama that could have 'sparked' the Revolution you are deerly wish to see. Just as history will tell you, BANKERS NEVER LOSE!

The dollar will never die either unless you can convince people that fiat currency is intrinsicly worthless and just because it says 'Ten Dollars' doesn't make it worth more than 'One dollar'

Wed, 10/27/2010 - 15:26 | 681256 MarketTruth
MarketTruth's picture

The US dollar is at 'end game' for the simple fact the Federal Reserve has devalued it so highly. As such, a 'new dollar' or, better still for them, SDR will need to be implemented. Odds are the 'new dollar' will come first and be a transition just as European countries went from their currency to the unified Euro over a period of time. The Federal Reserve and US Mint need to work together as producing coins by the Mint is now very troublesome due to the actual metal used in some coins being too valuable to make minting such coins truly viable/profitable to a large extent.

So the Federal Reserve needs a 'reset' to the new dollar (call it 10:1 so easy math for the simpleton sheeple) and this gives the Federal Reserve more room/time to continue their devaluation before SDR or some other unified currency is introduced.

Wed, 10/27/2010 - 16:30 | 681435 litoralkey
litoralkey's picture

The market already knows about "Foreclose Gate". Guess what? NOBODY CARES!


You make the critical mistake in your thought process in trusting the underlying assumption that we live in a market where all parties have perfect knowledge of the market. 

This is patently and easily verified as false.

Ruling materially affecting the entire market are being passed out daily by judges across the United States.  The knowledgebase needed for market participants to make rational market decisions is still being adjudicated at this time.

The flood of litigation has not even started yet.  There will be hundreds of class action lawsuits across dozens if not hundreds of jurisdictions.  There will be international lawsuits as MBS investors try to recoup losses.

The market is now bases upon the strength of the barrel of the gun.  Every trader is assuming the gun is under his control facing outward, and will trade as such, until such time as it is irrefutable that the gun is controlled by the opposing party and faced at oneself.

All heil the tyranny of the black robes and fatcats.


Wed, 10/27/2010 - 15:16 | 681221 count_de_monee
count_de_monee's picture

Breaking News - Portugal Update


The PSD (opposition) just announced they will wait until the last day before the budget vote (next Tuesday - vote is Wednesday) before deciding their vote.

Basically this throws the ball back into the government's court and leaves open the possibility of more negotiations until then.

Breaking it down: it's a draw, and we're heading into overtime. I wonder how those CDS will react?

I have a feeling they'll end up abstaining, but that won't really do much of anything to relieve the pressure. And ther's a general strike coming up next month. Should be fun.

Wed, 10/27/2010 - 15:21 | 681238 HarryWanger
HarryWanger's picture

Well it doesn't seem to be affecting BAC. BTW: what happened to all the folks who said you'd be a fool to buy BAC at 11 and change? Yesterday's headlines are forgotten in nanoseconds by traders.

Wed, 10/27/2010 - 15:27 | 681260 GlassHammer
GlassHammer's picture

Did BAC fix its balance sheet problems?


Wed, 10/27/2010 - 15:25 | 681255 daneskold
daneskold's picture

This morning Court issued TRO enjoining foreclosure sale by Bank of New York Mellon, BAC Home Loan Servicing, and MERS because of "substantial legal issues" surrounding their ability to proceed with a non-judicial foreclosure in light of the patently forged signature on a substitution of trustee and defect in the notice of default.

The MERS corp assignment of the note and trust deed, substitution of trustee, and notice of default were all notarized by the same notary.  A redaction to one of the acknowledgements was obvious.  Patent defects exist on the face of the documents.

BAC argued that defects in the assignment, the sub/trustee, and the NOD were irrelevant in a non-judicial foreclosure.  The judge felt that there was no difference between submitting a false affidavit to a court in a judical state and relying on a false document in a litigated non-judicial foreclosure.  That ruling was a poser to the BAC attorney.

Best of all, all of the defendants took the position that MERS had substantive rights by virtue of the original note and trust deed.  Woops.

In this state, a note and trust deed constitute a security if not offered and sold as a unit.  There was no qualifying registration filed with the state or federal government for that split of rights.  Thus, the note and trust deed are unregistered securities, and the remedy is that no involved in the making or performance of the note and trust deed may enforce them in any judicial proceeding.

Yes folks, that's right, today's court room action will result in the inability of anyone to enforce the note and trust deed.

Wed, 10/27/2010 - 16:00 | 681354 kaiserhoff
kaiserhoff's picture

Well done, thanks.  How long does a TRO run, and what's the next step?  NY state?

Wed, 10/27/2010 - 22:19 | 682217 StychoKiller
StychoKiller's picture

"Wells Fargo acknowledges 'problems' in foreclosure paperwork:"

Anyone else noticing that the slight breezes seem to be picking up speed lately? (Not to mention Volvos, trees, mailboxes, etc?)


