Recent Reading

Apologies for the lack of posts - I've been distracted by recent news, plus I'm starting a new contract tomorrow.  I've been focused recently on the various mortgage issues in the news and blogs.  Some of my favorites are Naked Capitalism, Marginal Revolution, and Credit Slips.  They all offer commentary and insights that aren't in the mainstream media (usually because the authors are experts who also have space to go into detail) and the first two have excellent comment sections.

Since the news broke about document issues for multiple servicers in foreclosure proceedings, I've been wondering how far it will extend.  According to Credit Slips, it's unlikely that someone who purchased a home out of foreclosure would be evicted or face financial consequences.  If they bought in good faith, the previous owner would have recourse against the servicer or title insurer. 

The issue that's still bothering me is cloudy titles.  It goes beyond foreclosures, potentially affecting pretty much every house with a mortgage purchased in the last fifteen years.  60% of mortgages in the US are recorded with MERS instead of the county register of deeds.  It's becoming apparent that there are flaws in the MERS system (JP Morgan Chase dropped MERS as a foreclosure agent), and those flaws may cloud the title of any house sold since the mid-nineties.  I'm not sure yet what's going to happen, but it could be a lot of revenue for local government.  The servicers may have to register a lot of notes with counties in a hurry.

Pretty much every time Yves posts about this on Naked Capitalism, someone comments that this is about deadbeat borrowers who would have lost their home anyway.  First, that's not entirely true - there are documented cases of foreclosures against inappropriate parties, specifically in Florida.  But this is about rule of law.  The consequences could go beyond the US and beyond the housing market.

It is vital that the notary system and affidavits are honest and trustworthy.  In international business you see notarized documents frequently.  (There are also "chamberized" documents, usually certificates of origin, where the document has been certified by a representative of the local chamber of commerce.  Your forwarder can help if you need this.)  And that's not even getting into documentary letters of credit.