MERS takes all checks and balances from a very regulated and safe real estate titling process----it takes all eyes off the process---and simply high-speed processes titles through handling tens of millions of subprime mortgage loan title changes over and over and over as global Wall Street bundled and sold our US subprime mortgages GLOBALLY. All of this was illegal----all of this is STILL ILLEGAL and yet global Wall Street was back under Obama with these same subprime mortgage frauds----tens of millions of title changes yet again. Have any of our US cities and their low-income communities seen any improvement with all this FLIPPING? Of course not ---that was the rule----do anything to make money just don't create a permanent local economy and don't create stable communities.
Lucy's Famous Chocolate Scene
Here is the famous Chocolate scene from I Love Lucy, an illustrious tv series in the 1950's.
Call me OLD-FASHIONED----but forcing low-income citizens desperate for housing-----forcing US city citizens made desperate for jobs and businesses to COMMIT ---AID AND ABET CRIME----to earn what is peanut to global Wall Street's tens of trillions----
I THINK CLINTON/OBAMA ARE ABOUT AS RACIST----CLASSIST AS ANYONE CAN BE-----HERE IN BALTIMORE THE POLS RUNNING AS DEMOCRATS BEING FAR-RIGHT WING GLOBAL WALL STREET ARE RACIST AND CLASSIST.
It is this 5% to the 1% creating all of the failed development problems in our US cities and know what? It is MY WHITE 5% who fill positions in Greater Baltimore ----Baltimore Development------executives at Johns Hopkins WHO DRIVE ALL THESE FRAUDULENT DEVELOPMENT SCHEMES.
All of this is on top of the corruption in our subsidized housing------THE ENTIRE PROCESS is geared towards taking more and more and more Federal funding from our ONCE EFFECTIVE AND EFFICIENT FHA----
WHAT???? No more 5% to the 1% getting money in their pockets it will go to the global 1% and their 2%? YES----WAKE UP IT IS NOT A BUSINESS OR AN ECONOMY.
Corruption is rampant at HUD and affordable housing projects
by Lynda Carson (tenantsrule [at] yahoo.com)
Thursday Feb 12th, 2015 12:14 AM
What is happening at Effie’s House and EBALDC is just one bright shining example of what is happening throughout the City of Oakland in the many subsidized housing projects owned by numerous non-profit housing developers that are members of the East Bay Housing Organizations (EBHO)!
Corruption is rampant at HUD and affordable housing projects
By Lynda Carson - February 12, 2015
Oakland - As important as HUD and it’s subsidized housing programs are to veterans, the poor, elderly and disabled, corruption is rampant from the top to the bottom in the realm of HUD and it’s tax payer subsidized housing programs. Corruption that is unfair to the homeless and low-income persons on the waiting lists trying to get into a so-called affordable housing project.
As just one example, the East Bay Asian Local Development Corporation (EBALDC) is one of Oakland’s largest nonprofit housing developers using tax credits to fund it’s subsidized housing projects for the poor, in addition to providing housing to low-income tenants with Section 8 vouchers, and Shelter Plus Vouchers. Additionally, EBALDC receives funding from the Home Program, and federal subsidized Section 8 Project-Based Vouchers in addition to grants and funding from numerous other federal programs being used to subsidize and fund it’s many so-called affordable housing sites, and programs.
Politically active like many others in the multi-billion dollar affordable housing industry, public records from the Federal Election Commission (FEC) reveal that during 2012 EBALDC gave $100 to Obama For America.
In it’s website EBALDC claims to have developed 1,918 homes to house around 3,600 people in the East Bay. EBALDC also claims that the organization directly manages 1,126 residential rental units in 19 properties, and have developed and manage more than 300,000 square feet of commercial space at their properties.
What is not being told to the public and tax payers who subsidize EBALDC’s rental properties in Oakland and the East Bay is that EBALDC has been providing tax payer subsidized housing to some of it’s employees in their numerous subsidized housing sites.
Additionally, it appears that it is totally legal to provide subsidized housing to the friends and relatives of EBALDC’s employees, and often they get preferential treatment over persons on the housing waiting lists including the homeless, elderly, and disabled desperately seeking affordable housing. In comparison, these types of activities are totally prohibited in public housing projects all across the nation.
The rules and regulations are not nearly as rigid for the non-profit housing developers receiving federal funds in the so-called affordable housing industry as they are for the nation’s 3,100 Public Housing Authorities (PHAs) that provide public housing, and Section 8 vouchers to the poor.
The PHAs receive their funding from the Department of Housing and Urban Development (HUD) to fund their programs. Many affordable housing developers receive funding from local PHAs that provide Section 8 Project-Based Vouchers to the non-profit housing developers in the affordable housing industry. The Project-Based Vouchers are used to fund long-term subsidized housing projects owned by non-profit organizations in the affordable housing industry.
One might even say that the so-called affordable housing industry has totally corrupted the original intent of the public housing program that it cannot compete with, and has been desperately trying to destroy in it’s efforts to grab as much federal funding as is possible for it’s own for profit housing projects. Currently the affordable housing industry is moving as fast as possible to promote the privatization of public housing, and many non-profit housing developers are seeking federal funding through the Rental Assistance Demonstration program (RAD) in the effort to grab as many public housing units as is possible to add to their own empire.
Corruption In Affordable Housing
Indeed, corruption is rampant in the affordable housing industry. As an example, Effie’s House is a 21 unit subsidized housing project owned by EBALDC in Oakland. EBALDC got it’s hands on the property in a sweetheart deal back in 1997 through the City of Oakland when the owner at that time could not afford to replace a broken boiler system in the building. The tenants spent around a year or more without any heat or hot water in the building before EBALDC took control of the property.
Fast forward to 2014. During October of 2014, Katherine Mull, a well compensated Property Manager for EBALDC who works in their main office and oversees their commercial properties jumped ahead of the line on the housing “waiting list” and moved into a studio apartment at Effie’s House. Top management at EBALDC gave her the title of “On-site Manager” at Effie’s House, and one of the first things Katherine Mull did when moving in was to allow her boyfriend to move into the subsidized housing unit with her. A boyfriend who was also allowed to jump ahead of all the others on a waiting list to move into the subsidized housing project. Management declines to state whether or not the boyfriend went through any back-ground checks, or an income certification process before moving into the building.
