Foreclosure-Gate: Bipartisan Bail Out of the Securitization Deviants

11-12-2010 • EconomicPolicyJournal.com

When Congress comes back into session next week, it may consider measures intended to bolster the legal status of a controversial bank owned electronic mortgage registration system that contains three out of every five mortgages in the country. Now it appears that Congress may attempt to prevent any MERS meltdown from occurring. MERS is owned by all the biggest banks, and they certainly do not want it to be sunk by huge fines. Investors in mortgage-backed securities also do not want to see the value of their bonds sink because of doubts about the ownership of the underlying mortgages. So it looks like the stage may be set for Congress to pass a bill that would limit MERS exposure on the recording fee issue and perhaps retroactively legitimate mortgage transfers conducted through MERS private database. Got that? Damn the rule of law. Damn the sanctity of a contract. Congress is getting ready to tell the courts, "Just accept any toilet paper MERS throws at you, and then throw the bums out of their house. We have campaign contributors the banking system to protect. Will Obama sign such legislation? Puhleeze. As Neil Garfield puts it: It appears that the Obama administration is ready to pardon all the securitization deviants by signing this bill into law.