MERS Getting the Grilling It Deserves

“If courts are willing to say MERS doesn’t have any ownership interest in mortgage loans, that may eventually call into question the priority of liens recorded in MERS’s name, and there are millions and millions of them.”
September 27, 2009
Fair Game

The Mortgage Machine Backfires

WITH the mortgage bust approaching Year Three, it is increasingly up to the nation’s courts to examine the dubious practices that guided the mania. A ruling that the Kansas Supreme Court issued last month has done precisely that, and it has significant implications for both the mortgage industry and troubled borrowers. Editor’s Note: See kansas-supreme-court-sets-precedent-key-decision-confirming-livinglies-strategies

The opinion spotlights a crucial but obscure cog in the nation’s lending machinery: a privately owned loan tracking service known as the Mortgage Electronic Registration System. This registry, created in 1997 to improve profits and efficiency among lenders, eliminates the need to record changes in property ownership in local land records.

Dotting i’s and crossing t’s can be a costly bore, of course. And eliminating the need to record mortgage assignments helped keep the lending machine humming during the boom.

Now, however, this clever setup is coming under fire. Legal experts say the fact that the most recent assault comes out of Kansas, a state not known for radical jurists, makes the ruling even more meaningful.

Here’s some background: For centuries, when a property changed hands, the transaction was submitted to county clerks who recorded it and filed it away. These records ensured that the history of a property’s ownership was complete and that the priority of multiple liens placed on the property — a mortgage and a home equity loan, for example — was accurate.

During the mortgage lending spree, however, home loans changed hands constantly. Those that ended up packaged inside of mortgage pools, for instance, were often involved in a dizzying series of transactions.

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. This company didn’t own the mortgages it registered, but it was listed in public records either as a nominee for the actual owner of the note or as the original mortgage holder.

Cost savings to members who joined the registry were meaningful. In 2007, the organization calculated that it had saved the industry $1 billion during the previous decade. Some 60 million loans are registered in the name of MERS.

As long as real estate prices rose, this system ran smoothly. When that trajectory stopped, however, foreclosures brought against delinquent borrowers began flooding the nation’s courts. MERS filed many of them.

“MERS is basically an electronic phone book for mortgages,” said Kevin Byers, an expert on mortgage securities and a principal at Parkside Associates, a consulting firm in Atlanta. “To call this electronic registry a creditor in foreclosure and bankruptcy actions is legal pretzel logic, nothing more than an artifice constructed to save time, money and paperwork.”

The system also led to confusion. When MERS was involved, borrowers who hoped to work out their loans couldn’t identify who they should turn to.

As cases filed by MERS grew, lawyers representing troubled borrowers began questioning how an electronic registry with no ownership claims had the right to evict people. April Charney, a consumer lawyer at Jacksonville Area Legal Aid in Florida, was among the first to argue that MERS, which didn’t own the note or the mortgage, could not move against a borrower.

Initially, judges rejected those arguments and allowed MERS foreclosures to proceed. Recently, however, MERS has begun losing some cases, and the Kansas ruling is a pivotal loss, experts say.

While the matter before the Kansas Supreme Court didn’t involve an action that MERS took against a borrower, the registry’s legal standing is still central to the ruling.

The case involved a borrower named Boyd A. Kesler, who had taken out two mortgages from two different lenders on a property in Ford County, Kan. The first mortgage, for $50,000, was underwritten in 2004 by Landmark National Bank; the second, for $93,100, was issued by the Millennia Mortgage Corporation in 2005, but registered in MERS’s name. It seems to have been transferred to Sovereign Bank, but Ford County records show no such assignment.

In April 2006, Mr. Kesler filed for bankruptcy. That July, Landmark National Bank foreclosed. It did not notify either MERS or Sovereign of the proceedings, and in October, the court overseeing the matter ordered the property sold. It fetched $87,000 and Landmark received what it was owed. Mr. Kesler kept the rest; Sovereign received nothing.