Since Danny Chen is the Property Manager at Effie’s House and can be found on-site in the building office 4-days a week at the location, and notices to the tenants advising them not to bother Katherine Mull unless it is an emergency, the tenants are not certain what Katherine Mull actually does at Effie’s House as the so-called On-site Manager.
The tenants generally call 911 when there is a real emergency, or they contact Property Manager Danny Chen. Additionally, the tenants have also been advised by notice not to call Mull on her cell phone, and have been told by management that if they lose the keys to their apartment that it is not an emergency. Being too poor to afford a locksmith when losing their keys and finding themselves locked out of their homes is definitely an emergency for the tenants at Effie’s House, no matter what EBALDC may falsely claim.
According to state law property managers are required to have a real estate license, but a check of the records for the Department of Real Estate reveals that property manager’s Katherine Mull and Danny Chen do not have a real estate license.
What is happening at Effie’s House and EBALDC is just one bright shining example of what is happening throughout the City of Oakland in the many subsidized housing projects owned by numerous non-profit housing developers that are members of the East Bay Housing Organizations (EBHO).
THIS IS THE PAY-TO-PLAY THAT KEEPS LOW-INCOME CITIZENS IN DEVELOPMENT CORPORATION 'LABOR AND JUSTICE' ORGANIZATIONS AND END WITH THEM SUPPORTING THE WORST OF CAPTURED GLOBAL WALL STREET CANDIDATES----IF YOU WANT TO HAVE HOUSING----YOU WORK IN OUR CORPORATE NON-PROFIT.
Obama Is Pushing For Further Corruption Of HUD’s Subsidized Housing Programs
Making matters worse, in the latest federal budget proposals released by the Obama administration during the first week of February, Obama is pushing for the further weakening of the rules and regulations for Public Housing Authorities (PHAs) all across the nation. The President is pushing for the expansion of the Moving To Work (MTW) demonstration program that has already totally corrupted around 35 housing authorities across the nation. There are currently around 35 MTW housing authorities and they do not have to abide by the normal rules and regulations that around 3,100 other housing authorities have to abide by. MTWs are allowed to mix all of their administration fees, public housing funding and Section 8 funding from HUD into one big slush fund. A slush fund that lacks transparency, and makes it very difficult to follow where all the money is really going.
Authorized by Congress in 1996, the Moving To Work (MTW) demonstration program was created for a limited number of PHAs to try out new and different ways to save money, and find cheaper methods to deliver housing services. However, MTWs have morphed into agencies that have become notorious for abusing the funding from Congress. Funding that was meant to assist the poor.
As an example, HUD was under fire by an April 19, 2012, report that was issued on May 21, 2012 by the Government Accounting Office (GAO), that ridicules any assertions by HUD that an MTW's activities can be evaluated properly.
The GAO is an investigative arm of Congress with the power to examine matters related to the receipt and use of funding by Congress, and the GAO believes that MTWs are not regulated enough to properly evaluate how they are operating.
As was reported by the National Low-Income Housing Coalition (NLIHC), during a March 29, 2012 oversight hearing of THUD and DOT programs in Washington D.C., HUD Inspector General David Montoya (IG) publicly criticized the Public Housing Authority of Philadelphia, as an example of the corruption of MTWs.
Montoya (IG) stated that the PHA in Philadelphia is an MTW demonstration program that was legally allowed to use $1.1 million of it's funding to fight against the oversight of the IG's office, and was allowed to use money to hire outside legal counsel to shadow "IG staff" that were auditing the housing authority, when it should have used the money on housing poor people instead.
Since it was legal for that MTW to operate in such a way, apparently all other MTWs are allowed to abuse funds that were meant to be used for housing needs, to fight against audits by the HUD Inspector General's office.
At the same hearing, Montoya (IG) also stated that removing the MTW status from the PHA in Philadelphia would be a first good step to resolve the problems the IG is aware of at that housing authority since 2004, according to a March 30, release by the National Low-Income Housing Coalition (NLIHC).
According to the GAO report, the information available from HUD about MTWs varies, and the GAO report further revealed that HUD has declined to specify in it's rules and regulations that the performance information from an MTW must be quantifiable and outcome oriented. The lack of rules and regulations has corrupted and hampered efforts to determine if MTWs are functioning properly, and places hundreds of millions of dollars in federal funding at risk of misuse, and abuse.
Further expansion of the MTW program would only jeopardize millions of dollars more in tax payer subsidies that are meant to assist the poor, but may be used for other reasons.
HUD has not established a process to assess compliance with statutory requirements for MTWs, and the report further states that HUD lacks the assurance needed to determine that an MTW is complying with the statute that governs how an MTW is supposed to operate.
Additionally, "HUD has not identified the performance data that would be needed to assess the results of similar MTW activities or the program as a whole, and has not established performance indicators for the program," according to the GAO.
The MTW program is wide open to corruption and abuse, and according to the GAO report, "HUD has not done an annual assessment of program risks despite its own requirement to do so and has not developed risk-based monitoring procedures."
Additionally, the GAO report reveals that HUD cannot verify the accuracy of information being self-reported by MTWs to HUD, and the GAO reports that HUD does not have any policies or procedures active that are needed to verify what is actually going on in an MTW housing authority.
Recent Report Exposes Major Corruption In HUD
According to public records, a February 4, 2015 testimony of David A. Montoya, Inspector General (IG), reveals that there has been massive fraud occurring in the upper ranks of management in HUD.
Recent shocking revelations in the testimony of David. A. Montoya before the U.S. House of Representatives Committee on Financial Services Subcommittee on Oversight and Investigations reveals that HUD officials have been trying too cover up serious violations of ethical, lobbying and other violations at HUD including the hiring of convicted criminals for key housing positions.
During the committee meeting Montoya revealed that since 2013 HUD officials have allegedly been involved in major ethical violations, hiring violations, and illegal lobbying. This included the hiring of Debra Gross, an affordable housing insider from the Council of Large Public Housing Authorities (CLPHA) who was put in charge of regulatory reform at HUD while still holding a position in the organization (CLPHA) that lobbies Congress and the President on behalf of the affordable housing industry, and public housing authorities across the nation.
