Untangling the Foreclosure Mystery - Part 2

As seen in Key West The Newspaper May 13, 2011
Part Doo because this is where it really starts to stink, and we’re all stepping in it.

If you recall last week I began to unravel the foreclosure mess that is invariably affecting every one of us. I began this series of commentaries to discuss how all of the economic ailments you are hearing about lately are intimately entwined.

Property values, court budgets, pension funds, robo-signing, tax base, foreclosures, and bank fraud are all seamlessly linked together.

Last week I described how main stream media covers this crisis superficially, and never gets to the meat of the story, while only touching on foreclosure “paperwork issues” the banks are having, and thereby omitting the holy grail of systematic fraud.

I posed the question, “Why do the banks have to produce questionable documents to proceed with a foreclosure?” and “Why can’t the banks simply use the documents on file in the County Clerk’s Office to foreclose?”

I alleged rampant, intentional, widespread bank fraud is the reason, and I answered the questions above by suggesting that the banks intentionally destroyed original notes and mortgages. On purpose.

I also suggested that they intentionally avoided filing subsequent assignments of mortgages, thereby evading billions in filing fees. I left you with another question: Why would the banks intentionally do that?

Here is a quick synopsis of what was going on during the housing bubble. Mortgages were intentionally being given to anyone, so long as you were breathing, and in some cases even if you weren’t.

So if you know someone who exploited this open spigot of cash, remember they could not have done it without the banks being COMPLETELY willing to provide the poorly underwritten loan.

The bank would then package up these mortgages in large groups and sell what are known as Mortgage Backed Securities or MBS to pension funds, municipal governments, and your grandmother.

Therefore the bank was IMMEDIATELY made whole on the million dollar loan they had just given to the guy working the drive through. The banks were then supposed to place the original note and mortgage in a trust, but they didn’t.

The banks simply provided a spreadsheet of numbers to the investors representing the mortgages, and then destroyed the originals, or conveniently “lost” them.

Why? Because if they had actually provided to your grandmother the mortgages she had been sold as well underwritten prime mortgages, she would see that they were a large pile of smelly dog excrement and know that she had been defrauded.

Sometimes they sold the same mortgage numerous times, placing it in numerous securities. They could, because they only provided a spreadsheet, and not the original docs.

This is the crux of why you hear the stories of robo-signing, sloppy paper work, forgeries, and the like. The vast majority of properties that were sold, or refinanced in the last ten years have had their title history intentionally destroyed by the banks.

This is what is ultimately affecting property values, market confidence and tax base. We won’t have a stable market here in the Keys until we can develop confidence in these title histories.

But it gets worse. More often than not, these securities were sold, resold, and traded as these MBS spreadsheets were kicked around like beers cups at Fantasy Fest. Novels will be written as to the scale of the fraud, credit default swaps, and methods with which those in the know were gaming the system. But lets tune in to our little piece of ponzi in paradise.

You would think that each time this mortgage and note traded hands that it would be properly recorded in the Clerk’s Office as has been done for centuries, right? WRONG.

You see the banks decided to create MERS for THEIR convenience. MERS stands for Mortgage Electronic Registration System. MERS is a private corporation that was created with the express purpose of electronically tracking mortgages, primarily so they could be bought and sold without having to record the transactions with County Clerks around the Country.

As stated on their website, “Our mission is to register every mortgage loan in the United States on the MERS® System.” They brag about how their system has saved the mortgage industry billions.

(Translation: We stole billions from the County Clerks by not properly recording mortgage assignments on our way to stealing every house in the country.)

One problem is that the Monroe County Clerk’s Office has been bilked out of an horrific amount of revenue because none of these assignments were properly recorded.

The other problem is that MERS is a bank created sham, and hence the need to robo-sign and forge all these docs when it is time to foreclose. Beyond foreclosure you could be paying your mortgage to the wrong person, or if you might pay off your mortgage and receive a satisfaction of mortgage you might have a creditor come after you years later.

While here in Monroe County our Clerk is chasing after non-profits for thousands, in Salem, MA, Registrar John O’Brien is going after MERS and the Big Banks for MILLIONS.

He conservatively estimates that MERS has evaded $22 Million from his office alone.

He’s gone so far as to remove deposits from banks behind MERS, and encourages registers around the Country to follow suit. In a recent interview he said, “Taxpayers have been cheated out of revenue and denied the right to know who owns their mortgage.”

Meanwhile, we’re sitting in the epicenter of the fraud, the vast majority of our title histories have been marginalized, and all that can be heard around Danny Kolhage’s Office regarding this is a ruckus cacophony of crickets. Every property in Monroe County will have this weight affecting it’s property value while these questions swirl for decades.

That’s home equity to start a business and create jobs, that’s tax base, that’s cuts in government spending including your children’s education, and on and on and on.

To put it in perspective, Danny Kohlage ignoring this, while worrying about someone transporting a dog out of state for adoption or a volunteer eating too many burgers, is akin to State Attorney Dennis Ward dropping the case of a serial ax murderer caught with the bloody hatchet in his hand on Duval because he needed to nail the eight-year-old who shook the extra gum ball out of the machine.

If for nothing else, our Clerk’s Office exists for the express purpose of maintaining the integrity of our title histories. Suggesting that Danny Kohlage is an EPIC FAIL is an understatement.

So the banks who defrauded your grandmother now need to create fake documents to take houses they don’t really own and quickly dump these properties back on the market before anyone catches on.

Quickly, let’s get a clean title at auction and cloud this up just a wee bit more.

No need to worry Matt, surely our taxpayer funded court system will protect due process, our property values, title histories and tax base. Won’t the courts make sure a bunch of greedy ol’ bankers and their teams of so called lawyers can’t stroll into Monroe County and commit countless acts of perjury, forgery, and fraud, after having defrauded investors, and evaded millions in filing fees that fund our government?

Next week, let me introduce you to my little friend, the rubber stamp.

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