Fri 2010-10-08 21:53 EDT

MERS 101

MERS - Mortgage Electronic Registration Inc. - holds approximately 60 million American mortgages and is a Delaware corporation whose sole shareholder is Mers Corp. MersCorp and its specified members have agreed to include the MERS corporate name on any mortgage that was executed in conjunction with any mortgage loan made by any member of MersCorp...Thus in place of the original lender being named as the mortgagee on the mortgage that is supposed to secure their loan, MERS is named as the ``nominee'' for the lender who actually loaned the money to the borrower. In other words MERS is really nothing more than a name that is used on the mortgage instrument in place of the actual lender. MERS' primary function, therefore, is to act as a document custodian. MERS was created solely to simplify the process of transferring mortgages by avoiding the need to re-record liens -- and pay county recorder filing fees -- each time a loan is assigned. Instead, servicer's record loans only once and MERS' electronic system monitors transfers and facilitates the trading of notes...MersCorp was created in the early 1990's by the former C.E.O.'s of Fannie Mae, Freddie Mac, Indy Mac, Countrywide, Stewart Title Insurance and the American Land Title Association... MERS, as has clearly been proven in many civil cases, does not hold any promissory notes of any kind. A party must have possession of a promissory note in order to have standing to enforce and/or otherwise collect a debt that is owed to another party. Given this clear-cut legal definition, MERS does not have legal standing to enforce or collect on the over 60 million mortgages it controls and no member of MERS has any standing in an American civil court. MERS has been taken to civil courts across the country and charged with a lack of standing in reposession issues. When the mortgage debacle initially, and inevitably, began, MERS always routinely brought actions against defaulting mortgage holders purporting to represent the owners of the defaulted mortgages but once the courts discovered that MERS was only a front organization that did not hold any deed nor was aware of who or what agencies might hold a deed, they have routinely been denied in their attempts to force foreclosure. In the past, persons alleging they were officials of MERS in foreclosure motions, purported to be the holders of the mortgage, when, in fact, they not only were not the holder of the mortgage but, under a court order, could not produce the identity of the actual holder. These so-called MERS officers have usually been just employees of entities who are servicing the loan for the actual lender. MERS, it is now widely acknowledged by the courts, has no legal right to foreclose or otherwise collect debt which are evidenced by promissory notes held by someone else...

MERS 101.

Tue 2010-08-24 19:48 EDT

California Court Rules: MERS Can't Foreclose, Citibank Can't Collect - Mandelman Matters

...if a foreclosing party in California, that is not the original lender, claims that payment is due under the note, and that they have the right to foreclose on the basis of a MERS assignment, they're wrong... based on this opinion. The bottom line is that MERS has no authority to transfer the note because it never owned it, and that's a view that even seems to be supported by MERS' own contract, which says that ``MERS agrees not to assert any rights to mortgage loans or properties mortgaged thereby''...some lawyers believe that this ruling is relevant to borrowers across the country as well, because the court cited non-bankruptcy cases related to the lack of authority of MERS, and because this opinion is consistent with prior rulings in Idaho and Nevada Bankruptcy courts on the same issue...

California court ruled; Citibank; collections; foreclose; Mandelman Matters; MER.

Phil's Favorites - By Ilene Thu 2010-08-19 15:58 EDT

Time for a New, New Deal?

Phil of Phil's Stock World

...The Big Lie being told by the right is that we can solve our problems by cutting spending and (ROFL) lowering taxes...Of course, let's keep in mind that the $1.5Tn the government spends directly employs 2.7M people and millions more indirectly so, for every person you cut, make sure you add back $20,000 a year for unemployment benefits and administration (or are we going to throw them all on the street?)...the real glove-across-your-face insult to your intelligence comes when they try to tell you that giving tax breaks to the rich and to corporations will help...US Corporations only paid a grand total of $138Bn in taxes in 2009 (6.5% of all taxes collected)...US Corporations have done nothing but outsource America's future for decades and it is time for the bottom 99% of the income earners (those earning less than $250,000 a year) to wake up and smell the class warfare that is being waged against them. How can we even begin to entertain the idea of cutting government and cutting government spending when the sum total contribution of Big Business America represents a rounding error in our national budget?...When private business fails to expand, when the budgets cannot be balanced because 25% of the population is unable to make income tax contributions due to loss of jobs and homes -- then a wise man knows when it is time to step in and let the Government fill the void. Not with more bailouts to the rich who, like Reagan's deficit ``are big enough to care for themselves'' but with bold programs that invest in the future of this country and utilize the skills and labor of this country and make America strong and independent...

