United States is a stockholder of MERS

FYI – Fannie Mae and Freddie Mac became owned by and part of the United States on September 6, 2008 when FHA took them over.  Consider the implications to any cause of action(s), constitutional or otherwise, and defenses, if the United States is a stock holder of MERS.  In professor Christopher Peterson’s work entitled “FORECLOSURE, SUBPRIME MORTGAGE LENDING, AND THE MORTGAGE ELECTRONIC REGISTRATION SYSTEM” at page 11 he stated:

“Two years after releasing the initial white paper, MERS, Inc. incorporated in Delaware as a non-stock corporation owned by mortgage banking companies that made initial capital contributions ranging from $10,000 to $1,000,000. (fn 61) [Editor’s Note: Maybe Borrowers and Investors ought to get together and do the same thing in reverse]

Foot Note 61 states: The charter members of MERS, Inc. were: 1st Nationwide Mortgage; Allied Group Mortgage, Inc.; American Home Funding; American Land Title Association; Crestar Mortgage Corp.; Fannie Mae; Freddie Mac; GE Capital Mortgage Services, Inc.; GMAC Residential Funding Corp.; HomeSide Lending, Inc.; Knutson Mortgage Corp; Lau Capital Funding; Merrill Lynch Credit Corp; Mortgage Bankers Association of America; Mortgage Guaranty Insurance Corp.; Northwest Mortgage, Inc.; ReliaStar Mortgage Corp.; Source One Mortgage Services Corp.; Texas Commerce Bank, NA; Chase Manhattan Mortgage; and, Weyerhaeuser Mortgage Company. Id. Mortgage Electronic Registration Systems, Inc. is actually a wholly owned subsidiary of MERSCORP, Inc. The dual structure of the company was designed to prevent creditors of MERSCORP from attempting to seize loans recorded in the Mortgage Electronic Registration Systems, Inc.’s name in the event that MERSCORP, Inc. declares bankruptcy. Mullen, supra note X, at 62.

George Gingo, Esquire
Foreclosure Defense Attorneys, P.A.
150 Cocoa Isles Blvd., Ste. 404
Cocoa Beach, FL  32931
Office: (321) 784-8158
Fax: (321) 784-8159

9 Responses

  1. visit this site if your doing battle in the courts.

    us/forclosure/network ..ugh ! http://www.usfn.org
    aka America’s M0rtgage Banksters Attorneys

    i figure if its out there we mind as well use it against em!!!!!
    you want an inside look to what the dirt law groups strategy is possibly thinking is what & how we are possibly thinking and using as a strategy. Look to some of the ringleaders..& check out their monthly news letters for legal tips they use; look on the site @ the top of the page tab ; publications & resources .. please pass the link around …but
    do use stealth when posting the name & / search engine crawlers WILL pick it up , now its easy to access so no point giving away a inside track.
    us/forclosure/network ..ugh ! http://www.usfn.org
    aka America’s M0rtgage Banksters Attorneys

    thanks neil!

  2. May be co-conspirators in a pyramid scheme?
    May be co-conspirators in a tax fraud scheme?
    May be co-conspirators in a Securitites fraud scheme?
    May be co-conspirators in a mortgage fraud scheme?

    you may chose any one of those but if you really think about it, we could actually pick the one that is not shown.

    ALL OF THE ABOVE.

    I still do not know how all these crooked people sleep at night.
    OOPS!, I forgot, they have million dollar salaries, stock options, bonuses and wonderful golden parachutes, they dine and wine with the lawmaker and government officials while we pray and wait for a miracle.

    Some time ago I decided I was not going to take it, and chose to fight and tell everyone I know about this fraud and to assist any one I meet with mortgage troubles to fight for their rights.

    What have you decided?, are you doing enough?, do not get mad, get even. Have you filed File grievances with the state bar associations against the foreclosure attorneys, you will see them explain to their peers how they are using forged signatures and invalid power of attorneys from defunct companies to execute their foreclosures. Just attack every where and make them spend their finite resources trying to explain themselves.

    In Florida the ball started rolling on this the State Bar Association will start looking into this, have you called your Local Association????