Days later, Sovereign asked the court to rescind the sale, arguing that it had an interest in the property and should have received some of the proceeds. It told the court that it hadn’t been alerted to the deal because its nominee, MERS, wasn’t named in the proceedings.

The court was unsympathetic. In January 2007, it found that Sovereign’s failure to register its interest with the county clerk barred it from asserting rights to the mortgage after the judgment had been entered. The court also said that even though MERS was named as mortgagee on the second loan, it didn’t have an interest in the underlying property.

By letting the sale stand and by rejecting Sovereign’s argument, the lower court, in essence, rejected MERS’s business model.

Although the Kansas court’s ruling applies only to cases in its jurisdiction, foreclosure experts said it could encourage judges elsewhere to question MERS’s standing in their cases.

“It’s as if there is this massive edifice of pretense with respect to how mortgage loans have been recorded all across the country and that edifice is creaking and groaning,” said Christopher L. Peterson, a law professor at the University of Utah. “If courts are willing to say MERS doesn’t have any ownership interest in mortgage loans, that may eventually call into question the priority of liens recorded in MERS’s name, and there are millions and millions of them.”

In other words, banks holding second mortgages could find themselves in the same pair of unlucky shoes that Sovereign found itself wearing in Kansas.

Asked about the ruling, Karmela Lejarde, a spokeswoman for MERS, contested the court’s reasoning.

“We believe the Kansas Supreme Court used an erroneous standard of review; this is not the end of the judicial process,” she said. “The mortgages on which MERS is the mortgagee will remain binding contracts.”

BUT Patrick A. Randolph, a law professor at the University of Missouri, Kansas City, who described himself as a friend of MERS, described the recent decision as unsettling. “This opinion is hostile to the notion of MERS as nominee and could lead to problems for it in foreclosing,” he said. “The entire structure of MERS as a recorded nominee could collapse in Kansas, and that could lead to a patch-up job where they would have to run around and re-record the mortgages.”

If so, MERS would be hoisted on its own petard. And it would be a rare case of poetic justice in this long-running mortgage mess.

33 Responses

  1. […] puzzle and is causing  some cases in the foreclosure process to crumble apart.  Hats off to LivingLies for reporting the recent Kansas supreme court decision which shot down […]

  2. Who are some of the reputable forensic real estate investigators who perform these investigation?

    I read of one called the I R S…but I was unable to find them on line

    Individual Resolution services

  3. OUCH!!!

  4. Check out this problem from the MERS forum (posted in 2002)–looks like Indiana was way ahead of the curve:

    ” Release Rejection Issues CO, NJ, & IN
    We have received several county rejections in CO, NJ, and IN. In CO and NJ, because the original Note and Security Instrument are sent to release our lien, we are getting rejections because there are inconsistencies in the Note endorsements and the title chain (i.e. the Note has been endorsed to our trustee, but the title chain has MERS as mortgagee). What is the best way to rectify this issue.

    In IN, we are receiving rejections, because the counties do not accept MERS as nominee. In a recent rejection from Grant County, the rejection letter states that, “It is our jurisdiction’s understanding that the word ‘nominee’ is not defined in Indiana code with respect to real estate or real property. Since ‘nominee’ has no legal status in our state, the attempt to circumvent the assignment or release process is not allowed.” Are we the only servicer having these problems? What is the most expedient way of dealing with these? Should we just get the Assignment we would normally need? I know that MERS would say no, but at the same time, we don’t want to expose ourselves to unnecessary penalties, because the word ‘nominee’ isn’t defined in the state of Indiana. Any suggestions? “

  5. JPMorgan Chase/Wamu have been acting as MERS nominees signing their names as “vice president” on hundreds, if not thousands, of mortgage assignments assigning mortgages over to JPMorgan Chase while employed at JPMorgan Chase/Wamu. The assignments are from many different “lenders” that no longer exist. In all instances, it looks like they are doing this for the sole purpose of foreclosing on a home through the Florida Default Law Group (foreclosure mill) that they had no prior interest in, ie. never lent a dime in the transaction. They use the same notary’s and witnesses and are all executed in Duval County, home of JPMorgan Chase in Jacksonville, FL. I have downloaded hundreds of these assignments from the county records from all across FL to present to the court. It will be interesting too see how they will spin this.

