In English law, a fee simple (or fee simple absolute) is an estate in land, a form of freehold ownership. It is the most common way that real estate is owned in common law countries, and is ordinarily the most complete ownership interest that can be had in real property short of allodial title, which is often reserved for governments. Fee simple ownership represents absolute ownership of real property but it is limited by the four basic government powers of taxation, eminent domain, police power, and escheat, and it could also be limited by certain encumbrances or a condition in the deed.^{[citation needed]} How ownership is limited by these government powers often involves the shift from allodial title to fee simple such as when uniting with other property owners acceding to property restrictions or municipal regulation.

http://en.wikipedia.org/wiki/Fee_simple_absolute

I viewed a House Subcommittee’s inquiry into the issue of mortgage bundling  and security documentation on CSPAN today. http://www.c-spanvideo.org/program/ForeclosureC

I used to do a lot of title work; and a rather straight forward discussion of the subject based upon cross examination of a number of witnesses by members on the committee had me shaking my head.

The issue of bundling becomes political only because the republican idiots wish to protect the goddamn bundling security funds; so half of the committee presentation became nonsensical.

Ownership of land is a State issue. Who owns the fucking land is of paramount importance in the real estate industry.  Besides the fact that the number one object of young members of the middle class WAS TO OWN LAND when I was a kid.

Chris Peterson, Esq who testified at these hearings underlined that the land recording system as well as the attenuate laws of recording go back well before this country was founded. There were country recorders in the colonies. Unassailable title ownership to land was one of the primary aims of our early settlers.

So let us get back to basics. Let us discuss how things were fifty years ago.

A member of the middle class be she a liberal or conservative or communist or fascist WANTED TO OWN HER OWN HOME.

You would buy a home in the 60’s in the suburbs for about fifteen grand. A really nice home with three or four bedrooms and a bath and a half with a big yard.

You would use your vets card and put down about $500-$1500 and pay closing costs of a couple hundred bucks.

You would end up paying $200/month on the mortgage with an added escrow monthly payment of forty some dollars for taxes and insurance.

Hence the term PITI; principal, interest, taxes and insurance.

The loan would be paid in fifteen years unless you opted for a longer loan period and your real interest would be about 6% per year.

You would own the property in fee simple absolute subject to:

The rights of the mortgagee—the bank.

The rights of the state to its taxes.

Easements

The easements would include the sidewalk and half of the street in front of your home.

The easements would also include sewage and water pipes and electrical cables and such so that the state’s interest in communal sewage and water and utilities would be observed. So the utility company can enter the premises to check its gauges, so that the plumbers can enter the premises and fix the pipes. See?

In Minnesota, if you did not pay your property taxes it would take the state ten years to get you off of that property.

In Minnesota, if you failed to honor your mortgage payment in reality it would take 18 months or more for the bank to be able to throw you out on your ass. Whereas it can take a savvy landlord a mere 60 days to get your ass thrown into the streets for non payment of rent or even less time than that.

Property rights meant something in this state and in this country.

Your mortgage payment would only go up if your property taxes went up. That is your PI would always remain the same but your TI would increase.

There was certainty in the universe.

Then capitalist pigs came to the fore, strong armed Congress and got rid of state usury laws and by the late seventies, mortgage interest rates got all the way up to 18%.

Then the banking industry was freed to do any goddamn thing they wished to do and the permanent mortgage interest rate became variable.

Oh, you can have a mortgage for 9% for the first couple of years and then we shall renegotiate the rate.

Then those contracts changed with the help of the Reagan Administration and the rate could be 7% for a couple months and then the fee holder found himself paying 18% which increased his mortgage payment X 2 or 3 and that was that.

Okay, so there is a political angle here but take a rather conservative view of all this as groups like realtors and chambers of commerce (at least in the old days) and small mortgage companies and the like.

YOU CANNOT SELL PROPERTY IF YOU CANNOT PROVE WHERE THE TITLE IS AND WHERE THE SECURED LIENS LIE.

You have to prove you have title to sell the property. You will do this through title opinions and title insurance.

You have to prove who owns the mortgages on the property so that they may be properly paid at closing.

You also have to demonstrate that all taxes are paid on the property or that they will be paid at closing.

You also have to note all easements on the premises.

This is first year realtor stuff; this aint Harvard Law School.  You need to learn this in your three month real estate course or you are toast as far as passing the state exam.

Well, as we all have learned these mortgages were sold as adjustable instruments; some of them contained changes in interest rates that took place a couple months after closing. And the rates were so goddamn high when adjusted that the promise of these high interest rates became a reality in the sale of the instruments to third and fourth and fifth party buyers. You see a mortgage at 6% interest is worth less than a mortgage at 10%. And if a loan is ‘secured’ well then the value of the instrument goes up even more.

So you are a fifth party purchaser of ten thousand mortgages but you really do not have the faintest idea where any of those mortgages are in terms of their power as being liens on certain properties because the Wall Street pigs bundled and they had no goddamnable idea where those liens were either.