It is a good thing for people to lobby Congress and the President for full funding for HUD’s subsidized housing programs meant to assist the poor, but the breakdown in HUD’s polices in recent years reveals how corrupt the system has become.
According to Montoya’s testimony there has been an institutional breakdown in HUD’s policies, which appears to reflect the corruption occurring in HUD’s housing programs from the top to the bottom of the nation’s so-called affordable housing industry.
Despite on-going massive budget cuts to HUD’s housing programs, HUD has done great work for many years in the effort to promote public housing and the Section 8 voucher program that assists the poor with their housing needs. However, since members of the affordable housing industry including members from Bridge Housing and other multi-billion dollar so-called non-profit housing organizations have totally infiltrated the upper ranks of management at HUD, the lobbyists have been promoting reform changes in HUD’s subsidized housing programs that are detrimental to the needs of the poor. The members of the affordable housing industry that have infiltrated HUD are pushing for reforms that are resulting in the privatization of our nation’s 1.2 million public housing units.
Additionally, the affordable housing industry is lobbying Congress and HUD for Rental Assistance Reform (RAR) that will result in higher rents for the poor in HUD’s subsidized housing programs. Reforms being pushed for by the so-called affordable housing industry will also result in Section 8 vouchers being taken away from the poor so that they can be converted to Project-Based Vouchers that the non-profit housing developers can use to fund their own so-called affordable housing projects.
Unfortunately for the poor, most non-profit housing developers have “minimum income requirements” at their so-called affordable housing projects that discriminate against the poor.
For more about the recent testimony about corruption at HUD click on the links further below…
Here is the goal of MERS----and the massive subprime mortgage fraud outside of simply laundering tens of trillions of dollars to global Wall Street-----they are making a MESS OF OUR PROPERTY RIGHTS TITLING PROCESS-----we cannot be LANDOWNERS if we cannot PROVE our titles are correct. Since US cites deemed Foreign Economic Zones have a goal of global corporate campuses owning all land ---outside of that allowed to be owned by global 1% and their 2%----global Wall Street wants to ERASE all history of US land ownership and MERS does just that.
Articles often refer only to the foreclosure process----but the actual corruption occurred during the Wall Street bundling and selling of these mortgages globally----allowing bundles to be FLIPPED over and over again by investors in China---Pakistan-----Bahrain-----Malaysia---all having that possibility of being the PROPERTY OWNER which your house title says is you. We are now told WE THE PEOPLE are responsible for making sure our house titles are CLEAN-----that costs lots and lots of money and often we are going to the same lawyers----who aided and abetted these frauds.
Global Wall Street CLINTON/BUSH/OBAMA think all this is really FUNNY----------absolutely no Rule of Law in a nation steeped in developed world RULE OF LAW-----this is how one takes a developed nation and bring it to third world
'As we noted previously, esteemed economists such as Hernando de Soto have identified that the respect for title, proper documentation, contract law and private property rights are the underlying reason capitalism works in Western nations, but seems to flounder elsewhere'.
Remember, our US Constitution was based on COMMON LAW brought from Europe and Britain----which is heavily tied to PROPERTY RIGHTS.
Why Foreclosure Fraud Is So Dangerous to Property Rights
October 12, 2010 8:00am by Barry Ritholtz
There seems to be a misunderstanding as to why the rampant and systemic foreclosure fraud is so dangerous to American system of property rights and contract law. Some of this is being done by people who are naked corporatists (i.e., the WSJ Editorial Board) excusing horrific conduct by the banks. Others are excusing endemic property right destruction out of genuine ignorance.
This morning, I want to explain exactly why this RE fraud is so dangerous, and explain the significance of the rights that are currently being trampled. I also want to demonstrate that the only way the nation could have the quantity and magnitude of errors we see is by willful, systemic fraud.
Perhaps this commentary will allow for a more intelligent debate of this issue, and focus on what can be done to fix the problems, rather than the blind parroting of talking points.
The process of purchasing a home in America culminates with an event called “the Closing.” It is an hour plus long contract signing that ensures the buyer is legitimately taking title, possession and legal ownership of a unique parcel of land and any structures upon it. The process gives any buyer specific rights to that property that cannot be abrogated under the laws of the United States.
At the closing, buyers sign and initial numerous documents. The goal is to accomplish the following:
1) Papers are signed that will be filed with the County Clerk (or appropriate officer) along with recording fees, for the official transfer of title from the prior owner to the new owner. The enabling purchase loan (i.e., mortgage note) is also filed with the Clerk.
2) The buyer receives title (ownership) of the land;
3) The mortgage lender establishes a new interest in that property contingent upon their mortgage note;
4) All other claims, liens, tax obligations and prior mortgages, home equity lines or second notes are satisfied and extinguished before title passes to the new owner.
5) Third party claims of any interest in that property superior to the buyer are eliminated;
6) Title Insurance is purchased and issued so the buyer has a recourse in case of defects in ownership occurs.
Every step of the process is designed to protect the property rights of all parties. The result is more than a mere transaction selling property from one party to another; rather, this has created a system where ownership interests are clearly defined; where title history can be reviewed going back decades and centuries. There is a certainty to the purchasers of this property against all future claims.
Everything about this process has been created to make sure the transfer goes off perfectly. In a nation of laws, contract and property rights, there is no room for errors. Indeed, even small technical flaws can be repaired via a process called “perfecting title.”
As we noted previously, esteemed economists such as Hernando de Soto have identified that the respect for title, proper documentation, contract law and private property rights are the underlying reason capitalism works in Western nations, but seems to flounder elsewhere.
We cannot have free market capitalism without this process. So what does it mean if banks have been systemically, fraudulently and illegally undermining this process?
The closing process described above took place with all parties participating voluntarily. The buyer wants the house, the seller wants the transaction, the financing bank wants to make the mortgage loan.
What happens during a proper foreclosure? The prior closing is essentially reversed, only its done involuntarily. The process requires another RE closing, only this time, the Note holder is exercising their right to repossess the house if the borrower has failed to uphold the terms of the mortgage note. It typically states that if a borrower fails to make the requisite payments, they become delinquent. After an extended period of delinquency, they go into default. That allows the note holder to exercise their rights to foreclose on the property, and take title and possession.
