http://voices.washingtonpost.com/...
D.C. Attorney General Peter Nickles this week created an opening for potentially tens of thousands of homeowners to challenge their foreclosures. He issued an enforcement statement emphasizing that District law requires that the assignment of a mortgage from one party to another be recorded within 30 days of the transfer.
This is a problem because many of the country's biggest mortgage companies list MERS, or the Mortgage Electronic Registration System, as the mortgage holder -- rather than the actual owner of the mortgage -- in local deed offices.
This is enormous
Nickles explicitly stated that, in the District, the requirement for recording every transfer of mortgage "is not satisfied by private tracking of mortgage interests through the Mortgage Electronic Registration Systems."
"A homeowner should not be misled into believing that a threatened foreclosure is supported by the District's public records when it is not," Nickles said in a statement, explaining that such practices are a violation of the jurisdiction's consumer protection law.
Nickles said such violations may provide a "good basis for challenging the foreclosure in court" and encouraged homeowners and advocates to contact the attorney general's office so that it "may consider bringing enforcement actions to stop foreclosure proceedings and seek restitution for consumers."
Folks.
This means that any mortgages held by MERS in DC are not valid.
MERS was a private mortgage transfer system designed to bypass the
land recorders.
Now i suspect the Banks will go screaming to congress to override this,
but if this is standard law in other states, the entire mortgage
system may explode.
Update: This is a very messy, complicated thing. I don't want to say
you can just walk from your debts, but, if the banks have busted their
security interest, you may well find yourself able to declare bankruptcy
and change the issues.
What I think has happened is the banks in seeking to be too clever by half
have opened the back door to Cramdown and allow you to treat house debt
like credit card debt.