    Check out this report by Nye if you haven’t already. This kind of fraud has been happening for a long time.

    http://livinglies.files.wordpress.com/2008/07/pmiocwenreport.pdf

    4closureFraud

  6. zurenarrh: “The MERS® System is a tracking system that tracks the changes in servicing rights and beneficial note ownership.” – But MERS doesn’t really even do that – as LivingLies and Nye Lavalle have hammered away at for years.

    In spite of what MERS declares, the MERS system (“milestones”) tracks only mortgage loan “servicers” and “investors.” It most certainly doesn’t track the note “owners.” When MERS states that Fannie is the “investor,” it sounds like Fannie is the “owner,” but it may not be, especially if the loan was securitized. Fannie may be the “Trustee” for the security, but MERS doesn’t even indicate that.

    It seems to me – and remember I don’t know what I’m talking about because I’m not an attorney – that “holding the note” should mean nothing if the holder is not entitled to the income of the note. An “endorsed in blank” note shouldn’t mean that it is a “bearer bond” – as much as MERS and servicers and foreclosure mills want it to be – if the income has been sold off and committed to another entity AND without true “agency status” with a RECORDED agreement for a DISCLOSED principal who is entitled to receive the income from the note – a concept that is anathema to MERS.

    Look closely at who creates what seem to be fake “assignments” of these loans – was it the attorneys for the “servicer?” Did employees of the “servicer” morph into MERS officers to create these documents?. In a normal world, courts would not tolerate frauds intended to create standing and should respond accordingly and decisively, as currently only a few judges, like Judge Shack, seem to be doing.

  7. Interesting read on mortgage securitization by Arnold Kling an economist and member of the Financial Markets Working Group of the Mercatus Center at George Mason University. In the 1980’s and 1990’s he was an economist with the Federal Reserve Board and then with Freddie Mac.

    Should Mortgages be Securitized?

    Like Humpty-Dumpty, mortgage securitization has taken a big fall. There is a widespread presumption that government policy, if not all the king’s horses and all the king’s men, should be aimed at putting securitization together again. The purpose of this essay is to question that presumption.

    The first section of this paper will describe how securitization worked at Freddie Mac in the late 1980s, when I worked there. This will allow me to introduce and explain the concepts of interest rate risk and credit risk in mortgage finance.

    The second section of this paper will describe developments in the mortgage industry from the mid-1980s through the 1990s, when Freddie Mac and Fannie Mae took on more interest rate risk. The third section looks at what evolved over the past ten years, when the process for allocating and managing credit risk changed, with “private-label” securitization and the growth of subprime mortgages.

    The fourth section of this paper describes various options for reviving mortgage securitization. The final section steps back and looks at interest rate risk and credit risk from a public policy standpoint. Government policy influences the allocation of credit risk and interest rate risk in capital markets. What are the social costs and benefits of various allocations? I suggest that policymakers might consider reverting to the housing finance system that preceded the emergence of securitization, in which depository institutions were responsible for managing both credit risk and interest rate risk for mortgages.

    read the rest here…
    http://creditriskchronicles.blogspot.com/2009/09/should-mortgages-be-securitized.html

    4closureFraud

  8. zurenarrh,

    Sorry I am not a registered
    “Commenter” at Daily Kos.
    Perhaps I’ll sign up over
    there.

    That’s a grass roots
    sort of political place.
    It’s great to see this
    issue getting aired
    at a ‘site like that one.

