Why is the Ibanez case so important?
First, to recap, the Ibanez case was handed down by the Massachusetts Supreme Court, the highest Court in Massachusetts. It is the Law in that state. The case was actually very simple.
The issue before the court was whether the two securitization trusts could prove that they owned the mortgages they were attempting to foreclose on.
The result was they couldn’t. This wasn’t the result of sloppy lawyering, or the homeowner hanging his hat on some obscure technicality. This was all out, full blown trench warfare, with two of the largest banks in the Country, who knew that a loss here in Massachusetts could be devastating. Were the banks rushed, and just unable to come up with the documentation in time? No, not even close. The Court actually gave them additional time, and told them exactly what the Court needed to see, in order for the Banks to win. Did they provide that to the Court? No.
Well, why didn’t they? I mean they are banks, and banks are supposed to keep good records right? You trust them with your checking account. You go on-line and check your balance to see how much you have, right? This is what banks do, keep track of things. So why couldn’t they keep track of these two mortgages?
Basically it was because they (banks and Wall Street in general) broke the system themselves. Why would they do that? To save money, which in turn allowed them to make a great deal of money in the short term, leaving the long term consequences to someone else.
We’ll explain what happened, in everyday terms, in our next article.