Investors face an “obstacle course” of challenges in attempting to get banks to repurchase loans that failed to match their description in bond documents, Grais said
bondholders said they have the power to order the trustee for the securities to start probes because the investors own 25 percent of the debt in particular bond issues.
EDITOR’S NOTE ON DISCOVERY: FOLLOW THESE CASES — THEY ARE DOING OUR WORK FOR US!
Obviously the REAL LENDERS are getting pissed off. So the ankle biting is starting and there is an even playing field — both sides have the money to fight it out. The REAL issue for the real lenders (investors) is that the middlemen (investment banks et al) refuse to cooperate in accounting for the loans that were supposedly in the loan portfolios which were REPRESENTED to be in the pool. As stated numerous times on these pages, they are finding that the loans are non-existent, never made it into the pool or that the loans described by the pool managers are mis-characterizations of the actual loans.
That’s our point for the borrowers too. The REAL (SINGLE TRANSACTION) DEAL here was between these lenders and the homeowners with numerous intermediaries in between creating layers of “exotic” (fraudulent) documents, spreadsheets, the result of which was that the “borrower” was the special purpose vehicle – SPV (i.e., the pool, the trust or whatever you choose to call it which incidentally was never actually created in accordance with law) PLUS the co-obligors and guarantors PLUS the servicers PLUS the homeowners. Grais doesn’t want to go after the homeowners because he wants all the obligors to be liable, not just the homeowner who received part of the funds borrowed from investors. THAT is why investors are not kicking aside the intermediaries and going directly after the foreclosures.
These lenders could fire the trustee and fire the servicer and put in their own people to settle these foreclosures on far more favorable terms for both the lenders (investors) and the borrowers (homeowners) than the current process of foreclosures. But if they did that they would be letting deep pockets off the hook for the rest of the lost money. These lenders are getting VERY close to the truth of the matter — not only were the loans misrepresented, not only were the underwriting standards non-existent, not only were the loans never actually transferred legally into a legally organized pool, but there are two huge black holes into which a substantial portion of their money was poured, never to be seen again.
BLACK HOLES IN THE MONEY FLOW THAT ALL INVESTORS AND ALL HOMEOWNERS SHOULD PURSUE
The first black hole was the spread between the money received from the lenders for funding mortgage loans and the actual money used for that purpose. My estimate is that at least 30% of the money went off-shore into SIVs never to be seen again. That is the “Tier 2 Yield Spread Premium” I have been talking about which I believe both the homeowners and the investors have right to recover under different laws. How many investors would have parted with pension fund money if they were told “Thanks for the $100 million. We are going to take $30 million and put it in our pocket and then buy $30 million worth of mortgages, change their descriptions and sell them to you for $100 million when their nominal value is less than $70 million.” Somehow I think even the stupidest fund manager would have said “No” to that proposition, but that is exactly what they got.
The second black hole is the money received from insurance, guarantees and credit enhancements which was represented to be covering the investors’ money but in fact was payable to the intermediaries. It’s really simple. Taking the $30 million they never used to fund the mortgages described in the preceding paragraph, they took a portion of that money and made some wild bets — not like a stupid bet though, because they had total control over the outcome. It was like betting on a horse and then shooting all the others as the race begins. The Jockey could drag the horse over the finish line and still win. In the world of securitization, they created contracts in which the party receiving the insurance was the one who declared the loss and the loss could not be contested by the insurer. The terms of the contract were that if a certain percentage of the loans defaulted then the value of the entire portfolio would be written down to a level chosen by the insured — yes the party receiving the insurance money decides how much the claim is worth and the insurer can’t say a word. By loading the portfolio (pool) up with loans guaranteed to fail, where the payments would reset to twice the person’s income for example these intermediaries made a fortune on paper. But of course AIG and AMBAC couldn’t pay all that so the American Taxpayer did. So the investor took the loss, the intermediary took the money, took the hedge money that would have covered the loss, and is now in the process of taking the homes too.
Grais wants to recover that money and he will. The investors will be made whole or will settle the obligation. But despite these settlements, and despite the fact that in many cases the loan principal of a homeowner loan has been paid several times over the media and the government don’t see that the the reason the housing market is getting a hosing, the reason the taxpayer is getting a hosing and the reason the economy is getting a hosing along with the budgets of local, state and federal governments, is that the trillions paid by the American taxpayer and private companies actually went somewhere. And the homes were just pawns in the game. If you stop the foreclosures dead in their tracks right now, nobody would lose any money. All we want is a fair share of this money to be credited to the loan obligations — which automatically means a correction in the principal amount due and an opportunity to adjust the loan terms to the new reality of the real obligation due and real value of the property that was fraudulently appraised to begin with and fraudulently represented to the lenders and the homeowners.