Ilene; new; new deal; Phil's Favorites; Time.

Wed 2010-07-21 10:28 EDT

I Would Do Anything For Stimulus, But I Won't Do That (Wonkish) - Paul Krugman Blog - NYTimes.com

...there's a school of thought which says that deficits are never a problem, as long as a country can issue its own currency. The most prominent advocate of this view is probably Jamie Galbraith, but he's not alone...OK, I don't think that's right. To spend, the government must persuade the private sector to release real resources. It can do this by collecting taxes, borrowing, or collecting seignorage by printing money. And there are limits to all three. Even a country with its own fiat currency can go bankrupt, if it tries hard enough...

com; NYTimes; Paul Krugman Blog; stimulus; wonkish.

Fri 2010-06-18 10:31 EDT

The Godley Papers

paul komierowski

The Godley Papers are a collection of articles published in The NSS (New Statesman and Society) and The Observer between 1988 and 1992. There is an introduction to the collection by Steve Platt, Editor, New Statesman and Society. The collection may be downloaded...[Wynne Godley papers]

Godley Papers.

Mish's Global Economic Trend Analysis Sat 2010-05-22 13:55 EDT

Richard Koo On Why This Recession Is Different; Mish On What To Do About It

Michael Shedlock

The Business Insider has a very interesting presentation by Richard Koo on The Real Reason Why This Recession Is Completely Different...The reason the recession is different is this is credit bubble busting depression not a recession. The effects are masked because of food stamps, unemployment insurance, and because of foreclosure policy...Koo blames cutbacks in fiscal stimulus in 1999 and 2001 as the reason Japan remains mired in deflation. I do not buy it...The real lesson is no matter how much money you throw around, economies cannot recover until noncollectable debts are written off...The moment fiscal stimulus stops economies are virtually guaranteed to relapse until the core problem is resolved. The problem is Asset Bubbles, Malinvestments, and debts that cannot possibly be collected...

different; Mish; Mish's Global Economic Trend Analysis; Recession; Richard Koo.

Mish's Global Economic Trend Analysis Wed 2010-05-19 15:00 EDT

Retail Sales Rise: Where? Let's Take a Look; Expect Nothing Less Than Panic

Michael Shedlock

...To understand why the Advance Retail Sales report is completely bogus, we must first analyze the Census Bureau Methodology...The published numbers are based on "same store sales". Think about all the companies that have gone bankrupt. Take Circuit City for an example. Gone. The doors are closed. Some of those shoppers went to Best Buy where same store sales rose. Also remember that Best Buy and many other chains closed weak stores. The result: same store sales went up again. Government methodology for reporting retail sales is based on sampling stores in existence. It does not factor in stores not in existence but recently were. Nor does it handle closed stores when the chain is still doing business. Government reporting of retail sales is fatally flawed. To understand what is going on, all one has to look at actual tax data. Heard any rosy numbers from states about sales tax collections?

expectations; Let's take; looking; Mish's Global Economic Trend Analysis; panic; Retail Sales Rise.

The Wall Street Examiner Sun 2010-05-09 09:58 EDT

The Minsky Cruise (part 2, Households)

...Now for the Minsky part. The theory above, in layman's terms, argues that over time, when an economy expands without serious contractions, finances will become increasingly risky. Minsky wrote of a shift from hedge finance (when debt, both principal and interest, can be serviced from cash flows) through speculative finance (when debt must be rolled over as only interest payments can be serviced from cash flows) and into Ponzi finance (when cash flows cannot cover interest payments and thus new debt must be added or assets sold). The idea in the Ponzi finance stage is that asset appreciation will compensate for the extra risk...I don't mean to suggest we (collectively) are broke, just that, as Minsky argued (and the data bears out) our balance sheets are increasingly betting on real estate and equity price appreciation with borrowed money...

Household; Minsky Cruise; Part 2; Wall Street Examiner.