The same care and attention to detail that occurred during the initial closing must also occur in the foreclosure process. All of the steps noted in our initial closing must occur here also. But since it is an involuntary process for the (soon-to-be former) property owner, extra care must be taken to make sure that property rights are being maintained and respected. The entire process is, if anything, is even more rigorous.
The law does not tolerate any errors in this process. What does the foreclosure process legally require? It varies by state and mortgage note, but the following is a good outline:
1) Notice of Delinquency is sent to a borrower who has fallen behind his payment schedule;
2) Notice of Default is sent to a delinquent borrower who has missed the requisite number of mortgage payments;
3) Notice of Foreclosure is sent to the defaulted borrower, and the process begins;
4) Affadavit by the bank’s representative are signed attesting to: Ownership of the note, who the borrower is, the property in question, the date of last mortgage payment, amount of delinquency, tax escrow owed, other payments (such as homeowners insurance);
5) Notarized documents: A Notary Public affirms that the affidavit was actually signed by the signatory, and this allows it to be entered into the court as documentary evidence;
6A) Notice of Pendency (Lis Pendens) is filed with the County Clerk putting the world on notice as to the foreclosure action;
6B) Summons and Complaint are prepared by bank attorneys, who further verify the specific information attested to by the bank executives. The attorneys then file the Complaint, commencing the Foreclosure Action;.
7) Service of Process is filed, either hand delivered to the home owner, or nailed to the door of the home;
8) Referee is Appointed to review and process the case; calculate the amount owed, and report back to the Court; The Referees report is also notarized;
9) Judgment of Foreclosure is moved for by Note holder;
10) Court orders the property auctioned. The court specifies a notice of the auction, publicizing the property auction;
11) Bidders must Close on the auctioned house in 30-90 days; In the event of no sale, the bank takes possession (REO);
The fraud that has come to light are primarily occurring in steps 4, 5, 6 and 7. The verification of the specific data that is mandated legally is not taking place by bank executives. Reviewing a file can take anywhere from, 20 minutes to well over an hour. Yet some bank employees are testifying that they have signed off on as many as 150 per day (Wells Fargo) or 400 per day (Chase).
It is impossible to perform that many foreclosure reviews and data verifications in a single day. The only way this could happen is via a systemic banking fraud that orders its employees to violate the law. Hence, how we end up with the wrong house being foreclosed upon, the wrong person being sued for a mortgage note, a bank without an interest in a mortgage note suing for foreclosure, and cases where more than one note holders are suing on the same property that is being foreclosed.
This is more than mere accident or error, it is willful recklessness. When that recklessness is part of a company’s processes and procedures, it amounts to systemic fraud. (THIS IS CRIMINAL AND SHOULD BE PROSECUTED).
The next step in our cavalcade of illegality is the Notary. Their signature and stamp allows these fraudulent documents to be entered into court as actual evidence (no live witness required). Hence, we have no only fraud, but contempt of court on top of it (BOTH OF WHICH REQUIRE PROSECUTION).
Law firms preparing the legal documents are not doing their job of further verifying the information. And, it seems certain states such as Florida have foreclosure mills who were set up from the outset as fraudulent enterprises. (EVEN MORE PROSECUTION NEEDED).
Lastly, some service processors are not bothering to do their job. This is the last step in the foreclosure proceedings that would put a person on notice of the errors (YET MORE FRAUD).
There are multiple failsafes and checkpoints along the way to insure that this system has zero errors. Indeed, one can argue that the entire system of property rights and contract law has been established over the past two centuries to ensure that this process is error free. There are multiple checks, fail-safes, rechecks, verifications, affirmations, reviews, and attestations that make sure the process does not fail.
It is a legal impossibility for someone without a mortgage to be foreclosed upon. It is a legal impossibility for the wrong house to be foreclosed upon, It is a legal impossibility for the wrong bank to sue for foreclosure.
And yet, all of those things have occurred. The only way these errors could have occurred is if several people involved in the process committed criminal fraud. This is not a case of “Well, something slipped through the cracks.” In order for the process to fail, many people along the chain must commit fraud.
That it is being done for expediency and to save a few dollars on the process is why the full criminal prosecution must occur.
The approach of most Western nations to property is an important legacy. In the United States, it has been enshrined in the Constitution. Even the rare exercise by the State to take private property during Eminent Domain requires an extensive and proper process. The Fifth Amendment to the US Constitution guarantees that no “private property be taken for public use, without just compensation.” The Supreme Court has detailed the process required for the State to seize any citizen’s private property without the owner’s consent.
There is simply no reason we should tolerate unlawful property seizure merely when it is done by banks. They are not the State, not the King, and not above the law.
As we listen to a TRUMP being the target of our CLINTON/OBAMA 5% TO THE 1% as they pretend not to be the problem for the 99% of American citizens----Trump is racist Trump is going to enslave us---Trump is going to take our health care away----
IT WAS FAR-RIGHT WING CLINTON/OBAMA GLOBAL WALL STREET NEO-LIBERALS WHO DID THAT
As Clinton neo-liberals set up Trump as the fall-guy here is Clinton in the 1990s staging the coming SUBPRIME MORTGAGE FRAUDS by allowing this MERS to open and take control of our titling processes----and it is indeed illegal under FEDERAL LAW ----Federal funds for housing require SECURE TITLES.
This is why today Clinton/Obama 5% to the 1% 'labor and justice' organizations have the 99% focused on Trump and not the GORILLA-IN-THE-ROOM issues.
So, 1995 came MERS with Clinton breaking Glass Steagall and a hundreds of billions of dollars in TECH INDUSTRY BUBBLE all funds used to build Wall Street infrastructure GLOBALLY. All of this was needed in order to allow global Wall Street to launder tens of trillions of dollars in mortgage fraud all over the world-----IT WAS DONE IN CLINTON ADMINISTRATION and Bush simply sat back and allowed all of it to happen. Obama did the same these several years and now Trump will sit back and watch all the fraud happen.
'Created in 1995 by the country’s biggest banks, MERS quietly took control of and privatized mortgage record-keeping across the country and, in the span of a few years, scrambled America’s private property ownership records to the point where no one could figure out who owns what'.
This of course will be the last of FEDERAL HOUSING AUTHORITY----it has been MILKED as much as possible now they will END any pathway for 99% of citizens to buy real estate.
