Here’s a small but possibly significant update on the American Foreclosure fraud. Via Vox Day we learn that a judge in Arizona has ordered a New York bank to produce the paperwork showing ownership of the mortgage on a house that was to be foreclosed.
Expectations are that the bank in question will not be able to establish a proper ‘chain of title’ and hence will not be able to pinpoint ownership. Which means they will have to admit that securities sold by this bank are backed by little more then hot air. Market-Ticker cites one of the more succinct explanations:
….. that they gave multiple certifications to the investors in the mortgage securtizations that they did indeed have the trust assets. If, as it now appears to be the case, that many mortgage loans were not properly conveyed to the trust (as in endorsed by the originator and all the intermediary parties specified in the contract governing the deal, the pooling and servicing agreement, and finally over to the trust), then all those certifications were patently untrue. Since investors relied upon these certifications (no one in their right mind would have ponied up for these deals if they had had any doubt that the trust owned the mortgage loans) and the failure to convey the notes is a big cause of problems with foreclosures, it would seem that the trustees are very logical targets for investor litigation.
They also illustrate what they expect to be the end result with an appropriate video. I’ll leave the last word to Mr. Day:
I’ve calculated that at least $3 trillion of the $7 trillion they [US banks] presently report as assets simply don’t exist. The damage has already been done and it’s time to start trying to staunch the bleeding rather than offering more pointless and costly transfusions.