The Meaning of MERS

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The Meaning of MERS

by Abigail C Field

People have learned a lot about MERS, but in general we haven’t really focused on what it all means. In short, it means that the mortgage industry decided that it was above the law.

MERS was set up thoughtlessly, without regard to its basic legality, and designed with only two objectives: lowering the mortgage industry’s costs and maximizing its convenience. As a result, MERS has none of the advantages of the centuries-old system it was intend to replace, and largely has. MERS is not accurate, not transparent, and not accountable to the public. To let MERS continue simply allows it to continue wreaking havoc on property records and the legal morass it’s created to continue tangling foreclosure and bankruptcy cases nationwide.

The Ultimate Answer: Legislate MERS Out of Existence

At this point legislatures from the states to Congress need to confront the deep reality of what MERS truly is. MERS must be legislated out of existence, and the costs for its existence to date—including the costs of accurately updating our land records nationwide–must be borne by all the players that benefited from MERS. Despite the broad claims of the MERS website, the beneficiaries are generally two groups: mortgage securitizers (yes that includes all the big Wall Street players and TBTF banks) and mortgage servicers (who again include the TBTF banks.)

In replacing MERS, legislatures should consider modernizing and standardizing land records.  The mortgage industry’s frustration with the pre-MERS era is legitimate. But what is not legitimate was the industry’s unilateral decision to create a self-serving system that was indifferent to law and the public’s interest.

Think all that sounds over the top and extreme? Let’s recap what we know about MERS.

MERS is a company whose product is a massive electronic database called Mortgage Electronic Registration Systems. MERS Inc. has no employees, but some 20,000 “Certifying officers”. Certifying officers have included employees of mortgage servicers, law firms, and subcontractors. At least, people signing in MERS’s name have included such people. Whether any of them is really an officer of MERS with any authority is very doubtful. Doubtful because there’s solid evidence that Bill Hultman, who designated all these people as signing officers, lacked authority to do so.

Signatures but Apparently No Authority to Sign

In short, the appointments appear to be invalid two and sometimes three reasons. First they’re apparently forbidden by MERS’s bylaws. Second, the resolution Hultman cites as giving him authority was adopted by an earlier incarnation of the company and doesn’t appear to have been ratified by this one. Third, even if good, the resolution only allows MERS members’ employees to be officers. On what grounds did Hultman designate attorneys at foreclosure mills and “signers” at contractors? A few months ago a Texas court found the authority issue serious enough to allow discovery on the point to go forward.

The authority issue is serious enough for MERS to take action. MERS kicked off 2011 by announcing a new authorization procedure was being adopted, that everyone would have to be reauthorized, but that in the meantime, people could keep signing as if nothing had changed. I wonder how that’s been worked out. Did MERS mark documents signed under the new authority in any way, so people can tell? How is someone to know? Seems to me like MERS is just begging for some long, nasty discovery battles. And it’s just one sign of how ad hoc and careless the MERS project has been.

(Note, in the nine months since I wrote the article at the “solid evidence” link I’ve been persuaded by other attorneys that the doctrine of apparent authority may not solve the problem but it’s a discussion too in the weeds for here.)

MERS Is Inaccurate

We know MERS was designed to track mortgage servicing rights and tracking ownership of the loan was incidental, only done if the investor volunteered the information. (see text at fn 16). We know MERS itself does not update the database or do quality control of any kind. All data entry is done by MERS member companies for their own loans. Limited empirical evidence suggests the database is not accurate.

Lisa Epstein of ForeclosureHamlet.org shared some of her results of searching the MERS database with me, and the results are discouraging. While working on one project, she discovered bad MERS numbers listed in SEC filings for a number of loans, and that Wells Fargo originated loans weren’t showing up at all. Another discovery she made was that MERS had 10 loans listed as active after the properties had been foreclosed and sold or sold short. She found them simply by examining the 45 loans in one securitized trust that were located in her county; that is, she hadn’t tried to select for inaccurate MERS data.

Despite the fact that no one is managing this database as a cohesive whole and apparently quality control is, ahem, uneven, for roughly half of all mortgages, MERS’s records are the only ones. The public has nothing else to turn to. For the life of a MERS loan the only record of who owns the loan and who services it is the MERS system. That’s the point, as MERS explains on its website.

MERS Hides Self-Dealing; OR, The Papers Are Meaningless

When the time comes to take MERS’s name off a loan, the MERS officer assigning the mortgage out of the database works on behalf the loan’s claimed current owner, whether as an employee of the servicer or as an employee of a contractor of the servicer. That is, the party getting the mortgage via the assignment is the party saying the assignment is happening. Using MERS’s name covers what seems otherwise obvious self-dealing.

For example, the John Kennerty who signed so many assignments of mortgage to Wells Fargo was a Wells Fargo employee. Or consider yesterday’s post about the New Century MERS assignments; only someone working behalf of the companies getting the deeds of trust could be signing them, since New Century doesn’t exist.

Perhaps self-dealing isn’t accurate because at some point I’m sure the receiving party paid good money for the mortgages. But that’s looking at the assignments purely from a document execution perspective, not a legal one. (see link at page 16.) That is, the way MERS assignments are done only makes sense if the documents are meaningless and the only issue is how quickly and cheaply the documents can be generated.

The documents themselves, however, are submitted to courts as if they have meaning. The documents claim Bank A, by signing the document, is transferring the mortgage (and sometimes the note) to Bank B, including the right to foreclose if the loan isn’t paid. The document itself is the transfer. It’s why the signature of the Bank A person is supposed to be notarized: To protect Bank A’s property from be stolen by someone signing an assignment without authority to do it.

So if the document is supposed to mean what it says, it sure looks like self-dealing when it’s Bank B’s employee signing in Bank A’s name.

Of course, MERS members might say, the document is essentially meaningless. Bank B bought the rights awhile back. The document isn’t really transferring anything; it’s just a piece of paper we need to have to give to the judge or record in the land records. This attitude is inherent in the MERS system, because not only did MERS separate the note and the mortgage, but it separated the transfer of the mortgage from the assignment process. At least that was its intent.

In that frame, where the mortgage assignment is meaningless, what’s the harm in having the receiving bank sign for the assigning bank? And what’s the point of notarizing the MERS signing officer’s signature when nothing’s really being transferred? No wonder they started robosigning the documents.  If the document is meaningless, why does it matter how you sign it?

I wonder how judges will feel when they really start to understand what a sham these assignments are.

Nobody Thought MERS Through

I worked as a corporate lawyer at a big firm for three years, several years ago. The job of a corporate lawyer, in part, is to think things through.  A related job is to help clients reduce their costs by ensuring that the clients’ plans comply with the law. By those measures, the lawyers who blessed MERS didn’t do their jobs.

According to the New York Times’s Michael Powell and Gretchen Morgenson, no one checked to make sure MERS’s system was legal in all 50 states. That’s amazing, because real estate law can vary state by state, even as to basic issues like who owns the land, the purchaser or the lender. Thoroughly analyzing a proposed system like MERS in light of the laws of each state is the kind of task law firms are supposed to be good at.

This failure has already cost MERS members, as MERS’s legality is being litigated on a state by state basis and though winning some, MERS is also losing some. (The link is to a law review article by Dean and Professor Christopher L. Peterson of the University of Utah Law School, the preeminent MERS scholar.) As a result, MERS has been forced to change its procedures. For instance, it has told members not to foreclose in the name of MERS. And along the way the institutions that have relied on MERS have spent a lot of money litigating, and lost a lot of money by not being able to foreclose in a timely fashion.

Another indicator that MERS wasn’t thought through are all the assignments being done on behalf of entities that don’t exist, such as the New Century ones I mentioned yesterday. The MERS system apparently presumed all lenders would continue to be around so that servicer executed assignments in the lenders’ names would make sense. That was as blindly optimistic as the belief home prices would always rise.

Another part of MERS’s operation I can only hope—mortgage backed securities investors can only hope—was thought through. That is, generally a securitization’s pooling and servicing agreement says that for every MERS loan in the deal, no assignment of mortgage needs to be prepared and delivered to the trust. The contracts presumed MERS worked, and that the mortgages were being successfully transferred along with the notes into the trusts without a contemporaneous assignment. So my question is: under all 50 states’ laws, does that work? If not, what does that mean for the securities?

The Ibanez case in Massachusetts demonstrated that one assignment practice that was standard in securitizations—assignments in blank—did not work under hundred-year old Massachusetts precedent. That fact and the failure to think MERS through make me nervous about the contract provision.

The Banks Believed They Are Above the Law

In a nutshell, here’s all you need to know about MERS, taken from the Powell and Morgenson piece:

“The bankers who midwifed its birth hired Covington & Burling, a prominent Washington law firm, to research their proposal. Covington produced a memo that offered assurances that MERS could operate legally nationwide. No one, however, conducted a state-by-state study of real estate laws.

