If 62 Million Mortgage Holders Unite, Our Nation could become foreclosure proof

[truedelphi]

The financial juggling that helped cause the 2008 crisis may be coming back to haunt banks—and help homeowners.
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by Ellen Brown -- posted Aug 18, 2010

Taken from URL
www.yesmagazine.org/new-economy/homeowners-rebellion-could-62-million-homes-be-foreclosure-proof

Over 62 million mortgages are now held in the name of MERS, an electronic recording system devised by and for the convenience of the mortgage industry. A California bankruptcy court, following landmark cases in other jurisdictions, recently held that this electronic shortcut makes it impossible for banks to establish their ownership of property titles—and therefore to foreclose on mortgaged properties. The logical result could be 62 million homes that are foreclosure-proof.

Mortgages bundled into securities were a favorite investment of speculators at the height of the financial bubble leading up to the crash of 2008. The securities changed hands frequently, and the companies profiting from mortgage payments were often not the same parties that negotiated the loans. At the heart of this disconnect was the Mortgage Electronic Registration System, or MERS, a company that serves as the mortgagee of record for lenders, allowing properties to change hands without the necessity of recording each transfer.
A committed homeowner movement to tear off the predatory mask called MERS could yet turn the tide.

MERS was convenient for the mortgage industry, but courts are now questioning the impact of all of this financial juggling when it comes to mortgage ownership. To foreclose on real property, the plaintiff must be able to establish the chain of title entitling it to relief. But MERS has acknowledged, and recent cases have held, that MERS is a mere “nominee”—an entity appointed by the true owner simply for the purpose of holding property in order to facilitate transactions. Recent court opinions stress that this defect is not just a procedural but is a substantive failure, one that is fatal to the plaintiff’s legal ability to foreclose.

Rest of article at URl posted in first lines of this OP

[dkf]

1. If 90% of all mortgages are held by Fannie or Freddie does this just put the Anerican taxpayer on

The hook? Do mortgage backed securities just become another debt of the taxpayer?

[truedelphi]

2. Ninety percent of all mortgages are NOT held by Fannie or Freddie

In fact a recent major network news team was saying that during the last few years of the housing bubble, many sub prime loans could have been regular old thirty year fixed loans, but people were so uneducated about the hows and whats and whys of finance that they took the sub prime deals.

After all, 0% interest sounds great doesn't it? Rather than normal market rate? And who ever would bother their pretty little heads aboyut how the rates of a sub prime might be onerous at some point in the future. After all, home values are going to be going up 22% for the next ten decades (Or so the experts told people.)

No one in America reads the fine print in the documents - you just have to be educated about finance to know what to to do.

Any many Americans who had bought their house long, long before the days of sub prime, went on to use the equity in their house for second, third and fourth mortgages. Which definitely are not Fannie or Freddie.