  9. OK, my last comment for the evening–NYE LAVALLE RULES!

    You should go to the the MERS forum and check out Lavalle’s sparring with CEO R.K. Arnold and the MERS chief legal counsel. Holy crap, Nye is taking them to task for all their foolishness–and this was back in 2003!

    Here’s a sample of Nye giving them holy hell:

    “I don”t think you all get it. We don”t care about whom is servicing the loan. They are just bill collectors and money transferors for borrowers and investors. Unless, you”re going to tell us and lie to us in this forum that MERS or the servicer is the investor or owns all beneficial rights to the mortgage and notes from origination to payoff, then what we are asking is not to know who is servicing the loan, but who is also subservicing the loan and to what trust, REMIC, SPV, entity etc. actually owns the loan and is the holder in due course of the note and to where the note may have been assigned to or any part thereof other than the servicing which the borrower already knows.

    We want to know what loan pools and trusts the mortgage is in. We want to know whom the document custodian is and where the note is being held and is physically located.

    We want to know all sub-servicers, special servicers; everyone that is in your records in any capacity that is touching a particular note.

    We want to put everyone, trustees, rating agencies rating the particular MBS transaction, Fannie, Freddie, custodians, investors such as mutual funds, pensions funds, trust funds, the FHLBs, OTS, OCC and the SEC as to what is going on here and how everything is being accounted for.

    We really don”t care about the servicer. If your records show that a loan has been kicked back, we want to see this. If there are implicit, implied or moral recourse agreements that are being used behind the scenes allowing the repurchase of loans going bad, we want to know and we want to trail, audit and document how that affects the “true sale” nature of the transaction as well as any REMIC or other tax consequences.

    In GA, and other states, we want to see that upon refinancing that those entities that are assigning rights “privately” and then publicly using MERS as a nominee are paying their dutiful and rightful intangibles taxes…

    We have the evidence of the fraud. Would you and your respective counsel be willing to meet and review the evidence…”

  10. Oh, wait–I didn’t read all the way down. It gets even better! “Eve” asks this on the MERS forum:

    EVE: “Finally, how does MERS transfer interest in the note without being owner or holder of the note? MERS assignments state “mortgage with the note”.”

    (This is exactly what I’d like to know–thanks for asking, Eve!)

    ADMIN: “A promissory note is transferred by the endorsement and delivery of the note. The mortgage assignment sometimes contains a reference to assigning the note as well, but the endorsement and delivery with possession of the note is what controls who holds the note interest. Additionally, there are times when MERS can be and is the holder of the note.”

    Thank you, Mr. (or Ms.) Administrator for making my case for me by giving a non-answer to a simple, direct question. In my case, MERS purported to assign the note and deed of trust to BAC servicing. But in its answer to my complaint, BAC admitted that Fannie Mae held the note at the time of my complaint (which came after the bogus assignment). Ergo, MERS’ assignment of the note is fraudulent, illegal, and actionable because they didn’t and don’t own the note.

    This is exactly what the Daily Kos diarist was saying. It’s what they Kansas Supreme Court said. The cat’s out of the bag…and it’s pissed!

  11. Here’s MERS’ take on assignments from the online forum at
    mersincDOTorg:

    “The MERS® System is a tracking system that tracks the changes in servicing rights and beneficial note ownership. Only when Mortgage Electronic Registration Systems, Inc. is the mortgagee of record is a mortgage loan registered on the MERS® System. MERS remains the mortgagee by holding legal title to the mortgage interest while servicing rights are sold via a purchase and sale agreement. The transfer of servicing rights is a non-recordable contract right. Both the old servicer and new servicer will notify the Borrower of the change in writing. Note ownership is transferred via endorsement and delivery of the promissory note which is also a non-recordable transfer. MERS continues to hold the mortgage lien interest as the mortgagee of record during these non-recordable transfers. No assignment of the mortgage lien is necessary. Only when the mortgage lien interest is transferred out of MERS name does a mortgage lien assignment become necessary.”

