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