If we believe that lenders only offer solutions
which are in their own best financial self-interest, then what is their best
financial self-interest and in what way(s) will it screw us?
As I see it, the "catch" is this: The very "alleged" lenders who would be paid
for the "toxic" loans they allegedly own may not be entitled to payment, because
they cannot lawfully establish the right to enforce the notes they claim as
theirs.
Mere possession of a note does not in itself prove
the right to enforce the note. The
Uniform Commercial Code, as adopted by states across the USA, is the
law of the land when deciding who or
what has that right.
Some analysts claim that as many as 75% of mortgage
loans written since 2002 are UNSECURED and UNENFORCEABLE as mortgage loans, and
point to mortgage loan securitization and cost-saving shortcuts which, along
with industry sanctioned predatory loan origination schemes, have resulted in
millions of mortgage foreclosures and the theft of trillions of dollars in
(monetized) home equity.
I've read a
widely accepted version of "The Plan" which proposes the use of Eminent Domain
to 1) compel alleged lenders to sell notes they may possess (but do not
necessarily own the rights required by law to enforce), or 2) seize the notes, under the police power of eminent domain, and, by law, provide compensation to their alleged owners.
In my opinion, the people's real power in using the rights of Eminent Domain is that it forces the alleged lenders to prove the right to
receive compensation from the community. It goes something like this: "Step forward and identify yourself to claim your
compensation. What? No ID? Sorry, the Law says that before the Community can pay out a nickel in
compensation, you've gotta show valid ID. Not some fake ID you bought from a Document-producing and then
Robo-Signing outfit... but real ID. If you give us some fake crap, I'll see to it that you
are arrested and charged with a crime. If you don't
have valid ID your claim for compensation is denied. Good bye."
If that proof is not forthcoming, as
articulated in Section 3 of the Uniform Commercial Code, acquisition of the
mortgage note by the use of Eminent Domain is unnecessary.
Each "program" homeowner whose alleged lender cannot
prove a valid claim can petition the court to legally extinguish the false
lien. Dedicated proceeds from subsequent
refinancing could then be used to reimburse the "program" for its costs and
contribute to an independently administered community fund for the continued
re-mortgaging of at-risk residences.
The People's use of Eminent Domain to preserve continued
home ownership within their community is great. Relying upon profit-first partners with a
self-serving agenda may not be so great.
One company, Mortgage Resolution Partners, is
proposing its own variation of The Plan it will control. The plan circumvents the likely
disclosure that the company's private label securities hold either no value, or less value than what was represented to investors.
Wouldn't it
be more in the public's interest to demand that an independent community non-profit entity implement The
Plan? That would ensure maximum public
benefit. If The Plan calls for MRP to be
paid a $4,500 fee plus costs for each mortgage loan it restructures, and
additional vigs, perhaps we should look this gift horse in the mouth. OK, we pay them for the use of their short-
term money, but they can't decide who sits in the bus, or who drives the
bus. They need to back off. Their self-serving expertise is easily
replaced by those within the housing community who are dedicated to helping save
communities, and are not so much party to unlawful foreclosures and evictions.
Or do we once again accept a
fox as guard of the hen house?
According to marketing documents, Mortgage Resolution Partners have publically
unnamed investors who are willing to finance the cost for communities to seize some
mortgage loans: specific mortgage loans that are now part of private-label securities and do not come with
federal loan guarantees.
Are these guys likely holders of possibly worthless
securities who are now looking for a quick public bailout?
Let's instead bail out Main Street. In addition to establishing independent
community nonprofit organizations to administer the use of eminent domain to
seize mortgages and then facilitate individual homeowners' quiet title actions,
I also advocate the immediate creation
of a state/publically owned, nonprofit
banking system. Our Money for our
Communities.
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