The irony is that DISCOVERY is the least likely way of actually getting the information to prove the fraud but the most likely way of showing that the other side is uncooperative. The fact is that these “brilliant” intermediaries were so narrow in their perspective that they really don’t know the answers to the questions put to them in discovery, they don’t have the paperwork and they don’t know how to find it. The work being done on behalf of borrowers in the TITLE AND SECURITIZATION ANALYSES AND OTHER SERVICES here and elsewhere is what reveals essential facts that prove the fraud like: the Notice of Default when they were reporting to the investor that the loan was fully performing and actually paying the the investor thus decreasing the obligation due, or a foreclosure on behalf of a pool that had long since been dissolved unknown to either the homeowner or the investor.
Funds Seek Countrywide, Bear Stearns Home Mortgage Buybacks
By Jody Shenn – Sep 22, 2010 6:47 PM ET
Mortgage-bond trustees Bank of New York Mellon Corp., Bank of America Corp. and Wells Fargo & Co. should demand lenders buy back home loans underlying securities owned by two hedge funds, a lawyer for the investors said.
The funds sent separate requests to the three banks that serve as trustees for 14 securitizations at issue with $11.6 billion in outstanding debt, said David J. Grais, a partner in the law firm Grais & Ellsworth LLP. He declined to name the funds in a Sept. 20 interview at his New York offices.
An increasing number of investors are taking action after the worst housing recession since the 1930s sparked a record drop in the value of mortgage debt. Banks face as much as $51 billion in losses tied to loan repurchases from poorly performing securities, FBR Capital Markets Corp. analysts said in a Sept. 20 report.
“The loss of patience has taken longer than we expected,” said Grais, whose hedge-fund clients are using data from real estate researcher CoreLogic Inc. to press their cause with the trustees. Grais said he has “been endlessly surprised” that more investors haven’t moved faster to assert contract rights.
His hedge-fund clients are looking to recoup money on loans in bonds from issuers including Countrywide Financial Corp., now part of BofA, and a unit of Bear Stearns Co., which was bought by JPMorgan Chase & Co.
Grais also represents the Federal Home Loan Banks of San Francisco and Seattle and Charles Schwab Corp. in separate lawsuits against securities underwriters, as well as hedge funds Ellington Management Group LLC and Greenwich Financial Services LLC in suits involving the servicing of mortgages within bonds.
Can’t Sue Underwriters
The hedge funds he’s representing in the request sent about 45 days ago to bond trustees can’t sue the securities’ underwriters because the funds bought the mortgage bonds in the secondary market, Grais said.
Kevin Heine, a spokesman for Bank of New York Mellon, and Jerry Dubrowski, a spokesman for Charlotte, North Carolina-based Bank of America, declined to comment.
Elise Wilkinson, a spokeswoman for San Francisco-based Wells Fargo, and Tom Kelly, a spokesman for JPMorgan in Chicago, also declined to comment.
Investors face an “obstacle course” of challenges in attempting to get banks to repurchase loans that failed to match their description in bond documents, Grais said. The funds he represents that are seeking buybacks used data from Santa Ana, California-based CoreLogic to show the quality of specific loans didn’t meet sellers’ contractual promises, Grais said.
Scraping Data
CoreLogic’s data is culled from bond reports, tax records, property-valuation models and credit services, Grais said. Typically, only bond trustees can review actual mortgage files, seek loan repurchases and file lawsuits if the demands aren’t met.
Earlier this month, Houston-based law firm Gibbs & Bruns LLP said its clients had demanded Bank of New York investigate mortgages backing $26 billion of Countrywide-issued bonds, a request the bank denied because it said it failed to meet multiple requirements.
Kathy Patrick, a partner at Gibbs & Bruns, said her unnamed clients are evaluating the response.
Who Has Power
In that case, bondholders said they have the power to order the trustee for the securities to start probes because the investors own 25 percent of the debt in particular bond issues.
Grais’s clients are relying on a different approach, in part because they don’t own 25 percent in all the cases they are pursuing, he said. Some contracts require not only that investors demanding trustee action own 25 percent of the overall deal, but rather 25 percent of each class of securities in a given issuance, he said.
So far Grais’s clients are relying on CoreLogic’s data, which he said costs about $5 per loan, to make the case for them. Gibbs & Bruns’ Sept. 3 statement didn’t mention offering such research to the bank.
CoreLogic’s information on 48 securitizations showed about 28 percent of properties were valued at least 5 percent more than they should have been, Grais said. About 21 percent inaccurately described consumers as planning to live in homes rather than rent or flip them, which can be determined in part through where borrowers’ tax and other bills get sent, he said.
While Grais said he’s having a “constructive dialogue” with Wells Fargo, he expects the push will end in court as trustees either balk at the requests or complete probes and demand repurchases that the mortgage lenders then dispute.
