POLICY BULLETIN – Number 2011-7

To: All MERS® System Members                 

November 8, 2011

On October 20, 2011, the Boards of Directors adopted a revised version of Rule 14 which contains notification provisions that will become effective on February 1, 2012. Under the new Rule, MERS® System Members will have enhanced requirements for notifying MERSCORP, Inc. (“MERSCORP”) of certain types of lawsuits, including some cases where Mortgage Electronic Registration Systems, Inc. (“MERS”) and/or MERSCORP are not a named party to the lawsuit. Notifications should be sent to the email address Rule14@mersinc.org. The attached Rule further defines the Members’ new responsibilities; please provide a copy of this Rule to all departments responsible for complying with it.

A draft revised Rule 14 of the MERS® System Rules of Membership was initially circulated for comment to the membership in May 2011. After receiving, considering, and incorporating extensive comments, the Boards adopted the attached version. Please note that Members will now have to notify MERSCORP of cases where neither MERS nor MERSCORP is a named party, but the cases involve issues related to the companies. See Section 2(a)(ii).

[...]

RULE 14 NOTIFICATION TO MERSCORP, INC. OF LAWSUITS AND ADDITIONAL INDEMNIFICATION PROVISIONS

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H/T Living Lies For This Superb Find

“Sometimes, only courts of law stand to protect the taxpayer. Somewhere, someone has to stand up. Well, sometimes is now, and the place is the Great State of Georgia. The Defendant’s Motion is hereby Denied”

“The United States Government paid taxpayer dollars to the largest of our financial institutions, and to European Union Banks, in order to prop up those poorly run organizations. Twenty Billion of those dollars were handed over to the defendant, U.S. Bank.”

“The HAMP guidelines require U.S. Bank to perform modification services for all mortgage loans its services. Otis Philips applied to modify his mortgage with U.S. Bank. U..S. Bank denied the request, without numbers, figures, or explanation, reasoning, comparison to the guidelines, or anything.”

“A cynical Judge might believe that this entire motion to dismiss is a desperate attempt to avoid the discovery period, where U.S. Bank would have to tell Mr. Phillips how his financial situation did not qualify him for a modification. Or, perhaps he was [Judge's emphasis, not mine] qualified, yet didn’t receive the modification, in violation of U.S. Bank’s Service Participation Agreement (SPA).”

“U.S. Bank’s silence on this issue might heighten the suspicions of such a cynical jurist.”

“Clearly, U.S. Bank cannot take the money, contract with our government to provide a a service to the taxpayer, violate that agreement, and then say no one on earth can sue them for it. That is not the law in Georgia. In fact, since no administrative review is provided in HAMP [which is something you should put in your OCC letter demanding review], the courts are the only recourse.”

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Rolling Stone-

Federal judge Jed Rakoff, a former prosecutor with the U.S. Attorney’s office here in New York, is fast becoming a sort of legal hero of our time. He showed that again yesterday when he shat all over the SEC’s latest dirty settlement with serial fraud offender Citigroup, refusing to let the captured regulatory agency sweep yet another case of high-level criminal malfeasance under the rug.

  [ROLLING STONE]

HuffPO-

The Times editorial describes why Eric Schneiderman, Beau Biden and Kamala D. Harris, Attorney General of California, have refused to join the 47 other attorneys general who have agreed to the settlement. The Times editorial stated,

The proposed settlement reportedly would prevent the states from pursuing claims against banks relating to fraud or abuse in the origination of loans during the bubble. (In some states, the statute of limitations has expired for bringing challenges for faulty originations but not on all loans in all states.) It would also prevent states from pursuing claims for foreclosure abuses, like improper denial of loan modifications. And it would prevent them from pursuing banks’ misconduct in their dealings with the Mortgage Electronic Registration Systems database, or MERS, a land registry system implicated in bubble-era violations of tax, trust and property law. The proposal would not preclude the states from pursuing the banks for wrongdoing in the repackaging and marketing of loans as mortgage-backed securities. But, as a practical matter, the ability to fully press such claims — and to achieve significant redress — could be impeded or blocked by the other constraints. Once one avenue of inquiry is closed off, it can be difficult to ascertain what happened along other points in the mortgage chain. In effect, the legal waivers being contemplated would let the banks pay up to sweep wrongdoing under the rug.

[HUFFINGTONPOST]

By: Donna M. Nagy

Indiana University Maurer School of Law

Abstract:     
This article refutes what has become the conventional wisdom that insider trading by members of Congress and legislative staffers is “totally legal” because such congressional officials are immune from federal insider trading law. It argues that this well-worn claim is rooted in twin misconceptions based on: (1) a lack of regard for the broad and sweeping duties of entrustment which attach to public office and (2) an unduly restrictive view of Supreme Court precedents, which have interpreted Rule 10b-5 of the Securities Exchange Act to impose liability whenever a person trades securities on the basis of material nonpublic information in violation of a fiduciary-like duty owed either to the issuer’s shareholders or to the source of the information. It also argues that nonpublic congressional information constitutes property which, like congressional funds and tangible property, rightfully belongs to the federal government and its citizens.

