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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (66977)	10/8/2010 9:50:15 AM
From: carranza2	Respond to of 217739

Ramsey is getting to be a regular with at Pater Tenebrarum's spot. He could not be in better company.

To: TobagoJack who wrote (66977)	10/12/2010 4:56:31 PM
From: carranza2	4 Recommendations Respond to of 217739

Ramsey gets it. Let's take a top-down macro view of this fiasco. If the securitized mortgages were improperly foreclosed or can be defended on the basis of fraudulent foreclosures, what happens to the MBS? A lot of this stuff has gone into default already thereby (probably) resulting in 'events of default' under the CDS derivatives insuring the crap. There may well be other CDS at play, however. What happens to the properties if the title cannot be transferred because the mortgages are funky? Do the title insurers go belly-up on a huge number of claims? What happens to the real estate market if substantial number of properties have bad title? Most important to me, what happens to the MBS if the holders can demand re-payment of the original price due to failure to meet documentation requirements? And the litigation? How much is it going to cost the banks to defend all the incredible number of lawsuits that are going to be filed? And the law mills, er, firms, that the banks used to foreclose? The legal malpractice suits are going to result in serious losses for the firms and their malpractice insurers. The foreclosing lawyers might well face ethical charges pressed by their bar associations and, conceivably, criminal charges as co-conspirators to fraud. No sympathy here for these crooks. Most important, without some return from foreclosed properties, there is going to be a tsunami of write-offs that is going to sodomize the banks' balance sheets. If I lived in one of the 23 states where this is a problem and I were in financial straits, I'd stop paying the mortgage, tell the banks to come and get me, and good luck to you because the attorney has been instructed to require painstaking compliance with each and every legal requirement. What happens if a substantial number of courts rule that MERS did not have authority to act? I cannot even imagine the consequences, esp. if the foreclosures were made in the name of MERS. It is conceivable that folks who were foreclosed might go back and challenge the foreclosure because even after a judgment issues and is final, in most states it is possible to challenge it on fraud grounds. This would be an ideal class action, and I am sure someone is already doing it. This is big and it will get bigger. And it is so complex even the Feds cannot do much about it as compliance with these legal requirements is primarily a matter of state, not federal, law. This is a classic Taleb-style black swan. Complexity increases risk. MERS was merde created without a single thought as to the consequences. Holy chit, amigo! And if you wonder why Summers and Emanuel jumped ship, wonder no more.