    Have you written your complaints to the FDIC, FTC, Federal Reserve, HUD, VA, SEC, and all acronyms in the regulatory alphabet to leave a paper trail that these crooks will not be able to erase. Just fight.

    For your Mortgage compliance analysis and your securitzation research

    Mortgage Analysis and Consulting, LLC.
    Rescuing the truth in lending!
    8300 Old Court House Rd
    Suite 320A
    Vienna, VA 22182

    Phone
    703-442-8828

    http://www.toxicmortgageloan.com

  3. New REMIC Rules May Provide More Room To Modify Commercial Real Estate Loans
    Distressed Real Estate and Tax Alert

    by Thomas J. Lyden, David H. Jones, Anthony J. Barwick . October 5, 2009

    The Internal Revenue Service (the IRS) recently released two pieces of guidance concerning the types of modifications that can be undertaken with respect to commercial mortgage loans held by a REMIC without jeopardizing its status as a REMIC or otherwise subjecting the REMIC to adverse tax consequences. The guidance provides a measure of clarity on issues confronted by mortgagors, REMICs that issue commercial mortgage-backed securities (CMBS), and investors that hold CMBS.

    First, the IRS released final regulations that now permit a REMIC to change the collateral for, the guarantees on, and the credit enhancement for mortgage loan held by a REMIC or to change the recourse or non-recourse nature of a mortgage loan without jeopardizing REMIC status. The regulations also outline the circumstances in which a REMIC is allowed to release a lien on real property securing a mortgage obligation held by the REMIC without causing the mortgage obligation to cease to be a permitted asset in the hands of the REMIC.

    Second, in Revenue Procedure 2009-45, the IRS describes certain situations in which it will not challenge the tax status of a REMIC due to the REMIC’s modification of a commercial mortgage loan that is currently a performing mortgage loan but where, in the view of the mortgage loan servicer, a significant risk of default exists, even if the default is expected to occur only at some distant future date. Under existing rules, a reasonably foreseeable risk of default must exist before a REMIC can modify a loan without incurring adverse tax consequences.

    Industry sources report that more than $150 billion of loans held by REMICs and other CMBS issuers will come due between now and 2012. Year to date, reports indicate that 528 such loans valued at $4.7 billion were not refinanced at their maturities even though about 75% of these loans were secured by commercial real estate generating sufficient cash to service the debt. Because financing remains scarce and commercial property values continue to decline, evidence indicates that “maturity defaults” for commercial properties with little or no amortization during the loan term will continue to be a widespread problem, further constraining the capital markets and depressing property values. The recently released guidance provides servicers more flexibility to negotiate loan workouts that are in line with workouts available to traditional bank borrowers and should to some extent remove at least one tax impediment to a successful recovery in the commercial real estate markets.

    A. The Regulations
    Under general tax principles applicable to all debt instruments, including mortgage loans held by a REMIC, a significant modification of a mortgage loan is treated as a debt-for-debt exchange in which the debtor is considered to have issued a new debt instrument to the holder in exchange for the existing unmodified debt instrument. Generally, if a mortgage loan is acquired by a REMIC other than during a limited three month start-up period or in certain other limited circumstances, it will not be considered a “qualified mortgage” in the REMIC’s hands and will be considered to be a non-permitted asset. Put another way, a significant modification of a mortgage loan held by a REMIC is treated as an exchange of the unmodified loan for the modified loan (a debt-for-debt exchange), and if this modification happens after the start-up period, this debt-for-debt exchange would be treated as an acquisition of a new mortgage loan, and therefore, a non-permitted asset. A REMIC is subject to a tax at a rate of 100% on any income from a non-permitted asset and if more than a de minimis amount of a REMIC’s assets are non-permitted assets, it will lose its status as a REMIC. If such a result were to occur, the REMIC could become taxable as a corporation. Existing regulations provide that certain loan modifications, although treated as significant modifications under general tax principles, will not cause the modified mortgage loan to be treated as other than a qualified mortgage. In particular, the existing regulations provide that any modification of a qualified mortgage occasioned by default or a reasonably foreseeable default will not cause the modified mortgage loan to cease to be a qualified mortgage. The recently released regulations expand the list of permissible modifications.