“They didn’t do the deep homework,” said an official involved in those discussions who spoke on condition of anonymity because he has clients involved with MERS. “So as far as anyone can tell their real theory was: ‘If we can get everyone on board, no judge will want to upend something that is reasonable and sensible and would screw up 70 percent of loans.’ ”

Unfortunately for the banking industry, the judiciary is not temperamentally inclined to rewrite laws for businesses’ convenience. Consider what U.S. Bankruptcy Judge Robert E. Grossman, a former partner of a major corporate lawfirm himself, wrote when finding assignments of mortgage by MERS violated NY law:

“The Court recognizes that an adverse ruling regarding MERS’s authority to assign mortgages or act on behalf of its member/lenders could have a significant impact on MERS and upon the lenders which do business with MERS throughout the United States.  However, the Court must resolve the instant matter by applying the laws as they exist today.  It is up to the legislative branch, if it chooses, to amend the current statutes to confer upon MERS the requisite authority to assign mortgages under its current business practices.  MERS and its partners made the decision to create and operate under a business model that was designed in large part to avoid the requirements of the traditional mortgage recording process.  This Court does not accept the argument that because MERS may be involved with 50% of all residential mortgages in the country, that is reason enough for this Court to turn a blind eye to the fact that this process does not comply with the law.”

It’s high time to legislate MERS out of existence.

Update 7-22-11

Lynn Szymoniak sent me this MERS presentation which suggests another fundamental problem with many MERS Assignments. See page 3, brown box 2 at right and pages 23 and 24. Every MERS officer is supposed to be an employee and officer of the lender they’re signing on behalf of, and is only supposed to sign for loans registered to that lender. That is, a MERS officer signing for, say, Citi is supposed to be an employee and officer of Citi, and only sign for Citi loans.

People generally understand an “officer” of a corporation to be someone who has a corner office, or at least, real status in the company. The word shows up in all the big titles, after:  Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, etc.  But we’ve learned the people signing documents are low level $10/hr employees, sometimes of the company and sometimes their contractors. These people sign as MERS officers for many institutions and believe they’ve been given signing authority by those institutions (presumably by being made officers).

These things can only be simultaneously true if we have another one of these meaningless paper situations.

They’re not “officers” in the commonly understood way. The only way these signers on behalf of multiple institutions can also be “officers” of each is if “officer” means nothing. These people also aren’t employees of the lenders in by any definition I know of. But surely the requirement by MERS that a certifying officer be an officer and employee of the company isn’t an accident. I mean, MERS could have said “agent”; could have said “employee or contractor” etc. Presumably it matters because the assignments claim to transfer assets of the company.

Again, once judges really understand how meaningless MERS documents are—how they are designed to look meaningful while in fact are meaningless—I don’t think it will be pretty. I only hope law enforcement is paying attention too.

 

140 Responses

  1. PURPOSE OF MERS IS TO RECORD ELECTRONIC IMAGES OF DATA VIRTUALLY RECIPROCAL EXCHANGE & PURCHASE GROUPS’ INVESTORY, DAILY PUBLIC PRICE PER SHARE, PRIVATE UNITS ‘EXCHANGE’ RECORDING ALL GLOBAL ‘CORRESPONDENTS’ BUSINESS’

  2. yoshi29, on July 27, 2011 at 11:59 am said:

    Always try to find an attorney.

    Debunking the Gospel of [Neil] Garfield

    I really haven’t read much on this site but stumbled on yoshi’s interesting commentary.

    I have conducted several Foreclosure Defense Forums myslef and have been agitating a certain Mortgage servicer to foreclose making me a model and example living the nightmare.
    Following the CASES for the last year I find that Pro Se are beating the pants of so called practicing attorneys who must still be practicing and haven’t reached a point of professional ability. Over 40 yrs we watched the courts and legal profession streamline the process, Due Process, and circumvent our Constitutional Rights to make their job easier as they are dumber.
    The law of 50 states requires original documents in order to enforce a contract and a mortgage is a contract.
    Wake up yoshi and 100 attroneys polled naitonwide on this issue lack any real knowledge of the law and definitely lack the abiltiy to defend a citizen in a courtroom.
    Law profession drop out when the laws were ignored and the lies became acceptable for a price.

    Do some more research yoshi you are full of crap!
    Joe Leinweber Jr, Ret USAF.
    Not afraid to use my real name.

  3. @fightingMERSin ca: that’s very, very interesting, assuming those cases say what you say they say. Mucho kudos if so. I have never believed that the language in the dot makes MERS anything other than a nominee placeholder. But, the language in the dot’s, as we know, is at odds with
    itself regarding who MERS is and isn’t. So we have one court ruling this way and another ruling that way: MERS is no one, MERS is an agent., if memory serves, even MERS is the beneficiary itself. And these courts do this without due consideration of any other documents (beside the dot) which might shed a light on the agency allegation or who MERS is and isn’t. The truth is “MERS”, does nothing, one way or another. The alleged principals – in EVERY situation – act in the name of their alleged nominee or agent, which is just not a cognizable dynamic / relationship. How may one, your honor, be the agent or nominee of one’s agent or nominee?

  4. I think that everyone is missing the #1 problem MERS has in CA.
    MERS is a Non-Authorized Agent and cannot legally assign the Promissory Note, making any foreclosure by other than the original lender wrongful, for the following reasons.

    1) Under established and binding Ca law, a Nominee can’t assign the Note. Born V. Koop 1962 200 C. A. 2d 519[200 CalApp2d Page 527, 528

    2) On most Notes, the term Nominee is not included and MERS never takes ownership, making it unenforceable and unassignable by MERS.
    Ott v. Home Savings & Loan Association, 265 F. 2d 643 [647,648

    3) Ca Civil Code §2924, et seq. is exhaustive and a Nominee is never included as an acceptable form of “authorized agent” in a judicial or non-judicial foreclosure.

    Finally, GOMES V. COUNTRYYWIDE HOME LOANS, INC., 192 Cal.App.4th 1149, IS FLAWED!
    a) The Gomes case simply failed to address and apply the established and binding definition of a nominee.
    b) The first thing the Deed of Trust does is (i) take away MERS right to payments and (ii) take away the right to enforce the Note.
    c) REGARDLESS WHAT A BORROWER AGREES TO, a borrower cannot legally grant MERS the right to assign the note or any of the rights of the note owner.

    Source: https://sites.google.com/site/mersfatalflawsincalifornia

  5. @Andrew, whenever a fraud claim is made, the person making it must
    demonstrate how he was damaged by the fraud. I’m not saying you weren’t, but how would YOU say you were damaged by securitization? If you can’t articulate damage, even if the court finds fraud, as hard as this is to believe, the court may yet rule against any relief. Pretty sure that’s how it goes.

  6. Can some one send this to ask justices of ri supreme court please

  7. @Mike Hanson – you might be onto something there about making a preemptive strike and filing a QT action. I’m still looking for attorney Walter Keane’s QT actions in Utah which are allegedly successful.

  8. @ tnharry, on July 27, 2011 at 8:51 am said:

    “except that the Borrower consents to the situation by signing the documents. it may be something, but it’s not fraud.”

    NOT FRAUD? Are you serious? Was the MERS/Securitization Scheme explained to every borrower before signing? THEY were so busy trying to execute as many Mortgages as THEY could, regardless of affordability. So the Borrowers were defrauded…Were they not?

    Fraud in the Inducement anyone?…

    Fraud in the inducement is an equitable defense, and occurs when A enters into an agreement, knowing that it is supposed to be a contract and (at least having a rough idea) what the agreement is about, but the reason A signed/made the agreement was because of some false information that B gave to A

    http://en.wikipedia.org/wiki/Fraud_in_the_factum

    —-

    @Pat, on July 27, 2011 at 9:33 am said:

    More important, if MERS is ruled unlawful, it could cloud titles going back to 1996 when the first MERS loans occurred. How far back would people be affected?

    MERS is Unlawful, all Titles since the introduction of MERS are Clouded and would go back as far as ‘1996’, as you stated.

    Fraudulent Mortgages more than likely go back much further than 1996 though.

  9. @Tony – actually there is a rather large caveat in the dot about MERS foreclosing. (and don’t forget about WHOM MERS -read alleged-member-hack might be claiming nominee/agent status)
    It’s the ” IF by something or other or custom”. As usual these days, my brain won’t remember the something or other part. Regardless, any court of which I am aware which has squarely confronted this language in the dot has found against the something or other or custom. This doesn’t make it binding precedent everywhere, of course. I’d cite it, anyway, or at least borrow (read plagerize) the reasoning of the courts which have so decided.

  10. @Marilyn – I read the Singer order on the bankster’s mtd. I’ve seen it before, I’m afraid. I also did not read the pleadings. I often accuse
    the banksters of making conclusions of law as opposed to facts (like their allegations they are the ‘holders’ of the note) Homeowners do it, too. They’re in a tougher spot, I guess. They have to make a stmt of fact about stuff singularly in the possession of someone else for one thing. The Singers were probably right about their general but unsupported allegations and didn’t appear to make the right arguments.

    It’s the banksters who make unsupported allegations from the get-go and get away with it.
    “John Brown executed a note and dot on 8/4/2003……”. Really? And you know this HOW? These documents are not necessarily self-authenticating to start with.

  11. As to Neil being on vacation and the amt of postings here (as opposed to comments), I’ve thought there were too many and moved too quickly. We the readers start a line of thinking and it’s truncated by a desire for quick responses to the next post. So there’s never any resolution of salient issues. This site posts stuff – that’s what it does, but firing off 4 to 5 posts a day leaves time for no meaningful consideration of any of them.