Tue 2010-04-27 08:22 EDT

Anecdotal Economics: A Chicken in Every VAT

...The retail consumer is back, and she* is in the mood to shop, we reliably are told. The Census Bureau reported March 2010 Advance Retail and Food Service Sales improved 7.6 percent from a year ago, and for 1Q2010 are 5.5 percent above 1Q2009...So why do state sales tax revenues tell a different, disconnected story? In the Nelson A. Rockefeller Institute of Government's April 2010 State Revenue Report, which chronicles the woeful status of state tax collections, concludes that sales tax collections fell almost 9.0 percent in 2009, a statistically significant 2.8 percent more than the reported decline in retail and food service sales made up estimated by the Census Bureau...It's a significant disconnect between theory (Census Bureau) and reality (actual sales tax collections), much as the similar, significant disconnect between the Employment Situation reported by the Bureau of Labor Statistics (theory), which appears to be masking the true extent of unemployment in America with all those marginally attached and discouraged workers, and the meaningful decline in actual payroll tax withholdings (reality), as reported by the Treasury Department in its Daily Treasury Statements...

Anecdotal Economics; chickens; VAT.

naked capitalism Mon 2010-04-26 10:08 EDT

Martin Wolf: China, Germany Commiting World to Deflation

...large foreign exchange surpluses, beyond what is useful to defend a currency, is NOT a sign of strength. They cannot be spent without causing the currency to appreciate, something that surplus-dependent countries are unwilling to do. Thus these holdings, which were incurred by acting as de facto export subsidies, cannot be utilized without serving as import subsidies....This battle of wills is rooted on every front in domestic politics, plus a collective inability to recognize that our current version of globalization is no longer workable. But we appear likely to test the current system to destruction rather than come up with less drastic ways out.

China; deflation; Germany Commiting World; Martin Wolf; naked capitalism.

Culture of Life News Tue 2010-03-30 16:01 EDT

Empires Must Regulate Trade And Finances

Elaine Supkis

I keep harping on the trade deficit issue since all of the other messes revolve around this misbalance...The `Me, Myself, and I' ethos is self-centered, childish and foolish. It comes out of living inside a major empire. The individual puffs up him or herself and decides, thanks to being fairly free inside of this empire, that the empire is stupid and doesn't need to be coaxed, nurtured or controlled. Instead, various individuals work day and night to evade taxes that support the imperial superstructure. They bribe politicians to allow looting of the purse via inflated war costs, corruption in buying services, tweaking laws so they channel all collective wealth into a few individual pockets, etc...The people are a collective. If they are individuals, they will be eaten by internationalist wolves or other empires that are not individuals. This is a harsh historical lesson: individuals eventually lose to organized groups...Mostly, throughout history, the freest people have been the CITIZENS of an empire (NOT the victims being oppressed by the empire). Free nations exist only in the shadows of an empire...This is why growing and preserving empires is more important than pretending to be an individual who has no ties to anything. Seriously, when major empires fall, the ability to roam the planet at will vanishes pretty fast...

Culture; Empire; finance; Life News; regulate trade.

Asia Times Online Fri 2010-02-05 10:49 EST

Stiglitz pinpoints 'moral' core of crisis

Nobel Laureate economist Joseph Stiglitz rightly condemns the "ersatz capitalism" of the United States, yet the government there is fixated on resurrecting the morally depraved system that led to the present crisis. Reformists forget that predatory lenders in the US in theory forfeit any right of collection. Start to fix that, and a new economic order could emerge. - Henry CK Liu

Asia Times Online; core; Crisis; morale; Stiglitz pinpoints.

