LANDMARK DECISION PROMISES MASSIVE RELIEF FOR HOMEOWNERS AND TROUBLE FOR BANKS

Ellen Brown, September 19th, 2009
http://www.webofdebt.com/articles/mers.php

A landmark ruling in a recent Kansas Supreme Court case may have given millions of distressed homeowners the legal wedge they need to avoid foreclosure. In Landmark National Bank v. Kesler, 2009 Kan. LEXIS 834, the Kansas Supreme Court held that a nominee company called MERS has no right or standing to bring an action for foreclosure. MERS is an acronym for Mortgage Electronic Registration Systems, a private company that registers mortgages electronically and tracks changes in ownership. The significance of the holding is that if MERS has no standing to foreclose, then nobody has standing to foreclose – on 60 million mortgages. That is the number of American mortgages currently reported to be held by MERS. Over half of all new U.S. residential mortgage loans are registered with MERS and recorded in its name. Holdings of the Kansas Supreme Court are not binding on the rest of the country, but they are dicta of which other courts take note; and the reasoning behind the decision is sound.

Eliminating the “Straw Man” Shielding Lenders and Investors from Liability

The development of “electronic” mortgages managed by MERS went hand in hand with the “securitization” of mortgage loans – chopping them into pieces and selling them off to investors. In the heyday of mortgage securitizations, before investors got wise to their risks, lenders would slice up loans, bundle them into “financial products” called “collateralized debt obligations” (CDOs), ostensibly insure them against default by wrapping them in derivatives called “credit default swaps,” and sell them to pension funds, municipal funds, foreign investment funds, and so forth. There were many secured parties, and the pieces kept changing hands; but MERS supposedly kept track of all these changes electronically. MERS would register and record mortgage loans in its name, and it would bring foreclosure actions in its name. MERS not only facilitated the rapid turnover of mortgages and mortgage-backed securities, but it has served as a sort of “corporate shield” that protects investors from claims by borrowers concerning predatory lending practices. California attorney Timothy McCandless describes the problem like this:

“[MERS] has reduced transparency in the mortgage market in two ways. First, consumers and their counsel can no longer turn to the public recording systems to learn the identity of the holder of their note. Today, county recording systems are increasingly full of one meaningless name, MERS, repeated over and over again. But more importantly, all across the country, MERS now brings foreclosure proceedings in its own name – even though it is not the financial party in interest. This is problematic because MERS is not prepared for or equipped to provide responses to consumers’ discovery requests with respect to predatory lending claims and defenses. In effect, the securitization conduit attempts to use a faceless and seemingly innocent proxy with no knowledge of predatory origination or servicing behavior to do the dirty work of seizing the consumer’s home. . . . So imposing is this opaque corporate wall, that in a “vast” number of foreclosures, MERS actually succeeds in foreclosing without producing the original note – the legal sine qua non of foreclosure – much less documentation that could support predatory lending defenses.”

The real parties in interest concealed behind MERS have been made so faceless, however, that there is now no party with standing to foreclose. The Kansas Supreme Court stated that MERS’ relationship “is more akin to that of a straw man than to a party possessing all the rights given a buyer.” The court opined:

“By statute, assignment of the mortgage carries with it the assignment of the debt. . . . Indeed, in the event that a mortgage loan somehow separates interests of the note and the deed of trust, with the deed of trust lying with some independent entity, the mortgage may become unenforceable. The practical effect of splitting the deed of trust from the promissory note is to make it impossible for the holder of the note to foreclose, unless the holder of the deed of trust is the agent of the holder of the note. Without the agency relationship, the person holding only the note lacks the power to foreclose in the event of default. The person holding only the deed of trust will never experience default because only the holder of the note is entitled to payment of the underlying obligation. The mortgage loan becomes ineffectual when the note holder did not also hold the deed of trust.” [Citations omitted; emphasis added.]

MERS as straw man lacks standing to foreclose, but so does original lender, although it was a signatory to the deal. The lender lacks standing because title had to pass to the secured parties for the arrangement to legally qualify as a “security.” The lender has been paid in full and has no further legal interest in the claim. Only the securities holders have skin in the game; but they have no standing to foreclose, because they were not signatories to the original agreement. They cannot satisfy the basic requirement of contract law that a plaintiff suing on a written contract must produce a signed contract proving he is entitled to relief.