  12. @marilyn – good for you. i’ve said it more times than i can count here – keep it as short and as simple as you can reasonable convey your case. i’ve seen too many cases where the plaintiff goes into this whole history of MERS and securitization when a few short statements would have conveyed their case better. Singer claimed a signer in his case was a “robo-signer” but didn’t really say why or how that mattered. people read this site and others and try to do this stuff without a LOT more research and preparation on their own. assert facts, not conclusions. i actually found it a little funny that the case was in Neil’s home state given the amount of crap i’ve been getting lately for criticizing the lack of useful information posted here. i still believe Neil is on an extended vacation or something and not in charge of the site right now. we went from 4-5 postings per day to 1-2 lately

  13. to tnharry
    I only saw the judges opinion, I did not go into getting the original complaint so I don’t really know how they presented the issues.

    I think that unless you are some top of the law attorney, the plainer and simpler you present your case , the easier it is for any judge to understand what you want to get across.

    In my case the title attorneys from Fidelity and Coronet title made several motions to the court that I should not be allowed to represent myself cause I baldly stated the facts .

    The court denied those motions to them.

    I write my motions very simple and direct, it would have to be a real dumb dumb not to understand what I am saying- or a corrupt Judge.

  14. @usedkarguy; Ok, that WI statute re recordation is akin to NRS 111.315 requiring interests in real property to be 1) (in writing and) t2) to be recorded to impart notice. When in writing but unrecorded, transfers are only binding (like a deed) on the parties thereto. Under NRS 111.315, if an assignment is done but not recorded, it’s good as to the A and B parties to it, but it is not enforceable (which enforceability would apply to a deed of trust)
    against third parties with no notice, such as the homeowner. I hasten to add that without delivery from A to B, an assignment or other
    instument impacting title to real property passes nothing. See who the doc (the assignment) is being returned to after recordation. Unless that party is the assignee or there’s a bonafide agency between B and that party, there has been no delivery.

    Okay, but the real thing that Wisconsin statute might provide help with is with the trustee’s deed at sale. The statute says the parties must be identified. Maybe the trustee’s deed should state “XYZ company as trustee for ABC beneficiary”. Otherwise you don’t know for whom xyz alleges it is the trustee and there is no proper identification of that party. That’s probably true anywhere and particularly true in Wisconsin pursuant to the statute you cited, 706.02(a) if the transaction falls under 706.01, which I didn’t look at but assume it does.

    I hope usedkarguy reads this because he may have found something very useful. If other states have mirror statutes, it would be as usefull there, also. Usedkarguy, I have you can find out by case law how this statute might in fact be applied to trustee’s deeds. Or maybe it’s time for a case of first impression. But as usual, that may not be the end of the argument. What does this failure to comply with 706.02 mean about the foreclosure? Does it nullify it? Is it void or merely voidable?
    Was it (also) failure to comply with foreclosure rules?

    There were so many great posts by everyone yesterday, I am having a hard time even reading them all. At a glance, tho, I think they should all be digested by everyone.

    I hope we can continue exploring these avenue together.

  15. @marilyn – i feel somewhat vindicated after reading that case you referenced. it’s proof that shoddy complaints and claims don’t work. mumbling something about robo-signing and using the magic livinglies words doesn’t work. you need facts and clearly defined claims. the complaint in that case hurt the plaintiffs a lot more than a judge who “didn’t get it”

  16. ELynx integrates electronic document delivery, online forms, electronic consent, and eSignatures into commercial client’s portals. Information and documents from multiple systems of origination can be presented within a single, consistent interface. Borrowers can provide information back to you securely and electronically. They don’t mean ‘consumers’ they mean everyone else.

    Please include in your knowledgebase about LPS/DOCX remediation’s, the nationwide network of attorney’s & title & settlement agents who are eLynx and/or eDelivery participants and not part of MERS as a MEMBER but the ‘common denominator’ of all ‘retail’ escrow transactions who link to the MERS members through other services including LPS/DOCX and eLynx and TD Services.

    TD Services dba TD Escrow (special services just for non-judicial states) part of the MERS network. Look at graphic revealing ‘MERS’ and Fidelity and the cloud and….

    Consider the fact in the member profile, that MERS identifies who is an eDelivery and eParticipant — a rather significant fact that the systems and transactions are indeed integrated. Many have asked ‘what is eDelivery and eParticipant’ well its eLynx members who are integrated with MERS Members

    Who is the MERS MEMBER? First 7 digits of a ‘Min’ # are the ‘Members ID number assigned. You can view the profile of the member who handled one transaction controlled by a 10 digit agreement (sale or purchase) number followed by a hyphen and control digit. Not all transactions are recorded in MERS long arm reach database. But LPS and DOCX and TD Services and eLynx all are integrated to communicate via the ‘cloud’ internet.

    For those of you who have never viewed a ‘MERS’ Member Profile pay particular attention to eRegistry Participant and eDelivery Participant and Lines of Business.

    Remind yourself that Wells Fargo Commercial Bank does not do residential mortgages clearly restated June 1998 in the public domain. Mark Oman of Norwest and Pete Wissinger liked the ‘stagecoach’ private brand label better than the ‘Norwest’ image of Alt-A assets and subprime lending.

    Example of ‘servicer’ and ‘escrow’ transactions both eRegistry and eDelivery.

    Corporate Name: GMAC Mortgage, LLC
    Address: 3451 Hammond Ave Mail Code 507-345-186
    City,State,Zip: Waterloo, IA 50702
    Toll Free Number: (800) 766-4622
    Direct Number: (800) 766-4622
    Fax Number: (999) 999-9999
    Primary Contact: GMAC MERS Dept.
    Website: http://www.gmacmortgage.com
    Member Org ID: 1000375
    Lines Of Business: Originator, Servicer, Subservicer, Investor, Document Custodian

    eRegistry Participant: Yes
    eDelivery Participant: Yes

    Notice ‘eDelivery’ an enterprise-wide eDelivery solution including Settlement Agent Management and integrates with ‘MERS’.

    Settlement Agent Management ‘common denominator’ for all ‘retail’ servicer escrow transactions nationwide.

    “With the increased risk of fraud and greater need for scrutiny in the loan process, lenders need more transparency with their closing partners and agents.

    The Settlement Agent Management (SAM) component of the eCN from eLynx gives lenders the tools and information they need to work with their closing partners.

    At the heart of eLynx’s electronic closing network (eCN) is SAM. 100,000 of the nation’s closing agents are registered and maintained within eCN. Registered agents handle closings for virtually every bank in the US. It is a simple process taking a settlement agent just a few minutes, but it greatly reduces a lender’s risk of fraud perpetuated by closing agents.

    SAM also provides greater visibility into the status of the closing including the scheduled closing date and information about funds disbursement.

    eLynx (company) products tracks and audits document delivery & receipt even can automatically print and mail documents if eDelivery is not successful

    “For over a decade, eLynx has provided the most secure eDelivery applications available, allowing you to securely send data and documents wherever they need to go.”

    Provides secure document delivery with tracking and auditability
    Combines multiple documents into a single document or package to simplify consumption

    Can include optional E-SIGN and UETA-compliant eSignatures

    The great advantage of eDelivery is the speed. Instead of waiting for days to receive a document in the mail, a notice arrives in email almost instantaneously. eLynx’s eDelivery services require different levels of authentication to pick-up the information, which is much more secure than regular email.

    Technology includes: HUD-1 Reconciliation; eDelivery, eSignature, eClosing, Collaboration, Fraud Mitigation, On-demand Platform, Document Viewing, …

    Read description of ‘eDelivery’ on eLynx and you’ll understand how the attorney and settlement agent were part of the nationwide title & settlement services ‘retail’ escrow transactions linking to MERS. You’ll begin to understand the original note is scanned digitally and reproduced as needed.

    NOTE: 10 Year life span of GMAC Mortgage of Iowa, GMAC Mortgage of PA, in 2006 sold and become new entity GMAC LLC. Financial Holding Companies must sell all affiliates and non-bank affiliates per rules of FED and they sell back to themselves in a different name or whom they are instructed to sell to.

    So any MERS transactions and retail escrow funding GMAC Mortgage, LLC dba as a business entity in PA where the website used as a registered fictitious name for another registered fictitious name GMAC Bank and we wonder why consumers as borrowers are vulnerable? don’t know this servicer will take consumer property into pipeline for benefit of beneficiary their parent not the consumer.

    INQUIRING MINDS WANT TO KNOW:
    HOW DID ‘CHASE HOME LENDING’ A ‘SUB-SERVICER’ at Retail who did not record their own MIN 18 digits used third party temporary lenders, and Chase listed below was not a eDelivery participant with eLynx. Hmmmmm.

    Corporate Name: Chase Manhattan Mtg. – Deerfield
    Address: 780 Kansas Lane
    City,State,Zip: Monroe, LA 71203-4774
    Toll Free Number:
    Direct Number: (318) 699-4636
    Fax Number: (318) 555-3344
    Primary Contact: Rachel Pylant
    Website:
    Member Org ID: 1000565
    Lines Of Business: Subservicer, Investor

    eRegistry Participant: No
    eDelivery Participant: No

    NOTE: Chase Manhattan Mortgage Corporation 1996/1997 affiliate of Norwest with GMAC-RFC – largest producer of non-conforming mortgage products not eRegistry nor eDelivery. Hmmmmmm.

