Editor’s Comment: I picked this up from but you can get it directly if want to read it all. There are three points I wish to draw your attention to:

  1. The realization that we have a systemic title problem that is getting worse daily.
  2. Neither the media nor the legislators get it: they say that they don’t want to “de-legitimize MERS”. WARNING: THIS PRESUMES THAT IT IS LEGITIMATE NOW. It isn’t. First of all MERS disclaimed any financial or property interest as a condition to being named on the mortgage or deed of trust so it is not only a nominee, it is nothing. You might just as well have filled in Donald Duck. Second the use of a nominee with undisclosed principals violates truth in lending laws and defeats the purpose of recording interests in real property. BOTH MERS and the LOAN ORIGINATOR were shills, straw-men, for undisclosed people who could be changed at will. Thus anyone examining the title would be required to take the word of a private party with no actual knowledge as to who should be considered the mortgagee at any point of time, which could change from minute to minute. Third not only is it wrong in principle it is wrong in fact: the MERS database is an unsecured database and intentionally designed as such. ANYONE can get a user name and password and change the data and they do. I’ve seen it. One minute the underwriter is listed as the “owner” and the next minute it is the servicer, and the next minute it is the named Trustee of the pool. So the question is really simple: Is it worth creating title chaos for decades to come and maybe forever just to save the skins of some megabanks that are completely unnecessary and whose presence in the marketplace is destroying the American position of world leadership?
  3. The remedy that is being piloted around the country is that they are bringing the foreclosures in the name of the loan originator. They call that a “work-around.” You might call it a shell game. This is what happens when the people with the money control the microphone and the people with the knowledge are sent to Siberia. Let me make it simple: the loan originator either was or was not the lender. They were the lender if the money came from their capital resources available under regulation for lending. If the money was wired in from, say, Wells Fargo with whom the  “loan Originator” had no account, or it was a wired from ANY source other than the “loan originator” then the money used by the closing agent was the money of an undisclosed third party. That is called a table-funded loan. Under Regulation Z, table funded loans as a pattern of practice are presumptively predatory and subject to rescission and other remedies. A table funded loan is a loan in which the real lender is not disclosed depriving the borrower of knowing who  he/she is doing business with amongst other things and its illegal and it should be. By definition it means that the party named on the note and mortgage is NOT the creditor. So if their “work-around” is to sue in the name of the loan originator, then in discovery you find that payments were directed to parties other than the originator. Why would that be if they were the lender?

In short, this dog won’t hunt. There is no way to fix the mortgages, notes and obligations without the investors direct participation and without the borrower’s participation. The banks don’t want to do that because when the investors and borrowers compare notes they are going to find that what they thought was the biggest fraud on earth, is really tens times worse. The test is easy: if the loans were real and everything was legitimate, the  why would you need MERS or a mortgage originator who isn’t the lender? If this is just a technicality, then why can’t they just fix it by bringing everyone into the courtroom or the negotiating table? The answer is they can’t and they don’t want to because they too busy milking this until there is no juice left — then  they might say OK here, take it. It reminds me of an old Buddy Hackett joke about a duck. remind me to tell it to you when nobody else is listening.


If sufficiently widespread, these complications could have a substantial effect on the mortgage market, inasmuch as it would destabilize or delegitimize a system that has been embedded in the mortgage market and used by multiple participants, both government and private. Although it is impossible to say at present what the ultimate result of litigation on MERS will be, holdings adverse to MERS could have significant consequences to the market.

according to a report released by Standard & Poor.s, ¡°most¡± market participants believe that it may be possible to solve any MERS-related problems by taking the mortgage out of MERS and putting it in the mortgage owner’s name prior to initiating a foreclosure proceeding.58 According to one expert, the odds that the status of MERS will be settled quickly are low.59


Posted on16 November 2010. Tags: , , , , , , ,



November 16, 2010
Examining the Consequences of Mortgage
Irregularities for Financial Stability and Foreclosure

*Submitted under Section 125(b)(1) of Title 1 of the Emergency Economic
Stabilization Act of 2008, Pub. L. No. 110-343

Excerpts beginning pg 19:

