Mass Supreme Court Rules Against Wells Fargo, Deutsche Case on Validity of Mortgage Transfers in Securitizations –– Yves Smith – Bottom line: even thought the Supreme Court ruling in this Massachusetts case, Ibanez, was narrow, it still represents a major blow to the securitization industry. The judges based their ruling strictly on Massachusetts law issues, and did not opine on the New York trust law issues we have highlighted. The ruling emphasized the horrible job the banks did in protecting and documenting their ownership interest and the overall carelessness of the securitization process. Effectively this shows the shortcomings of the fundamental design of the securitization process, of developing a one-size-fits-all process when some states have long-standing law (real estate is very well settled) that is idiosyncratic. How, in this case, could you design a securitiztion process that did NOT account for the need to handle the assignment of the mortgage, as Massachusetts requires? If you read the decision, you will see the judges recite the history of the two mortgages at issue and how they describe the language of the PSA and its requirements, how the banks did not adhere to its requirements, and how the documents the banks provided fail to link the properties in question specifically to the securitizations (meaning you can’t look at the closing documents and see clear evidence that the loans in question were even intended to be in these pools). This is the key sentence from the decision, that the use of a securitization does not alter or reduce the requirements that apply to transfers and ownership of the loans and the related property: Where, as here, mortgage loans are pooled together in a trust and converted into mortgage-backed securities, the underlying promissory notes serve as financial instruments generating a potential income stream for investors, but the mortgages securing these notes are still legal title to someone’s home or farm and must be treated as such.
Bernanke Rejects Bailouts – Federal Reserve Chairman Ben Bernanke on Friday ruled out a central bank bailout of state and local governments strapped with big municipal debt burdens, saying the Fed had limited legal authority to help and little will to use that authority. The $2.9 trillion municipal-bond market has been stung recently by worries that some cash-strapped cities or states won’t be able to pay off or roll over debt. Costs have risen broadly for municipal borrowers. The market also faces challenges from the expiration of the Build America Bonds program, which helped cities and states borrow $165 billion at interest rates held down by federal subsidies. Some analysts speculate the Fed could jump into the market by purchasing muni debt or lending to struggling borrowers. "We have no expectation or intention to get involved in state and local finance," Mr. Bernanke said in testimony before the Senate Budget Committee. The states, he said later, "should not expect loans from the Fed."
Is something wrong with the sexual development of human males? – Have you noticed there aren’t as many males in the world anymore? Well, there isn’t. A growing body of evidence has begun to show something is wrong with the sexual health of human males. To begin with, Sperm counts have dropped by 50% in the last 50 years worldwide. (1) On the other hand, sperm abnormalities and rates of male infertility have increased radically. Rates of testicular cancer have also doubled in the last 20 years.The question is, why? Scientist now believe certain man made chemicals are to blame. These chemicals have been known to interfere with the male hormonal system where they wreak havoc on the building blocks of male sexual development. The problem is, they are everywhere. 60 years ago synthetic chemicals were a futuristic novelty. Since that time, the chemical industry has developed more than 90,000 man made compounds and the vast majority have never been tested for effects on human beings.