    INQUIRING MINDS WANT TO KNOW HOW DID ‘Wells Fargo Home Mortgage’ storefronts from June 2004 forward nationwide active as ‘eRegistry and eDelivery participants for both originations and servicing through the Minneapolis MN – Correspondent Business Operations? was never an ‘investor’? Hmmmm. Not therefore ‘Wells Fargo Bank NA’ hmmmm.

    Corporate Name: Wells Fargo Home Mortgage
    Address: 2701 Wells Fargo Way X9998-012
    City,State,Zip: Minneapolis, MN 55467
    Toll Free Number:
    Direct Number: (651) 605-3711
    Fax Number: (952) 562-0980
    Primary Contact: Masse Adjetey
    Website:
    Member Org ID: 1005298
    Lines Of Business: Servicer, Subservicer, Investor, Document Custodian
    eRegistry Participant: Yes
    eDelivery Participant: Yes

    NOTE: EMAIL of ‘wellsfargo.com’ ordering title & settlement agents and local attorneys for their ‘mortgage brokers’ to place title policy in name of ‘x’ lender and for ‘x’ amount…. hmmmm. did order the retail escrow transactions – and are the recognized nationwide lender who does not do ‘mortgages’ and integrated in the title & settlement agency of former PHH and Cendant Settlement Services morphed into 4 IPO’s 2006-2008 – hmmmmm.

    eLynx Webinar: Executing Your eLending Strategy for Fiserv Customers

    So read all about Electronic Closings referred to Post Close and Servicing phase of loans, documents converted to paper because lenders lack infrastructure for secure electronic delivery of servicing documents to borrowers. Electronic documents require signatures and without the ability to capture binding signatures electronically, you may have to rely on wet signatures (or blue ink) which would require in-house staff to process and scan incoming mail before you could leverage electronic delivery to borrowers. eLynx can help you (clients of commercial banks) to automate the entire post close and servicing operations.

  17. Johngault,

    Yes, I think we’ve established there’s no assignee and hence the nominee status has been terminated. I don’t think it’s necessary to get into case law–doesnt hurt, of course, but if the deed itself says an assignment is necessary and there isn’t an assignment, I think our work is done. On that point, anyway.

    In fact, I think that the plain language of both notes and deeds are enough to establish the pretender lender’s shenanigans. For example, the note defines note holder as fulfilling both of two requirements: 1) taking the note by transfer and 2) being entitled to payments under the note. Securitization necessarily makes 2) a problem for most purported note holders because even if said holders took the note by transfer, they weren’t entitled to payments–the investors/certificateholders were. Therefore, they are not note holders as defined in the note. Easy peasy.

    I think you would appreciate that argument, johngault, given your nose for sniffing out what all these documents actually say rather than what custom or conventional wisdom tells us they say.

  18. @marilyn – okay, I will.

  19. Well, that’s not quite true about the alarm. Just the percerption all those foreclosures were bogus would be alarming. In a roundabout way, we’ve already seen alarm. We’d see some more. Still, in the absence of some monster edict, it would be taken in stride in the final analysis as things are, and isn’t that where we’re at? The perception but no ‘monster edict’? And anyway, Wall Street got propped up and while the perception is temporarily damaging to ‘portfolios’ and stock values, the world is still revolving. I agree with people who say an edict might be economically damaging.
    Our government is in the unenviable position of weighing the law and what is right against economic realities. Some people say that’s major bull and the “edict(s)” should be made. I guess that would be essentially by the highest court of each state or jurisdiction by decisions in cases, like in my view Nevada has done. If the law, even at the cost of our economy, must always be the primary consideration in the U.S. of A., then it’s the only truth any American should champion (regardless of whether or not you believe such rulings would cause economic tsunami).
    This requires cases to reach the highest court in each state or the jurisdiction which could set binding precedent for that area.

  20. to johngault

    This case showed up on my computer. It might enlighten some as to what Judges know or don’t know, or want to know. All these issues might be too deep for some Judges.

    Take a minute to look at it where the plaintiffs are given the opportunity to make clear their allegations in short plain statements.

    Singer v. Bac Home Loan
    Us District Court D Arizona
    July 21, 2011

  21. @zurenarrh – that’s an interesting observation. I have argued about whether or not anyone is a successor and or assignee for the lack of an assignment.. But as you more succinctly stated, in the absence of an assignment at least in title-theory states, there can be no assigneee, at least if you follow the NV SC’s recent ruling. Just a reminder: that court just ruled that in NV, a title-theory state, all assignments of dots must be in writing and there must be a complete chain of title. (This ruling was made in the context of mediation between the borrower and the alleged beneficiary. The court ruled
    that a person authorized to make decisions for the ben must show up,
    (don’t send a grunt) and show up with a complete written chain of title evidencing that entity’s interest in the deed of trust. The court ruled any alleged capsulization of the chain would not cut it. Must produce the assignments themselves. It’s my own idea to apply this to foreclosure actions: If they can’t mediate without showing this complete chain of title, they certainly may not take your home.)

    There could still be a successor, though. That brings to mind B of A’s claim it is the successor in interest to was it CW or some other outfit?
    I didn’t look at that; just heard about it
    So, again, do you think we’ve established that at least in title-theory states there is no assignee in the absence of a written assignment of the deed to trust, even if unrecorded?* What if any factors would be relevant to them going back and doing them ex post facto? If you llive in NV or another title-theory state which does or will follow this reasoning, these answers may be critical. Why would that be prohibitted? IF there are reasons, they don’t come to this mind this morning. I know at least some courts have not allowed them (ex post facto or after-the-fact assignments) as to the current alleged beneficiary but I can’t remember why this minute.

    *this assumes MERS is only a nominee placeholder or even an agent
    and not itself a beneficiary. MERS, recognizing finally the bs-ness of alleging it is the beneficiary, has backed off that, anyway.

    People who want to save their homes don’t want a chain of ex post facto assignments, but disregarding for the moment their legitimacy otherwise, it’s probably what is needed to return our land records to some form of accuracy. Still, the lack of this chain will keep people in their homes longer when properly asserted as some kind of affirmative defense to foreclosure. Maybe that’s what Genpact is doing with MERS – trying to determine what assignments should have been done and working on getting them. But when a company in the chain is
    gone, well, that’s a mess and maybe an incurable one by any
    optimistic standard.

    If the complete chain of title is required, some keen mind may fashion a path back to a lost home out of it along the lines of foreclosure actions were not in conformity with the statutes because the trustee did not act for the proper party. That is hardly compliance with foreclosure statutes (or the terms of the deed of trust) if that is the case. If there is a broken chain of title and a complete chain of title is necessary (whether recorded or not), then a legal stranger in fact has made off with your home. The ‘government’ need not be unduly
    alarmed by this. These foreclosures would not all be ‘undone’ at once. They would be in the grand scheme of things slowly integrated into the economic picture in the absence of some national edict nullifying those trustee sales, and that’s not going to happen whether or not it could or should imo.

  22. @tony—wake up—the fake “mortgages” were NEVER securitized…

  23. This has been a great read. 115 comments…good work Neil. People are paying attention. Thank you for creating this forum. The information being shared is valuable and I am glad both sides of the Mers issue are being discussed, as in… is it legitimate or not. I am reading the same book that Tony is reading of course, knowing how it worked before Mers. I know that Mers has destroyed the property record of every loan in their system. The creators of Mers did this and it is only fitting that they should reap what they have sown. The people defending Mers really have a lot to learn.

  24. Unfortunately, most people here do not want to hear the other side, or legal arguments or facts that contradict what they believe or hurts their own case.
    You are absolutely correct about the wording of MERS as nominee for the beneficiary. As well, most deeds stated that the homeowner gives MERS the right to foreclose as nominee. Homeowners argue that they did not know this, but if they had read the documents, instead of being in a hurry to sign, they might have understood more.
    MERS was not set up to steal homes, as people claim. It was set up to facilitate lending, as I described in my previous post. And until the housing crisis occurred, except in random foreclosure cases, MERS was not a point of contention.
    What are the implications of MERS being ruled unlawful? Does it void the Note? No. The borrower is still obligated to pay and a lender could file a lien, which would make resale or refinance problematic. Or the lender could take them to court for court ordered foreclosure. Would this be successful? Likely. Can the file bk? Yes, but other issues may pose problems.
    More important, if MERS is ruled unlawful, it could cloud titles going back to 1996 when the first MERS loans occurred. How far back would people be affected? How could such an event be resolved?
    What would happen to securitized loans, and the debt?
    The bottom line is that any rulings against MERS and securitization on a nationwide basis would completely destroy both the financial system and the real estate property ownership. A complete Depression would occur, leading to far greater problems than the last Depression.
    People here have no problem with such a result, but they do not see the true harm. The government and the court system by now knows and understands the situation. Therefore, as I have indicated before, either the US Supreme Court will rule in favor of MERS and Securitization, or the government will legislate in favor.
    It is national suicide to have any other result.

    I am not going to lie, this is one of the most craziest things I read yet. You sound like Nicholas Biddle trying to save the Second Bank of the united states. Funny thing though, when the bank was denied a charter this was the only time the United States ever paid off the entire debt period. You writing here sounds like your Ally Bank commercial ” I love my bank.”

