Golly, I have been screaming about MERS for years.

Well, not to everyone, I guess.

So MERS is less than 20 people, a company whose name is on over 60 million mortgages, which does not actually own any mortgages.

Huh?

Well, Michigan is a perfect example.

Each state has a system for recording of deeds and other real estate documents, like mortgages.

This is so you can check the official records to see if there are any liens, like mortgages, on property that you might want to buy.

Or, if you are a bank or mortgage company, you can see if someone else has a lien that would be ahead of yours.

That is, the first lien has to be paid first, second next, and so on, when the property is sold or transferred.

By Michigan law, the state of Michigan comes first.

Hey, you and I would do the same.

So property taxes have to be paid first regardless of when any mortgage was recorded.

Now, you probably never checked this stuff yourself.

That is what title companies do.

Well, oddly enough, the county register of deeds, who handles these things in Michigan, charges for the service of recording documents.

I just checked the Macomb County Michigan web site: $14 for the first page, $3 for each additional page.

Remember how many pages your mortgage was?

Blame the damn lawyers, but 35, 40 pages or more is not unusual.

Back in the old days, no big deal, you got the mortgage, they added the charge for recording it to what they charged you.

Somewhere in the 1990s, that changed enormously.

I have dealt with parts of the whole meltdown before on this site, let’s just say mortgages were bought and sold and packaged and re-packaged and sold again.

Take that recording fee and multiply it by all those pages and all those mortgage transactions, well, MERS claims to have saved some $2.4 billion.

Sounds innocent so far.

Except that MERS is filing motions to lift the stay in bankruptcy court, starting foreclosure proceedings in some areas, and more.

But, their documents say they are the “nominee” for the mortgagee or note holder or whatever.

Lots of the terminology depends on state law, in Michigan: mortgagee.

So, the savings occurs because MERS is the nominee on the recorded mortgage, for whoever is the actual owner of the note, holder of the mortgage.

All the shuffling and selling and packaging and re-selling goes on behind the scenes, with no notice to anyone who checks the public record.

No problem while the housing bubble was still inflating.

Big problem when that bubble burst.

MERS and the mortgage companies seem not to have kept accurate record of the mortgage assignments and sales and so on.

So, when challenged in courts in Ohio and New York and Nevada and Kansas and Idaho, and especially, Florida, courts have been throwing out foreclosure actions because no one can prove who actually owns the mortgage, that is, who has the right to foreclose.

In Michigan we have foreclosure by publication, so it is difficult to raise this issue as a defense.

What do I think?

I am ready, just get me the right case.

MERS And Mortgages

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HAMP failing is the topic of an Arthur Delaney story in the Huffington Post.

As well as numerous rants, about failed government policies on mortgages and foreclosure, on this blog.

Estimates in the article of HAMP failure range from 60% to 90%.

This counts only the approved modifications, most of my Detroit area foreclosure calls report the inability to even get a modification.

Yesterday, 10 month trial period, followed by denial.

The program is supposed to be, they review everything, and make a preliminary deal for a new  payment.

If you make 3 monthly payments, on time, at the new amount, you are supposed to get the permanent modification.

Let me know if you got one.

1.4 million homes taken since Obama took office.

And check out the term “shadow inventory” in the linked to post on this site.

Not only is the HAMP program not working, it is running out of gas.

More people canceled and dropped out the last three months than signed up, and June was a 12 month low for new HAMP applications.

Reportedly, less than 5% of the HAMP modifications, that get done, include principal reduction.

That is, reducing the total amount owed on the house.

So, they are just re-shuffling what you owe them, maybe extend the term out to 30 years, maybe temporarily lower the payment.

With at least 15 million homes out there worth less than what is owed on them, how does this help?

Michigan homes are almost certain to continue to fall in value, as we need people with jobs to buy homes and we have been losing jobs for  6 straight years.

The more they foreclose, the more they sell, the more supply, that lowers the price in the market.

Which puts more homes underwater, more incentive for people to bolt, or more often, leave because they cannot afford the payments, and the mortgage companies won’t work with them.

HAMP Foreclosure Prevention Failing

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2.  Write to the address in the notice requesting a modification.  Keep a copy of the letter.  (Do this even if you have been rejected before.)

3.  Get all the papers with your mortgage, payments letters, everything, and put it in a file or envelope.

4.  Write a letter to the mortgage company requesting the payoff amount, in writing, and send a RESPA letter (See sample at www.stopcreditor.com/)  to the mortgage company..
(Do this for each mortgage on the property)

5  .Get an idea what your house is really worth, to sell, right now, as is, without painting or any fixing up.  Any other homes for sale in your area?  Find out what they are asking.

