Please check out this recent post by Karl Denninger over at The Market Ticker. It links over to a very long document that will interest those of you who have your JD. Even for those of us non-lawyers, it makes a fascinating read:MERS/MBS/Foreclosure Goes RICO
...[W]ithout standing [REMICs] can't foreclose, but then we get back to "who can?" And what we find is that the originator was paid, and thus they can't either. Worse, for those originators that are bankrupt, their "assets", such as they are, can't go anywhere without a bankruptcy trustee's signature, and further, even if someone was to acquire that, which nobody has, THE REMICs CAN'T TAKE THE PAPER ANYWAY AS THEIR CLOSING DATE HAS EXPIRED.
So we have a bankrupt originator who was paid in full and can't foreclose, and we have a note that can't be transferred into the REMIC without destroying its tax preference (retroactively, incidentally), which instantaneously trashes the value of the MBS - probably by more than they could hope to recover if they were going to take the note anyway...
Another fistful of sand is about to be thrown into the gears of real estate commerce - and the associated Mortgage Backed Securities. Fugly.