    No assignment of the mortgage lien is necessary? Even when the note is sold? Do they think we’re stupid?

    Again, this is an open admission that any mortgage/deed of trust involving MERS necessarily separates the note from the mortgage. It’s as simple as that–straight from the horse’s mouth. If MERS thinks it owns the mortgage separate from the note–regardless of what the mortgage/deed of trust says–it is sadly mistaken and only gets this fraud over on people who are 1) too scared to take them on and/or 2) don’t know any better (which is most people) or 3) both of those.

  12. Deontos,
    Thanks for posting that Daily Kos diary. It’s very helpful, especially since the writer’s situation sounds quite similar to mine in many respects. I’m not a Daily Kos member and would like to comment in support of this diarist, but even if I signed up right now, I couldn’t comment for 24 hours (according to their policy). If you are a member, could you post a link to Living Lies? If you already have, my apologies–I didn’t read ALL the comments on the diary.

  13. dny,

    I agree with you wholeheartedly regarding the following statement of yours:

    “I think these MERS ‘assignments’ should be attacked as frauds intended to create the illusion of standing for servicers. If these ‘assignments’ really did transfer the note as well as the mortgage – which we know MERS can’t do because by its own admission it never owns anything, including notes…”

    That’s exactly what this my MERS assignment is trying to do–give the appearance that they have legal authority. I have been contemplating writing a letter to my county’s chancery clerk (who records deeds of trust) informing him of these issues and pointing out to him that he may be aiding and abetting illegal activity by recording these assignments from MERS.

    I mean, it’s one thing if the general public doesn’t know the ins and outs of assignments and the chain of title, but one would think that the county recorder would be a little more sophisticated than Joe Sixpack when it comes to these matters.

    One more thing: I find it very interesting that MERS’ whole business model is predicated on the idea that they don’t have to record any assignments and in fact don’t record any–until they want to steal someone’s house. Then they are more than willing to pay the nominal fee to have an assignment recorded publicly.

    It’s a farce, really. And again I’ll say–all of this is really quite simple for a judge to be able to understand. It seems like all one would have to do is say, “Your honor–investors in Fannie Mae securities own my note and MERS is the fake beneficiary/nominee of my deed of trust. Since there was no assignment of my deed of trust to Fannie Mae (or investors in their trust), it has been separated from the note and we all know that if a note is not secured by a deed of trust, the holders of the two pieces are plumb $#!+ outta luck . So tell these thieves to back off and give me my damages and attorney’s fees for their fraud.”

    And if they say, “Oh well, MERS recorded the assignment of your deed of trust on their private system, so it is valid,” the answer to that is that MERS is in no position to do anything concerning the deed/note since they do not meet (and never did meet) the basic legal definitions of either “beneficiary” or “nominee.” Even though the deed of trust calls MERS both of those things, MERS did not and does not serve the functions of either of them and it is the actions taken under the contract that matter, not the names given to the parties in the contract.

    If any lawyer would care to comment on the correctness (or lack thereof) of this line of argument, feel free. I won’t take it as legal advice, just information. And any knowledgeable non-lawyer, same deal–I will not construe your information as legal advice. I will just think “Hmmm, that’s very interesting and informative, but certainly not legal advice.”

  14. FROM DAILY KOS:
    Mon Sep 28, 2009 at 06:26:09 AM PDT

    *** How I am Beating the Crap out of Countrywide/MERS ***

    garnered a large response concerning how to combat illegal
    foreclosures. Several of you suggested that I put into form a step by step guide on how to fight these illegal foreclosures. I will impart to you my knowledge and personal experience in fighting these crooks who tried to illegally foreclose on my house, coupled with my knowledge of the court system, and most importantly how you or a family member or friend can fight these criminals both with, and without an attorney. My hope is that this community uses its skills to get this information out to the many, many Americans in need…

