Big Bank Foreclosure Probe, BloombergSubmitted by Mark Twain on Thu, 03/03/2011 - 01:50
Foreclosures Require Original Documents
Believe it. Save your home.
BofA, Citigroup Cringe, Mortgage Database
Draws Scrutiny in Foreclosure Probe
Bank of America Corp. (BAC), Citigroup Inc. (C) and PNC Financial Services Group Inc. (PNC).. investigators questioned... database instead of original documents to justify foreclosures.
MERS is a private database run by closely held Merscorp Inc. that tracks ownership in about half of all U.S. home mortgages. It allows banks to buy and sell loans without having to record transfers with the county, and some lenders named MERS as their agent to bring foreclosures. Consumer advocates argue that MERS records aren’t a legal substitute for traditional documents, prompting some courts to throw out foreclosures.
Merscorp... will propose a rule change to stop members from foreclosing in its name. It’s owned by Fannie Mae and Freddie Mac, the government-owned mortgage companies that have received $151 billion in government aid since 2008, and financial firms including Bank of America, Citigroup and JPMorgan Chase & Co. (JPM), according to the MERS website.
... MERS... can “cloud ownership” of a loan... second in U.S. home lending and first among mortgage servicers... uses MERS for “a substantial portion” ...transferred into securitized trusts.
...MERS,... the company said it was designed to “build upon and supplement, but not displace, the existing public land- record system.”
Merscorp was created in 1995... after county offices couldn’t deal with the flood of mortgage transfers, according to MERS. The system... for Wall Street to quickly bundle mortgages together in securitized trusts, fueling the growth in home lending.
Foreclosure practices... MERS50 states are jointly investigating... false documents... signatures to justify several 100,000 foreclosures. Bank of America, JPMorgan and PNC were among lenders that temporarily halted or delayed foreclosures to review practices.