The next step may be to file so-called derivative lawsuits on behalf of bondholders, which Grais said is an untested approach that would rely partly on court precedent involving family trust cases.
To contact the reporter on this story: Jody Shenn in New York at jshenn@bloomberg.net
To contact the editor responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net
Filed under: bubble, CDO, CORRUPTION, currency, Eviction, foreclosure, GTC | Honor, Investor, Mortgage, securities fraud | Tagged: Bank of America, Bank of New York Mellon, BEAR STEARNS, countrywide, David J. Grais, Ellington Management Group LLC, Greenwich Financial Services LLC, Wells Fargo |
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“Kathy Patrick, a partner at Gibbs & Bruns, said her unnamed clients are evaluating the response.”
Who do you think her unnamed clients are and why do you think they’re unnamed? Has anyone ever wondered why the government never gives a damn about what all this crap does to your credit? Because it guarantees them higher returns.
Many of America’s largest pension funds are sticking to expectations of fat returns on their investments even after a decade of paltry gains, which could leave U.S. retirement plans facing an even deeper funding hole and taxpayers on the hook for huge additional contributions.
The median expected investment return for more than 100 U.S. public pension plans surveyed by the National Association of State Retirement Administrators remains 8%, the same level as in 2001, the association says.
The country’s 15 biggest public pension systems have an average expected return of 7.8%, and only a handful recently have changed or are reconsidering those return assumptions, according to a survey of those funds by The Wall Street Journal.
Corporate pension plans in many cases have been cutting expectations more quickly than public plans, but often they were starting from more-optimistic assumptions. Pension plans at companies in the Standard & Poor’s 500 stock index have trimmed expected returns by one-half of a percentage point over the past five years, but their average return assumption is also 8%, according to the Analyst’s Accounting Observer, a research firm.
The rosy expectations persist despite the fact that the Dow Jones Industrial Average is back near the 10000 level it first breached in 1999. The 10-year Treasury note is yielding less than 3%, and inflation is running at only about 1%, making it tougher for plans to hit their return targets.
Return assumptions can affect the size of so-called funding gaps—the amounts by which future liabilities to retirees exceed current pension assets. That’s because government plans use the return rates to calculate how much money they need to meet their future obligations to retirees. When there are funding gaps, plans have to get more contributions from either employers or employees.
The concern is that the reluctance to plan for smaller gains will understate the scale of the potential time bomb facing America’s government and corporate pension plans.
[…] Seek Countrywide, Bear Stearns Home Mortgage Buybacks $11.6 … unknown wrote an interesting post today. Here’s a quick excerptThe first black hole was the spread […]
SAY IT AINT TRUE. WE NEED TO RESTORE OUR RIGHTS
http://blog.fulldisclosure.net/
Any New Century or Home123 victims—go here to read some discovery responses (informal discovery)
http://www.scribd.com/doc/38041447/NOTARY-WAS-EMPLOYEE-OF-NEW-CENTURY-DISCOVERY-RESPONSES
New Century and Home123 are in bankruptcy in Delaware still.
New Century TRS Holdings Inc is the consolidated company for the bkr.
The bkr trustee has had to hire a law firm in New York, Hahn & Hessen, to handle the trustee work.
So, that is why in the discovery responses you will see things like ‘the TRUST admits that the loan….blah blah’.
The TRUST referred to is the bankruptcy trust.
Read the previous … It is securities fraud 101. I have the note . the trustee and the successor trustee does not, Bear Stesrns was the despositor was never asigned the Note. The servicer was never assigned the Note! I did find my loan in the certificate series. In order for the successor trustee to be the real party in interest or have standing the seller had to sell assign or set over the rights title an interest in the note to the despositor. the despositor had to sell assign or set over it’s right title an interest in the note to trustee.. period enough said! My email address is sbrewer@email.com… neil contact me
pelucheven, I agree with you ! I have the Note endorsed in blank signed by the senior vice president! All the trustee(successor trustee) to the certificate series has is a lost note and no assignments of the note and mortgage.
Obviously something is wrong when some one without a mortgage is foreclosed and the judge had not the even or slightest nick of curiosity about that very small flaw.
But the crooks call it a technical mistake, your F&**(()d but it was just a technical mistake.
HEY you all 7,000,000 people who have lost your homes and the 62,000,000 that are in danger, just remember it is just a technicality you are still a dead beat!
When Jason Grodensky bought his modest Fort Lauderdale home in December, he paid cash. But seven months later, he was surprised to learn that Bank of America had foreclosed on the house, even though Grodensky did not have a mortgage.
Grodensky knew nothing about the foreclosure until July, when he learned that the title to his home had been transferred to a government-backed lender. “I feel like I’m hanging in the wind and I’m scared to death,” said Grodensky. “How did some attorney put through a foreclosure illegally?”