    First of all, this advice applies to my state. Some of this may not apply in your state. The major premises of this diary remain however. Many many foreclosures are being conducted illegally. This is how in my state and hopefully in your state you can combat an illegal foreclosure.

    http://www.dailykos.com/story/2009/9/28/786368/-A-Guide-on-How-to-Fight-an-Illegal-Foreclosure-in-my-State,-pt.-1

  15. dny,
    Good catch. Just like the justices in the Kansas decision said, there is no way of knowing which Trustee they are referring too. Except that the only Trustee in the prospectus in general is the Trustee for the securitization (US Bank). So, I guess I can take my claims up with them. Oh Wait. I am being foreclosed on by Wells Fargo for US Bank National Association as Trustee by Residential Funding Company, LLC FKA Residential Funding Corporation Attorney in Fact. So, I guess I will have to take my claim up with Wells Fargo for US Bank National Association as Trustee by Residential Funding Company , LLC FKA Residential Funding Corporation … If only I could figure out who that actually is or what it means. What? Did you say something about deceptive business practices? 🙂

    Thanks,
    Dan Edstrom
    dmedstrom@hotmail.com

  16. zurenarrh,
    Just remember – this is what my securitizer said about MERS. Whoever securitized your loan may have said this, nothing, or something else completely.

    Thanks,
    Dan Edstrom
    dmedstrom@hotmail.com

  17. zurenarrh: I think these MERS “assignments” should be attacked as frauds intended to create the illusion of standing for servicers. If these “assignments” really did transfer the note as well as the mortgage – which we know MERS can’t do because by its own admission it never owns anything, including notes – then it would be a transfer of a note previously declared to be “in default.” Kings County, NY Judge Shack has repeatedly questioned why “servicers” or “trustees” would “purchase” “non-performing” loans.

    Dan Edstrom: If your deed of trust says that MERS is “nominee” for the lender, and the prospectus says that MERS is “nominee” for the “Trustee” (presumably the “Trustee” of the securitized “trust”? – or do they mean Trustee for the DOT?) – then is the “Trustee” your “Lender?” (If A=B and B=C, then A=C). Can you therefore bring your predatory lending claims directly to the Trustee?

    I think the Kansas decision starts to unravel MERS “as nominee.” There can be no “agency” status if the “principal” is never disclosed, so it doesn’t seem that they should enjoy “agency status.” Also, the Kansas Supreme Court seemed to zero in on the huge problems created by the MERS-created split of mortgage from the note.

    Legal disclaimer: I’m not a lawyer and probably don’t know what I’m talking about either, so you should get a legal reality check from a local attorney.

  18. This quote from Dan’s prospectus is VERY interesting:

    “With respect to each of these mortgage loans, MERS serves as mortgagee of record on the mortgage solely as a nominee in an administrative capacity on behalf of the trustee, and does not have any interest in the mortgage loan.”

    When MERS decided to make a public assignment to my servicer with my county recorder in preparation for their attempted robbery–I mean, “foreclosure”–of my home, the assignment purported to “assign, grant, and transfer “all beneficial interest” in the deed of trust “TOGETHER WITH THE NOTE,” echoing the language in the deed of trust regarding sales of Notes.

    However, as Dan’s quote above points out, MERS has nothing to do with Notes. They don’t own them, they don’t hold them (MERS itself admits this)–they’re not even named in my Note. On what possible legal grounds could MERS assign a Note in which they never had any “beneficial interest?”

    I know that my Note is “held” by Fannie Mae–I’m assuming that means “securitized.” Even if MERS is an agent for Fannie Mae under the language of my deed of trust, MERS has NOTHING to do with the Note even though they told my country recorder that they do. Is that not at least common law fraud, among other things?

  19. Here is what my prospectus says. Remember – this is what was used as disclosure to the Investors who are “holders of certificates” issued by the Trust (REMIC) that allegedly “holds” my mortgage:

    “With respect to each of these mortgage loans, MERS serves as mortgagee of record on the mortgage solely as a nominee in an administrative capacity on behalf of the trustee, and does not have any interest in the mortgage loan.”