6.  Get your last two years’ tax returns together.

7.  Get all the pay stubs and pay/unemployment records for this year.

8.  Make a list of all creditors, car loans, leases, credit cards, medical bills, credit unions, student loans, back taxes, everyone you owe, or who claims you owe them, money.

9.  Write up an accurate monthly budget, with the income you reasonably expect going forward, and your future expected living expenses.
(this does not count the credit card and other monthly bills that are NOT costs of living.  For example, future utility bills are living expenses, VISA payments are not.)

10.  Contact attorney Kurt O’Keefe with any questions, at kurt@michiganmortgageattorney.com,
or 586-819-0736 Macomb County office, 313-962-4630 Wayne County office.

FOR YOUR FREE COPY OF THE CONSUMER’S GUIDE TO DEFENDING FORECLOSURE,

click here.

Top Ten Things To Do When You Get A Foreclosure Notice

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They were devised as a way to conceal risk from regulators, investors, anyone actually.

Being “special”, as in the recurring comment of the Church Lady on Saturday Night Live: “Isn’t that special?” they were not on the books.

So, banks could conceal their financial condition.  Which they continue to do.

That is why Congress has no answers as to what was done with all the TARP money that was supposed to rescue those too big to fail institutions.

They held onto the money, for the most part, as only they have an idea how bad their balance sheets actually are.

The SIVs were used to hold risky mortgage backed securities, which collapsed in value with the mortgage crisis.

That brought the banks to their knees, begging in Washington, where our civil servants cheerfully have pledged trillions of dollars, so far, to bail them out for their greed inspired fraud.

A fraction of that money should have been used to beef up the Justice Department to indict the scoundrels.

Special Investment Vehicle

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I have been screaming “No Bailouts!” for over two years.

However, the Banks appear to have bought both political parties, as I defy anyone to find “Change You Can Believe In” from Bush-Paulson to Obama-Geithner.

It may be a recession for the rest of us, but the Big Four are raking it in.

They now issue half of the new mortgages issued in the U.S.

Instead of rescuing bankers, many of whom should have been indicted for the criminal fraud they perpetrated, the government should have enacted judicial mortgage modification, to re-adjust the real estate market and clear out the losses on mortgages from all the bad bets the banks made.

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DO NOT PAY ANYONE FOR MORTGAGE MODIFICATION ADVICE.

At least, until you use the free counselors available.

You need to have your income information, last year’s tax returns, and proof of your income year to date, to make meeting with the counselor and mortgage company meaningful.

The hoops you jump through can seem complex, but it is worth it, if you want to use every thing you can to keep your home.

At or after the meeting with the mortgage company representative, which will probably be the lawyer hired by them to do the foreclosure, you find out if you qualify for a mortgage modification.

The first qualification test is whatever guidelines apply to your mortgage, FNMA has its own, some of the servicers have their own, HAMP has its set.

If you do NOT qualify there, you still get another chance under the state guidelines.

These are, amortizing 80% of the principal balance, after waiving late fees, over 40 years, from the date of the modification, at 3% interest.

If any or all of these get that mortgage payment down to 38% of your gross income, you qualify for a modification.

Your mortgage company does not have to agree to any modification.

But, if they do not, they have to foreclose through the court, and not by publication in the Legal News.

This opens up the chance to use the produce the note foreclosure defense, more on that in another post.

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     I suppose as a lawyer, I should applaud them for hiring one firm to file the complaint, and another to defend it.

     I swear, I do not make this stuff up.

     I posted earlier on Wells Fargo foreclosing, taking over a house, then suing to have it put back in the original owner’s name.

      Now Al Lewis of Fox News has the story on Wells suing itself in a foreclosure case.

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The anti-kickback provisions have not been enforced as I would have liked, but, it is still my favorite law.

It is a fee shifting statute, so, if you win, the bad guy pays your attorney fees.

Here is a link to the sample RESPA letter recommended by HUD.

If you cannot figure out what the mortgage company did with your payments, or think they did not give you credit for all the payments you made,  send the letter.

The law gives them 20 days to acknowledge they got the letter, and are working on getting you the accounting.

They get a whopping 60 business days, more than 3 months, to actually get you that accounting.

So far, every one I have seen is WRONG.

If they do not send the confirming letter, if the do not timely get you the accounting, or if it is wrong, you have grounds to sue them.

If you would like a more detailed letter, use the form below.

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     We are not even close to the bottom.  All four new folks I talked to Monday were unable to pay their mortgages, but not being foreclosed on yet.

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