Corruption Porn / December 16, 2010
Dude, Where’s My Mortgage? How a Corrupt Outfit Called MERS Is Destroying Our System of Property Rights
By Yasha Levine
This article was first published by AlterNet
“For the first time in the nation’s history, there is no longer an authoritative, public record of who owns land in each county.” — University of Utah law professor Christopher Peterson
There is an unbelievable scandal in the making that threatens to subvert our four-century-old method for guaranteeing a fundamental building block of the American republic—property ownership. The biggest reason why you probably haven’t heard much about it is that it involves one of the most generic and boring company names imaginable: Mortgage Electronic Registration Systems, Inc., or MERS. It is a story of deception engineered at the highest level of power for short-term gain, and another epic failure of the private sector to uphold the laws and traditions of American society, even something as fundamental as property rights.
Created in 1995 by the country’s biggest banks, MERS quietly took control of and privatized mortgage record-keeping across the country and, in the span of a few years, scrambled America’s private property ownership records to the point where no one could figure out who owns what. This was no accident, and was done by design: MERS was a tool used by America’s top financial institutions to pump up the real estate market. Mortgage-backed securities, robo-signers, lightning quick foreclosures, subprime mortgages and just about everything else that went into feeding the biggest real estate bubble in U.S. history could not function without help from MERS. But unlike many of the Wall Street scandals, this one could blow up in the banks’ faces, with the little guy laughing all the way back to his free McMansion, and local governments seeing their empty coffers fill back up with the billions of dollars in unpaid fees that MERS circumvented.
The story begins in mid-’90s with the founding of MERS, Inc. by the nation’s most powerful banks, ostensibly with the aim of streamlining and modernizing the process of registering and tracking mortgages. Traditionally, there has been no centralized registry of real estate ownership information, with counties maintaining their own records for properties within their borders—a system that has remained virtually unchanged since colonial times.
The MERS database went live in the middle of the dot-com bubble, and was supposed take inefficient government bureaucracies kicking and screaming into the future by providing a centralized, national registry of mortgage ownership information. “MERS addresses a problem that was costing the industry a significant amount of money,” Rick Amatucci, a Fannie Mae vice president and the agency’s liaison with MERS, told Mortgage Banking magazine, just as the new registry went online in 1997. The database would give lenders across the country instant access to real-time mortgage information, diminish potential for fraud, and lower costs for servicers and borrowers, according to Mortgage Banking Association, which was tasked with overseeing the project.
But that kind of talk was just for the press release. The banking industry wasn’t concerned with efficiency or transparency or the greater good. It was all about making money, as quickly and cheaply as possible. And that is what MERS was for. It was created to help the industry push its latest money-maker: mortgage-backed securities, a Wall Street financial scam that dressed up the most toxic, guaranteed-to-fail loans as Grade A investment vehicles that could be sold to suckers looking for an easy gain.
But before mortgage-backed securities could be unleashed on the residential housing market on a massive scale, bankers needed to get rid of America’s long-standing real estate recording laws, which required lenders to file all mortgage transactions—the origination of a new loan, for instance, or the transfer or sale of a mortgage between banks—with the county in which the property is located. While this recording requirement was not a problem in the sleepy pre-securitization days of the home loan business, when mortgage transactions were kept to a minimum, it was going to be much more difficult—if not impossible—with widespread use of securitization, which jacked up the industry like high-grade meth. Mortgages would be changing hands dozens of times, going from loan originators to banks to Wall Street investment houses, which would collect them by the thousands and package them into complex debt instruments that would be chopped up into shares and sold off to multiple investors all over the world.
Bankers needed a quick, clean way of reassigning mortgages without having to go through the “cumbersome” process of recording them with county courts and recorder offices. But instead of working with municipalities to modernize title registration by a creating a national database that was aboveboard and that everyone could use, the banking industry did what it does best: hid the information with sly accounting tricks.
And it succeeded. In just a few short years, MERS took over the bulk of residential mortgage registration. There are about 80 million residential mortgages in America today, and MERS tracks 60 percent of them.
“[M]ortgage bankers formed a plan to create one shell company that would pretend to own all the mortgages in the country—that way, the mortgage bankers would never have to record assignments since the same company would always ‘own’ all the mortgages,” wrote University of Utah law professor Christopher Peterson, who wrote a key paper on MERS and the mortgage industry.
Here is how the plaintiffs in a class action suit filed in Florida in July 2010 against MERS and a legal firm described the MERS registration system:
The whole purpose of MERS is to allow “servicers” to pretend as if they are someone else: the “owners” of the mortgage, or the real parties in interest. In fact they are not. … With the oversight of Defendant Merscorp and its unknown principals, the MERS artifice and enterprise evolved into an “ultra-fictitious” entity, which can also be understood as a “meta-corporation.” To perpetuate the scheme, MERS was and is used in such a way that the average consumer, or even legal professional, can never determine who or what was or is ultimately receiving the benefits of any mortgage payments. The conspirators set about to confuse everyone as to who owned what. They created a truly effective smokescreen which has left the public and most of the judiciary operating “in the dark” through the present time.
The use of MERS as a generic placeholder for the real owner of a mortgage was a crucial component of the entire securitization machine.”[T]he entire scheme was predicated upon the fraudulent designation of MERS as the ‘beneficiary’ under millions of deeds of trust,” according to a class action suit filed in Nevada in 2009 against MERS and all the big, crooked banks we’ve learned to fear and hate. “Before MERS, it would not have been possible for mortgages with no market value . . . to be sold at a profit or collateralized and sold as mortgage-backed securities. Before MERS, it would not have been possible for the Defendant banks and AIG to conceal from government regulators the extent of risk of financial losses those entities faced from the predatory origination of residential loans and the fraudulent re-sale and securitization of those otherwise non-marketable loans.”
How efficient was MERS at perpetuating trickery in the real estate market? Well, according to statistics published by the U.S. Treasury’s Financial Crime Enforcement Network, from 1997—the year MERS went online—to 2005, mortgage fraud reports increased by 1,411 percent.