Jesse's Café Américain Tue 2009-12-01 22:16 EST

Draining the Swamp: The Fed's Tri Party Repo Machine

Jesse

A triparty repo transaction is a transaction among three parties: a cash lender acting on behalf of all holders of dollars (the Fed), a borrower that will provide collateral (dodgy debt holder in shaky financial condition), and a clearing bank, most likely a primary dealer like J.P. Morgan, which is only too happy to collect its fees as an agent of the Fed... This is the method of obtaining toxic assets from the books of non-primary dealers, and providing stability and liquidity from the aggregate value of all dollar holders to cover the misdeeds of diverse financial institutions and other favored parties. In other words, the Fed is draining the financial debt swamp and toxic waste dumps into your basement, if you hold Federal Reserve Notes.

drain; Fed's Tri Party Repo Machine; Jesse's Café Américain; swamping.

naked capitalism Tue 2009-10-27 12:45 EDT

More on Banks Engaging in Mortgage Fraud

Hoisted from comments: I am a lawyer who has been involved in corporate finance for over 25 years...the securitization industry 5-10 years ago made a collective choice to ignore the terms of contracts, state and local laws and legal convesntions developed over hundreds of years. Why? Because they could. Our legal system and conventions were built on the assumption that most businesses would choose to follow them. Instead, the securitization industry simply developed a cost/benefit approach to following the law and adhering to contracts. It worked quite well becaseu most individuals just aren't equipped to read and enforce their mortgage agreements or fully understand the law.

banking engage; mortgage fraud; naked capitalism.

zero hedge Mon 2009-10-12 09:37 EDT

The 60% Plunge In Private Equity Deal Flow

If there is one sector that is really hurting despite the outperformance of all other asset classes (money being thrown at equities, bonds, and commodities without regard or prudence as Rosenberg has pointed out), it is private equity. Indeed, while credit has thawed in general, investors are still completely shutting out the 5x+ leverage transaction world: the bread and butter of the LBO business model. For a sober look at the desolation in the PE landscape, even as funds rush to raise more billions in dry equity powder which sits at banks collecting 1%, consider that YTD only $33 billion in 654 PE deals has been disclosed, a 60% drop from the 1,532 deals done through Q3 in 2008, and N/M when compared to the heady days of 2007....

60; plunge; Private Equity Deal Flow; Zero Hedge.

Sun 2009-10-11 18:07 EDT

Cassandra Does Tokyo: Mourning Rally

...it is most curious that I should find myself experiencing very visceral negative reactions to the upward movements in the gold price...the rallying Gold price signifies more monumental failures at multiple levels for society, in politics, for nations, for our individual and collective ability to measure our wants and desires with our means. So despite my skeptical exoskeleton about most things (financial innovation perhaps first and foremost), the aforementioned bothers me intensely, for I am, at heart, both an idealist, and a closet optimist about humanity...So when I see Gold rally, my visceral reaction is the result of my incredulous beliefs confronting contrary evidence, and the mourning for said failures (both real and imagined) that it represents.

Cassandra; Mourning Rally; Tokyo.

Bank-Implode! Sun 2009-09-20 12:22 EDT

Bank-Implode! >> Blog Archive >> Exclusive -- Wells Fargo's Commercial Portfolio is a ticking time bomb

In order to sort through the disaster that is Wells Fargo's (quote: WFC) commercial loan portfolio, the bank has hired help from outside experts to pour over the books... and they are shocked with what they are seeing. Not only do the bank's outstanding commercial loans collectively exceed the property values to which they are attached, but derivative trades leftover from its acquisition of Wachovia are creating another set of problems for the already beleaguered San Francisco-based megabank...According to sources currently working out these loans at Wells Fargo, when selling tranches of commercial mortgage-backed securities below the super senior tranche, Wachovia promised to pay the buyer's risk premium by writing credit default swap contracts against these subordinate bonds...should the junior tranches eventually default, then the bank is on the hook.

bank implode; blogs Archive; exclusive; ticking time bomb; Wells Fargo's commercial portfolio.

