What Gives Congress The Right To Trample and Destroy The Authority of States to Pass Laws That Govern Property?
What gives them the right is that we own property, and the elites have run out of other things to take from us. Same as any other third world nation.
From David Dayen at Naked Capitalism:
The top Republican on the House Financial Services Committee has tucked a provision into his mortgage finance reform bill that would create a privately held “National Mortgage Data Repository.” The repository would basically look like MERS, the bank-owned electronic database tracking mortgage transfers. The difference is that, while MERS’ activities have drawn legal challenges across the country, the National Mortgage Data Repository would have the force of statute to carry out the exact same behavior. According to the bill text, any document arising from this repository would be seen as presumptively legal, pre-empting state and federal laws on demonstrating the right to foreclose.
Jeb Hensarling, the chair of the House Financial Services Committee, introduced the bill last Thursday. Hensarling has already gotten into trouble this year for taking a ski vacation/fundraiser with Wall Street lobbyists, including an official from the American Securitization Forum, just six weeks after getting the Financial Services Committee gavel. Financial interests donated over $1 million to Hensarling in the last election cycle. It’s not a stretch to suggest that legislation offered by Hensarling at least has the stamp of approval from Wall Street, if it’s not directly written by their lobbyists.
The bill is called the Protecting American Taxpayers and Homeowners (PATH) Act, and it’s the House Republican response to a series of bills and initiatives to resolve Fannie Mae and Freddie Mac, and set a course for the future of mortgage finance. Most of the bill deals with that: in Hensarling’s vision, Fannie and Freddie are totally dismantled within five years, and private actors take up the slack with virtually no government guarantee. While in the past I’ve trashed the idea of just reconstituting Fannie and Freddie under a different name, in reality, expecting private actors to recreate a secondary mortgage market without any guarantee (or even with one, in my view) is wishful thinking.
But that’s not what’s interesting about Hensarling’s bill, which sprouts from the same “GSEs caused the housing crisis” rhetoric that conservatives have parroted for years. No, it’s this revelation of the banks’ true desire to wrap up the documentation failures of the bubble years that should raise alarms.
Title III of the PATH Act directs the Federal Housing Finance Agency to provide a charter for something called the National Mortgage Market Utility (NMMU). Basically, whatever the FHFA Director approves as the NMMU is acceptable – through a cooperative, partnership, whatever. The FHFA then regulates the NMMU. Basically this utility would create standard practices for origination, servicing, pooling and securitization of mortgages, and operate a common securitization platform, something we’ve seen in other drafts of mortgage finance reform bills. Allegedly, community banks would not be discriminated from participating in the management of the utility, but if this has to take on a spate of duties formerly performed by Fannie and Freddie, there’s little question that big financial institutions would be favored.
There’s a lot to this National Mortgage Market Utility (for one, its creation, under the bill, would allow for the exemption of mortgage backed securities from SEC oversight under the Securities Act of 1933), but let’s focus on how it’s empowered to bulldoze state and federal property rights laws. According to Section 331 of the bill, the utility would “organize and operate” the National Mortgage Data Repository. The repository would be a standardized catalog into which any qualified depositor (qualified by the utility, it appears) could stash all their mortgage-related documents – including notes, mortgages, and any related information. The repository would set the standards for the required information in the documents, as well as standards for recording a “creation, assignment, or transfer of interest.” You’ll notice the lack of any regulatory oversight of these procedures. Basically, this private entity, the National Mortgage Market Utility, which could be owned by banks, sets the rules for a brand new private mortgage transfer and document database, not dissimilar to MERS. Theoretically, the data in the repository would be publicly available, with privacy safeguards.
Now here’s the kicker. The repository’s defined purpose is to “address problems that can arise when paper notes cannot be produced, due to loss or destruction as a result of natural disaster or other causes; and to provide a uniform procedure for demonstrating the right to act with regard to such notes or other registered data for all actions in any State or Federal proceeding, judicial or nonjudicial, involving such notes or other data.” Emphasis mine.