You see, if ABC bank provides a mortgage to the new owner of the property, ABC then sells the mortgage to somebody else. And supposedly, the bank signs a transfer of rights deed to the purchaser of the mortgage and the purchaser of that mortgage records this document with the Register of  Deeds or the Registrar of Titles for the county in which the property is situated.

Well after three or four or five transfers, the buyer—which is some megalocorporate entity—does not bother to procure the needed mortgage transfer deeds. That way the prick on top saves money on document production costs as well as filing fees with the country recorder.

So secured instruments became almost or quasi-secured instruments to property where real estate values crashed to half of their values, while interest rates climbed to heights unattainable by the original owners of the property AND WORLD MARKETS WENT INTO THE TOILET.

Okay, so let us look at a particular instance where chain of title became a little fucked up.

Mr. & Mrs. Smith own a home on Clinton avenue in Minneapolis. They purchased the home in 2005 for 140 big ones. They make only 48,000/yr between them but the interest rate begins at 5% and they only put $2,000.00 on the property when they purchased it. Six months later the rate on the same mortgage went to 9.5% and so did the mortgage payment.  Then Mrs. Smith lost her job so that their joint income shrank from $48,000.00 to $34,000 and Mr. Smith started drinking on a much more regular basis and he moved out and said fuck you and stopped making payments on the mortgage.

So Mrs. Smith gets a lawyer and they put the house up for sale and find out that it is now worth $100,000 on a good day; $40,000 less than the mortgage. 

Mrs. Smith leaves the home and her attorney and gets a job as a stripper in DT St. Paul, but that is another story.

So three companies file papers to foreclose on the mortgage and end up in court attempting to prove which one of them might proceed to foreclose on the premises.  One of these companies went bankrupt months before and some court order is involved that appointed some trustee representative to stand in the shoes of the bankrupt. These hearings end up being quiet title actions which are expensive in terms of filing fees, attorney fees and witness fees AND TIME.

And of the three parties appearing at the foreclosures end up filing false affidavits concerning ‘lost documents’ as such. The affidavits are false because a court is not going to accept an affidavit simply based ‘upon information and belief’ that the statements included are true and correct. Instead, the parties are holding robotic affidavits saying that the titular signer KNOWS AND HAS SEEN the evidence referred to in the documents. Except that the robotic signer has not seen shite at the time the affidavit is executed.  This is straight out perjury.

And there is case law, in all of these states wherein some decision emanating from a quiet title action long ago is overturned; so court orders no longer function to ensure title to land either.

Think about this for a minute. If you cannot prove who is entitled to title to land, your entire society is screwed; big time.

This is exactly the point that the real estate attorneys were discussing at the committee hearings.

None of this should have a goddamn thing to do with republican ideas or democratic ideas or conservative ideas or communist ideas.

WHO OWNS THE FUCKING PROPERTY? WHO HAS THE RIGHT TO FORECLOSE ON A MORTGAGE WHERE THE OWNER OR MORTGAGOR HAS STOPPED MAKING PAYMENTS THEREBY ACQUIRING TITLE?

But reality has nothing to do with the republicans in Congress today. Neither do logical laws having to do with realty have anything to do with the repub reality.

But the big banks or mortgage institutions or bundling Wall Street pricks or whatever… do not wish any state court to fuck WITH THEIR MONEY. So they instruct their republican reps to block for them as they run downfield hoping to dump the football to some other ‘team mate’ before it blows up in their hands.

The only real point I am attempting to make here is that if you cannot properly ascertain a chain of title at the county recorder’s office, the property is worthless.

And if your society cannot properly ascertain the title to real estate, YOUR SOCIETY IS SCREWED.

And that goes for communist nations, capitalist nations, socialist nations and banana republics.

HALF OF THESE COMMITTEE MEMBERS AND HALF OF THEIR WITNESSES ARE  FUCKING IDIOTS.

The end.

Previous version @ http://onceuponaparadigm.wordpress.com/2010/12/18/fee-simple-absolute/

Here is some general documentation as well as links to further research these issues.

http://www.huffingtonpost.com/2010/02/06/house-committee-opens-inv_n_452307.html

MERS is the central device by which the banks have tried to opt out of the legal system and the real-property record system,” U.S. Representative Alan Grayson of Florida said in an interview. “They have taken it upon themselves, with the supposed consent of the borrowers, to violate a system of property record-keeping that we’ve had going back centuries.”

Attorneys general of all 50 states opened a joint investigation into home foreclosures Oct. 13, saying they will seek an immediate halt to any improper practices at banks and mortgage companies. The announcement came after several banks, including Bank of America Corp., halted foreclosures in either all states or the 23 with judicial supervision of foreclosures.

http://www.bloomberg.com/news/2010-10-19/u-s-electronic-mortgage-registry-comes-under-fire-in-foreclosure-crisis.html

Under the MERS system, a borrower who takes out a loan agrees to allow the company to act as the lender’s nominee, or agent, on the mortgage or deed of trust securing the property. That means MERS holds the lien, according to the company.

