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Some more gory details of the mortgage mess. Looks like a distinct possibility that the mortgage securitization might not hold legal muster. This opens the door of home owners to be able to sell their homes before having to pay the mortgage holder! Explosive stuff. A must read article.

The problems with MERS began to come to light when “vice presidents” of the firm began to submit affidavits in foreclosures, saying the original note had been lost. In some cases those notes were signed by people who signed thousands of such affidavits, and have now admitted they did not actually review the files, as the affidavits said they had.Nor were those people really employees of MERS. It turns out that MERS allows financial institutions that are its members to name anyone a vice president or assistant secretary of MERS. It seems a little unlikely that someone who had never been hired or paid by a company could be a vice president.

via Some Sand in the Gears of Securitizing – CNBC.

Informative piece about Foreclosure Freezes at major banks across US. In short, the Banks are in some cases unable to provide proof that they own the mortgages. Due the multiple resales, and mortgage securitization, the paperwork transferring the ownership of mortgages did not make it through from the sellers of mortgage loans to the buyers. Ooch!!!

Also, don’t forget to see this article on the whole mortgage securitization process.

But during the height of the housing bubble, investment banks were churning out mortgage bonds in such a frenzy, sometimes the assignments never got executed and mortgage notes never got delivered. Keep in mind that this was during the years when lenders were giving out low-doc and no-doc mortgages. It was inevitable that the fast and loose and slightly documented culture would not stop at the mortgage originator but stretch all the way through the process. For more on this, see RortyBomb’s excellent discussion of the securitization process, complete with nifty and highly informative charts.

via A Primer On The Foreclosure Crisis – CNBC.