Posts in Banks
UCC Article 3 and Mortgage Backed Securities

Borrowing money to buy a home used to be straightforward.  Nowadays, the promise to pay back the borrowed money (Note) is transferred into securities, known as mortgage-backed securities (MBS), and pieces of this MBS are sold in the form of certificates to investors all over the world.  The Deed of Trust, which secures the promise to pay with the home, also known as a mortgage, lives in a virtual world somewhere between your home and the investors in the security holding your Note. 

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After Foreclosure: A Housing Surplus

Of the 74.5 million homes in the United States approximately 45 million homeowners borrowed money to buy their homes.   Out of these 45 million, six million homeowners have already lost their homes to foreclosure and another ten million are underwater, which mean their homes are worth less than their mortgages.[1] Potentially over 16 million homes could be bank owned and on the market as REO properties.

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Chink in the Armor: A Foreclosure Defense

The securitization of home loans may provide a new way to contest foreclosures.  An Alabama court recently ruled that a trustee of a pool of home mortgages had no standing to bring a foreclosure action on one of the home mortgages allegedly in the pool despite having possession of the original Promissory Note because the transfer of the Note did not follow the express terms of the Pooling and Service Agreement governing the pooled mortgages.

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