    Learn true economics and then come back. Your writing sounds like a teacher saying Columbus discovers America, when all he did was start the slave trade a major business in the Americas.

    Also lets get into how this writing is flawed:

    Slavery was like MERS and the securitisation problem today. They said if it is found illegal the economy would fail and the world would go down the tube. Heck the supreme court even found it legal, there was a civil war over this (and party over other things too). When it was abolish did the US go under? Was everyone living in caves? NO because if this was so then we would not be writing on this blog nor using all the new gadgets we do today.

    So you are now saying the new form of slavery if found illegal would destroy this nation? Whats in you coffee?

  25. Probably shouldn’t use the word ‘mortgage’ in place of ‘deed of trust’ and vice-versa because they are distinctly different documents. A mortgage is a lien while a deed of trust conveys legal (“bare naked”) title.

    @Ian – I don’t rightly understand that question. I dont’ know how title to real property would be messed up by a lien. I assume you gave someone a lien on your home(?) You didn’t give them title by giving them a lien, so you still have the legal title to your home and it’s not messed up.

  26. @usedkarguy – that’s good info. Does Wisconsin use mortgages or deeds of trust these days? I note those decisions, etc. are most recently dated l979. It looks to me like WI uses mortgages? The map below identifies WI as a lien-theory state. Here is a link to that map again of title-theory and lien theory states:

    http://title.grabois.com/

    Maybe all lien theory states use the mortgage and not the dot. Pretty much all I know about mortgages is that they’re liens and I thought they required judicial foreclosure, but I guess I really don’t know about that. Laws re: ‘mortgages’ may have changed since I studied that stuff.

  27. In other words, MERS and its members have been boiled on their own boilerplate. Hoisted with their own petard.

    And for those who would indignantly say, “But you signed the Deed of Trust…”, I admit I signed it–never denied doing so. I am the trustor. And what I as trustor signed stated that MERS is the nominee for the Lender’s successors and assigns, but there are no such successors and assigns. So MERS is the “nominee” of no one; MERS is no longer the nominee in the absence of assignments from the Lender. Whoever would be “principal” to MERS’ “agent” has no grounds to claim MERS is its agent because there is no assignment and hence, no “assigns” and the agency relationship between MERS and any party other than the Lender is terminated (or was never begun in the first place).

  28. CHECK IT OUT:

    http://dealbook.nytimes.com/2011/07/27/once-unthinkable-breakup-of-big-banks-now-seems-feasible/?nl=business&emc=dlbkpma1

    “Yet even JPMorgan is merely trading at book value. Put another way, the market regards the value that JPMorgan provides as a financial services conglomerate as zilch.”

    TIME TO DIE…

  29. Just can’t believe these issues have gone unresolved for how many years now? Three? Four? Going on 5?

    Not good.

  30. Here’s another thought…

    Reading over my Deed of Trust yet again, I see the first sentence in the MERS identification section says that MERS is “acting solely as nominee for Lender and Lender’s successors and assigns.” Yet the whole purpose of MERS is to eliminate assignments! That’s another piece of the puzzle, as suggested below, namely that the Note changes hands, but the DOT supposedly does not. In other words, there are no “assigns” of MERS.

    Let me illustrate what I mean. In my case, the Note was supposedly sold a week to Fannie Mae a week after closing. If all the paperwork was done properly–indorsement and delivery, etc.–that sale of the Note would make Fannie Mae the “Note Holder” as defined in the Note. So let’s assume for the sake of argument that Fannie Mae is now the “Note Holder” of my Note.

    According to the plain language of my Deed of Trust, for MERS to be the “nominee” of Fannie Mae instead of the “nominee” for my Lender, Fannie Mae would need to be an “assign” of my Lender. Right? Well, the problem for Fannie Mae is that Fannie Mae is NOT an “assign” of my Lender. If Fannie Mae IS an “assign” of my Lender, Fannie Mae has yet to make that argument or present evidence of such. Therefore, MERS, according to the plain language of the Deed of Trust, is NOT the “nominee” for Fannie Mae.

    And that, friends, is how MERS (and its members) has shot itself in the foot by working to eliminate assignments. The supposed agency status of MERS is only transferred by assignment–according to the Deed of Trust, not me–yet MERS exists to eliminate assignments. This of course goes back to one of Judge Grossman’s points in Agard, namely that MERS cannot be a “common agent” for all MERS members–there has to be an assignment to the new Note Holder, yet there never is such an assignment (at least there isn’t in my case).

    So we’re one sentence into the MERS role in the Deed of Trust and already we see that MERS, by its own rules, CANNOT be what it purports to be, i.e., a blanket “mortgagee of record,” if and since there are no “assigns.”

    I am curious to see tnharry’s take on this, if he is still reading this now rather lengthy thread. The only way around this problem is if there IS somehow, somewhere, an “assignment” from the original Lender to the new “Note Holder.” I don’t know where such an assignment would be if not in the land records, and if such an assignment does exist somewhere besides the land records, I would think it would be of dubious legality.

  31. TN,
    You asked “and your counter to the widely held concept that the mortgage follows the note is what? that idea moots the MERS issue entirely in those jurisdictions that follow it” and dny answered it: “a (valid) mortgage follows a (valid) note? If A has a note endorsed in blank, is it really entitled to enforce a mortgage that names B as mortgagee, WITHOUT a valid assignment of mortgage?”

    Thanks, dny!

  32. johngault,

    Thanks for the encouragement. I’m not a lawyer either, I’m just try to suss all this out the best I can. You wanted to know if I would answer the “so what” of all this, as you put it. If by that you mean what is the remedy we should seek now that we know that MERS is a problem because it isn’t a beneficiary and purports to be a simultaneous principal/agent for the lender/itself, I’d say simply that the remedy should be whatever would be done to you or I if we filed falsehoods in the land records and tried to act as simultaneous principal and agent in an attempt to divest someone of their biggest asset, i.e., their home.

    And I’m not sure exactly what that is, but it would probably involve fines and/or jail time. I have no idea what ought to be done from a legislative policy standpoint except that the shenanigans of MERS should be stopped. And the shenanigan I’m primarily referring to is pretending to maintain an accurate record of which party owns which Notes. Another shenanigan is pretending to be the beneficiary/mortgagee when it is not. Seems like a simple policy fix would be to outlaw the use of private databases of ownership of indebtedness/Notes as a substitute for the public land records.

    From my own perspective as a litigant entangled with MERS in a lawsuit entering its third year, the remedy is also fairly simple. The court should recognize that MERS has slandered the title to my property. It should recognize that nothing MERS has done has any legal force. It should recognize that MERS is not the beneficiary of my Deed of Trust but tried to convince me it was in said Deed of Trust (in bold print, no less), making said Deed of Trust fraudulent on its face. It should recognize that the whole point of MERS is to bifurcate Notes and security instruments ab initio–though without giving the appearance of such bifurcation–so that 1) the Notes could be used to increase the bottom line of “the financial system” by being pledged ad infinitum to various and sundry trusts in whole or in part, and doing so behind everyone’s back (or more accurately, behind the curtain of MERS) YET still maintaining the illusion that the Notes were secured by security instruments and 2) using MERS assignments at foreclosure time to “de-bifurcate” the Notes and security instruments and make it appear as if they had never been separated. And then the court should award the proper damages to be paid out, the land records expunged of the falsehoods placed there by MERS, and just generally let them know that in these United States, we take our property rights pretty damn seriously and we don’t take kindly to their attempts to take those rights from we the people.

  33. @tnharry;

    What is money?
    Where does it come from?
    Who creates it?
    How is it issued?
    Why are Governments in Debt?
    Why is there income tax?
    Who issues money?

  34. […] Livinglies’s Weblog Filed Under: Foreclosure Law News, Foreclosure News Tagged With: crisis, foreclosure, […]

  35. @tnharry,

    your statement:

    “as to your last point though, banks aren’t supposed to be serving us. they are supposed to be serving their shareholders. don’t think for one minute that the bank is your friend or protector. the minute you borrowed money from them, an adversarial relationship was formed.”

    That’s right. Why is that?

    The whole purpose of banking is to facilitate the exchange of products and services.

    Let’s see the US government gave up that job and gave it to the federal reserve bank back in 1913. Oh, it’s not called the federal reserve bank of the USA.

  36. http://www.youtube.com/watch?v=AF5zQ2J4n_0

    I mean it,this crazy world…enough of this,it takes so few words to speak truth and volumes to defend…lies.

    who knows where evil lurks in the hearts of men?

  37. @tnharry.

    your statement:

    “i appreciate the anger and frustration leveled at MERS, but explain how dismantling it would help save one single home from foreclosure? or how the existence of it and its operation has directly caused anyone to lose their home?”

    Dismantling it would put it before when things were normal and dismantling it would get fuk’in wall street out of our homes. Just like wall street is in every commodity from sugar to oats and they jack up the price so they can trade it but main street really cannot trade it but rules are set so that you think you can trade it. But in the end, main street pays a premium for the oats or sugar and doesn’t even know it.

  38. You can’t “fix” a dying tree with band-aids…you have to chop it down and let a new one grow…

  39. SUBPRIME “LOANS” NOT REALLY “LOANS”. NEVER “FUNDED”. ONLY “SERVICING RIGHTS” ARE ACTUALLY TRANSFERRED.

    WAKE UP AND SMELL THE BULLSH**.