The MERS hustle had another benefit: it saved the banking industry—and cost municipal governments—tens of billions of dollars by allowing lenders to avoid paying county filing fees, which cost an average of $30 a pop. According to the AP, if every mortgage tracked by MERS had been resold and re-recorded with a county just one time, the system would have saved the banking industry $2.4 billion in filing fees. In reality, most mortgages are sold and resold a dozen times—sometimes more, which means that MERS extracted at minimum around $30 billion from cash-strapped local governments. “Some counties also use recording fees to fund their court systems, legal aid organizations, low-income housing programs, or schools. In this respect, MERS’s role in acting as a mortgagee of record in nominee capacity is simply a tax evasion tool,” says Professor Peterson.
But there was one major downside to the scam: because MERS departed from established real estate recording requirements, there was no guarantee that its claim to ownership, if challenged, would be honored by the courts.
Transparent real property registration was one of the earliest—and most important—functions of the American government, a practice that has changed amazingly little since the colonial times. According to “Foreclosure, Subprime Mortgage Lending, and the Mortgage Registration System,” American colonists began to enact laws requiring land sales, transfers and mortgages to be entered into the public record with a government agency going back almost 400 years. The Massachusetts Plymouth Bay Colony adopted its first such “recording law” in 1636, which stated that “all sales exchanges giftes mortgages leases or other Conveyances of howses and landes the sale to be acknowledged before the Governor or anyone of the Assistants and committed to publick Record.”
By the time the Boston Tea Party rolled around, every English colony had passed laws that required lenders and landowners to enter their names and property and mortgage information into the public record. The reasons for the popularity of the laws are simple and utilitarian: transparent public records of property ownership prevented disputes over who owned what and allowed people to use land as collateral on loans. “The necessity and usefulness of these early public title records is attested to by their nearly universal and uninterrupted force in subsequent American law. Indeed, Pennsylvania’s first recording act, first adopted in 1717, remains in force to this day,” wrote Peterson. Banks that failed to register mortgage transactions risked losing their ability to enforce the contract. And that is exactly what is on the verge of happening with mortgages registered with MERS.
Dozens of lawsuits all across the country have been filed against MERS and its partners to put this very issue to the test. And while most of them are still ongoing, it’s clear that MERS is fighting for its life.
The Wall Street Journal:
Now, critics and homeowners facing foreclosure are increasingly challenging, among other things, MERS’ role and legal standing in home foreclosures where it acts as legal representative of the mortgage holder. MERS has fought and won legal challenges in the past. But the nationwide epidemic of foreclosures in the wake of the housing collapse will present it with a wave of challenges unlike any it has seen previously.
Trouble for MERS could add risk to banks by slowing down the securitization process, and creating uncertainty during a time when banks are struggling to reassure shareholders and customers. One hedge fund investor said Friday that questions around MERS are adding to his concerns about banks in the mortgage business and are keeping him from investing in the sector.
While MERS officials say they are confident about their business model, it has become clear that their scheme might very well be on the verge of toppling. On November 17, Congress quietly rammed through a sneaky, vaguely worded bill that would have legalized MERS’ dealings retroactively. And while the bill didn’t pass, we can expect Wall Street’s lackeys in Congress to continue their efforts. After all, if courts continue to rule against MERS’s business model—and it looks like they will--many homes may become foreclosure proof. As Reuters put it: “If court rulings against MERS’ authority to foreclose proliferate, many foreclosure cases may be halted indefinitely, and some homeowners in default may end up with clear title to their homes.” Owners will still owe money to banks, but their homes would no longer be counted as collateral on the loan. In short, banks would not be able to kick people out of their homes. And clearly, that is something that America’s plutocracy just cannot abide.
So who or what is MERS? How was this little-known corporation able to change nearly 400 years of legal practice in the span of a decade, and do so much damage so quickly? And why did no one blow the whistle?
As a result of the lawsuits being filed against MERS, a lot of previously unknown information about the inner workings of MERS is coming to light.
The people who developed the concept of MERS were connected with Fannie Mae and Freddie Mac, as well as the most corrupt lending institutions in America. People like Brian Hershkowitz, former director of the Mortgage Bankers Association and founder of the association’s technology committee that oversaw the early development of MERS in the early ’90s, according to a homeowner-turned-activist-blogger, who is involved in a class action lawsuit against MERS (In 1993, Mortgage Banking magazine referred to this new mortgage resignation system as “New Age Delivery.”)
“Ain’t accounting fraud great?”
Hershkowitz was an early tech-booster in the banking industry, heralding a new age where efficiency and profitability would reign supreme. In the early 90s he attributed the success of Countrywide Financial to the fact that it embraced emerging computer technology. “They use technology in ways that give them a competitive advantage and set them apart. They were operating with excess capacity, and now they are putting it to use,” Hershkowitz, then-associate director of the Mortgage Bankers Association, told the New York Times in 1991. A few years later he went to work for Countrywide as an executive involved in “areas of strategic planning and executive management.” From 1982 to 2003, Countrywide performed like a Ponzi scheme, with shareholders gleefully getting a 23,000.0 percent return on their investment, until the bank collapsed under the weight of its own fraud schemes in 2007.
It seems that MERS has operated along similar lines. According to sworn testimony by various MERS executives, the organization has cycled through four different corporate entities in its brief lifespan. MERS also has almost no paid employees and does not seem to keeps any records or minutes of corporate meetings. When pressed to explain the inner workings of the organization, its executives evaded questions, feigned ignorance and generally acted like provincial mafia bosses on trial—exactly the kind of professionalism one would expect for a company responsible for tracking the ownership information of 50 million mortgages. It was just a couple of guys sitting around, chatting, smoking…and making sure not to leave any evidence behind. No wonder county officials who blew the whistle on MERS early on were squashed.
Edward Romaine, a Republican recorder of deeds for New York’s Suffolk County, was one of the few officials who tried to refuse to take filings from MERS. “He argued that not only would the county lose out on fees—$1 million in one year alone—but that MERS failed to even maintain a clear chain of title on a property. He got backing from New York’s attorney general,” reported the Associated Press. MERS sued Suffolk County and took the case all the way up to the state’s highest court, where it won on appeal in 2007. The court forced the county to accept MERS filings because the county lacked the statutory authority. Put another way, the court forced a municipal government to do business with a criminal organization, despite objections from county officials.
