Friday, February 3, 2012
New York Attorney General Sues Banks Over Electronic Mortgage System
Due 10 Feb 2012. This is New York...notice that California is not far behind. What kind of economic implications are there when states sue banks that are "too big to fail"??? How will this affect the bank customers?
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I didn't understand how the Mortgage Electronic Registration System would work so I looked it up in the internet. "Mortgage Electronic Registration Systems, Inc. (MERS) is an American privately held company that operates an electronic registry designed to track servicing rights and ownership of mortgage loans in the United States." I think its intention is good since its goal is to track the loans and the system might make it easier. It seems like this system is being widely used by many banks, the lenders of the mortgage. I feel pretty nervous about it being held by private corporation. The mortgage crisis was one of the reason that brought us into the recession. According to the article, "The suit also said the use of MERS resulted in the filing of improper NY foreclosures and created "confusion and uncertainty" over property ownership interests." Government needs to step in and help to improve the system in order to protect the rights of people.
ReplyDeleteI think that with the MERS system, the privately held company needs to keep a closer eye on what it is doing. When single states sue large banks, the large banks will 95% of the time always win. IF the bank does not win the case, they will still have all the money in the world to make a large profit under the company’s name. From this article, I got that the state has a limited amount of money of where it should go, and one man from a state versus an entire bank corportation, his chances of sorting everything it out and for their to be certainty in the interests are slim. If many large states come together and decide that this is an issue they all want to win, then I think the government would take a second look at the situation. But since California says that “…we support that MERS work”, New York is alone in fighting. The customers will be hesitant to keep trusting these banks. Of course, since these banks are too big too fail, people will continue to put money in the banks knowing that the banks will not go out of business.
ReplyDeleteWhen a bank is too big to fail, it is hard for one state to have any power against it when it feels that something is wrong with the system. Such as in the case of New York thinking that MERS does not work and California supporting it. If a lot of states think the same thing about a major bank, then it should probably be taken into consideration. Customers would start to not trust these big banks but wouldn't really know where to put their money. This makes it hard to alter anything because people have no where else to turn and they have to put their money somehwere.
ReplyDeleteThe economic implications of a state suing a bank that considers itself too big to fail is not particularly good. Generally speaking the bank will win which means that they will get away with what they are doing. I think that MERS has a good basic premise but the practicality is definitely flawed. Also the article says that MERS can cause confusion which means that it isn't quite reliable. Also, as previously stated, it is difficult to take on a "too big to fail" bank if only one state is challenging them.
ReplyDeleteThere are no positive implications for the state suing these powerful banks. The state, regarding the company MERS, thought that the banks showed poor and suspicious behavior. Although Schneiderman had proper cause to sue, he has a slim chance of winning this case. This case has to do with suspicious actions regarding mortgages by the banks. This affects many bank customers as most people have mortgages on their homes. Bank customers will become more skeptical due to the highlighting of these big banks' flaws. The banks will ultimately suffer as people become more aware of their faulty practices.
ReplyDeleteWhen states sue big banks that are "too big to fail" there aren't really any positive implications. MERS is an illegal practice practiced by banks to evade county recording fees. It led to states losing money while the banks were saving at least two billion dollars. MERS led to confusion to not only fees, but property ownership and taxes too. This can affect bank customers by decreasing the amount of people using those banks because of there illegal practices and changing to other banks.
ReplyDeleteWhen states sue banks that are labeled as too big to fail, the implications are not good. The bank, with its money and power, is obviously going to win, and just create more turmoil for the state. MERS is not always helpful, as it just leads to further confusion and chaos. By suing the bank, though, I think that the state will succeed in making the general public aware of their practices, and more concerned with where they put their money.
ReplyDeleteWhen powerful banks are sued by states there are few if any positive outcomes. Sure, there may be some kind of small pay out in the end but to the bank its not a lot and to the people its not enough. When a bank is considered too big to fail, they know it and abuse their power and we all suffer, suing them would only raise awaerness of the problem and give the CEOs a headache, which could be worth it.
ReplyDeleteNo matter how uplifting this article may seem from afar, it definitely represents the power of major banks. In that case, there are little to no positive outcomes from battling against these ships while we are on small boat. More specifically, they're wasting their time and money. Bank customers are then affected because they have ties to the banks. If the banks "fall" they fall with them too. Or even if the banks do not fall, the banks have created a distorted reputation for themselves that could lose them a lot of customers.
ReplyDeleteI think the label "Too big to fail" is a terrible thing to say about any position of power; that's like giving cops immunity to the law. Sure, in practicality it makes no sense to go after the banks because of the negative repercussions, but I think for once in history, it's about time we stop caring about the money and do what's right. Honestly, it's about time for a revolution in this country.
ReplyDeleteSo MERS is a nice thing I guess but I dont believe it will work. Loans cannot be tracked easily especially with the forging of signitures going on. The state vs huge bank is a blow out in favor of the bank. The unfortunate thing about the banks being too big to fail is that they kindoff are too big to fail. That being said I still believ that what is done for a good cause should still be done so the state should still sue if its inhabitants feel it is just. They just need to realize theat they will most likely lose.
ReplyDelete