Last week New York Judge Robert Grossman ruled that all of MERS’ business practices are illegal.

It’s a staggering blow to the banks and their endless efforts to circumvent due process. ‪​‪It has the potential to once again slow down the foreclosure process. ‪​‪

The foreclosure registry was set up by the banks with one purpose in mind, to make securitizing mortgages easier for them.

And homeowners, as is usually the case with matters relating to bundled mortgages, were getting screwed. ‪​
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Here’s the short explanation. MERS allowed the banks to bypass public record keeping, all in an effort to streamline the records that banks were using to foreclose.

Local record keeping regulations might have been cumbersome for the banks to keep up with, but it protected the homeowners and provided transparency. ‪​‪

By allowing the banks to essentially hijack an important part of the record keeping process, namely the recording of each time a mortgage was sold to a different investor, banks had much greater control then than they ever should have been allowed to.
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Banks can talk about streamlining the process as the reason behind MERS all they want, but the effect was that it was much more difficult for homeowners to see who currently owned their mortgage, and it just allowed the banks to be sloppy with their records, and they were. ‪​‪

MERS was separating the notes from the mortgages, again so they could be securitized, yet in the case that was brought before Grossman, their lawyers argued they could still foreclose because in theory, the mortgage follows the note. ‪​

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Except in in this case it didn’t.

MERS was doing one thing, but telling the courts they weren’t.

They tried to have their cake, and eat it too.

Thankfully Judge Grossman didn’t buy any of their arguments; and now the banks are reeling.
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Almost all of the fraud I’ve seen perpetuated by the banks comes back to their efforts to service the Wall Street mortgage packaging machine in some form or another, and MERS is no exception.‪​

Once again the banks tried to deny homeowners their rights, and forgot that the homeowners are their customers!!! ‪​‪

Any other business that showed such blatant disregard for their clientele would have never had survived.

Judge Grossman saw through MERS thinly veiled attempt of a business model, and ripped it to shreds.
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Don’t expect me to be among the King’s Men. I will not be putting MERS back together again.

If you or anyone you know is struggling with real estate questions or may be facing foreclosure, the workshop this Thursday will offer insight to your options and ways to keep your head above water during this time of real estate havoc.

What: August Real Estate and Foreclosure Workshop
Where: 2500 Weston Rd Ste 404, Weston, FL 33331
When: Thursday, August 6th, 2009, 6:00 to 7:00 PM
Registration: To register email roy@oplaw.net or call privately 954-384-6114.

The latest research covered in Thursday’s workshop includes the current study around mortgage modifications in 2008 and also the common thread between foreclosures and social networks.

How do these topics affect me and my home?
Attend the workshop, get answers!

Roy Oppenheim will be available after the workshop to answer any questions you may have about the current real estate condition and foreclosure process.

With about 6 million folks going to lose their homes to foreclosure this year, I have been repeatedly asked what kind of grade I give the Obama administration in addressing the foreclosure crisis during the first 100 days. I would say a B or B-. Let me explain.

On the one hand, there has been some improvement in the overall credit markets and we are seeing a lot more refinances at historically low interest rates. However, only about 2 in ten families will qualify to refinance this year. That means a whopping 80% will have to proceed on a different course.

The so called “mortgage modifications” so far have been a failure. 50% of all modifications end up in foreclosure. That is the current number. Because the servicers have little control over their obligations to their investors, it is cheaper and safer for them to foreclose.

Short sales have gone way up and it seems that the servicers are more likely to agree to a short sale than a modification where the investor takes a crew cut!

I have always described the “Obama plan” as a three legged stool:

1. Refis;
2. Modifications; and
3. the threat of bankruptcy judge telling the lender that the principal amount of the loan is being reduced or “crammed down” their throats due to the decrease in the property values.

Of course, to date the third leg of the stool does not exist since it got hung up in the Senate. That will not likely change due to the lobbying done by the banking industry. Ironically, it appears that some of the very tax payer bailout money is now being used to pay expensive Washington lobbyists to keep this bill from coming to the Senate Floor. How ironic! Thus it appears that the long sort after weapon that foreclosure defense attorneys were awaiting is remaining elusive and will continue to hinder our ability to get better results in our loan modification negotiations.

So, would I have given the President an A if the bankruptcy laws had actually been changed in these first 100 days??? You bet ya!!!