MERS cost local governments billions of dollars in lost revenue, but there is a chance that the cash-strapped counties will be able to claw some of that money back. Lawsuits have been filed against MERS in California, Nevada, Tennessee and 14 other states that accuse the company of functioning as a tax evasion vehicle designed to help banks circumvent filing fee requirements. “In California, the suit against MERS could cost the company somewhere between $60 to $120 billion in damages and penalties. With so much money extracted from California’s municipalities, no wonder the Golden State is facing a $25 billion budget gap,” reported the Associated Press.
We’re constantly being told that liberalization, deregulation and privatization automatically equal greater freedom and increased efficiency. But MERS provides us with a different narrative, one in which the government works perfectly well, when not corrupted by corporations who want to use it to loot public wealth.
Think of the revenue sources coming to Maryland and BAltimore from thousands of flipping and flopping of subprime mortgage titles------global Wall Street CLINTON/BUSH/OBAMA----that is ERHLICH/O'MALLEY/HOGAN -----that is SCHOKE/O'MALLEY/RAWLINGS-BLAKE-----all thought it was better to save global Wall Street $30 a pop then bring that revenue to our government coffers.
'The MERS hustle had another benefit: it saved the banking industry—and cost municipal governments—tens of billions of dollars by allowing lenders to avoid paying county filing fees, which cost an average of $30 a pop'.
When our US city pols and players tell WE THE PEOPLE our city and state government coffers are EMPTY we need to stand up and say---NO, WE THE PEOPLE ARE ACTUALLY QUITE RICH----NOW PAY UP!
Much of that tens of trillions is now offshore in global hedge funds like CARLYLE GROUP-----CARROLL GROUP----but our US IVY LEAGUE endowments had the benefit of illegal transference of funds from AIG DURING ITS COLLAPSE FROM FRAUD. These several years will see global financial insurance corporations and muni-fund corporations like PIMCO----HOLDING OUR REVENUE.
STAND UP AND DEMAND THAT REVENUE.
Below we see only part of a great article describing TITLE LAW from old world Common Law to our US Constitution. Please google the article for very boring but good real estate title PUBLIC POLICY. Sorry I did not have time to format! What we want to make clear now is this-----global Wall Street has already started to place the responsibility of current homeowners to prove these titles are clear----and that costs lots of money. So, you may own that house in Baltimore tied to flipping and subprime mortgage loan bundling for a few decades---try to sell it and you will be paying for the title security.
These subprime mortgage frauds are often targeted to low-income communities in decay having lots of vacant housing maybe owned by city -----so it is city planning offices who map out who owns which piece of property then develops a plan to claw that real estate into bundles for global corporate campuses----using these frauds is one way all that real estate forecloses back to global Wall Street banks ----flipping houses in communities with no intent to develop tying to our FHA and subprime loans to move all that money to Wall STreet while waiting for global corporate campus development.
BALTIMORE CITY STAT under O'MALLEY had this as a central goal.
The Buck Stops Here: Toxic Titles
and Title Insurance
Molly Rose Goodman
By failing to properly transfer ownership of
loans and mortgages, recording fraudulent documents, and
performing unlawful foreclosures, financial institutions and
law firms have generated property titles that range from
defective to toxic. Those actions evince a systemic failure to
comply with longstanding principles of real property law and
regulations governing financial transactions. Title companies
participated in title services and issued title insurance poli-
cies throughout the housing boom and although they did not
directly cause toxic titles, many title insurers have ultimately
assumed the risk for the bad practices that became the
industry norms in the last decade. In this article, I will
discuss how title insurers have exposed themselves to liability
for toxic titles.
Document fraud and robosigning became commonly
recognized phrases after the nancial market collapsed in
2007. The rapid increase in foreclosure lings exposed
documentation errors and deception that was commonplace
in securitization and real estate transactions throughout the
housing boom. The continuous appreciation of property
values and the success of securitization diverted attention
from the industry's systemic failure to comply with long-
standing principles of property law.
Title companies participated in title services and issued
title insurance policies throughout the housing boom. Al-
though title insurers did not directly cause toxic titles, they
have ultimately assumed the risk for the bad practices that
became the industry norms in the last decade. In this article
I will discuss why and how title insurers have exposed
themselves to liability for toxic titles.
Following this introduction, the Article proceeds in eight
Part I gives a summary of real property principles
and the state and local laws regulating real estate conveyanc-
ing and recording of land records.
Part II discusses the emer-
gence of title insurance and describes the title industry's
role in property conveyancing and settlement services
In part III, I describe the history of securitization and the
conditions that spurred the housing boom.
Part IV outlines
the securitization process and introduces the MERS elec-
tronic registry, which the nancial industry uses to track the
ownership of mortgages. This section also enumerates the
paperwork problems that stemmed from the use of MERS
and the sloppy practices that became the industry norm for
Part V introduces foreclosure mills and robosigning and
describes the title defects that were created by securitization
errors and unlawful foreclosures. This part also discusses
the parties who may be harmed by unlawful foreclosures,
particularly third-party purchasers.
Part VI examines how
errors in the securitization process and unlawful foreclosures
create liability for the party at the end of the line: the title
insurance companies. This part also examines a title
insurer's duties to its policyholders and how an insurer's ac-
tions can either mitigate or amplify its liability.
In part VII,
I discuss possible methods to x the toxic titles clouded by
securitization errors or unlawful foreclosures.
Property law is one of the most complex and confusing ar-
eas of the American legal system, and the potential for miss-
ing or defective records adds even more complexity to
transfers of real estate. Advances in technology and the
Internet have improved the availability and accuracy of pub-
lic land records, and have simplied the process of examin-
ing the documents relevant to a chain of title.
reliability of public records has reduced some of the risks
historically associated with real estate transactions, but er-
rors can still impact the legitimacy of recorded documents.
Documents are occasionally mislabeled or improperly
indexed within recording systems and a simple typo or
mistake in the drafting of a conveyancing document can cre-
ate a awed title.
A. Real Estate Conveyancing
A seller's ability to convey marketable title is often a pre-
requisite for real estate sales and a standard purchase and
sale agreement obligates the purchaser to accept the prop-
erty if the seller is able to deliver marketable title.
Multiple industries work together to coordinate the
financial and real property components of a conveyancing
transaction, and to ensure that the entire transaction
complies with the relevant laws. A number of companies
operate on a national scale and oer multiple settlement ser-
vices to oversee real estate transactions from start to finish.