    I am in a non-judicial state. But if I were being sued by MERS I would get a copy of the prospectus for my securitization. I believe this is SEC filings 424(b)(5) – at least it was for mine. They have a couple of other things to say about MERS also (such as it is fairly new and could hose things up for the investors).

    If MERS were to get the note from somebody to foreclose, this would mean they would need an assignment. Once the mortgage is transferred the first time, the lender changes. They would need to have an agreement with MERS to use MERS, etc, etc through all of the assignments. Where is the proof that MERS is holding the note to foreclose? How did they get it? Was consideration paid? etc., etc., plus what everyone else is saying (I haven’t read enough about MERS yet).

    Disclaimer: I am not a lawyer and do not know what I am talking about

    Thanks,
    Dan Edstrom
    dmedstrom@hotmail.com

  20. From the MERS website;
    http://www.mersinc.org/Foreclosures/index.aspx

    Mortgage Electronic Registration Systems, Inc. (“MERS”) is a proper party that can lawfully foreclose as the mortgagee and note-holder of a mortgage loan. MERS Membership Rule 8 provides required guidelines that must be followed when MERS is the foreclosing entity. Please click here to access the Rules of Membership, and reference the Rule 8 requirements.

    In mortgage foreclosure cases, the plaintiff has standing as the holder of the note and the mortgage. When MERS forecloses, MERS is the mortgagee and it is the holder of the note because a MERS officer will be in possession of the original note endorsed in blank, which makes MERS a holder of the bearer paper. MERS will not foreclose unless the note is endorsed in blank and held by MERS.

    The MERS Legal Primer provides a sampling of cases that address the standing of MERS to foreclose its mortgages. These cases are not meant to be an exhaustive list involving MERS but are merely to serve as a primer for the legal arguments.

    MY RECORDED MORTGAGE SAYS THIS
    (PARAGRAPH C)

    “MERS” is Mortgage Electronic Registration Systems, Inc. MERS is a separate corporation that is acting solely as a nominee for Lender and Lender’s successors and assigns. MERS is the mortgagee under this security instrument. So are they a nominee OR mortgagee?

    It goes further to state in PARAGRAPH F

    “Borrower does hereby mortgage, grant and convey to MERS (solely as nominee for Lender and Lender’s successors and assigns) and to the successors and assigns of MERS the following described property located in the County of _______.

    Yet MERS by their own admission says they are simply a tracking service. BOGUS!!!

  21. […] on in the banking and mortgage industries.  but it is a good sign that the went with this story.  Neil Garfield also published on his site Living […]

  22. Thanks for your response, SF_Dan. On another thread, Lee also backed up this point:

    “But there is a point beyond this that I believe is even greater; the very existence of MERS keeps notes from being legally securitized as ‘asset-based’ certificates/securities. That being because anything that reverts to a former beneficiary (which in the past were usually banks) **fails sale accounting** – and according to FAS 140, anything that fails sale accounting cannot be considered an asset. “

  23. Complete lay-person here…

    Does this ruling indicate that, *HAD* Sovereign properly recorded it’s interest with the county clerk when they made the loan, then they *would* have been allowed to assert it’s rights to the mortgage?

  24. […] are many sites to help people with foreclosures.  Neil Garfield’s Living lies,  Charles Lincoln’s Spiritual Patriot and Foreclosures Stop Now to name just a few.  Take […]

  25. […] 27, 2009 · Leave a Comment Read another great opinion about the thieves called MERS and their cohorts aka  banks or servicing companies.  The tide is turning and more and more […]

  26. MERS was created in 1997. Wasn’t that under Clinton’s watch? By Freddie and Fannie, isn’t that under Barney “The Pig” Frank’s watch? Hmmm

  27. RE: zurenarrh

    Hey, if they actually believe that they have standing and merit for an appeal to the Federal Supreme Court then MERS should put their money (or is it ours?) where their mouth is and ‘belly up to the bar’ — the legal one.