MERS continues to be the mortgagee of record as long as the note promising the borrower’s repayment is owned by a MERS member. If it’s sold to an outside entity, the assignment is recorded with the appropriate county.

About 60 percent of newly originated loans are on the MERS system, Lejarde said. Since its inception in 1995, it has carried 66 million loans and currently has between 23 million and 25 million active loans, she said.

“The problem with MERS is it takes a public function and puts it into a private entity that doesn’t seem to have any clear accountability,” said Alan White, a law professor at Valparaiso University in Indiana. “And it does it on legal grounds that seem tenuous.”

Securitization

MERS played a key role in the bundling of mortgages into securities that reached a frenzy before the economic decline of 2008, critics including Grayson of Florida said. It allowed banks to sell and resell home loans faster, easier and cheaper, he said.

“MERS was a facilitator of securitization,” said Grayson, a Democratic member of the House Financial Services Committee.

MERS disagrees. It was created to provide clarity and transparency and not “to enable faster securitization,” it said in an Oct. 9 statement.

“MERS probably served a necessary purpose given the volume of securitization that went on,” Talcott Franklin, a lawyer in Dallas who represents investors in mortgage-backed securities, said in a phone interview. “But for MERS, do you know how overwhelmed the county recorder offices would have been by the volume of assignments that had to go through there?”

Fees

A big selling point for the company is its cost savings. It charges $6.95 for every loan registered, Lejarde said. With an average cost of about $40 for filing a mortgage assignment with local counties, MERS has saved the industry about $2.4 billion, Merscorp Chief Executive Officer R.K. Arnold said in a September 2009 deposition in an Alabama suit.

http://www.bloomberg.com/news/2010-10-19/u-s-electronic-mortgage-registry-comes-under-fire-in-foreclosure-crisis.html

Oh and this on securitization:

Mortgage-bond issuers and investors moved to quell questions about whether banks properly assigned loans made during the securitization boom, arguing that such transfers are valid even if the loan's owner isn't identified in certain records.

The American Securitization Forum, a trade group for the securitization industry, is set to release on Tuesday a 28-page defense of widely used practices for bundling mortgages into securities. The securitization process and foreclosure-documentation practices are likely to face criticism from lawmakers at a Senate Banking Committee hearing Tuesday.

http://www.housingwire.com/2010/11/16/securitization-sector-set-to-defend-practices

Some more material on consumer debt:

Here comes the pinch: To manage household debt, Americans have used such moves to pull over $2 trillion out of their homes in the past five years. In the first six months of 2006, consumers extracted over $500 billion.

The sharp increase in foreclosures poses "a serious threat to neighborhood stability," said Pat Vredevoogd, president-elect of the National Association of Realtors, in a conference call with reporters on Tuesday. "It can cause all homes in the neighborhood to lose value."

The deterioration of homeowners' ability to keep up with mortgage payments will add oomph to calls on Capitol Hill for new regulation of mortgage lenders and brokers. "There is considerable discussion by incoming House Finance Committee Chairman Barney Frank [D-Mass.] to enact a predatory lending law for these mortgage lending problems," says Keith Ernst, senior policy counsel for the Center for Responsible Lending.

http://www.forbes.com/2006/12/19/mortgage-lenders-bust-biz-cz_ms_1219bust.html

This is why this Subcommittee is in charge of looking into all this graft:

The Subcommittee on Commercial and Administrative Law shall have jurisdiction over the following subject matters: bankruptcy and commercial law, bankruptcy judgeships, administrative law, independent counsel, state taxation affecting interstate commerce, interstate compacts, other appropriate matters as referred by the Chairman, and relevant oversight  http://en.wikipedia.org/wiki/United_States_House_Judiciary_Subcommittee_on_Commercial_and_Administrative_Law

In foreclosure proceedings robotic affidavits submitted to the courts as primary evidence where the individual ‘signing’ the affidavit has absolutely no personal knowledge concerning the facts contained in the affidavit. This has been categorized as ‘manufacture of documents’ –this byJames Kowalski, attorney in his testimony to this Subcommittee. He adds that all of these problems are subsumed under the category of ‘chain of title’ issues.  http://www.c-spanvideo.org/program/ForeclosureC

Vanessa Fluker from Michigan also testified as to her clients who were bamboozled by the lure of those selling ARM’s.

Tom Deustch, a lying scum representing the interests of the pigs (MERS) who got us into this mess is really interesting to listen to.

He talks about chains of documents, chains of documentable evidence…..See he is underlining the fact that somewhere in these bundles you can find PROMISES TO PRODUCE DOCUMENTS or PROMISES TO PRODUCE DOCUMENTS SOMETIME IN THE FUTURE…

He is nothing but a lying scum.

Oh mistakes will be made!!! Yeah, destroying our entire financial structure.

Christopher Peterson, Esq. gives us some history. The county recording office, the recording laws regarding real estate filings were all in place well before the colonies bound together as a country.

It is Christopher Peterson’s arguments that I have expanded upon here. It was only after reviewing his testimony twice on the net that I saw he was underlining every point I have made here.