Comment Text:
I am very concerned about Consumer Privacy issues with Mortgage Backed Securities (MBS). MBSs by nature, disclose consumer financial information, to multiple entities not privy to the original transaction between borrower and lender. In fact, investors have an information advantage far superior to the borrower. Many borrowers, myself being among them, cannot even ascertain who the true owner of my mortgage is. Lenders refuse to disclose this information, MERS does not record the information consistently, and it is not recorded in the Registry of Deeds.
Any entity who gains membership to MERS can view more information than the consumer is made aware of. The investor purchases of an "alleged" interest in personal real property, yet it is never recorded or disclosed until a future event occurs. This is in effect, bucket shopping. The Futures Trading Practices Act of 1992 exempted such transactions from state bucketing laws "to provide legal certainty...". The statuatory purpose, I would surmise, was not to create and allow transactions involving property rights protected by the 14th amendment. Further, as witnessed by the current mortgage mess, this exemption has created a far greater "legal uncertainty" with respect to the property rights that are securitized, than any issue that the exemption was meant to eliminate.
An MBS is also by nature, a fiduciary conflict of interest. A bank cannot exert their fiduciary responsibilities for two classes of consumers, lenders and investors. Their interests in respect to MBSs, are adversarial. Banks disclose one consumers (borrowers) private financial information to another consumer (investors) freely, while withholding the information in a reciprocal manner. This is all done without the borrower having any knowledge of the securitization and subsequent transactions.
Borrowers expect privacy of their financial information when entering into any contract with a lender. Securitizations on private property rights should not be legal without signed consent of a real party in interest (borrower), on any instrument involving the lender and any subsequent party in interest. It also must be voluntary and not ahesive, such as the MERS contracts. This would allow ALL consumers to have privacy control, bargaining power, and disclosure in Mortgage backed securities.