Various commentators have begun to ask whether the poor recordkeeping and error-filled
work exhibited in foreclosure proceedings, described above, is likely to have marked earlier
stages of the process as well. If so, the effect could be that rights were not properly transferred
during the securitization process such that title to the mortgage and the note might rest with
another party in the process other than the trust.44

iv. MERS

In addition to the concerns with the securitization process described above, a method
adopted by the mortgage securitization industry to track transfers of mortgage servicing rights
has come under question. A mortgage does not need to be recorded to be enforceable as between
the mortgagor and the mortgagee or subsequent transferee, but unless a mortgage is recorded, it
does not provide the mortgagee or its subsequent transferee with priority over subsequent
mortgagees or lien holders.4

During the housing boom, multiple rapid transfers of mortgages to facilitate securitization
made recordation of mortgages a more time-consuming, and expensive process than in the past.46
To alleviate the burden of recording every mortgage assignment, the mortgage securitization
industry created the Mortgage Electronic Registration Systems, Inc. (MERS), a company that
serves as the mortgagee of record in the county land records and runs a database that tracks
ownership and servicing rights of mortgage loans.47 MERS created a proxy or online registry
that would serve as the mortgagee of record, eliminating the need to prepare and record
subsequent transfers of servicing interests when they were transferred from one MERS member
to another.48 In essence, it attempted to create a paperless mortgage recording process overlying
the traditional, paper-intense mortgage tracking system, in which MERS would have standing to
initiate foreclosures.49

MERS experienced rapid growth during the housing boom. Since its inception in 1995,
66 million mortgages have been registered in the MERS system and 33 million MERS-registered
loans remain outstanding.50 During the summer of 2010, one expert estimated that MERS was
involved in 60 percent of mortgage loans originated in the United States.51

Widespread questions about the efficacy of the MERS model did not arise during the
boom, when home prices were escalating and the incidence of foreclosures was minimal.52 But
as foreclosures began to increase, and documentation irregularities surfaced in some cases and
raised questions about a wide range of legal issues, including the legality of foreclosure
proceedings in general,53 some litigants raised questions about the validity of MERS.54 There islimited case law to provide direction, but some state courts have rendered verdicts on the issue.
In Florida, for example, appellate courts have determined that MERS had standing to bring a
foreclosure proceeding.55 On the other hand, in Vermont, a court determined that MERS did not
have standing.56

In the absence of more guidance from state courts, it is difficult to ascertain the impact of
the use of MERS on the foreclosure process. The uncertainty is compounded by the fact that the
issue is rooted in state law and lies in the hands of 50 states. judges and legislatures. If states
adopt the Florida model, then the issue is likely to have a limited effect. However, if more states
adopt the Vermont model, then the issue may complicate the ability of various players in the
securitization process to enforce foreclosure liens.57 If sufficiently widespread, these
complications could have a substantial effect on the mortgage market, inasmuch as it would
destabilize or delegitimize a system that has been embedded in the mortgage market and used by
multiple participants, both government and private. Although it is impossible to say at present
what the ultimate result of litigation on MERS will be, holdings adverse to MERS could have
significant consequences to the market.

If courts do adopt the Vermont view, it is possible that the impact may be mitigated if
market participants devise a viable workaround. For example, according to a report released by
Standard & Poor.s, ¡°most¡± market participants believe that it may be possible to solve any
MERS-related problems by taking the mortgage out of MERS and putting it in the mortgage owner’s name prior to initiating a foreclosure proceeding.58 According to one expert, the odds
that the status of MERS will be settled quickly are low.59

19 Responses

  1. From this report:

    ‘A mortgage does not need to be recorded to be enforceable as between the mortgagor and the mortgagee or subsequent transferee….”

    Do any of the people who work on these committees have any background in real estate law at all? Do they bother looking any up at all before penning their reports? The first part is true – “a mortgage does not need to be recorded to be enforeceable as between the mortgagor and the mortgagee” , but it is NOT true or at least not always true that a mortgage is enforceable as between the mortgagee (borrower) and a “subsequent transferee”.

    I haven’t checked all states, of course, but I have cited Nevada statute 111.315 numerous times in hopes of inciting readers to look at their own state statutes for what would be called a “mirror statute”. A mirror statute is one which ‘mirrors’ laws of another state, that is, is just like it only applicable to the other state.
    Here is NRS 111.315 again:

    “Recording of conveyances and instruments: Notice to third persons. Every conveyance of real property, and every instrument of writing setting forth an agreement to convey any real property, or whereby any real property may be affected*, proved, acknowledged and certified in the manner prescribed in this chapter, to operate as notice to third persons, shall be recorded in the office of the recorder of the county in which the real property is situated or to the extent permitted by NRS 105.010 to 105.080, inclusive, in the Office of the Secretary of State, but shall be valid and binding between the parties thereto without such record.”

