A bill that will legalize the fraud, in other words. And it may be passed during the lame duck session, says John Carney, senior editor at CNBC:
When Congress comes back into session next week, it may consider measures intended to bolster the legal status of a controversial bank owned electronic mortgage registration system that contains three out of every five mortgages in the country.
The system is known as MERS, the acronym for a private company called Mortgage Electronic Registry Systems. Set up by banks in the 1997, MERS is a system for tracking ownership of home loans as they move from mortgage originator through the financial pipeline to the trusts set up when mortgage securities are sold.
The system has come under scrutiny by critics who charge MERS with facilitating slipshod practices. Recently, lawyers have filed lawsuits claiming that banks owe states billions of dollars for mortgage recording fees they avoided by using MERS.
... Perhaps even more devastatingly, some critics say that sloppiness at MERS—which has just 40 full-time employees—may have botched chain of title for many mortgages. They say that MERS lacks standing to bring foreclosure actions, and the botched chain of title may cast doubts on whether anyone has clear enough ownership of some mortgages to foreclose on a defaulting borrower. The problems with MERS system led JPMorgan Chase [JPM 39.61 -0.41 (-1.02%) ] CEO Jamie Dimon to stop using MERS for foreclosures in 2008.
Now it appears that Congress may attempt to prevent any MERS meltdown from occurring. MERS is owned by all the biggest banks, and they certainly do not want it to be sunk by huge fines. Investors in mortgage-backed securities also do not want to see the value of their bonds sink because of doubts about the ownership of the underlying mortgages.
So it looks like the stage may be set for Congress to pass a bill that would limit MERS exposure on the recording fee issue and perhaps retroactively legitimate mortgage transfers conducted through MERS private database.
Self-styled consumer advocate Neil Garfield says the legislation is already being drafted:After years of negative judicial decisions about the use of a straw-man on mortgages, MERS was about to lose its existence as well as its credibility. But now all of that is set to change as Wall Street money is pouring into the coffers of those who are receptive (i.e., almost everyone in Congress). The legislation is already being drafted under the interstate commerce clause to ratify MERS and everything it did retroactively. It appears that the Obama administration is ready to pardon all the securitization deviants by signing this bill into law. This information is corroborated by several people who are in sensitive positions — persons who would be the first to know such proposals. Fortunately, there are some people in Washington who have a conscience and do not want to see this happen.
Garfield is overstating things a bit. In truth, the results of the legal challenges to MERS have been mixed. But it is very plausible that the banks might want to put to rest any ongoing uncertainty about the legality of MERS. I wouldn't be at all surprised if Congress manages to pass a bill that bails MERS out of its legal issues.
Regulatory capture by the Wall Street banks is so complete that it won't surprise a bit if Congress passes this kind of bill and President Obama signs the bill into the law of the land, thus legitimizing FRAUD and PONZI to save the banks and big investors who bought MBS created out of numerous REMICs, which, thanks to MERS, may not have had any loans properly transferred to them.
In other words, these REMICs, set up by Fannie and Freddie and big Wall Street banks and managed by big Wall Street banks, may have "naked shorted" the securities, when there was no loan to supposedly "back" those securities. They simply hoped no one would notice, and that happy housing bubble would go on forever (until Goldman Sachs showed up with John Paulson).
Their plan during the housing bubble years, in retrospect, was to grow as big as possible so that when the proberbial sh_t hit the fan they would be protected as "Too Big To Fail" banks. Fraudulent mortgage inducement to suck in borrowers, fraudulent securitization and selling of securities with no backing, fraudulent foreclosures, they must have figured, would be all forgiven by the government because the mess would be so gigantic that the entire financial system would collapse. Just to make sure, the bankers stuffed their own people into key government agencies as well as hiring ex-government regulators.
So far, they have been absolutely correct, and their regulatory capture has been working like a charm.
If the captured Congress and the White House dare legitimize, retroactively to boot, a fraud operation like MERS, there go the financial markets. There goes the country, probably. Restore the trust and confidence in the markets? My a_s.
Instead of bankers hanging from the numerous lamp posts on Wall Street, we will see these bankers get away with theft - stealing homes from defaulting homeowners even though they don't have any legal standing to foreclose, but so what, if the government changes the law and legalizes fraud, they don't need to prove anything. Just as they had planned all along.
And we are told to blame "deadbeat" homeowners. Because, as Matt Taibbi said at the end of his latest article on 'Foreclosuregate',
Because in America, it's far more shameful to owe money than it is to steal it.