Bank of America has acknowledged the error and will correct it at its own expense, said spokeswoman Jumana Bauwens.
Grodensky’s story and other tales of foreclosure mistakes started popping up recently across South Florida. This week, GMAC Mortgage, one of the nation’s largest mortgage servicers and a major mortgage lender, told real estate agents to stop evicting residents and suspend sales of properties that had been taken from homeowners in foreclosure. The company said it might have to “correct” some of its foreclosures, but was not halting those in process.
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In Florida courts, which have been swamped with foreclosure cases for several years, mistakes “happen all the time,” said foreclosure defense attorney Matt Weidner in St. Petersburg. “It’s just not getting reported.”
And the legal efforts required to resolve a foreclosure mistake are complicated. “Unwrapping it is like unwrapping Fort Knox,” said Carol Asbury, a Fort Lauderdale foreclosure attorney. “It’s very difficult.”
The process is under increasing scrutiny, as Florida’s court system struggles with the mountain of cases that have resulted from the housing crisis.
Grodensky said he spent months trying to figure out what happened but said his questions to Bank of America and to the law firm Florida Default Law Group that handled the foreclosure have not been answered. Florida Default Law Group could not be reached for comment, despite several attempts by phone and e-mail. Grodensky said he has filed a claim with his title insurance company, but that, too, has not resulted in any action.
It wasn’t until last week, when Grodensky brought his problem to the attention of the Sun Sentinel, that it began to be resolved.
“It looks like it was a mistake in communication between us and the attorneys handling the foreclosure,” said Bauwens.
Court records show Countrywide Home Loans filed a foreclosure case in Broward County civil court against the former owner of the home on Southwest 14th Street in 2008. Bank of America took over Countrywide at the end of that year.
The following year, Grodensky and his father Steven bought the house for cash as an investment property. Jason Grodensky’s brother Kenny Sloan lives in the house now. They negotiated a short sale, which means the lender agreed to accept less than the mortgage amount. Documents show the sale proceeds were wired to Bank of America. The sale was recorded in December 2009 at the Broward County Property Appraiser’s Office.
But in court, the foreclosure case continued, the records show. There was a motion to dismiss the case in July, followed the next day by a motion to re-open it. A court-ordered foreclosure sale took place July 15. The property appraiser’s office recorded the transfer of the title to Fannie Mae the same day.
Bauwens said the lender would go back to court to rescind the foreclosure sale.
Broward Chief Judge Victor Tobin, who set up the county court’s foreclosure system, said this is the first he’s heard of this type of mistake. “From the court’s point of view we have no way of knowing that someone sells a house unless they tell us,” said Tobin. “The bank would first have to tell the lawyers and the lawyers would presumably ask the court for an order dismissing the case.”
Tobin said the court system is under pressure to clear up its foreclosure backlog. This year, the state court system pumped $6 million into the effort, hiring more temporary judges and staffers.
Some say there’s too much effort aimed at simply disposing of the cases.
“The evidence doesn’t matter, the proof doesn’t matter, due process doesn’t matter,” said Asbury, the attorney. “The only thing that matters is that they get rid of these cases.”
Mindy Watson-Cintron of Century 21 Tenace Realty said she was unable to stop a foreclosure even though she had a willing buyer for a Coral Springs home last summer. Watson-Cintron had a letter from GMAC Mortgage, agreeing to sell the house in a short sale. The letter indicates the deal would be accepted through Aug. 20.
Watson-Cintron said she called, pleaded and even spent three hours one day in the lobby of the law offices of David Stern in Plantation trying to get someone to agree to put the foreclosure on hold. Stern’s office is one of the nation’s largest foreclosure firms and, Watson-Citron said, represented GMAC in the foreclosure case.
But the foreclosure continued. The lender took back the home and now has it listed for sale — at a lower price than Watson-Cintron’s buyer offered. “The bank’s not talking to the attorneys and the attorneys are not talking to the courts,” she said.
Stern could not be reached for comment despite several attempts by phone and e-mail to his office. A spokesman for GMAC Mortgage promised to look into the case.
Florida Attorney General Bill McCollum is investigating Stern’s firm, Florida Legal Default Group, based in Tampa, the Law Offices of Marshall C. Watson in Fort Lauderdale and Shapiro & Fishman, which has offices in Boca Raton. Officials have said the investigation centers on whether foreclosure documents submitted by these firms were false, misleading or inaccurate.
In announcing its decision this week to halt evictions and suspend sales in foreclosure cases, GMAC cited a deposition by Jeffrey Stephan in a Palm Beach foreclosure case in which Stephan said he did not verify all the documents and did not sign them all in the presence of a notary. Stephan said he signed as many as 10,000 documents a month.