    Real property is “affected” by a mortgage or deed of trust (NV uses the dot). This statute says that a conveyance (deed, say) or instrument (deed of trust or assignment, say) is binding on the parties to the instrument, like ABC assigns to XYZ and the assignment is executed but not recorded. But, this statue also states that it is not binding on third parties.
    The first two parties are ABC and XYZ. It’s binding on them. It is NOT binding on anyone else, any “third
    parties”. This includes the borrower – the borrower is not a party to the assignment. Since the unrecorded assignment is not binding on the borrower, it cannot be enforced against the borrower until it is recorded.
    Therefore, XYZ, the ‘subsequent assignee’, may not come after the borrower’s property until the assignment is recorded.

    I’m going to hazard a guess that many states have a mirror statute. Just the fact that Nevada has a statute contradicting this statement in the report makes me crazy. It’s dissemination of false material and that’s just plain dangerous.

    All state statutes are online somewhere. Try
    “Maine recording statutes”, for example, to find yours.
    I do not understand why more people don’t do this.

    If you live in a state which has such a statute, you can perhaps shut down your pending foreclosure if the alleged assignment has not been recorded.

  2. Neva: In answer to your questions, definitely title problems (MERS), BK originator, loan is in 2 trusts & we’re digging deeper, possible DocX involvement, but no NOD yet; we are proactively fighting with the aid of an experienced atty who “gets it”. Can’t say too much, but they sent out a VERY heavy hitter against us (they are possibly worried or just overkill, who knows?) Should be interesting!

  3. I have some of Mers’ membership rules and two declarations by one of its officers, William Hultman, fwiw. If you want them, email me at
    I also have info in another case wherein a loan servicer has testified that MERS wants the note endorsed in blank to f/c, whereas YOUR pretend-lender will swear the endorsement in blank was for its benefit, read owner.

  4. What about this article? How can MERS “do business” or even defend itself in California when the Secty of State says they are not allowed the right to defend a lawsuit until they file returns & pay their taxes.

  5. Bank Of America: Heavy Sales By Fidelity, AXA
    UPS Says To Hire 50K Temp Workers For HolidaysJP Morgan, BAC Near Settlement On Foreclosures

    Text Size
    By Tiernan Ray

    It is perhaps no surprise that heading into the thickets of the mortgage foreclosure mess, several substantial holders of Bank of America (BAC) shares trimmed their positions in the stock by a third or more in the quarter ended in September, according to data from the most recent 13-F filings with the Securities & Exchange Commission.

    Fidelity Investments, for example, dumped 95 million shares, or 39% of its holdings, leaving it with roughly 1.5% of the BAC shares outstanding, according to data from Paulson & Co. dumped 30 million shares, or 18% of its stake, which totals 1.4% of the common. And AXA Financial got rid of 47 million shares, or 35% of its stake, leaving it holding 0.9% of B of A’s common stock outstanding.

    BAC stock today closed down 16 cents, or 1.3%, at $11.94.

  6. Leapfrog, of course they need to prove who holds the note, but will the judge go for it. They are trying to paper over the problem. What other fraud has occurred in your case? Robo-signing, notary fraud, fraudulent documents, back dated documents, title fraud?

  7. Brian, what is this garbage about “tender” . Isn’t that up to the discretion of the court? I have the same almost boilerplate wording in a suit against my pretender lender and they also allege that MERS has standing. They also say its “none of my business” who owns the note and they don’t have to show it. I was sent a stack of paperwork 5 inches thick in bluster & posturing. Yet, all they needed to do was SHOW how they came to “own” my loan (which of course they are UNABLE to do).


  9. Neil or anyone who can answer this question for me, please do, need some imput.

    Complaint caption Bank, as successor by way of merger with bank, as trustee under the pooling and servicing agreement dated **/**/2007.

    Assignment recorded in 2009 by Mers/Loan servicer, for blah, blah, (whom by the way was ordered to cease and desist and filed for bankruptcy in 4/2007) to this same above caption, but fails to state which trust.

    Now, nearly 18 months of suit pending and discovery, mostly avoided, now they Motion to Judge for scriveners error, that trust was left out.

    Scheduling for hearing.

    What would that mean for the assignment which has been recorded in 2009, which still has not been deemed a legal, equitable assignment?