Thu 2009-09-17 09:31 EDT

Why capitalism fails - The Boston Globe

Stephen Mihm

Mainstream economics rediscovers Hyman Minsky; ``Instability,'' he wrote, ``is an inherent and inescapable flaw of capitalism.''...Minsky drew his own, far darker, lessons from Keynes's landmark writings, which dealt not only with the problem of unemployment, but with money and banking...Minsky argued that Keynes's collective work amounted to a powerful argument that capitalism was by its very nature unstable and prone to collapse. Far from trending toward some magical state of equilibrium, capitalism would inevitably do the opposite. It would lurch over a cliff...Minsky spent the last years of his life, in the early 1990s, warning of the dangers of securitization and other forms of financial innovation, but few economists listened. Nor did they pay attention to consumers' and companies' growing dependence on debt, and the growing use of leverage within the financial system... Minsky...argued for a ``bubble-up'' approach, sending money to the poor and unskilled first. The government - or what he liked to call ``Big Government'' - should become the ``employer of last resort,'' he said, offering a job to anyone who wanted one at a set minimum wage. It would be paid to workers who would supply child care, clean streets, and provide services that would give taxpayers a visible return on their dollars. In being available to everyone, it would be even more ambitious than the New Deal, sharply reducing the welfare rolls by guaranteeing a job for anyone who was able to work. Such a program would not only help the poor and unskilled, he believed, but would put a floor beneath everyone else's wages too, preventing salaries of more skilled workers from falling too precipitously, and sending benefits up the socioeconomic ladder.

Boston Globe; Capitalism Failed.

Language Log Wed 2009-09-16 18:57 EDT

Language Log >> Google Books: A Metadata Train Wreck

.This is almost certainly the Last Library, after all. There's no Moore's Law for capture, and nobody is ever going to scan most of these books again. So whoever is in charge of the collection a hundred years from now -- Google? UNESCO? Wal-Mart? -- these are the files that scholars are going to be using then. All of which lends a particular urgency to the concerns about whether Google is doing this right...you need good metadata. And Google's are a train wreck: a mish-mash wrapped in a muddle wrapped in a mess.

Google Books; Language Log; Metadata Train Wreck.

naked capitalism Tue 2009-09-01 13:10 EDT

Twenty-Five Years to Work Off the Debt Overhang?

T. S. Eliot was right. Human beings cannot stand very much reality. As much as I have an appetite for bearish views (I figure the optimist case gets disproportionate air time), the headline of Ambrose Evans-Pritchard's latest piece, ``Our quarter-century penance is just starting,'' is grim even by the standards of the bearish faithful. Great comment by DownSouth, quoting Martin Luther King and Reinhold Niebuhr to the effect that by delegating to elites what should be the role of labor unions and grass-roots organizations. Niebuhr wrote: ``when collective power, whether in the form of imperialism or class domination, exploits weakness, it can never be dislodged unless power is raised against it'' ``Before we can fix the economy, the polity must be repaired first.''

debt overhang; naked capitalism; working; years.

ClubOrlov Wed 2009-08-26 15:25 EDT

Local food: success is 100% possible

kollapsnik

This is a guest post from Tim, a city planner from sunny Moncton, NB. Tim has spent some time looking into the viability of local, small scale agriculture, and has come up with some results that give us every reason to be optimistic regarding our ability to feed ourselves through our individual and neighborhood-scale efforts, even as the systems of large-scale, industrial agriculture and food delivery unravel due to a combination of high input costs, epic droughts brought on by accelerating climate change, and a shortage of credit caused by the financial collapse. The remaining challenge is start doing it quickly enough: this summer, that is. "Russian households (inclusive of both urban and rural) collectively grow 92% of country's potatoes on their garden-plots, the size of which is typically...

100; ClubOrlov; local food; possible; Success.

Fri 2009-07-24 00:00 EDT

Economic Meltdown - Articles: The Roots of the Financial Crisis: Who Is to Blame?

-- John Dunbar, David Donald; top 25 subprime lenders; wall street backers; banks that financed subprime industry collecting bailout billions

article; blames; economic meltdown; Financial Crisis; rooted.

Tue 2009-04-21 00:00 EDT

naked capitalism: Guest Post: Mother of All Stealth Scams?

pension fund scam involved ``alternative investments, allowing private funds to collect exorbitant fees and senior pension fund managers to collect huge bonuses based on bogus benchmarks''

Guest Post; mother; naked capitalism; Stealth Scams.

Tue 2008-09-02 00:00 EDT

naked capitalism: Stephen Roach: "Pitfalls in a Post Bubble World"

``root of our collective mess is sustained US overconsumption''

naked capitalism; pitfall; Post Bubble World; Stephen Roach.

Fri 2007-11-30 00:00 EST

naked capitalism: Counterparty Risk Problems With Credit Default Swaps?

(45 trillion notional CDS outstanding; counterparties "concerned about collecting from hedge funds that were long"?

Counterparty Risk Problems; Credit Default Swap; naked capitalism.