The article was first presented at a conference honoring the publication of Boston University Professor Tamar Frankel’s new book on Fiduciary Law. Drawing from Professor Frankel’s extensive work, and from the prior application of fiduciary principles in congressional disciplinary actions and Executive Branch prosecutions of members of Congress for so-called honest-services fraud, the article maintains that congressional officials owe duties of trust and confidence to a host of persons including the citizen-investors they serve, as well as the federal government, other members of Congress, and government officials outside of Congress who rely on their loyalty and integrity. These persons are deceived and defrauded when congressional officials misappropriate nonpublic congressional knowledge to enhance the profit in their personal investment portfolios. The article concludes that Rule 10b-5 prohibits members of Congress and legislative staffers from trading securities on the basis of material nonpublic information obtained through congressional service, but for a variety of prudential reasons, it suggests that education, rather than prosecution, may be the SEC’s most effective enforcement tool.

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Supreme Court of Florida
____________
No. SC08-2443
____________

IN RE: IMPLEMENTATION OF COMMITTEE ON PRIVACY AND COURT RECORDS RECOMMENDATIONS—AMENDMENTS TO THE FLORIDA RULES OF CIVIL PROCEDURE; THE FLORIDA RULES OF JUDICIAL ADMINISTRATION; THE FLORIDA RULES OF CRIMINAL PROCEDURE; THE FLORIDA PROBATE RULES; THE FLORIDA SMALL CLAIMS RULES; THE FLORIDA RULES OF APPELLATE PROCEDURE; AND THE FLORIDA FAMILY LAW RULES OF PROCEDURE.

[November 3, 2011]

REVISED OPINION

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We always knew this was coming, They always knew this was coming and they always knew the taxpayers were going to pick up yet another Ponzi Tab to another brilliant sub-prime cover up!

FOX BUSINESS-

We said it was the Federal Housing Administration, which sells lenders a 100% guarantee against defaults on home mortgages typically for lower income people. FHA has seen defaults skyrocket on these loans.

But the Federal Housing Administration fought us vigorously on our story. So did liberal economic research groups.

Turns out they were wrong.

As the FHA is now set to soon release its annual report, the University of Pennsylvania’s Wharton School estimates that the FHA faces around $50 billion in losses in coming years.

By GRETCHEN MORGENSON
Published: October 3, 2004

NYT-

IT is literally a trillion-dollar question: What will a humbled, reined-in Fannie Mae, the nation’s biggest mortgage provider, mean to the economy, the financial markets, interest rates and housing in America?

Since regulators disclosed evidence of widespread accounting improprieties at the company, which carries almost $1 trillion in mortgages on its books, the response from the financial markets has been surprisingly muted. To be sure, Fannie Mae’s stock has lost 14 percent of its value, but its debt securities have held fairly steady and the pools of mortgages it sells to investors have continued to attract buyers.

Even if Fannie Mae’s troubles are eventually worked out, there may be other, potentially nasty reverberations from the company’s weakened position. These include a possible hit to the dollar if foreign investors, who have bought so much of the company’s debt, become alarmed by the accounting problems and sell.

[NEW YORK TIMES]

The financial giants are loaded down with dicey loans as defaults increase

Business Week-

Fannie Mae (FNM ) and Freddie Mac (FRE ) have been cast as saviors in the housing drama that’s roiling the financial markets. After they stepped in to snap up billions of dollars in subprime loans earlier this year, some politicos declared the duo a point of strength: “Freddie and Fannie aren’t the problem. [They] are the good part,” Representative Barney Frank (D-Mass.) said in a recent hearing.

But that doesn’t mean they’re immune to the pain. Like the big private- sector players, these government- sponsored companies, which own or guarantee 45% of all residential mortgages, have taken on more risk in recent years. Now they hold a sizable piece of subprime and other potentially toxic debt–securities and largely illiquid loans that could take a hit after the recent fire sale prompted by two Bear Stearns hedge funds. And given the state of the broader housing market, more trouble may lie ahead. That would be bad news for shareholders and investors who own their mortgage-backed securities. “We don’t know how much trash is on their balance sheet,” says Josh Rosner of researcher Graham Fisher & Co. “It seems they’ve shot themselves in the foot.” Fannie declined to comment. Says a Freddie spokeswoman: “We are well positioned to withstand even a severe and enduring period of heightened credit risk.”

[BUSINESS WEEK]

via Freddie Mac-

On and after November 10, 2011, Servicers may not refer any new Freddie Mac foreclosure or bankruptcy cases in New York to Steven J. Baum, P.C., whether referred within or outside of the Program.

Attorney Susan Chana Lask says

“This looks like the beginning of a well-deserved end for Baum”