Some foreclosure defense attorneys have questioned whether similar practices involve other lenders as they push huge numbers of foreclosures through the courts. In one South Florida foreclosure case, Chase Home Finance executive Beth Cottrell said in a deposition in May that her team of eight supervisors signs 18,000 documents a month. Chase’s spokesperson did not comment.
Harriet Johnson Brackey can be reached at hjbrackey@SunSentinel.com or 954-356-4614.
NO. THERE’S NO LIFE AT MERS
By Damian “DinSFLA” Figueroa
Mortgage Electronic Registration Systems, Inc (MERS) has a very long history. The beginning stages have remained a mystery until now.
In 1989, Brian Hershkowitz developed the “Whole Loan Book Entry” concept while serving as a director for the Mortgage Bankers Association (MBA). In 1990, he first introduced this concept to seven different industry group; Document Custodian, Originators, Servicers, Title Insurers, County Recorders, Government Sponsored Enterprises (GSE’s) and Warehouse/Interim Lenders. The reception was very positive and it was viewed as a very useful recording system to be used for how equity and debt securities could be identified and managed.
In 1991, Mr. Hershkowtiz published Farming It Out in Mortgage Banking Magazine. His main discussion in this article is primarily about getting the opinion of the experts in the technology outsourcing service industry. In 1992, Mr. Hershkowitz published another article called Cutting Edge Solutions in Mortgage Banking Magazine. In this particular article he mentions the actual meeting that took place at the Mortgage Bankers Association of America (MBA) headquarters with many key players that are known today as some of MERSCORP’s shareholders, such as, Fannie Mae and Freddie Mac. In this meeting they discussed a “System” that will bring changes in mortgage records.
Mr. Hershkowitz went on to become President and COO of LandSafe Credit, a leading settlement service provider that was a subsidiary of Countrywide. Mr. Hershkowitz also spent several years serving Countrywide in the areas of strategic planning and executive management.
In 2001, Mr. Hershkowitz became Executive Vice President at Fidelity National Information Services (FNIS) and President of its mortgage and information services division. His responsibilities included management of the Company’s data offerings, including public records information, credit reporting information, flood hazard compliance data, real estate tax information and collateral valuation services. He left FNIS in November of 2006 to become Chief Executive Officer of Maximum Value Group, a consulting firm focused on providing advice to private equity and other market participants in the area of banking and mortgages.
ENTER THE X-FILES
MERS has evolved into a totally different purpose today.
Mortgage Electronic Registration Systems, Inc. is a wholly owned subsidiary of MERSCORP Inc., located at 1595 Spring Hill Rd Ste 310 Vienna, VA 22182.
MERS was founded by the mortgage industry. MERS tracks “changes” in the ownership of the beneficial and servicing interests of mortgage loans as they are bought and sold among MERS members or others. Simultaneously, MERS acts as the “mortgagee” of record in a “nominee” capacity (a form of agency) for the beneficial owners of these loans.
To ensure widespread acceptance within the industry, MERS sought to have security instruments modified to contain MERS as the original mortgagee (MOM) language. MERS began to change decades of business practices after the two biggest mortgage funders in the U.S. the Federal Home Loan Mortgage Corporation (Freddie Mac) and the Ferderal National Mortgage Association (Fannie Mae) modified their Uniform Security Instruments to include MOM language. Their approval opened the doors to incorporate MERS into loans at origination.
Soon after, U.S. government agencies like the Veterans Administration, Federal Housing administration and Government National Mortgage Association (Ginne Mae), and several state housing agencies followed both Fannie/Freddie to approve MERS.
More than 60 percent of all newly-originated mortgages are registered in MERS. Its mission is to register every mortgage loan in the United States on the MERS System. Since 1997, more than 65 million home mortgages have been assigned a Mortgage Identification Number (MIN) and have been registered on the MERS System.
The mortgage-backed security (MBS) sector tested the viability of MERS because a substantial number of mortgages are securitized in the secondary market. In February 1999, Lehman Brothers was the first company to include MERS registered loans in a MBS.
Moody’s Investor Service issued an independent Structured Finance special report on MERS and it’s impact of MBS transactions and found that where the securitzer used MERS, new assignments of mortgages to the trustee of MBS transactions were not necessary.
Since MERS is a privately owned data system and not public, all mortgages and assignments must be recorded in order to perfect a lien. Since they failed to record assignments when these loans often traded ownership several times before any assignment was created, the legal issue is apparent. MERS has destroyed the public land records by breaking the chain of title to millions of homes.