The Potential Impact of 60 Million Fatally Flawed Mortgages

The banks arranging these mortgage-backed securities have typically served as trustees for the investors. When the trustees could not present timely written proof of ownership entitling them to foreclose, they would in the past file “lost-note affidavits” with the court; and judges usually let these foreclosures proceed without objection. But in October 2007, an intrepid federal judge in Cleveland put a halt to the practice. U.S. District Court Judge Christopher Boyko ruled that Deutsche Bank had not filed the proper paperwork to establish its right to foreclose on fourteen homes it was suing to repossess as trustee. Judges in many other states then came out with similar rulings.

Following the Boyko decision, in December 2007 attorney Sean Olender suggested in an article in The San Francisco Chronicle that the real reason for the bailout schemes being proposed by then-Treasury Secretary Henry Paulson was not to keep strapped borrowers in their homes so much as to stave off a spate of lawsuits against the banks. Olender wrote:

“The sole goal of the [bailout schemes] is to prevent owners of mortgage-backed securities, many of them foreigners, from suing U.S. banks and forcing them to buy back worthless mortgage securities at face value – right now almost 10 times their market worth. The ticking time bomb in the U.S. banking system is not resetting subprime mortgage rates. The real problem is the contractual ability of investors in mortgage bonds to require banks to buy back the loans at face value if there was fraud in the origination process.

“. . . The catastrophic consequences of bond investors forcing originators to buy back loans at face value are beyond the current media discussion. The loans at issue dwarf the capital available at the largest U.S. banks combined, and investor lawsuits would raise stunning liability sufficient to cause even the largest U.S. banks to fail, resulting in massive taxpayer-funded bailouts of Fannie and Freddie, and even FDIC . . . .

“What would be prudent and logical is for the banks that sold this toxic waste to buy it back and for a lot of people to go to prison. If they knew about the fraud, they should have to buy the bonds back.”

Needless to say, however, the banks did not buy back their toxic waste, and no bank officials went to jail. As Olender predicted, in the fall of 2008, massive taxpayer-funded bailouts of Fannie and Freddie were pushed through by Henry Paulson, whose former firm Goldman Sachs was an active player in creating CDOs when he was at its helm as CEO. Paulson also hastily engineered the $85 billion bailout of insurer American International Group (AIG), a major counterparty to Goldmans’ massive holdings of CDOs. The insolvency of AIG was a huge crisis for Goldman, a principal beneficiary of the AIG bailout.

In a December 2007 New York Times article titled “The Long and Short of It at Goldman Sachs,” Ben Stein wrote:

“For decades now, . . . I have been receiving letters [warning] me about the dangers of a secret government running the world . . . . [T]he closest I have recently seen to such a world-running body would have to be a certain large investment bank, whose alums are routinely Treasury secretaries, high advisers to presidents, and occasionally a governor or United States senator.”

The pirates seem to have captured the ship, and until now there has been no one to stop them. But 60 million mortgages with fatal defects in title could give aggrieved homeowners and securities holders the crowbar they need to exert some serious leverage on Congress – serious enough perhaps even to pry the legislature loose from the powerful banking lobbies that now hold it in thrall.

Ellen Brown developed her research skills as an attorney practicing civil litigation in Los Angeles. In Web of Debt, her latest book, she turns those skills to an analysis of the Federal Reserve and “the money trust.” She shows how this private cartel has usurped the power to create money from the people themselves, and how we the people can get it back. Her earlier books focused on the pharmaceutical cartel that gets its power from “the money trust.” Her eleven books include Forbidden Medicine, Nature’s Pharmacy (co-authored with Dr. Lynne Walker), and The Key to Ultimate Health (co-authored with Dr. Richard Hansen). Her websites are www.webofdebt.com and www.ellenbrown.com.

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Planning the H1N1 Flu Pandemic: Body Bags, Mass Graves, Quarantine Orders

by Michel Chossudovsky

An atmosphere of insecurity and fear is being created simultaneously in several countries in a global public health initiative under the auspices of the WHO.

We are summarising selected reports on body bags, mass graves and quarantine orders. Swine flu is acknowledged to be milder than seasonal influenza. So what is the purpose of these initiatives?

There is a consistent pattern. These reports raise serious questions as to the public health objectives of our governments, not to mention the WHO. The entire construct is politically motivated and corrupt . It serves the financial interests of the pharmaceutical industry. It justifies the militarization of public health and violates fundamental civil liberties.

CANADA

VIDEO: Preparing for the H1N1 Pandemic: Body Bag for Canada’s First Nations

“It is unfortunate that this has been linked exclusively with H1N1,” he said. “Health Canada apologizes. We all regret the alarm caused by the stocking of this particular item.”