    As far as I can tell, the higher up on the judicial review ladder the appeals have been made, the greater depth and breadth of the scrutiny, and the increased mass exposure of the problem(s) — and the Garfield Continuum solution(s).

    The fact is that MERS can not run around ‘backdating’ securitized-mortgage chains at the county recorders’ offices (though it could put a good number of people to work trying) — nor could it try at the SEC. After all, to do so would ultimately require a borrower/investor(s) signed contract to record — and likely a judicial approval for such — none of which is procedurally reasonable, nor a curable remedy to the note/deed split.

    In terms of a self-executing admission to a cross-claim, me thinks it could be nothing more than an attempt to qualify as a subsequent remedial measure, if at all, even though 1) is correct, and 2), as well as 3), so long as properly argued by the borrower according to evidence and proof.

    This is not to suggest that there will not be an attempt to pull a ‘new’ rabbit out of the hat — cause they will probably try something. After playing out this Ponzi scheme this far along, in their minds they MUST to try something else to trick and deceive the masses.

    Thank you Mr. Garfield and all.

    Authentically,

    SF_Dan

  28. EDIT: seminal reference to LivingLies

  29. Greetings to Mr. Garfield and all:

    While the NYT exposure is a no-brainer, in my eyes the article is a fail because it does not analyze, identify and inform the masses of the facts concerning who knew what and when in the underlying adoption of MERS’ practices, as well as the emphasis on MERS’ front-end “savings scheme” (below) without any reference or indication of the extraordinary TRILLIONS in BACK-END COSTS to the borrowers, investors, judicial system, taxpayer(s), and Americans as a whole.

    As few and far between as there are of the litigators, forensic analyzers/reviewers/auditors and everyone in between that GET IT, so too goes the media, who should light the readers’ hair on fire and then blow that same hair back — knocking that fire out — leaving the recipient in shock from unconscionability.

    In other words, the article is a fail because the author does not understand the layers of meta-detail in the securi-gage (securitized-mortgage) mosaic, and, hence, provides no depth of information and provocation — nor a seminal pointed to LivingLies. *points hand to screen with thumb pointed down*

    ~~~~~~~~~~~~~~~~~~~~~

    “Cost SAVINGS to members who joined the registry were meaningful. In 2007, the organization calculated that it had SAVED the industry $1 billion during the previous decade.
    (CAPITALIZED emphasis added)
    ~~~~~~~~~~~~~~~~~~~~~

    “To call this electronic registry a creditor in foreclosure and bankruptcy actions is legal pretzel logic, nothing more than an artifice constructed to SAVE time, money and paperwork.”
    (CAPITALIZED emphasis added)
    ~~~~~~~~~~~~~~~~~~~~~

    As always, thank you to Mr. Garfield and all for the dedication and perseverance.

    Authentically,

    SF_Dan

  30. Lawyer in article says this:
    “The entire structure of MERS as a recorded nominee could collapse in Kansas, and that could lead to a patch-up job where they would have to run around and re-record the mortgages.”

    How would they do that, exactly? Can MERS really just say something like–“OK, Kansas Supreme Court, you caught us! Now we’ll just go to each country recorder and record the assignments that we should have put on the public record in the first place. No harm, no foul, right guys?”

    Wouldn’t that essentially be an admission that 1) true sales of the notes were never completed 2) which would render every transaction concerning the notes subject to fraud claims and/or 3) claims that the note and deed of trust/mortgage were separated and therefore both unenforceable?

    Or can they just, having been caught, go fix the public records with no consequences? That would be like the shell game con artist simply showing you where he had hidden the pea after he had taken your money, admitting the fraud while keeping your money.

  31. Another great article by Gretchen Morgenson. Keep the pressure on this banking debacle!!

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