Hey Harlem, Will the Mortgages Be Declared Not Valid?

The Supreme Judicial Court in Boston, Mass. will issue a ruling as to whether foreclosures in the

state should be completely undone because securitization

"industry" practices violate real estate law governing how

mortgages may be transferred. This case could have global

ramifications." The case involved just two foreclosures -- one by

Wells Fargo, the other by US Bancorp -- but potentially may apply

to millions nationwide.

Today the Court found, in a decision by Justice Ralph D.

Gants, "We agree with the [lower court] judge that the

plaintiffs, who were not the original mortgagees, failed to make

the required showing that they were the holders of the mortgages

at the time of foreclosure.... There must be proof that the

assignment was made by a party that itself held the mortgage."

The decision ruled illegal, the foreclosure documentation

practices which "securitization" has made into {standard mass

practice} in Massachusetts and other states -- transferring title

to the foreclosing bank {after} it forecloses; transferring

mortgage titles into a trust pool {en blanc}, or without any new

owner being named; and skipping the county recordation of the

transfer. "These blank mortgage assignments were never recorded

and they were not legally recordable," the Court found.

            Moreover, the court did not limit its ruling to prospective

effect; it also allowed it to be applied retroactively. So, many

thousands of already completed foreclosures by these banks are

voided, and can be challenged; title insurers may also have to

pay up. The Cambridge attorney of one of the homeowners, Paul

Collier, said the ruling reverts ownership of thousands of homes

back to those who lost them, at least temporarily.

            Elsewhere, the New York Supreme Court has given 30 banks

until Jan. 19 to submit briefs and evidence as to why their

foreclosures in that state "should not be found illegal." The

Kansas Supreme Court has found the banks' Mortgage Electronic

Registration System (MERS) to be "akin to a straw man"; and

California and New Jersey have lower court decisions against the

banks being appealed to higher courts.

            But the possibility is also rumored, that Republicans in

Congress will try to end-run the courts by a legislative act

attempting to make MERS legal, retroactively. The Obama White

House, reportedly, would back it.