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Taibbi "Waking up to discover the mortgage market was a giant criminal enterprise"

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September 26, 2009 – Comments (3) | RELATED TICKERS: GS

MY COMMENT: America's leading Financial Reporter, Rolling Stone's Matt Taibbi breaks another ground breaking story here. 

Fool knows my view:

1. Get a stock pile

2. A debt jubliee is the solution

3. The F.I.R.E. economy and people in power don't like #2.

Meanwhile, it can and will likely start at the local level. State and local governments who refuse to support continued DC/NY economic insanity. Taibbi write up on Goldman Sachs and Grayson are worth reading too.

Waking up to discover the mortgage market was a giant criminal enterprise

A landmark ruling in a recent Kansas Supreme Court case may have given millions of distressed homeowners the legal wedge they need to avoid foreclosure. In Landmark National Bank v. Kesler, 2009 Kan. LEXIS 834, the Kansas Supreme Court held that a nominee company called MERS has no right or standing to bring an action for foreclosure. MERS is an acronym for Mortgage Electronic Registration Systems, a private company that registers mortgages electronically and tracks changes in ownership. The significance of the holding is that if MERS has no standing to foreclose, then nobody has standing to foreclose – on 60 million mortgages. That is the number of American mortgages currently reported to be held by MERS. Over half of all new U.S. residential mortgage loans are registered with MERS and recorded in its name. Holdings of the Kansas Supreme Court are not binding on the rest of the country, but they are dicta of which other courts take note; and the reasoning behind the decision is sound.

via Landmark Decision: Massive Relief for Homeowners and Trouble for the Banks.

This is a potentially gigantic story. It seems that a court has ruled that about half of the mortgage market has been run as a criminal enterprise for years, which would invalidate any potential forelosure proceedings for about, oh, 60 million mortgages. The court ruled that the electronic transfer system used by the private company MERS — a clearing system for mortgages, similar to a depository, that is used for about half the mortgage market — is fundamentally unreliable, and any mortgage sold and/or transferred through MERS can’t be foreclosed upon, at least not in Kansas.

The rest is here:

http://trueslant.com/matttaibbi/2009/09/22/landmark-decision-massive-relief-for-homeowners-and-trouble-for-the-banks/

BONUS ========================

Grayson interview:

Rep. Alan Grayson: "Has the Federal Reserve Ever Tried to Manipulate the Stock Market?"

Alan Grayson: "Which Foreigners Got the Fed's $500,000,000,000?" Bernanke: "I Don't Know."

3 Comments – Post Your Own

#1) On September 26, 2009 at 8:48 AM, abitare (58.11) wrote:

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#2) On September 26, 2009 at 3:44 PM, angusthermopylae (40.04) wrote:

Abso-freaking-lutely fantastic!

I have often wondered if it's just me, or do many people not realize the importance of the court system in "fixing" the economy?  I'm not advocating suing everyone for everything, but when there is a systemic problem (in this case, MERS trying to foreclose on properties when the homeowner/debtor has no clue who MERS is), sometimes all you need is a good court precedent to turn the whole thing around.

'Course, it works the other way, too.  GE and Chrysler turned the whole process on its head when the court agreed that secured creditors didn't get first pick...I can't wait for that argument to be brought up in a non-government-influenced bankruptcy.  Whichever judge handles it will probably have to say, "Yeah, but that was a one time thing...."

Back to my point:  There is hope that a lot of the abuses, perversions, and flat out criminal activity within the higher level of finance in our country are going to be hauled out into the open and given their overdue public flogging.  During that process, courts start setting precedence over what does and does not constitute criminal behavior...or, at the very least, behavior that will get you sued and stripped of your filthy lucre.

The BofA judge threw out a settlement that the SEC wanted--now they are going to trial.  Madoff's trial (finally!) and the investigative reporting are showing how Big Finance-eers are either taking advantage of the system or making stupid decisions.   Now MERS isn't the actual owner of the mortgages underlying the toxic assets.

Hella Sweet!

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#3) On September 29, 2009 at 3:33 PM, GoodVibe4Ever (< 20) wrote:

As a good gesture to stretch a hand to you and in hope any past misunderstanding will be put behind us, you will find below one of my "Marconi" charts for your beloved SWHC. I started a position yesterday common and calls. Large position. I also started it as my first pick in CAPS in the last 4 months. I thought to pass this call to you in hope you might find value in it.

Here's my pitch:

SWHC is a buy as long as it holds high 4s. Current is $5.15 - Charts are below with current price target of $12
* Log scale: http://cdn.cloudfiles.mosso.com/c71692/media/image/200909/phpesbBZpGV-SWHC.JPG
* Arithmetic scale: http://stockcharts.com/h-sc/ui?s=SWHC&p=D&yr=3&mn=0&dy=0&id=p47357946116&a=179320828

Have a good day and night!

GoodVibe

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