This is essentially allowing the banks to write down their fraud from inflating the appraisals. In a good deal of the investor lawsuits the investors claim and plead in specificity that the banks inflated the appraisals. This was a fraud upon the homeowners as well as the investors and it has been overlooked even though there has been Congressional testimony by the Appraisers Association that the banks were pressuring appraisals to write higher appraisals or lose business. All it takes are 1 or 2 inflated appraisals to compromise a market. Many of these banks had their own appraisal companies that they controlled. So, when I see the government providing cash incentives of taxpayer money for reducing principals that were articially inflated by the intentional fraudulent actions of the banks as part of their scheme – it makes me wonder just how stupid the people running this operation of the government are… And it has to start from the top down. Why do we continue tp pay crooks for their crimes!

There could be complications with MERS vs. MERS®…

The Investors probably would have gotten more if they (or their agents) hadn’t been complicit. Think about it logically… the borrower signs the mortgage docs on the 17th of the month and the Trust closes on the 28th of the same month…do ya really think in less than a week the banks could calculate the tranche revenue streams, print up the Prospectus docs including the specific loans and sell it to investors? Nah – it was all prepared in that 90 day – 6 month period it took “underwriting” to approve the loan… which means or appears that the investors knew that what they were buying Wall Street didn’t yet own to sell. Nemo dat… securitization at its finest and no disclosure to the borrower.

If the investors had any real leverage they’d have certainly gotten more out of $500 Billion than $8.5B.

The government, including the states, are just afraid that the gov’t workers, unions and corporate pension an retirement beneficiaries will find out that their retirement funds were gambled away in worthless, fraudulent securities…so they are trying to replenish the missing funds by settlements and over taxing the public.

That used to be the major differences between the Republicans and Democrats before the right-wing went haywire – after Nixon. Republicans believed in states’ rights and Democrats believed in government unity.

You’ll love this… MERS started in 1994-94 by 4 guys… Paul Mullings was CEO, Mullings joined Freddie Mac from JP Morgan Chase where he was senior vice president, manager Mortgage Finance, and Fair Lending executive at Chase Home Finance, the nation’s fourth largest residential mortgage lender; James Dowell, Before joining MortgageFlex, Mr. Dowell held senior management positions with MERS, where he was the Chief Technology Officer. Mr. Dowell’s management history includes the Western Conference of Service Employees Data Center, which provided financial processing for nine national labor unions and Finance and Operations for Harrah’s Casino and Divisional Information for Valmont Industries… then you have today’s 2 known characters R.K. Arnold and Dan McLaughlin.

Bottom-line is that the scheme backfired because neither the banks, nor MERS could process and handle 67 million mortgages in 5 years. MERS only had 11-45 people. Nor can 6-8 banks carry the heavy financial debt load of these mortgages on their books. Reality is that they used MERS to float 67 million mortgages across the books and under the tables of their 4000 “members” disguising and shifting the accounting. They created the majority in of these “subprime” loans from 2003-2008 because Wall Street was being sued by original investors from lawsuits that carried over from the 1980s. By 2002, when RTC v. Key Financial was decided, the flood gates were opened and they needed to create funds [mortgages for investors] to make settlement payments. The intentions of MERS may have been admirable – but when the crooks began manipulating MERS and the mortgage system it tainted the entire industry and collapsed the economy.

Although, and this is where the fraud upon the borrower begins, it appears that the banks NEVER intended to carry 30 year loans – because they can’t handle those huge numbers on their books – nor would maintaining mortgages replenish the system, they also didn’t factor in a complete collapse.

The ONLY way to get out of this crash gracefully is to have the individual states take back all these foreclosures, REO and loan from 2003-2008 and create housing departments (like water, DMV) set up to take payments, restructure loans with borrowers at 1-2% interest rates for 30 years and split the income with investors.

Land recordation appropriately belongs to each and every state – without that MERS is creating housing genocide. Still want to keep MERS? Then regulate the hell out it.

“Bair seems to be the only person in the government to recognize how broken the modern servicer system is, both for borrowers, investors and the economy as a whole.” She’s probably the only one with no skeletons of bank lobbyists in her closet.

She’s also smart enough to realize that 61 million mortgages between 2003-2008 are more than the 6-8 [possibly anti-trust] banksters can handle. They can’t keep these toxic assets on their books and that’s why they created MERS to move the “servicing” around among its members. They set up the “trusts” so they could not modify loans and it appears the banksters intended to foreclose systematically so they could continue to “churn and burn” – but it backfired. Now, you can bet in the back room they’re sweating this out because smart attorneys and federal officials are figuring out the scheme. Bernie wasn’t alone.