Eike Batista, Brazil's richest man, is sniffing around as well.Why did the Central Bank decide to investigate the market in loan assignment at this precise moment?
Once borrowers have determined that their new and old lenders will work with them on the loan assignment, they must "understand what the potential savings are and weigh that against the overall cost of doing this," said Marc Kunen, the Manhattan branch manager for Mortgage Master, a mortgage banker.
A routine check on Brazil's market for loan assignments found different totals for purchases and sales.
To avoid the costs and complexity of tracking all these exchanges, Fannie Mae, Freddie Mac and the mortgage industry set up MERS to record loan assignments electronically.
Loans were heaped into trusts with little documentation of ownership or proper loan assignments — it was all about volume and the fees that came with it — and now that sloppiness is hurting both lenders and borrowers.
On Oct. 10, Judge Boyko, 53, ordered the lenders' representative to file copies of loan assignments showing that the lender was indeed the owner of the note and mortgage on each property when the foreclosure was filed.
Intense competition for corporate and industrial loan business is another problem as banks cut deals and lower underwriting standards to win loan assignments.
Paul Jackson, an art history doctoral student in his ninth year at N.Y.U., said that stipends in his department were about $9,000 when he started (N.Y.U. said it now has a $13,000 minimum) and that he has taken out loans, accepted teaching assignments at other universities and worked four days a week in the Jackson Pollock-Lee Krasner house in East Hampton.
Mr. Bennett said he thought he might be able to save his home, despite falling behind on his loan payments, because the mortgage assignment was signed by a mortgage company employee, Marti Noriega, who was previously involved in a foreclosure that had been halted.
Instead of granting and recording a new loan when a borrower refinances, the assignment process transfers a mortgage to a new lender, which then revises it.
"Well, there's Eric Foner, of Columbia," said the vice-president for chancy loans, who had been given the assignment of proposing some historians for the job.
