Bank of America Takes a Shot to the Head

The ruling is in and it spells trouble for the financial system -

The banks tried to get constructive assignment (e.g. assignment by contract, even though the PSAs said otherwise - that actual assignment and delivery had to take place) recognized by the judge, and failed to produce evidence of actual assignment (because there wasn't any - the notes were originally endorsed in blank and there was no evidence of actual physical delivery to the trustee.)  The Judge said no.  That's what I was talking about earlier in this case - this has been the pattern and practice in these securitized loans, and the ASF and others in the industry have argued that despite language in the PSAs that required physical delivery they didn't have actually perform in that fashion to have a factually and legally-good transfer

The Real Effect
As Denninger has been repeatedly pointing out, there is State law about how you can conduct your business. The banks violated that law, lied about it, and committed fraud.

This is going to get ugly as now everyone who lost something in 2008 is going to be out for their pound of flesh. There's pretty much only one of two ways this can end:

1. The bankruptcy of most if not all of the institutions that participated in this via the hands of their investors. (This is the preferred method)
2. Some sort of legal rangling involving bailouts, law changes or nationalization of these institutions. (3808 anyone?)

Look for Republicans to get on the wrong side of this argument as they try to get between the people and the bankers.