Wed, 10/27/2010 - 15:30 | 681275 Don Smith
Don Smith's picture

LOL of the day - Treasury: Foreclosure woes not systemic threat (Reuters)

Wed, 10/27/2010 - 17:04 | 681546 JLee2027
JLee2027's picture

Good one!

You know they are worried about a systemic reaction when they run BS like that.

Wed, 10/27/2010 - 16:18 | 681410 rookie
rookie's picture

So let me see if I am following all this …underwriters were supposed to assign the notes and mortgages to the trustee but instead they assigned the mortgages to MERS as nominee and they signed the assignments of the notes or allonges in blank to noone.  Now they either have to go back and assign both the notes and mortgages to the trustee (expensive and REMIC tax issues) or the mbs holders have unsecured securities.  But the bigger question is whether the practice of signing the allonge to the notes in blank allowed them to sell the loans more than once in a ponzi-like scheme like the bank in florida.


If Chris Whalen can say on national tv that they pledged the same loans more than once . . . why are there still no indictments?  It should be pretty simply to prove if the same loan is in more than one mortgage pool

Wed, 10/27/2010 - 16:34 | 681444 Cognitive Dissonance
Cognitive Dissonance's picture

I've long thought that this "double and triple selling of notes" is much bigger than even our worse nightmares are telling us.

It explains sooooooooooo much about all the little puzzle pieces that don't seem to fit, but are just sort of floating out there. I believe there was MASSIVE fraud perpetrated by the TBTF banks with the informed consent at the highest levels. This was done not just for greed and control reasons, but to gather huge amounts of money from various sources that could be used without public oversight or knowledge.

I doubt it will all come out, but there is more that will surface before a "political solution" will be announced that will take the USA fully into the Banana Republic column. We've been there for the last decade, but it still hasn't been acknowledged by the majority of the sleeping citizens. It soon will be after the mid-terms have concluded and the shame duck Congressional Critters return for a last hurrah.

Wed, 10/27/2010 - 16:41 | 681478 rookie
rookie's picture

do you think that maybe the state ags just don't get the big picture yet - they are only focused on the fradulent foreclosure documents but not the ponzi part?  maybe they will start to figure out the real fraud under the cover-up fraud.

Wed, 10/27/2010 - 18:24 | 681743 Cognitive Dissonance
Cognitive Dissonance's picture

I don't think the state AG's have the big picture yet for several reasons, mostly because when one is part of a large system one has great difficulty seeing beyond the system.

State AG's think in terms of laws and checks and balances. One of the reasons so many legal professionals can't see the systemic fraud and manipulation is because in order to do so, they must completely change their worldview of how the system works and who is working the system.

Most simply can not conceive they "their" system is so hopelessly corrupted by so many layers by so many people. This is why the average Joe has such a difficult time accepting that 9/11 was such a massive fraud connected to so many parts of the system. To accept that 9/11 is a lie is to aceptt that much of what they believe in, are connected to, are a part of, is also a lie.

So much easier for the State AG's to think in terms of rampant fraud by greedy Wall Street types while regulators were corrupted than to begin to question their basic belief systems. We only see what we wish to see. And we won't see any more than we are emotionally capable of seeing. A lawyer will find it very difficult to accept that something they trained many years to participate in and then worked many years to feed themselves in is nothing like what they wish to believe.

It's called a cognitive dissonance and it's usually resolved with denial and selective thinking/seeing/understanding. People who spend their entire lives believing they do not live in a Banana Republic aren't going to admit they do without some serious shocks to the system first. 

Wed, 10/27/2010 - 18:41 | 681772 rookie
rookie's picture

so why don't people like cheyenne and banksouttacontrol (see previous threads on the ponzi part) write a letter to every state ag explaining how the ponzi part would happen (even write the letter anonymously).  there have to be some state ags especially the midwestern ones who would pursue the fraud.  we won't get our capital markets back until we pursue the fraud.

Wed, 10/27/2010 - 19:47 | 681910 Cognitive Dissonance
Cognitive Dissonance's picture

Why would any individual state AG go up against the Fed and the Federal government? Why? Because they are doing "good"?Because they are serving the "truth"? When they do go after the Ponzi, do you think the Ponzi will just sit around and let itself be exposed or do you think it will hang the state AG by the balls? Do you have the type of courage your asking of the state AG?

Not beating you up, but just asking fair questions. This won't end until you and me and the old lady across the street and the barber on main street and the 3rd grade school teacher all say they've had enough and demand it stop. Until then, anyone who sticks his or her head out and directly challenges the Ponzi will be killed in every sense of the word.

Only when the people leader with the leaders follow.

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