And in fact it is still unknown who owns this particular loan.

I read somewhere that one of the problems is that the notorious “tranching” of debt a.k.a. slicing and dicing into MBS was done in such a way that particular mortgages were not assigned to particular entities, but some kind of complicated derivative-type instrument was created in which money and mortgages would be pooled. Nobody owns these mortgages, but instead they own some kind of claim against … something or other … based on the overall rate of payment or non-payment of the body of loans which were sliced and diced. The mortgages were not divided up as such, but instead pools of risk were declared and then sold, with nobody really knowing (or caring) about anything apparently except for cash flow derived from some kind of mathematical formula. Or so it seems.

The fact that the actual ownership of houses was lost in the shuffle is yet another damning indictment against the Federal Reserve and the rest of the US government. The actual ownership of mortgages and the receipt of payments for those mortgages was not important enough to bother about, but instead the important thing was simply to position one’s bank or investment brokerage or fund as close as possible to the spigot of cash originating at the Fed, and to hell with the rest.

There are even deeper allegations which I have read. One allegation is that losing sight of the individual ownership of mortgages was a deliberate act intended to disguise the fact that the tranching of mortgages had the effect of selling them many times to different buyers – effectively the counterfeiting of MBS. Another allegation is that once the federal bailout money became available to banks which had non-performing loans, it became a lot more lucrative to own non-performing mortgages than performing ones, so the banks therefore tried to increase the size of their portfolio of bad loans by either encouraging people to stop making payments or by initiating foreclosure against houses whose mortgages were fully paid up.

This is another manifestation of the decivilizing effect of government, as Jeffrey Tucker was noting in another article about light bulbs and detergent. The foundation of civil society is respect for private property, so when private property ceases to exist in any form that ordinary people (let alone lawyers and accountants) can understand, then civilization ceases.