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Even more good news from New York:

The ubiquitous Mortgage Electronic Registration Systems, nominal holder of millions of mortgages, does not have the right to foreclose on a mortgage in default or assign that right to anyone else if it does not hold the underlying promissory note, the Appellate Division, Second Department, ruled Friday.

“This Court is mindful of the impact that this decision may have on the mortgage industry in New York, and perhaps the nation,” Justice John M. Leventhal wrote for a unanimous panel in Bank of New York v. Silverberg, 17464/08.

“Nonetheless, the law must not yield to expediency and the convenience of lending institutions. Proper procedures must be followed to ensure the reliability of the chain of ownership, to secure the dependable transfer of property, and to assure the enforcement of the rules that govern real property.” The opinion noted that MERS is involved in about 60 percent of the mortgages originated in the United States.

Holy shit, the rule of law still exists in America! Seriously, this is a BFD.

Pray for rain?

Kiss my ass, Gov. Perry. Really.

New sheriff in town

The NY Attorney General. Dave Dayen has more:

This is an ENORMOUS deal. Schneiderman is looking at the failure to properly convey notes and mortgages to the securitization trusts, which court records clearly show was practically the industry standard during the housing bubble. Abigail Field’s work looking at just a handful of mortgages in one district court showed a perfect record of failure. These trusts were strictly time limited under New York law, and there’s no way for the banks to really make this right. By the way, the mortgages Field looked at had Countrywide as the originator. Countrywide is now part of Bank of America.

If this plays out as it could, Schneiderman could declare these securities invalid under New York trust law. There would be a lawsuit in response, of course, but the exposure of Bank of America for this claim is massive, potentially bigger than their capital reserves. Pretty much every investor in a BofA MBS would demand their money back on the faulty security. Not to mention the inability to foreclose on borrowers because of the lack of proof of ownership of the loan. We’re talking about trillions of dollars in losses on millions of loans with no true owner. It’s a nightmare scenario for the banks.

Obviously Schneiderman is just at the beginning of his probe. But at the least, this scrutiny of the loan documents shows that he’s completely not ready to join a 50-state settlement where he gives up his investigation in exchange for some nominal, piddling sum of money. That does not match his recent history and his ongoing investigations.

UPDATE: Gretchen Morgenson reports that Schneiderman and Delaware AG Beau Biden (the VP’s son) are investigating securitization fail at Bank of New York Mellon and Deutsche Bank. These were two of the bigger trustees, who had the responsibility of properly packaging mortgage backed securities.

Last night

In all the preparation for Netroots Nation, I forgot I was supposed to host Virtually Speaking last night — until I got a frantic phone call four minutes to showtime.

Our guests were John Amato and Dave Niewart, my cohorts from Crooks and Liars. Always fun! Click here to listen.

The problem

With Santorum’s position that doctors be criminally prosecuted for performing abortions, he’s really saying that the hired gun who performed the homicide be prosecuted, but the person who hired them is actually a victim.

He’s a lawyer, he knows better. And if he knows better, he knows the wives, friends, sisters and mothers will be prosecuted for murder. Gee, I wonder how most people would feel if he put it that way?

Enriching his friends

New Jersey’s answer to Arnold Schwarzenegger is taking the first steps toward enriching his friends and benefactors by privatizing public schools:

NEW YORK (Reuters) – New Jersey Governor Chris Christie announced a pilot program on Thursday that would allow private companies to run public schools in some of the state’s chronically underperforming school districts.

The public-private partnership would authorize school management organizations to operate five schools, and would target some of the 100,000 New Jersey students now enrolled in 200 chronically failing schools, the governor’s office said.

The state’s teachers union, which has clashed with the Republican governor over cuts to school aid and other issues, said the plan was part of Christie’s “ongoing effort to privatize public education in New Jersey.”

[...] Christie has appointed as his acting education commissioner Christopher Cerf, the former president of Edison Schools Inc., the country’s largest private-sector manager of public schools. The company is now called EdisonLearning.

Oh yeah, Christopher Cerf! Look at the chart at the top of this post and see if you can follow with this post from Blue Jersey:

Billionaire Rupert Murdoch owns Fox News, which promotes both a “corporate education reform” agenda and politicians like Governor Chris Christie to carry that agenda out. Murdoch recently hired Joel Klein, former NYC Schools Chancellor and toady to billionaire Mayor Michael Bloomberg, to run Wireless Generation, Murdoch’s venture into the education business.

Klein is the former boss of Christopher Cerf, currently Acting Commissioner of Education under Chris Christie. Cerf’s last edu-business venture before accepting the position was as founder of Global Education Advisors, which “consulted” with the Newark schools on a plan to vastly increase the numbers of charter schools in the city.

The $500,000 for the report came from the Broad Foundation, funded by billionaire Eli Broad. The foundation also funded Cerf’s training as an education administrator.

Continue Reading »

Oh swell

They just started digging up the street outside my window. And today was the first day that was cool enough to turn off the air-conditioning…


My dear daughter-in-law, a real style maven, was mentioned on the MTV Style blog (she’s the one on the right.)

Oddly enough, it’s for an outfit on which she quotes my son as saying, “You look like you’re going to participate in a drum circle, then milk a cow and then jump on a motorcycle”.

Brits put the foot down

No American-style health care!


As my buddy Dave points out, cutting government spending at this point may crash the economy – and lose the election. Wheee!

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