    Specifically, a servicer on behalf of a REMIC may undertake the following modifications without causing the modified mortgage loan to lose its status as a qualified mortgage:

    * A modification that releases, substitutes, adds, or otherwise alters a substantial amount of the collateral for, a guarantee on, or other form of credit enhancement for a recourse or non-recourse obligation; and
    * A change in the recourse nature of a mortgage loan from recourse (or substantially all recourse) to non-recourse (or substantially non-recourse) or vice versa.

    Contrary to recommendations made by several commentators on earlier proposed regulations, the final regulations contain a retesting requirement under which a modification described in either of the two bullet points listed above will be a permitted modification only if, following the modification, the modified loan continues to meet a “principally secured” test.

    The regulations also clarify that a release of a lien on real property collateral securing a mortgage that would not be a significant modification under general tax principles (such as a substitution of collateral under a unilateral right given to the mortgagor under the terms of the mortgage loan) will be permitted as long as the mortgage loan continues to be principally secured by an interest in real property after giving effect to any releases, substitutions, additions or other alterations to the collateral. Thus, any change to a mortgage loan that involves a lien release, even if it is in connection with a modification permitted under the “default or reasonably foreseeable default” standard of the existing regulations, will require a retesting following the release.

    Generally, a mortgage loan will be a qualified mortgage only if it is principally secured by an interest in real property at the time it is contributed to the REMIC. Existing regulations provide that a mortgage loan will be considered to be “principally secured” if the REMIC sponsor (generally, the person who forms the REMIC) reasonably believes that the fair market value of the interest in real property securing the mortgage equals at least 80-percent of the mortgage’s adjusted issue price (the “80% test”) either at the time the obligation is originated or at the time it is contributed to the REMIC (in other words, the mortgage loan can have no greater than a 125% LTV). No post contribution testing was required under existing regulations.

    The recently released regulations, however, provide that in the case of a modification of the type described in the two bullet points above, or in connection with any lien release (other than in a defeasance transaction where treasury securities are posted as collateral and other requirements are met), the collateral value of the obligation will need to be re-tested in order to satisfy the “principally secured” requirement. Consequently, the fair market value of the modified mortgage real property collateral must at least equal 80% of the adjusted issue price of the modified mortgage loan immediately after the modification. This standard will be difficult to satisfy if the value of the property has decreased significantly from the date of origination to the date of modification, which is precisely what one would expect when dealing with a distressed mortgage loan.

    In response to comments received with respect to earlier proposed regulations, and in view of how difficult it would likely be to satisfy the 80% test, the recently released regulations provide for an alternative method for determining compliance with the “principally secured” retesting requirement. Under the alternative test, a modified loan will be principally secured if the fair market value of the interest in real property that secures the mortgage loan immediately after the modification equals or exceeds the fair market value of the interest in real property that secured the mortgage loan immediately before the modification.

    The principally secured tests may be difficult to satisfy even if the lien release is accompanied by a contemporaneous partial prepayment if the overall value of the real property securing the mortgage loan has declined.

    For example, assume a REMIC owns a mortgage loan that it acquired at a time when its unpaid principal balance and its adjusted issue price was $80 and that this loan was secured by two parcels of commercial real property, one having a value of $90 and one having a value of $5. Now assume that in connection with a reasonably foreseeable default, the REMIC agrees to modify the loan. Assume that immediately before the modification, the adjusted issue price of the loan was still $80 but that the fair market value of the first parcel of property had declined to $60 and the fair market value of the second parcel had declined to $2. If the modification consisted solely of a deferral of payments or a reduction in interest rate, no retesting would be required.

    Assume, however, that in connection with the modification, the REMIC releases its lien on the second property for a prepayment of $2. In this case, retesting is now required and the modified loan would not satisfy either of the tests. The ratio of the fair market value of the real property, now $60, to the adjusted issue price of the loan, now $78 ($80 reduced by the $2 prepayment), would be less than 80%. Moreover, the alternative test would not be satisfied because the fair market value of the real property securing the loan immediately before the modification would be $62 and immediately after the modification it would only be $60. The IRS has been made aware of the difficulty presented in satisfying the tests in these circumstances but it remains to be seen whether the IRS will take further steps to make the rules more workable.