    Can anyone give me answer regarding what this does to the actual foreclosure case and the actual assignment?

    Time is of the essence, please help me with imput , it would be greatly appreciated.


    While robo-signing has been the most high-profile foreclosure concern for residential mortgage-backed securities lately, it appears it is a relatively low risk compared to the currently less-prominent one related to missing and defective documents, according to a recent Moody’s Investors Service report.

    Like what you see? Click here to sign up for a National Mortgage News free trial and daily newsletter to get the latest feature stories, news headlines, data, and in-depth analysis on the issues impacting the mortgage industry.
    The report’s author, Moody’s vice president and senior analyst Yehudah Forster, said the latter risk is one that in most cases will cause only delays but in some could also prevent foreclosure.

    The robo-signing, in contrast, is likely to only delay foreclosures, not prevent them, according to Moody’s.

    Some other risks that have arisen in connection with foreclosure issues also are noted in the report but categorized as lesser concerns than the other two.

  11. A separate report from the Congressional Oversight Panel, also being released Tuesday, raises questions about whether improper document transfers could create additional liabilities for the biggest U.S. banks. The consequences could be “severe,” the report said, “if documentation problems prove to be pervasive and, more importantly, throw into doubt the ownership of not only foreclosed properties but also pooled mortgages.”


    Bair has some concerns about recent foreclosure process problems and reviews due to some loss-sharing arrangements the FDIC is in, even though the agency is not the primary regulator in the matter.

    She told the Securities Industry and Financial Markets Association meeting in New York that the matter is a “serious problem” that may go beyond the initial affidavit-related concerns.

    Bair, who said she plans to step down from her post when her term ends, said while not all information is in from the file-level reviews major servicers are doing yet, it currently looks like there could be title transfer concerns.

    In addition, she said there could be problems with mortgage modifications being consistent with the rules in cases where servicers that participate in the Home Affordable Modification Program are involved.

    While the FDIC is not the primary regulator in the matter, Bair said she is suggesting to those that are that the issue be handled in a matter that does not slow the foreclosure process down too much.

    “The market does at some point have to clear,” she said.

    The securitization-industry defense doesn’t address the problem of “robo-signing,” in which employees falsely asserted that they had personally reviewed the details of foreclosure cases.

    Still, the report is aimed at countering claims made by critics that the rush to feed demand for securities led banks to cut corners in assigning and tracking ownership of mortgages, just as they did, critics claim, when buying and making mortgage loans.

  12. I think the wool is being pulled over people’s eyes. The banks get it, the courts are getting it and the people of the US get it. The biggest Ponzi scheme of all time, in all of history. This scheme is affecting the entire world economy. The US will totally lose face with the entire world if we allow this to go unpunished. If the Federal Reserve keeps printing money for these bastard banks, we will go into double digit inflation. This has to be handled on a judicial basis to prove that the rule of law is still in place in America. The TBTF banks can go to hell. They are destroying our economy and our way of life. Hurry up and fail–Citibank, BofA, JPMorganChase, BonyMellon, Wells Fargo and the rest. WE don’t need you.

  13. The Buddy Hackett Duck Joke –
    The lost art of telling a joke, courtesy of Buddy Hackett on ‘The Johnny Carson Show’ …

  14. Sent this right after the Hearing:

    .Admin Options.Edit PostAdd Tags Cancel
    Delete Post Edit Blog Posts..Mr. Berkland,

    Your report was insufficient to say the least, I have all the proof that is needed to collapse 517 million dollar certificates, who will bear the burden. I will not stop till I expose the massive fraud and corruption that exist. I have the proof as I explained in my last email. I have the Note, I have a sworn affidavit that states the written assignment NEVER happened, the lost note is only an indemnification no where was they a conveyance of right title and interest. I will Use the Media to find the investors, if there is one with improper documents , they are many. The Investors were DECEIVED and So was the Court ! Fraudulent ,unlawful ,assignment of record I will find every Investor and give them this info like I tried to give you, This is just the beginning of a major financial disaster. Unlike The BANKS I DO Have ALL the ORIGINALS, can’t wait to help out the Investors tear down the “Too Big to Fail’ . Remember the Nursey Rhyme Humpty DUMPTY;sat on the wall Humpty Dumpty , had a great fall. I’m not waiting on the BIG BANK to Fall, I’m gonna PUSH THEM OFF.