Health Canada regularly re-stocks body bags every three or four months, he said. But especially in the case of Wasagamatch First Nation, which received roughly 30 of the bags, the number of bags delivered “was excessive.”

“In this case, we overestimated,” he said. “Our apology is to all First Nations.” (see H1N1 Swine Flu: Health Canada apologizes, says body bags were ‘routine restocking’, Globe and Mail September 18, 2009)

Source CBC

THE UNITED KINGDOM

Mass Graves. Increased Mortuary Capacity

Àccording to an Official Home Office Report, see below. (See Michel Chossudovsky, Fear, Intimidation & Media Disinformation: U.K Government is Planning Mass Graves in Case of H1N1 Swine Flu Pandemic, Global Research, August 2009)

The mass graves, according to the report, “are being planned to deal with the rising death toll from swine flu if the pandemic escalates”:

“The grim revelation will see the mass burial sites dug in advance to cope with any potential crisis.

The Government is planning to create a series of communal graves to cope with the second outbreak expected in the autumn and through the winter.

A Home Office document published earlier this year sets out plans for how local councils should deal with a high death toll – estimates of the number of deaths range from 55,000 to as high as 750,000 from the H1N1 killer virus – including setting up temporary mortuaries.

So far, 44 people in England have been confirmed as dying after contracting swine flu and another five have died in Scotland. The document says that while most cemeteries have sufficient burial capacity for a number of years, this could be put to the test at the peak of a pandemic. (Daily Express, August 19, 2009)

Concepts:

increasing mortuary capacity,

chilled storage area,

body hoists, deposit/exit the deceased, etc (see above)


UNITED STATES

US Homeland Security. Quarantine Orders

The following Report was released at the very outset of the crisis in Mexico by CBS News regarding the implementation of nationwide quarantines.

The U.S. Department of Homeland Security has sent a memo to some health care providers noting procedures to be followed if the swine flu outbreak eventually makes quarantines necessary.

DHS Assistant Secretary Bridger McGaw circulated the swine flu memo, which was obtained by CBSNews.com, on Monday night. It says: “The Department of Justice has established legal federal authorities pertaining to the implementation of a quarantine and enforcement. Under approval from HHS, the Surgeon General has the authority to issue quarantines.”

McGaw appears to have been referring to the section of federal law that allows the Surgeon General to detain and quarantine Americans “reasonably believed to be infected” with a communicable disease. A Centers for Disease Control official said on Tuesday that swine flu deaths in the U.S. are likely.

Federal quarantine authority is limited to diseases listed in presidential executive orders; President Bush added “novel” forms of influenza with the potential to create pandemics in Executive Order 13375. Anyone violating a quarantine order can be punished by a $250,000 fine and a one-year prison term.

A Homeland Security spokesman on Tuesday did not have an immediate response to followup questions about the memo, which said “DHS is consulting closely with the CDC to determine appropriate public health measures.”

The memo from McGaw, who is DHS’ acting assistant secretary for the private sector, also said: “U.S. Customs and Coast Guard Officers assist in the enforcement of quarantine orders. Other DOJ law enforcement agencies including the U.S. Marshals, Federal Bureau of Investigation, and Bureau of Alcohol, Tobacco, Firearms and Explosives may also enforce quarantines. Military personnel are not authorized to engage in enforcement.” (See Department of Homeland Security Guidelines For Possible Swine Flu Quarantines, CBS, April 28, 2009)

IOWA

The FACILITY QUARANTINE ORDER document posted on the website of the CDC, a federal government agency, envisages quite explicitly “forced confinement” in the case of the H1N1 swine flu:

“The Department has determined that it is necessary to quarantine your movement to a specific facility to prevent further spread of this disease. The Department has determined that quarantine in your home and other less restrictive alternatives are not acceptable because [insert the reason home quarantine is not acceptable, the person violated a previously issued home quarantine order, the person does not have an appropriate home setting conducive to home quarantine, etc.] The Department is therefore ordering you to comply with the following provisions during the entire period of quarantine:

1. Terms of confinement. You are ordered to remain at the quarantine facility, _____________________ [insert name and address of facility], from ___________ to ____________ [insert dates of quarantine].

….

4. Legal authority. This order is issued pursuant to the legal authority contained at Iowa Code chapters 135, 139A and 641 Iowa Administrative Code chapter 1, a copy of which is labeled Attachment B and is attached to this order for your review. The Department shall comply with the principles for quarantine contained in subrule 1.9(3) of this attachment when issuing and implementing this order.