    The final regulations improve upon the previously issued proposed regulations in that they do not require an appraisal for purposes of demonstrating compliance with the principally secured requirement under either of the above-described tests. Under the final regulations, if a servicer reasonably believes that a modified mortgage loan satisfies the principally secured requirement under either of the above-described tests, the modified loan will be considered to satisfy the principally secured requirement. A servicer can base such a reasonable belief on: (i) a current appraisal by an independent appraiser; (ii) an original appraisal undertaken in connection with the origination of the mortgage loan, updated as appropriate for any changes that might affect the value of the real property; or (iii) some other commercially reasonable valuation method. In spite of this increased flexibility, many servicers may be reluctant to proceed without a new appraisal.

    The recently released regulations are effective for modifications and lien releases occurring after September 15, 2009.

    B. Rev. Proc. 2009-45
    Revenue Procedure 2009-45 provides that the IRS will not challenge the tax status of any REMIC or any non-REMIC investment trust and will not treat the modification of a commercial mortgage by a REMIC as a prohibited transaction if:

    * The servicer reasonably believes that there is a significant risk of default on the un-modified mortgage loan upon the maturity of that mortgage loan or at an earlier date; and
    * The servicer reasonably believes that the modified loan presents a substantially reduced risk of default, as compared to the un-modified mortgage loan.

    For purposes of the revenue procedure, a commercial mortgage loan is any loan other than a one-to-four family residential mortgage loan.

    A servicer’s “reasonable belief” that a significant risk of default exists must be based on a diligent contemporaneous determination of that risk, which may take into account credible written factual representations made by the mortgagor if the servicer has no reason to know that such representation is false. The revenue procedure specifies that a mortgage loan may be currently performing in accordance with its terms and still present a significant risk of default, and the fact that such default may not occur until some time in the distant future does not, in and of itself, negate a reasonable belief that such default will be likely. The revenue procedure provides that risk of default a year of more in the future may support a reasonable belief.

    In short, in the case of commercial mortgage loans, the revenue procedure puts a gloss on the standard set out in the existing regulations that permit a REMIC to modify a mortgage loan without adverse tax consequences so long as default is reasonably foreseeable with respect to the mortgage loan. In effect, the revenue procedure provides that default can be reasonably foreseeable even if a loan is performing and even if the foreseeable default event lies in the distant future.

    By its terms, the revenue procedure applies only to REMICs (and non-REMIC investment trusts) that were formed to hold pools of performing commercial mortgage loans. Specifically, for the revenue procedure safe harbor to apply, no more than 10% of the pool of loans (by unpaid principal balance) could have been more than 30 days or more delinquent at the inception of the REMIC or non-REMIC investment trust. It should be noted, however, that the revenue procedure provides a safe harbor, not a bright line test. Thus, for example, a REMIC that did not satisfy the startup-day delinquency test would not qualify for the safe harbor, but it could undertake loan modifications of the type described in the revenue procedure without automatically violating standards set out in the regulations for loan modifications.

    Conclusion
    The two pieces of guidance discussed above are of some help in dealing with the refinancing crisis facing the commercial real estate sector and should provide servicers with useful tools to assist the workout process in advance of an imminent default scenario. These changes remove a significant disincentive for the revision of commercial mortgages otherwise performing but at significant risk of default upon maturity. Making the servicer a more active participant in the pre-default process and accelerating discussions among all stakeholders will undoubtedly result in tensions among these parties. Servicers will be further required to quickly decide ahead of a default what will be in the best interest of the CMBS holders and which borrowers are basically sound and which loans it makes more sense to foreclose quickly.

    While some of the adverse tax consequences for doing so have been removed by the recent guidance, it remains to be seen to what extent servicers will otherwise be empowered to navigate the myriad interests of the bondholders and other participants in the REMIC structure in a pre-default scenario. In many instances the pooling and servicing agreements will limit the servicer’s options for permissible loan modifications. Typically, absent a default or foreclosed property scenario, any powers of amendment vested in the servicer are limited to those that are ministerial in nature and the servicer does not have the ability to otherwise deal with the loan obligations constituting the trust property of the REMIC. As such, the servicer will not likely act on its ability to enter into one of the expanded permitted list of loan modifications without added comfort from the holders of the interests in the REMIC insuring the servicer that such modification is permissible or will not otherwise violate the terms of its pooling and servicing agreement with the holders.

