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Pesqueeb

Pesqueeb

bicycle in airplane hangar
Feb 2, 2007
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Riding past the morgue.
Mortgage Backed Securities. The mess is just getting started.

Now, what does “broken chain of title” mean? Simple: When a homebuyer signs a mortgage, the key document is the note. As I said before, it’s the actual IOU. In order for the mortgage note to be sold or transferred to someone else (and therefore turned into a Mortgage Backed Security), this document has to be physically endorsed to the next person. All of these signatures on the note are called the “chain of title”.

You can endorse the note as many times as you please—but you have to have a clear chain of title right on the actual note: I sold the note to Moe, who sold it to Larry, who sold it to Curly, and all our notarized signatures are actually, physically on the note, one after the other.

If for whatever reason, any of these signatures is skipped, then the chain of title is said to be broken. Therefore, legally, the mortgage note is no longer valid. That is, the person who took out the mortgage loan to pay for the house no longer owes the loan, because he no longer knows whom to pay.

To repeat: If the chain of title of the note is broken, then the borrower no longer owes any money on the loan.

Read that last sentence again, please. Don’t worry, I’ll wait.

You read it again? Good: Now you see the can of worms that’s opening up.
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syadasti

syadasti

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Apr 15, 2002
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kidwoo said:
The gulf of mexico isn't 'clean' by any standards.

Unless your name is obama or you work for BP
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Neither is the Niger Delta which is probably at least double the amount of the BP spill but spread out over a 40 year period.
 
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