5. Ensuring compliance. In order to ensure that you strictly comply with this Quarantine Order the Department or persons authorized by the Department may regularly inspect the quarantine facility.

6. Violations of order. If you fail to comply with this Quarantine Order you may be ordered to be quarantined in a more restrictive facility. In addition, failure to comply with this order is a simple misdemeanor for which you may be arrested, fined, and imprisoned.” Michel Chossudovsky, H1N1 Swine Flu Pandemic: Iowa Contemplates “Forced Confinement” in a “Quarantine Facility”, Global Research, August 2009)

This is an official document of the Iowa State government, which has also been endorsed by the Centre for Disease Control (CDC). If it were a preliminary or internal draft, it would not have been published by the CDC. The question is whether similar quarantine procedures are being replicated in other states across America.

MASSACHUSETTS

“A new law just passed in Massachusetts imposes fines of up to $1000 per day and up to a 30 day jail sentence for not obeying authorities during a public health emergency. So if you are instructed to take the swine flu vaccine in Massachusetts and you refuse, you could be facing fines that will bankrupt you and a prison sentence on top of that.” (See VIDEO; Compulsory Vaccination in America?)

The legislation for forced vaccination in Massachusetts  (Mass. Senate Bill)

http://www.mass.gov/legis/bills/senate/186/st02pdf/st02028.pdf

or

http://www.scribd.com/doc/17532372/Massachusetts-S18-Swine-Flu-Home-Entry

The announcement of the Mass Public Health Council

http://www.scribd.com/doc/18523710/MA-Public-Health-Council-Swine-Flu-Emergency-Dec

VIDEO featuring Bob Dwyer, discusses the legislation approved by the Mass. Senate

THE MILITARIZATION OF PUBLIC HEALTH

According to CNN, the Pentagon is “to establish regional teams of military personnel to assist civilian authorities in the event of a significant outbreak of the H1N1 virus this fall, according to Defense Department officials.”

“The proposal is awaiting final approval from Defense Secretary Robert Gates.

The officials would not be identified because the proposal from U.S. Northern Command’s Gen. Victor Renuart has not been approved by the secretary.

The plan calls for military task forces to work in conjunction with the Federal Emergency Management Agency. There is no final decision on how the military effort would be manned, but one source said it would likely include personnel from all branches of the military.

It has yet to be determined how many troops would be needed and whether they would come from the active duty or the National Guard and Reserve forces.

Civilian authorities would lead any relief efforts in the event of a major outbreak, the official said. The military, as they would for a natural disaster or other significant emergency situation, could provide support and fulfill any tasks that civilian authorities could not, such as air transport or testing of large numbers of viral samples from infected patients.

As a first step, Gates is being asked to sign a so-called “execution order” that would authorize the military to begin to conduct the detailed planning to execute the proposed plan.

Orders to deploy actual forces would be reviewed later, depending on how much of a health threat the flu poses this fall, the officials said.” (CNN, Military planning for possible H1N1 outbreak, July 2009, emphasis added)

The implications are far-reaching. The decision points towards the militarization of civilian institutions, including law enforcement and public health. (See Michel Chossudovsky, H1N1 Pandemic: Pentagon Planning Deployment of Troops in Support of Nationwide Vaccination, Global Research, July 31, 2009)

Military and Civilian Planning; International Swine Flu Conference in Washington

There is evidence of international coordination, The military and Intelligence agencies are involed in planning  (click the program below to enlarge)

obama

Excerpts from the Program, click to enlarge:

Topics include (quoted in the program)

Mass Fatality Management Planning

When 50% or more of employees are out sick or taking care
of their sick ones

When H1N1 fl u pandemic unfold in two or three successive
waves in a calendar year

Disruptions to public, private and critical infrastructure undermining
your essentials functions

Direct fatality management tactical operations

Activate fatality management operations

Conduct morgue operations

Manage ante-mortem data

Conduct final disposition

Continuity of Operations (COOP) and Continuity
of Government Planning

Public’s distress of exposure and safety

Breakdown of public services, utilities

Medical supplies shortage

Effectively undertake mass vaccinations

Enforce quarantines

Protect public works first responders from falling ill or being hurt in civil disturbances

For detailed review of the H1N1 Flu Pandemic, see GlobalResearch.ca – Centre for Research on Globalization  h1N1 Flu Pandemic News Dossier (60 plus articles and reports)

© Copyright Michel Chossudovsky, Global Research, 2009