  40. @Pat. YOUR STATEMENT below

    “More important, if MERS is ruled unlawful, it could cloud titles going back to 1996 when the first MERS loans occurred. How far back would people be affected? How could such an event be resolved?
    What would happen to securitized loans, and the debt?
    The bottom line is that any rulings against MERS and securitization on a nationwide basis would completely destroy both the financial system and the real estate property ownership. A complete Depression would occur, leading to far greater problems than the last Depression.”

    THAT’S RIGHT, AND THUS YOU UNDERSTAND THE PROBLEM IS CREATED AND BECOMES WIDE AND FAR FETCHING AND CONSEQUENCES, OH MY GOD.

    THUS, NOBODY CAN CONFRONT IT AND THE SOLUTIONS BECOME FIXES AND FIXES AND FIXES, AND YET THE REAL SOLUTION IS TO GO BACK TO HOW IT WAS DONE BEFORE SECURIZATION, BUT SINCE BANKS AND WALL STREET OWN CONGRESS, IT WILL NEVER HAPPEN.

    THUS NEW RULES ARE CREATED, AND NEW RULES AND NEW RULES AND CODES. WHAT A MESS. THANK YOU VERY MUCH YOU BANKSTER.

  41. @yoshi29

    “Unfortunately, for the homeowner, foreclosure defense is not easy. It is a lot of painstaking detective work and TILA rescissions happen in only one of out of 50-75 loans.”

    hahahhahaha.

    Why is it so complicated? Why so painstaking detective work?

    Jeepers, these are homes people live in. They try to make it go right. They work a work at a regular job.

    Somebody makes 20-30-40- per hour and one of you fuks come along and wants 400/hour. Why is that? Because you understand the code – the complexity of the words in the civil codes and other such Bull shit.

    Unbelievable.

  42. John Gault- in a lien-theory state, how can a ‘lender’ foreclose on the mortgagor, if, due to a horribly corrupted chain of title, the mortgagor has no ownership of the property? They can’t sell it if they have no mortgage, so what factors would be at play here?

  43. What about the fact that in my contract it says that Countrywide is the Lender when it never was the lender.

    Doesnt that make the contract null and void.

    Obama and Boehner are snake oil salesmen.

  44. Reality is not fair

    The United States is asking to get its debt ceiling raised.
    While “We the People” are got our Debt ceiling lowered.

    HEIL THE BANKSTERS

  45. I’m putting this up here for reference as to the lien theory:

    Wisconsin is a state which follows the lien theory of mortgages. In other words, the mortgagee does not have legal title in the mortgaged premises Section 708.01 Wis.Stats. See also, Mutual Fed. S. & L Assoc. v. Wisconsin Wire Works., 58, 58 Wis. 2d 99, 104, 205 N.W2d762 (1973). The mortgagor retains full ownership in the property, which consists of equitable and legal title, while the mortgagee’s interest is that of a lien holder. Therefore, the mortgagee’s status is that of a holder of a security interest Osborn, Mortgages, sec. 127 at 208.See also, Bank of Commerce v. Waukesha County, 89 Wis. 2d 7155, 279 N.W.2d 237 (1979).

    “A foreclosure suit has been said to be merely a proceeding for the legal determination (emphasis added) of the existence of the mortgage lien. The ascertainment of its extent, and the subjection to a sale of the estate pledged for its satisfaction.” 55 Am. Jur. 2d Mortgages sec. 553 (1971).

    Wisconsin Statute 706.02 Conveyance of Real Property; Recording; Titles Formal Requisites (1) Transactions under s. 706.001 shall not be valid unless evidenced by a conveyance that satisfies all of the following:
    (a) Identifies the parties; and
    (b) Identifies the land; and
    (c) Identifies the interest conveyed, and any material term, condition, reservation, exception or contingency upon which the interest is to arise, continue or be extinguished, limited or encumbered

  46. Dear Pat, If I sign something that turns out to be illegal. Then the other side cannot enforce it.

    If a tenant in Los Angeles signs a lease agreement that is subjet to rent control that is contrary to Rent Control That part of the lease is null and void.

    So if Pat signs a contract to supply Tnharry with a kilo of cocaine. Tnharry cannot sue Pat for the cocaine in a court of law in the USA.

    I like tnharry he is the Devils Advocate and probably works for the Banksters.

  47. Well, I left something out. In a lien theory state, in addition to holding a lien, the dot trustee holds equitable title to the real estate (but not legal title) in trust for the beneficiary. .

  48. @dny – I think the answer to your question about an end in blank and no assignment of the dot may depend on the state. Are mortgages used?
    If a state which uses dot’s, is that state a title theory state or a lien theory state?
    I don’t think many people knew (or cared) that when they signed a dot in a title theory state, they were actually granting legal title to their homes to be held by the trustee for the trust for the benefit of the lender. The homeowner retained equitable title. In a title-theory state, although a dot acts as a lien, it isn’t. It’s a title transfer.
    People who sign “mortgages” are granting a lien on their homes, as are people who execute dot’s in states which are “lien-theory states”. In a lien theory state, the borrower retains legal title to his home and the lender has only a lien. That’s why judicial foreclosure is required – the lender must get a judgment that the default on its lien should allow an action to go forward giving the lender legal title to the property. The lender does not have legal title to your home, but if you default on the loan, it may and will get it.

    In non-judicial, title theory states, the trustee already has legal title to the home and the trustee is allowed by virtue of the terms in the dot to extinguish the borrower’s equitable title by trustee’s sale, to seize on the home without the necessity of a judicial action.

    Because in a non-judicial, title theory state, the trustee holds legal title to real estate, all transfers of that title must be in writing pursuant to the statute of frauds. The statute of frauds says all transfers of interest in real property must be in writing. It’s no different than a deed. In fact, it is a deed, just one held by the trustee for the trust created by the deed of trust. If the Johnsons want to convey title to their home to the Smiths, they must do so by written instrument.

    To make this more readily understandable, I’ll just say the legislation could have just said “well we’ll just give the lender title so he can foreclose the borrower’s equitable interest if there’s default.” But that was just too much and provided no safety against error by the lender. So they put a third party in the act, the trustee, to hold the legal title as a neutral party (regardless of claims to the contrary that the trustee is not neutral), hence the deed of TRUST. The trustee’s job is to be notified of the borrower’s default by the lender and to be provided evidence of that default by the lender. The trustee is then to notify the borrower of the lender’s allegation of default and to hold a trustee’s sale to get rid of any remaining interest of the borrowers (the equitable title).

    But this has been skewed terribly, starting by a misappropriation of the word “beneficiary” by MERS and its pals. The lender was referred in the deed of trust as the beneficiary because while the trustee held legal title to the real estate, it was the lender who was the beneficiary of that trust. You must have a beneficiary for a trust. Beneficiary means the party for whom the trust is created or has the benefit of the trust. The borrower is the trustor: he trusted the trustee to hold the legal title to his home for the benefit of the lender/beneficiary until he paid off his loan.

    Whether by state law brought about by lobbying from lenders or otherwise, the trustee today is acting as the agent of the alleged lender with no regard whatsoever for the homeowner, the trustor. Even still, the trustee may act only at the behest of the lender/beneficiary where an amt is due and owing (and these may be two keys words). If a trustee acts at the instance of anyone else, he has not complied with his duties, has violated his fiduciary, and he may be found to have violated state laws, as well. A trustee cannot know if he is fulfilling his obligation to the true beneficiary unless he is given all documents which would define the party demanding foreclosure as that party. I always allege the trustee has a dual fiduciary to the beneficiary and the trustor.
    Even if his fiduciary is limited to the beneficiary, he still owes a duty of good faith and fair dealing to the borrower. This is a right which arises in contract, and the contract is the deed of trust.

  49. tnharry, agreed that the only way to resolve this is through successful proactive or defensive litigation in the courts, and best with an attorney who knows what she/he is talking about. I’ll leave you alone now…

  50. I didn’t mean the statute of limitations, of course. It’s the statute of frauds
    regarding that which must be in writing.

  51. @dry, okay so maybe I should read Judge Grossman again. But I doubt I am going to find any determination that any mortgage is void. Unenforceable as it stands, yeah. I have stated 50 times here I’m not a lawyer.
    Still, until one of the brilliants set me straight, I’m of a mind that a holder who is not the owner of a note does not receive the benefit of the collateral. If a state’s UCC says otherwise in regard to negotiable instruments, I believe a conflict may be found with other relevant laws, especially in title-theory states where assignment of the deed of trust is a necessary vehicle to actually transfer the interest created by the trust. At least according to the NV SC, which just ruled based on existing law that the statute of limitations is implicated and so those assignments must be in written form.
    I haven’t spent a lot of time analyzing Carpenter v Logan, which by all accounts holds that a collateral instrument follows the note. Carpenter was decided before the advent of the deed of trust, as far as I know. Prior to the deed of trust, mortgages were the operative document. I’m no authority on mortgages, generally, but don’t I understand they call for judicial foreclosure and constitute only a lien on real property (whereas a deed of trust is not a lien per se, it is the holding of legal title to real property in trust)? So in states using mortgages, Carpenter may still be the bomb, but if I’m right and it were decided prior to the implementation of the deed of trust certainly in title-theory states, Carpenter wouldn’t apply. I just read a capsulization and it refers to “mortgage”.