Real estate brokers, attorneys and lenders work with title
companies to coordinate property conveyances with loan
Generally, borrowers/purchasers (the consum-
ers) pay for the title and settlement services performed in
connection with their closing.
Companies that provide closing and settlement services on
a national scale are less inclined than local firms to learn
the intricate conveyancing customs of each county, or even of
each state. National companies strive to cut costs and speed
up transactions, and often rely on software to oer automated
services. Uniform procedures are beneficial for lending
transactions that must comply with federal law, but they
can overlook the various systems of state conveyancing
It is simply AMAZING how much revenue is lost to our US cities through simply these real estate actions------then on top we have what this article shows for graft-
'Imagine you’re a developer with a pal who handles permits for the city of San Diego. And say you thought the permitting fees were a little too high. Not to worry, your pal says, and he knocks down the price for you'.
Building permits et al-----
It is sure our US city planning agencies are tied to the where, when, why, how of these serial mortgage frauds. It is another example of PAY-TO-PLAY to global Wall Street is Federal FHA fraud in tens of trillions--throwing a few million to 5% to the 1% in these subprime mortgage fraud schemes.
Why should WE THE PEOPLE worry if these communities are simply being PLAYED while waiting for the next global corporate campus development? It is behind the total breakdown in our civil society ----it is behind the elimination of any ability to rebuild our local communities with local economies that would REALLY give people jobs, businesses, and homes. For those tied to RACE OR CLASS thinking all this is great ---get rid of that OLD WORKING CLASS BALTIMORE to make room for the MOVING FORWARD NEW CITY----ONE WORLD FOREIGN ECONOMIC ZONE----better WAKE UP----99% of US citizens are going into the global labor pool with no idea of RACE/CLASS/CREED.
City’s Development System a Major Fraud Risk, Says AuditorA stinging audit of the Development Services Department finds that customers don’t know if they’re being charged accurately.
Photo by Sam HodgsonCity Auditor Eduardo Luna
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By Liam Dillon | July 2, 2012
Imagine you’re a developer with a pal who handles permits for the city of San Diego. And say you thought the permitting fees were a little too high. Not to worry, your pal says, and he knocks down the price for you.
The city is at risk for this simple bit of municipal corruption, according to a new report from City Auditor Eduardo Luna. He examined the city’s Development Services Department, which handles permitting, and found serious problems. In short, weaknesses in the department’s computer system could allow employees to commit fraud without being detected.
“It creates an environment where someone lone or rogue could do it,” Luna said in an interview.
The finding is one of the most substantial in Luna’s 80-page review of development services’ computer system, which helped the department process $1.16 billion in city permits in 2011. Luna calls the computer system development services’ “central nervous system” because it manages all permitting and development functions.
Standard industry and city practices require employees to have no more access to alter the overall computer system than what they need to do their limited jobs, such as reviewing plans or charging fees, the audit says.
In this case, the audit contends that too many employees have too much access to various functions of the computer system, and its cumbersome process makes it impossible to figure out if employees are committing fraud. The audit outlined a possible situation where a development services employee could charge a customer a discounted fee through making a project seem smaller than it is. They then could sign off on the building inspection so the discrepancy would never be discovered.
To reduce risk, the employee that deals with fees shouldn’t be able to touch the building inspection, which is a separate service.
Auditors also said it’s unclear if the department is charging accurate fees and deposits: Projects have been overcharged by as much as $345,000 and undercharged by $37,000.
To be sure, the audit didn’t uncover any examples of fraud and the $345,000 overcharge was discovered and refunded within days. But that doesn’t make the situation any less significant, Luna said.
“The risk is there,” he said.
Luna recommends 13 changes to the Development Services Department including restructuring its management to create greater internal controls, separating employees’ responsibilities so they can’t access as much of the computer system and documenting more changes to individual permits. He attributed much of the failures to inefficient staffing, high workloads, limited supervision and deficiencies with the computer system itself.
Department head Kelly Broughton disputed almost all of Luna’s findings, contending that his auditors didn’t understand how the computer system worked and that its internal controls were strong.
The department, Broughton said in its official response, “follows appropriate access protocols; and documents and records changes in the system appropriately. We believe the authorities currently granted to employees are appropriate and proper.”
Broughton emphasized that the audit did not document any examples of fraud.
Two other points are worth noting for now. Last year, the city merged its planning department with development services, giving Broughton’s department authority over neighborhood growth issues. Luna said his audit didn’t examine that restructuring.
You might also be familiar with the city’s new multi-million dollar computer system, One SD, which was created with much fanfare and cost overruns. Development services uses a separate system, which was developed in-house, that links to OneSD, Luna said.
This is from where these subprime mortgage frauds geared towards US city Foreign Economic Zone development starts------it then corrupts our City Department of Planning----with Baltimore that sends out global Wall Street Baltimore Development and its 'labor and justice' organizations----partnered with Greater Baltimore. These are the movers and shakers of these massive subprime mortgage loan frauds---they throw some millions out to get out the NEW HOME OWNERS----when media tries to sell these mortgage frauds as IRRESPONSIBLE CITIZENS-----tell that media outlet GOODBYE.
See why a Trump appointed a BEN CARSON from Baltimore tied to a global Johns Hopkins?
Our low-income citizens having been forced to pay-to-play these few decades----there is a better way to put money in your pockets---EASY PEASY! Let's bring justice back to our US city development!
Community Planning and Development
The Office of Community Planning and Development (CPD) seeks to develop viable communities by promoting integrated approaches that provide decent housing, a suitable living environment, and expand economic opportunities for low and moderate income persons. The primary means towards this end is the development of partnerships among all levels of government and the private sector, including for-profit and non-profit organizations.
Consistent with these objectives, the Office of Community Planning and Development has developed a set of underlying principles that are used in carrying out its mission.
- Community building begins with job creation, employment, and creation of safe, decent and affordable housing.
- Planning and execution of community development initiatives must be bottom up and community driven.
- Complex problems require coordinated, comprehensive, and sustainable solutions.
- Government must be streamlined to be made more efficient and effective.
- Citizen participation in Federal, State and local government can be increased through communication and better access to information.