Sliced and Diced Beyond Recognition: Banks May Not "own" Some Properties

That's the conclusion of a Federal Judge:

"Saying that Deutsche Bank’s arguments of legal standing fell woefully short, the judge wrote: “The institutions seem to adopt the attitude that since they have been doing this for so long, unchallenged, this practice equates with legal compliance. Finally put to the test, their weak legal arguments compel the court to stop them at the gate.”

A spokesman for Deutsche Bank declined to comment on the ruling. But the inability of Deutsche Bank, as trustee for the pools, to produce proof of ownership at the time of the foreclosures will fuel borrowers’ concerns that they are being forced out of their homes by entities that may not even hold the underlying loans.

“This is the miracle of not having securities mapped to the underlying loans,” said Josh Rosner, a specialist in mortgage securities at Graham-Fisher, an independent research firm in New York. “There is no industry repository for mortgage loans. I have heard of instances where the same loan is in two or three pools.”"

http://www.nytimes.com/2007/11/15/business/15lend.html?_r=1&oref=slogin

Check that last sentence: "I have heard of instances where the same loan is in two or three pools."

Lawyers will be challenging these foreclosures Big Time. There is even the possibility some Deadbeats may walk away with a free home. For starters, how much will it cost just to extract the "ownership" of each individual property from the pool or pools?

this will create a cottage industry for distressed investors. this is no different from any other type of big liquidation. the lender is going to take a big hit, just wants to get out, and someone *might* walk away with a really good deal, *if* they are liquid enough to pay cash

the story appears overhyped

http://calculatedrisk.blogspot.com/2007/11/gm-watch-flap-continues.html

Here's the best comment in the story:

"As to the real ramification of the Ohio decision, aside from slowing the foreclosure trains, is that the fact that there were no “original” assignments rendering the sales of the mortgages to the trusts, in violation of the true sale obligations imposed by securities law. ”

http://iamfacingforeclosure.com/blog/2007/11/16/the-judicial-integrity-of-the-united-states-court-is-%e2%80%9cpriceless%e2%80%9d-%e2%80%93-27-more-foreclosures-dismissed/

Well, hey, the Rule Of Law may actually prevail in some Courts. That is, you actually have to PROVE OWNERSHIP to throw someone out of a house! This is, of course, highly inconvenient for the Wall Street Cartel.

So, two million foreclosures in progress or on the way. For starters, how much is it going to cost just to untangle the ownership from the securities?

In addition, the RE Gang who perped the SUBPRIME ripoffs are not exactly politically popular in all jurisdictions, possibly making them moving targets for prosecutions.