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To: John McCarthy who wrote (102477)	9/25/2009 1:08:14 AM
From: John McCarthy	Respond to of 116555

Posted by Hawk Anyone here been reading about the Kanasas Supreme Court ruling on foreclosures?? Pretty exciting stuff!! The ruling effectively nullifies bank's ability to foreclose on about 60 million homes because they are no longer party to the mortgage contract. trueslant.com globalresearch.ca rbguy.dailykos.com The way I interpret it, the CDO/CMO Special Purpose Entity (SPE) structure was not properly set up to transfer legally enforceable property rights. They certainly have no standing in court. This means the banks sold a fraudulent product and wrapped them up in CDO/CMOs with no legal standing to enforce foreclosures. Which seems to mean that the CDO/CMO entity, and/or holder, can either demand different collateral from the banks (since the mortgage notes, themselves, act as collateral against cash flow into and out of the SPE), or they can dissolve themselves. Thus, effectively speaking, it truly calls into question whether CDO/CMOs are legal entities with enforceable rights. It also makes one wonder if those CDS's bought/written on CDOs/CMO are enforceable. But more importantly, if the structure was not legal, then what obligation do the mortgage insurers like ABK/MBI.. etc have to pay out? If the structure was set up in a legally flawed manner than makes it impossible to foreclose, and didn't assign property rights to the CDO/CMO then do the insurers have to pay out? Hawk Message 25968386 ========================================= The ruling effectively nullifies bank's ability to foreclose on about 60 million homes because they are no longer party to the mortgage contract. Not really. Its a Kansas Supreme Court decision, it wouldn't apply to all mortgages in the US, only those that are based on Kansas law (maybe mortgages for houses in Kansas, maybe those owned by corporations based in Kansas, or those with a contract that specifying Kansas law) siliconinvestor.com ========================================= To: Tim Fowler who wrote (12541) 9/24/2009 6:26:02 PM From: Hawkmoon Read Replies (1) \| Respond to of 12545 Not really. Its a Kansas Supreme Court decision, it wouldn't apply to all mortgages in the US, only those that are based on Kansas law Uh.. actually this is basic contract law. And if the creators of the securitized mortgage structures (CDO/CMO) didn't comply with Kansas state law, it's pretty likely they didn't comply with basic contract law in the other 49 states (plus territories). This is serious stuff and the fall out could be huge. I think it's going to require the government to buy out all of the CDO/CMOs, or at least the worst traunches currently in, or at risk of, foreclosing. It certainly throws the CDS markets into chaos.. The key is whether we see the Kansas decision applied to other states. I think that's inevitable. Hawk siliconinvestor.com ========================================= To: Hawkmoon who wrote (12544) 9/24/2009 6:45:44 PM From: Tim Fowler Respond to of 12545 OK. Maybe this is just nitpicking but if that's true, then it isn't really true that "The ruling effectively nullifies bank's ability to foreclose on about 60 million homes because they are no longer party to the mortgage contract." It would be the nature of basic contract law, and the structure in this contract nullify the banks ability to foreclose. This ruling would only be indicative of the non Kansas mortgages associated with such special purpose entities being unforclosable, it wouldn't be the causative agent of the unenforceability (at least it wouldn't be the root cause, or the proximate cause, but it may be a link in the chain, the root cause would be what I mentioned above and the proximate cause would be court decisions in other states, but this decision might help more of those decisions happen, both as a precedent and as motivation for people who face possible foreclosure to make this argument in court) siliconinvestor.com