    Thanks, Please feel free to pass this email along like you did the other as a matter of fact Make sure you pass it right on along to The Bank Of New York Mellon , and JP Morgan Chase I will find the Investors and we will join suit against the “TOO Big To Fail”, “Too Big To Prosecute!!! ”

    Sonya Brewer

    —–Original Message—–
    From: Berkland, Adam (COP)
    Sent: Thu, Nov 4, 2010 5:29 pm
    Subject: Response from the Congressional Oversight Report

    Ms. Brewer,

    Thank you for contacting us with concerns about irregularities surrounding the documentation of your mortgage loan. The housing market has been reeling across the country right now due to concerns about these irregularities, as investors, servicers, and homeowners try to sort out the technical issues, and government agencies launch investigations into allegations of fraud.

    The Panel is currently working on the foreclosure documentation crisis, with a focus on its effect on TARP investments and initiatives, as the topic for our upcoming November report that is due to come out in just a few weeks. Because of the high degree of relevance of your comments to our work on that report, I will be sure to pass along your e-mail to staff members here, and we’ll be sure to take your thoughts into account in our ongoing oversight work.

    The Panel is not empowered to assist individuals directly or intervene in disputes with servicers or banks, so if you are looking for assistance in pursuing an investigation into this issue, I would encourage you to call either your state’s Attorney General (AGs in all 50 states have opened investigations into the irregularities as you may know), or to your Representatives in Congress.

    Thanks again for your e-mail, and please let me know if you have any further questions.


    Adam A Berkland

    Staff Assistant / Director of Correspondence

    Congressional Oversight Panel

    Office: 202-224-9925


  15. “the ultimate result of litigation on MERS will be, holdings adverse to MERS could have significant consequences to the market.”

    You know what else is a significant consequence to the market? The fraud that is being perpetrated in the biggest ponzi scheme of all time. The banks, government and the courts all GET IT. It’s just plain fraud being perpetrated by them.

    Investigations into “problems” , hearings, etc is just window dressing, nothing more. THEY AL GET IT.

  16. The banksters made the same cardinal mistake Enron made.

    The politicians lost their jobs because of them.

    Also Crime does not pay. That is why the United States was successful It was a country of law and order.

    The Soldiers of World War 2 The Great Generation went half way across the world to Defeat Evil.

    Why do you think we lost the war in Iraq and Afghanistan Twenty First Century Military might against 20th Century Military (without tanks) They dont even have Tanks. Because the people of the United States do not believe in the War. It is basically a Mercenary War.

    That is why we will win the war against the Banksters eventually.





    I’m afraid I don’t quite understand exactly what you’re asking for in requesting a meet-and-confer on discovery. As you know, my clients (Universal American Mortgage Company of California and Universal American Mortgage Company, LLC (collectively “Universal”)) have already served responses to your previous discovery demands. Universal objected to your requests on numerous grounds, but nonetheless produced the relevant loan files to you. Thereafter, you and I discussed the responses at length on the telephone. At this time, Universal stands by its objections. If you have particular issues regarding our objections that you would like us to consider, please send me a detailed letter, and I will consider your points in good faith.

    You have also requested dates for depositions. First, as I stated previously, the case is not yet at issue (meaning, we haven’t answered the complaint yet), and it is Universal’s intention to respond to the Second Amended Complaint (“SAC”) by way of a demurrer. In short, it is our position (as will be reflected in our forthcoming demurrer papers) that the SAC does not allege any viable claims against Universal. Under these circumstances, Universal’s position is that depositions would be premature and represent an unwarranted and unduly burdensome expense at this stage of the case. In addition, the only prospective deponent you have identified thus far is Suchan Murray. It is my understanding (though I am in the process of confirming this with my clients) that Ms. Murray is not an employee of my clients. Rather, I believe she works for MERS. If that is the case, I cannot agree to make her available for a deposition, in any event. (Of course, to the extent you attempt to depose Ms. Murray, you must serve notice of the deposition upon my office.)

    Finally, you left me a voicemail yesterday that I retrieved this morning in which you indicated that you have retained the assistance of someone to help you with the case. Thank you for letting me know. Please understand, however, that if that person is an attorney, then I can no longer communicate with you directly–I am ethically obligated to deal only with your attorney. Please let me know.

    Kevin S. Asfour
    K & L G a t e s
    10100 Santa Monica Boulevard, 7th Floor
    Los Angeles, CA 90067
    tel 310-552-5016 / fax 310-552-5001

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