IN MERS CEO’S OWN WORDS
In or around the summer of 1997, MERSCORP President and CEO R.K. Arnold wrote, “Yes, There is life on MERS” Mr. Arnold stated, “Some county recorders have expressed concerns that MERS will eliminate their offices nationwide or destroy the public land records by breaking the chain of title. As implemented, MERS will not create a break in the chain of title, and, because MERS is premised on an assignment recorded in the public land records, MERS cannot work without county recorders.”
In this same article Mr. Arnold also states “The sheer volume of transfers between servicing companies and the resulting need to record assignments caused a heavy drag on the secondary market. Loan servicing can trade several times before even the first assignment in a chain is recorded, leaving the public land records clogged with unnecessary assignments. Sometimes these assignments are recorded in the wrong sequence, clouding title to the property”. Mr. Arnold never mentions the fact that the mortgage notes have been securitized, thereby becoming “negotiable securities” under the Uniform Commercial Code.
In an interview for The New York Times, Mr. Arnold said, “that his company had benefited not only banks, but also millions of borrowers who could not have obtained loans without the money-saving efficiencies MERS brought to the mortgage trade.”
Mr. Arnold went on to say that, ” far from posing a hurdle for homeowners, MERS had helped reduce mortgage fraud and imposed order on a sprawling industry where, in the past, lenders might have gone out of business and left no contact information for borrowers seeking assistance.”
“We’re not this big bad animal,” Mr. Arnold said. “This crisis that we’ve had in the mortgage business would have been a lot worse without MERS.”
Unfortunately, even a simple search in the Florida Land Records proves the opposite to be the case. Researchers have easily found affidavits of lost assignments actually stating, “the said mortgage was assigned to Mortgage Electronic Registration Systems, Inc., from “XXXXXXX”, the original of the said assignment to Mortgage Electronic Registration Systems, Inc., was lost, misplaced or destroyed before same could be placed of record with the Florida Land Records County Clerk’s office; That, “XXXXXXX”, it’s successors and/or assignee is no longer in business/or do not respond to our request for a duplicate assignment, and therefore, a duplicate original of said assignment cannot be obtained.”
According to affidavits such as these, not only have the borrowers lost contact with the lenders, but the same is true that MERS did as well.
On September 25, 2009, Mr. R.K. Arnold was deposed in Alabama. Mr. Arnold admitted MERS does not have a beneficial interest in any loan, does not loan money and does not suffer a default if monies are not paid. On November 11, 2009, William C. Hultman was deposed in Alabama and made the same admissions.
Yet again, researchers have easily located affidavits recorded in the Florida Land Records stating “That said Deed of Trust has not been assigned to any other party and that MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, Inc. is the current holder and owner of the Note and Deed of Trust in question.”
NO. THERE’S NO LIFE AT MERS
Aside from not recording assignments, Mr. Arnold failed to mention that the certifying officers given authority to execute sensitive loan documents would not be paid employees of MERS. This raises the critical legal question as to how one can act as a certified officer and execute any equitable interest on behalf of any security instruments without being an employee of MERS.
On April 7, 2010, in the Superior Court of New Jersey, MERS Treasurer and Secretary William C. Hultman gave an oral sworn video/telephone deposition in the case of Bank Of New York v. Ukpe.:
Q Do the assistant secretaries — first off, are
you a salaried employee of MERS?
A No.
Q Are you a salaried employee of MERS Corp,
Inc.?
A Yes.
Q Are any of the employees of MERS, Inc.
salaried employees?
A I don’t understand your question.
Q Does anyone get a paycheck, if they are an
employee of MERS, Inc., do they get a paycheck from
Mercer, Inc.?
A There is no MERS, Inc.
Q I thought, sir, there’s a company that was
formed January 1, 1999, Mortgage Electronic Registration
Systems, Inc. Does it have paid employees?
A No, it does not.
Q Does it have employees?
A No.
Q Does MERS have any employees?
A Did they ever have any? I couldn’t hear you.
Q Does MERS have any employees currently?
A No.
Q In the last five years has MERS had any
employees?
A No.
Q How many assistant secretaries have you
appointed pursuant to the April 9, 1998 resolution; how
many assistant secretaries of MERS have you appointed?
A I don’t know that number.
Q Approximately?
A I wouldn’t even begin to be able to tell you
right now.
Q Is it in the thousands?
A Yes.
Q Have you been doing this all around the
country in every state in the country?
A Yes.
Q And all these officers I understand are unpaid
officers of MERS?
A Yes.
Q And there’s no live person who is an employee
of MERS that they report to, is that correct, who is an employee?
A There are no employees of MERS.
If so, how does anyone have any authority to sign security instruments encumbered by any loan documents, if these certifying officers are not paid employees and never attend corporate meetings in the capacity as Vice President, Assistant Secretary, etc. with Mortgage Electronic Registration System, Inc..
COURTS FIND ISSUES WITH MERS
Federal and state judges across America are realizing that the mortgage industry’s nominee is backfiring.