    If you have questions with respect to any of the foregoing, please contact the authors of this Alert.

    Contacts:
    Thomas J. Lyden, +1.202.778.9449, tom.lyden@klgates.com
    David H. Jones, +1.704.331.7481, david.jones@klgates.com
    Anthony J. Barwick, +1.919.743.7340, tony.barwick@klgates.com

    This publication/newsletter is for informational purposes and does not contain or convey legal advice. The information herein should not be used or relied upon in regard to any particular facts or circumstances without first consulting a lawyer.

  4. Exposing the 21st Century Banksters
    -from the research staff at Accountable America
    September 16, 2009

    After the 1929 stock market crash, President Franklin Delano Roosevelt appointed Ferdinand Pecora to investigate the cause. Pecora’s investigation took on the powerful ‘banksters,’ the corrupt financial titans of his day, and revealed widespread fraud and abuse. His investigations ushered in sweeping regulatory changes.

    Today, a Financial Truth Commission led by Phil Angelides is beginning to look into the fraud and abuse that helped usher in the worst financial crisis since the Great Depression. Their first public meeting is scheduled for tomorrow.

    Seventy years ago,Pecora outlined Angelides’ challenge:

    Above all, Pecora understood the power of public outrage.

    “Pecora’s success was his ability to crystallize the anger that a lot of Americans were feeling toward Wall Street,” said Michael Perino, a law professor at St. John’s University and author of an upcoming book about the hearings. “He was able to create a clamor for reform.”

    But Pecora also realized that such clamor was fleeting.

    In his 1939 book, “Wall Street Under Oath,” Pecora wrote, “The public is sometimes forgetful.” As memories of the stock market crash faded, he warned, Americans “may lend at least one ear to the persuasive voices of The Street subtly pleading for a return to the ‘good old times.’ ”

    Reflecting on his investigation, Pecora recalled how “the captains of Wall Street, still within the shadow of panic and depression,” had seemed at first eager to submit to oversight. But it didn’t last.

    “The more business recovered, however, and the stronger it felt, the more openly and bitterly did Wall Street oppose any sound program of reform,” he wrote.

    That’s what current advocates of regulatory change fear.

    Wall Street wants us to forget the pain the financial collapse caused because they know that outrage begets reform. They don’t want to see the system reformed because they don’t want to be held accountable.

    But, the truth is, the current system failed us. It brought job losses and financial heartache to millions of Americans. Wall Street’s abuse is responsible, but, so to is the regulatory framework that is supposed to keep abuse in check.

    It’s time to hold the masterminds of the economic collapse responsible. It’s time to reform the system so that it doesn’t happen again. As Ferdinand Pecora did in his day, it’s up to the Financial Truth Commission to expose the rampant abuse of the corrupt and arrogant 21st century ‘banksters’ that continue to stand in the way of real reform.

  5. See MERS page at http://en.wikipedia.org/wiki/MERS

  6. The more complicated a transaction the more likely there is fraud.

    Why is the NAFTA agreement ” Free Trade” the size of a phone book?

    Crooks/Banksters abound, and all we can do is pray that the judiciary has not gone the way of the legislative, and perhaps the executive branch of our government.

    Rule of Law, is what we seek.

  7. Ladies and Gentlemen, please fasten your seatbelts, the (*&^^^*() it’s about to hit the fan!!! make sure you wear a hat just in case. The evil plan it’s unwinding itself and it’s way of doing so many,many many will fall victims, but wait most of those victims are wearing a “perpetrator” hat today, it’ll be sweet to see them marching down to the slaughter house in tears, while many of us leak our wounds and get back on our feet. The evil machine it’s loosing it power, perhaps they should have made it a hybrid machine!!

  8. stock holders in more ways than one

  9. ”Oh what a tangled web we weave when first we practice to deceive”

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