    @nancy drewe – I’d like to hear more about what you say about MERS in your comment – even to be pointed toward more material. Sounds outrageous, but still…………..

  52. I did not mean to imply that the annual fee is the only fee paid by members to MERS. They also have to pay MERS if they look cross-eyed, aka do anything at all – enter something, change something, sign something, etc.

    So how much money did these guys really save? Quelle blage – what a joke.
    And what a joke to pretend that’s what MERS was about. I don’t know if MERS intended to be the enabler of all things wicked, but they sure as hey devolved into it. It’s a private and clandestine organization which holds any clues to the records, not to be confused with actual records, of our land. I would probably get a visit from a goon squad if I wrote what I really feel.

  53. Wow! So many useful comments. This sight is jumpin’ today. God, that’s awful. We should be jumpin at the beach!
    @zurenarrh – give yourself a hug and hearty pat on the back. That’s a terrific capsulization of the logic which must be applied to this mess to defeat claims to our homes. Guess that’s why they pay judges big bucks or at least why some of them earn those bucks.
    Let’s look at the second quote re MERS alleged common agency with everyone and its brother. MERS may act as a common agent (assuming arguendo MERS is an agent at all) for everyone and its brother, no doubt.
    However, it’s possible the judge is dispelling even this idea as a myth. The ready distinction, even if MERS could, in the quote, however, is the unknown-ness of those alleged principals. When anyone purports to act for MERS (tweakedness reminder: the principal (bankster) purports to act as the agent of its alleged agent (MERS) for a 25.00 fee to MERS)

    found this in my own records:

    “For a $25 fee, employees of any of the 3,000 loan servicers that belonged to MERS could get themselves designated as a MERS “vice president” or “assistant secretary,” authorized to sign official documents on behalf of MERS.” – assume for this purpose this is accurate

    there is first of all no evidence ever submitted that that party is a MERS’ member. One may do nothing about nothing in ref to MERS if one is not a member. So WHAT does it take to show one is a MERS’ member? They can forget MERS’ ‘records’ by way of a print-out (at least not one from the records the public has access to in their look up a member section) because we know they aren’t reliable (I looked up a lender who is out of business some 4 years now and it’s still showing in MERS’ database as a member). If I could find one error, you can, too, as necessary, but at any rate, even MERS disclaims the accuracy of its own ‘records’. What I’m saying is MERS’ database is an unreliable source to ascertain that anyone is a MERS’ member. Okay, got rid of that (maybe). Now what else would show the ‘member’ is in fact a member? A membership agreement, which at MERS, is their contract, the rules of membership. The application is filled out, sent in with the requisite initial fee, and you’re apparently in like Flynn. Okay, so they come up with that – the membership agreement. But are they STILL members?
    As far as I know, this only entails payment of an annual fee. That’s not determinative, though, because (at least) something else may have triggered the former member’s ouster (yeah, right) or withdrawal. A declaration by a
    motivated ‘member’ seems inappropriate. If it ever gets to where these proper issues are before a court, that’s going to be their route: the
    self-serving declaration, so get ready.

    The second part of the second quote warrants attention, also:

    “MERS’s position that it can be both the mortgagee and an agent of the mortgagee is absurd at best.”

    So true, yet we can’t get anywhere with this observation standing alone. At least one court (not in regard to MERS as I recall) has held that confusion in a dot as to the beneficiary is enough to void the instrument. I wouldn’t count on that, though. So what is the argument?
    Maybe it’s articulated in the rest of that decision. Hope so, because I can’t formulate it myself this minute. Maybe someone else can or has. Zurenarrh has done a great job of expounding on facts, but it’s still not an argument. He’s right imo about everything he says, but we need words which answer “so what”? I dont know the so what. I mean, should homeowners go back and ask for a more definitive statement of terms in their deeds of trust which they signed? Well, no they can’t. So what is the so what argument?
    The only thing I can think of is to point to MERS (tweakedness alert:
    read ‘MERS-alleged-member, changed forever from MERS-member) various allegations in different litigation:
    Nominee over here, agent over there, beneficiary yet somewhere else, which is what the Kessler court found using different words. I’m thinking estoppel, of course, but what is the value?
    Maybe I’m making too big a deal, prescribing more value than might be there, to this sentence from the good judge.

    zurenarrh, maybe you would consider taking on the 3rd. It’s the real biggie. It also falls in line with thinking there must be assignments of the deed of trust from a to b to c to d, a complete chain of title, even if unrecorded.

  54. talking in such abstracts isn’t helping anyone. in your scenario, you assume that based on z’s arguments, the mortgage is “void”. unless you have a court order saying the mortgage is void, it’s not. and if we’re talking about a nonjudicial state, does it even matter? this is all great theory to have fun with on this blog, but unless and until a judge says they don’t have standing to foreclose they can and will take the house.

  55. tnharry: I should have typed: “If A has a note endorsed in blank, is it really entiled to enforce a (void) mortgage that names B as mortgagee, WITHOUT a valid assignment of mortgage?” A “Void” mortgage, because it names a non-entity as “mortgagee” and for all the other absurdities that zurenarrh has cited from the Grossman decision…

  56. tnharry: Isn’t the widely held concept that a (valid) mortgage follows a (valid) note? If A has a note endorsed in blank, is it really entiled to enforce a mortgage that names B as mortgagee, WITHOUT a valid assignment of mortgage? Aren’t you – and admittedly many courts – setting aside centuries of dirt law relating to DOT’s, mortgages for the ease of transfer afforded by the UCC?

  57. Nancy – i think your comment was missing a few words. I’m not following what you were trying to say.

  58. You don’t get it!
    MERS a database created by Freddie/Fannie to be at long-arms reach for Uniform Commercial Financial transactions period.

    Iowa UCC Alternative see Federal Home Mortgage Corp registrations in which over and over they record ‘MERS’ as debtor

  59. the courts are fairly split on the third party beneficiary issues and HAMP now, so check local listings as john said. and as always, arm yourself with information and make sure you know what you’re doing. don’t cite New York or California opinions in Georgia pleadings….

  60. In at least one case, and I forget which although I think one was Upke in NJ, the court did find that the homeowner is an intended beneficiary of HAMP and therefore had standing to bring an action along the lines of violation of HAMP by the bankster. I hadn’t wanted to mention Upke here before since people here who are p.o.’d about not getting modifications pursuant to HAMP have never even looked at the HAMP stuff I have looked at and I am not in line for a HAMP modification. No, not bully for me. If you want a modification, you need to get off your duffs and read the governing docs.
    What is easily available are the HAMP agreements themselves and all the
    info on HAMP at FNMA’s website. We’re it, remember? (at least until the attorneys start taking cases pro bono) Attorneys, don’t even think about going off on me. I didn’t say you SHOULD take cases pro bono.

  61. and your counter to the widely held concept that the mortgage follows the note is what? that idea moots the MERS issue entirely in those jurisdictions that follow it

  62. http://www.propublica.org/thetrade/item/once-unthinkable-breakup-of-big-banks-now-seems-feasible/

    Once Unthinkable, Breakup of Big Banks Now Seems Feasible
    by Jesse Eisinger
    ProPublica, July 27, 2011

  63. And let’s not forget the Kesler argument about the “nominee” status of MERS:

    “The parties appear to have defined the word [nominee] in much the same way that the blind men of Indian legend described an elephant – their description depended on which part they were touching at any given time.” Landmark Nat’l Bank v. Kesler, 216 P.3d 158, 166-67 (Kan. 2010)

    And the argument against MERS put forth in Agard by Judge Grossman:

    “This Court finds that MERS’s theory that it can act as a “common agent” for undisclosed principals is not support by the law. The relationship between MERS and its lenders and its distortion of its alleged “nominee” status …”

    AND (my favorite):

    “MERS’s position that it can be both the mortgagee and an agent of the mortgagee is absurd, at best.”

    And that last quote brings me to what I was going to say earlier but never got around to posting:

    MERS calls ITSELF the “mortgagee of record.” That description certainly implies that there is an ACTUAL mortgagee somewhere that is NOT “of record”–which is obviously problematic. So Judge Grossman is absolutely right: For a mortgage/deed of trust to say that MERS is BOTH the mortgagee/beneficiary AND simultaneously the agent of the mortgagee/beneficiary (i.e., the lender or note holder) is absurd because it’s legally impossible. That is to say, in legal terms, one is either a principal OR one is an agent. If one could somehow be BOTH principal AND agent, there would be no need for an agent. In other words, if an assignment said “MERS, as nominee for MERS, hereby assigns XYZ to ABC,” it wouldn’t make any sense. One cannot be an agent for oneself in commission of an act–like an assignment–because if you are doing the assignment and you ARE the principal, your agent is not involved and doesn’t need to be identified.

  64. @tny
    Those words in the deed of trust, “it’s successors and or assigns” dictate that one must look to contract law and laws pertaining to interests in real property in determining the validity of those words.
    And here I depart from my limited knowledge of contract law. But even I know how significant the validity / enforceabillity would be. I don’t think they have anything to do with the closing table, however. They refer to subsequent events. I guess that could be debatable (was it a subsequent event) when loans have been sold forward (sold before the loan is in place) and maybe that’s what you mean, and that might lead to a worthy debate as to whether or not the ‘forward’ buyer of the loan is a successor or assignee. I don’t see it as that significant, though it might be. We’d need to hear more of the argument. I can’t formulate it, anyway.