In Mr. Arnold’s own words, “For these servicing companies to perform their duties satisfactorily, the note and mortgage were bifurcated. The investor or its designee held the note and named the servicing company as mortgagee, a structure that became standard.” What has become a satisfactory standard structure for the mortgage industry has not been found by many courts to be legally sufficient to foreclose upon the property.
Again, MERS only acts as nominee for the mortgagee of record for any mortgage loan registered on the computer system MERS maintains, called the MERS System. MERS cannot negotiate a security instrument. Therefore, MERS certifying officers cannot have legal standing to assign what MERS does not own or hold.
The Supreme Court of New York Nassau County:
Bank of New York Mellon V. Juan Mojica Index No: 26203/09
Justice Thomas A. Adams stated, “Not only has plaintiff failed to establish MERS’ right as a nominee for purposes of recording to assign the mortgage, more importantly, no effort has been made to establish the authority of MERS, a non-party to the note, to transfer its ownership.”
The Supreme Court of Maine:
Mortgage Electronic Registration Systems, Inc. v. Saunders, No. 09-640, 2010 WL 3168374, (Me. August 12, 2010) The Court explains that the only rights conveyed to MERS in either the Saunders’ mortgage or the corresponding promissory note are bare legal title to the property for the sole purpose of recording the mortgage and the corresponding right to record the mortgage with the Registry of Deeds. This comports with the limited role of a nominee. A nominee is a “person designated to act in place of another, usu[ally] in a very limited way,” or a “party who holds bare legal title for the benefit of others or who receives and distributes funds for the benefit of others.” Black’s Law Dictionary 1149 (9th ed. 2009).
In Hawkins, No. BK-S-07-13593-LBR, 2009 WL 901766
The Court found that the deed of trust “attempts to name MERS as both beneficiary and a nominee” but held that MERS was not the beneficiary, as it had “no rights whatsoever to any payments, to any servicing rights, or to any of the properties secured by the loans.”
In Re: Walker, Case No. 10-21656-E-11 – Eastern District of CA Bankruptcy court rules MERS has NO actionable interest in title. “Any attempt to transfer the beneficial interest of a trust deed without ownership of the underlying note is void under California law.” “MERS could not, as a matter of law, have transferred the note to Citibank from the original lender, Bayrock Mortgage Corp.” The Court’s ruled that MERS and Citibank are not the real parties in interest.
In re Vargas, 396 B.R. at 517-19. Judge Bufford found that the witness called to testify as to debt and default was incompetent. All the witness could testify was that he had looked at the MERS computerized records. The witness was unable to satisfy the requirements of the Federal Rules of Evidence, particularly Rule 803, as applied to computerized records in the Ninth Circuit. See id. at 517-20. “The low level employee could really only testify that the MERS screen shot he reviewed reflected a default. That really is not much in the way of evidence, and not nearly enough to get around the hearsay rule.”
FRAUD ON THE COURT
In US Bank v. Harpster the Law Offices Of David J. Stern committed fraud on the court by the evidence based on the Assignment of Mortgage that was created and notarized on December 5, 2007. However, that purported creation/notarization date was facially impossible: the stamp on the notary was dated May 19, 2012. Since Notary commissions only last four years in Florida (see F .S. Section 117.01 (l)), the notary stamp used on this instrument did not even exist until approximately five months after the purported date on the Assignment.
The Court specifically finds that the purported Assignment did not exist at the time of filing of this action; that the purported Assignment was subsequently created and the execution date and notarial date were fraudulently backdated, in a purposeful, intentional effort to mislead the Defendant and this Court. The Court rejects the Assignment and finds that is not entitled to introduction in evidence for any purpose. The Court finds that the Plaintiff does not have standing to bring its action.
The Court dismissed this case with prejudice.
In Duval County, Florida another foreclosure case was dismissed with prejudice for fraud on the court. In JPMorgan V. Pocopanni, the Court found that Fishman & Shapiro representing JPMorgan had actual knowledge at all times that the Complaint, the Assignment, and the Motion for Substitution were all false. The Court found that by clear and convincing evidence WAMU, Chase and Shapiro & Fishman committed fraud on this court.
Both these cases involved Mortgage Electronic Registration Systems Inc. assignments.
FRAUD INVESTIGATIONS
Two RICO Class Action lawsuits have commenced against Foreclosure Law Firms and MERSCORP for fabricating and forging documents that are entered into courts as evidence in order to have standing to foreclose. Unknown to judges and the borrowers, they accept these documents because they are executed under perjury of the law. These “tromp l’oeil” actions have finally surfaced and the courts has taking notice.
The lack of supervision and managing of MERS “Robo-Signers” has led to a national frenzy of fabrication, forgery and certifying officers wearing multiple corporate hats. Anyone who compares signatures of these certifying officers will see a major problem with forgery in hundreds of thousands affidavits and assignments which creates an enormous dark cloud of title defects to millions of homes across the US.
On August 10, 2010 Florida attorney general Bill McCollum announced that he is investigating three foreclosure law firms for allegedly providing fraudulent assignments and affidavits relating in foreclosure cases.
In a deposition taken in December 2009, GMAC employee Jeffrey Stephan said he signed 10,000 affidavits or similar documents a month without personally verifying who the mortgage holder was. That means many foreclosures could have taken place based on false documentation and many homes may have been unlawfully foreclosed on.
On September 20, 2010, GMAC halted foreclosures in 23 different states. Two of the three firms being investigated by the Florida attorney general, the Law Office of Marshall C. Watson and the Law Offices of David J. Stern PA, have represented GMAC in foreclosure proceedings.
This is not limited to only GMAC Mortgage. There are many hundreds of thousands of these same documents that are being created by many foreclosure law firms across the nation.
University of Utah law professor Christopher L. Peterson has raised the issue that MERS should be regarded as a debt collector. He argues that some of MERS’ methods are just the sort of deceptive practices that ought to be regulated under The Fair Debt Collection Practices Act (FDCPA), 15 U. S. C. §1692(a),(j).
CONCLUSION
Finally in May, 2009, Mr. Arnold said in Mortgage Technology Magazine, “Every system in the mortgage industry can switch MERS registry on or off at will,” referencing that both the Obama administration and Congressional leaders are aware of this.
President Obama and Congressional leaders it is time to permanently switch MERS lifeless device off!
Not until MERS became the primary focus for challenges to legal standing in foreclosure courts as reported as the alternative media, have the main stream media and the mortgage industry have begun to realize that property records cross the United States have become totally unreliable.
It has taken more than a decade for the courts to recognize that MERS has become a mortgage backfire system leaving clouded titles in over 65 million loans since 1997.
Courts across the nation must comply with the law. Any documents submitted to the courts regarding property ownership should be assumed to be nothing but smoke in a mirror.
No, Mr. Arnold, there’s no life at MERS.
Damian Figueroa, “nominee” of stopforeclosurefraud.com, a blog on Foreclosure Fraud.
© 2010 FORECLOSURE FRAUD | by DinSFLA. All rights reserved. http://www.StopForeclosureFraud.com
Don’t think Corelogic or Zillow is or was reliable ever.
Corelogic link by CHASE told me my home is $ 313,000.00(no appraisal AVM !!) and after 35 months it was down
to $ 126,000.00 = $ 187,000.00 HOW COME ?
In the Corelogic report , One room and my 2 bathrooms was missing .
Zillow is the worst , I just checked on a Neighbours
home $ 60,000.00 For Sale and the Zestimate is
$ 142,000.00 , and then I found out , that my EMPTY Lot next door , has a Home on there WOW,I did not
build yet .
ABC Nightly News is doing a story on the FLA mess tonight. Finally some MSM coverage.
It ‘s to bad we can’t attach documents, Because everyone here would be shocked with the evidence I have gathered on securities fraud. The evidence was provided to me by the “successor trustee” through discovery and sworn affidavits. I found my loan number in the pool which I could check through CTSLINK which is Wells Fargo as they are the master servicer to the certificates and custodian. Plus in addition to the sworn affidavit that said ” it appears that a written assignment was NEVER done to the trustee, but XXX has only acted as the servicer. Well, there was never an assignment to the despositor, the successor trustee produced to me a lost note and an undated, unsigned allonge from the seller direct to the trustee, ( the seller was and still is the servicer). I have the Prospectus ,the PSA and the Original NOTE endorsed to me, sent to me by mail from the original lender. The ‘successor trustee” Knows I have the original note but still stands by the lost note affidavit because according to them the note could not be found.( I know because I have it ) , they are claiming I got it by mistake. All I can say is the seller can not sell by way of allonge undated and not signed direct to the trust. An allong must be attached to the note as to become a permament part of the note .The seller sold/ assigned all it’s interest to the depositor, the depositer sold/ assigns to the trustee,the trustee bought out the despositor( in my case) after they were on the Brink of failer years later. The trustee then nominated a successor trustee that is foreclosing on me for the “certificate holders’ of the Bear Stearns Asset Backed certificate series xxxx-x.
There is an article on the Washington post todayhttp://www.washingtonpost.com/wp-dyn/content/article/2010/09/22/AR2010092206132.html?hpid=topnews
I just invided Attorney Fisher to our Forum , see his great story :
http://www.heraldtribune.com/article/20100813/ARTICLE/100819878
Maybe , finally, some justice and blood from Wells Fraudgo.
We will wait to see how this plays out.