    I think more the question is can a contract, the dot, bind parties not parties thereto, that is, the successor and or assignee for the dot? It seems akin to a reservation and any successor or assignee would take the dot subject to. I don’t think this would necessarily preclude renouncement, (and who is there to argue?) but the renouncement would nonetheless have to be made somehow. Assuming the legitimacy of that phrase, one must still demonstrate that one is a successor or assignee and that takes a complete chain of title for the dot.
    Just because MERS stayed a nominee placeholder in public records, it doesn’t change the fact that assignments from a to b to c to d must have been done, though unrecorded. If you’re reading this, I ask you to pause and think about that for a moment, and of course if you want to argue, have at it. This, a to b to c to d, however, leads to an argument that
    MERS and its members meant to bifurcate the note and the dot (by not doing the assignments whether recorded or not) or simply did, and what all that might mean. I prefer the first argument, especially after reading the NV SC’s recent rulings in Pasillas and Levya regarding assignments in title-theory states: they must be done.

    And yoshi and Mr. Weidner, though I have applauded Mr. Weidner’s writings in the past, I’ll get to you later. But for now, I’d like to weigh in briefly and say eat a rock as to Mr.Garfield’s anything. He was here. Where were you?

  65. “A computer system can only hold a scanned copy- not the original of a Note. A scanned copy is not a legal document as any electronic medium could be manipulated or tampered with. This is why MERS cannot be a mortgagee. A copy of check or a copy of a copy of check cannot be cashed as they are not negotiable trade instrument. If a check is not written properly with some non-sense written on it, it is null and void. The same applies to mortgages. Therefore, any mortgage with MERS on it must be null and void and mortgagor must have the right for quite title.”

    Let me re-write the above.

    Even if MERS does not have to hold an original NOTE to be a mortgagee, it is an invalid entity as it can’t assign or have possession of any documents by itself. It contradicts the chain of process of human transactions which has the right to do things and decide validity without an external agency or assistance. MERS is like putting a mentally unfit person to sign a mortgage.

    Now, if one holds a Note it does not mean that the party owns it. This is so as a bank teller who holds a check does not own bank’s money to pocket it. Above all, how can a computer system owns a NOTE? It doesn’t have the capacity even to own anything including itself as any machine is made and bought by a human. This whole notion of MERS is absurd and all mortgages that have MERS must have quite title.

    Another things that makes me upset is the HAMP and run around made by banks. The Federal government did not clearly mention the incidental and indented public who is at risk of home ownership as beneficiaries of HAMP. After giving tax payers money as incentives, they conveniently wrote a loose language “encourage” to modify mortgages. This must be challenged as the beneficiaries of any contract entered by a public authority such as banks with the Federal government ARE THE INCIDENTAL public itself by commonsense. Laws are written based on commonsense. I am not a lawyer but I have good commonsense.

  66. Give me a break, tn—you’re smarter than that…

  67. i appreciate the anger and frustration leveled at MERS, but explain how dismantling it would help save one single home from foreclosure? or how the existence of it and its operation has directly caused anyone to lose their home?

  68. The arguments here supporting Mers are disingenuous. The assertion that, after reading the portion of a Mers mortgage offered at closing, one could have simply walked away from the loan is specious at best. First off, how many knew prior to the financial collapse what Mers was? The answer is…only bankers. Second, where else would one turn even if they did know about the evils of Mers? It’s not a secret that nearly every major lender jumped on board the Mers train as it was leaving the station. Why not? There’s strength in numbers….as who in their right mind would question something that could possibly bring down the entire economy? TBTF come to mind?

    The whole Mers argument being put forth here is one grounded in fallacy, not reality. The “implied” agency agreement between Mers and its members is comical at best. To judge the efficacy of Mers on how many courts have ruled in its favor is as self-serving as its business model. How many judges around the country, who by the way happen to have Mers mortgages, want to be the court known as the one who added insult to an already severely injured economy? And how much money does the banking cartel have to insure that their arguments in courts around the nation are well fought? More than individual homeowners have?

    Many, if not most states have a similar statute as this….§ 432.010 (“No action shall be brought . . . upon any contract for the sale of lands . . . or an interest concerning them . . . unless the agreement upon which the action is brought, or some memorandum or note thereof, shall be in writing and signed by the party to be charged therewith, or some other person by him thereto lawfully authorized . . .”) Note that there’s no mention of a good old boys club, or membership of any kind.

    These so-called lenders never provided written authorization to MERS permitting MERS to assign or transfer either the notes or the DOT/Mtges. Simple membership into any organization cannot trample on age old black letter law that states that agency must be specific to any agreement. Just because you and Banker Joe shake hands and agree that you’ll carry out his business arrangements from now on does not preclude the need to have the legal means to do just that. And that is just one of the many flaws of Mers.

    Contrary to what is being argued here, the absence of written authority to act on another’s behalf is not accepted practice. “An agent constituted for a particular purpose, and under a limited and circumscribed power, cannot bind his principal by an act beyond his authority.” Andrews v. Kneeland, 6 Cow. 354 N.Y.Sup. 1826. Mers, as nominee, is an agent of the principal, for limited purposes, and has only those powers which are conferred to it and authorized by its principal.

    As to the argument that the mortgage details that Mers can do this or that, including bringing foreclosure, this language quoted by MERS is found in the mortgage under the section “BORROWER’S TRANSFER TO LENDER OF RIGHTS IN THE PROPERTY” and therefore is facially an acknowledgment by the borrower. The fact that the borrower acknowledged and consented to MERS acting as nominee of the lender has no bearing on what specific powers and authority the lender granted MERS.

    Mers was a bad idea gone viral, hatched in the minds of those obsessed with immeasurable hubris and unbridled greed. And the sooner we get rid of it the better.

  69. INTERNAL LOAN DOCUMENT (PROPUBLICA):

    http://www.propublica.org/documents/item/228207-internal-loan-document

    from previous link:

    “…And so GMAC, which was bailed out by taxpayers in 2008, began looking for a way to craft a document that would pass legal muster, internal records obtained by ProPublica show.

    “The problem is we do not have signing authority—are there any other options?” Jeffrey Stephan, the head of GMAC’s “Document Execution” team, wrote to another employee and the law firm pursuing the foreclosure action. No solutions were offered.

    Three months later, GMAC had an answer. It filed a document with New York City authorities that said the delinquent Ameriquest loan had been assigned to it “effective of” August 2005. The document was dated July 7, 2010, three years after Ameriquest had ceased to exist and was signed by Stephan, who was identified as a “Limited Signing Officer” for Ameriquest Mortgage Company. Soon after, GMAC filed for foreclosure.

    An examination by ProPublica suggests this transaction was not unique. A review of court records in New York identified hundreds of similar assignment documents filed in the name of Ameriquest after 2008 by GMAC and other mortgage servicers.”

  70. HERE WE GO—

    http://www.propublica.org/article/gmac-mortgage-whistleblower-foreclosure

    “It is neither irrational nor wasteful to expect the foreclosing party be actually in possession of its claimed interest,” the court said, “and have the proper supporting documentation in hand when filing suit.”
    “This assignment of mortgage has all of the markings of GMAC finding that it lacked a needed mortgage assignment in order to foreclose and just making it up,” said Thomas Cox, a Maine foreclosure defense attorney.

    In New York, it’s a felony to file a public record with “intent to deceive.”

    “It’s fraud,” said Linda Tirelli, a consumer bankruptcy attorney. “I want to know who’s going to do a perp walk for recording this.”

  71. prepare yourself for the onslaught yoshi. never criticize the Neil…

  72. Always try to find an attorney.

    Debunking the Gospel of [Neil] Garfield

    Apr 7, 2010 // by Steve Dibert // Mortgage Fraud News, Steve’s Blog // 17 Comments

    Since starting MFI-Miami almost 2 years ago, I have received some pretty strange calls from people. I’ve had real estate agents call me who have bought 15 income properties and then try to claim they are victim of Predatory Lending. I’ve had people who have bought investment properties who thought because they watched two episodes of The Apprentice they’re as smart as Donald Trump. I have gotten calls from the conspiracy theorists who think the Obama Administration wants their property so they can build an internment camp on it when the armed UN hovercraft come skimming over the Everglades. These are some of the more interesting calls.

    However, the most interesting calls I get are from Pro Se litigants. What are Pro Se litigants? Pro Se litigants are homeowners who represent themselves in court and usually have no training as a lawyer. They are usually people who think they know more than everyone else or have the attitude of “Why should I hire a lawyer when I can do it myself.”

    As the saying goes, “An attorney who represents themselves has a fool for a client.” Here’s a case in point. I had a foreclosure client when I started MFI-Miami, who filed an answer to his foreclosure that he copied and pasted off Neil Garfield’s website, Living Lies. My client then tells me he was going file a federal civil RICO case against his lender because his wife’s “forged” signature violated interstate commerce laws which is a RICO predicate. When I asked him who told him he could do that, he claimed he read he could do it on Garfield’s site. I have since received dozens of calls from people asking me for free advice based on what they read by Neil Garfield.

    I have received at least 6 calls in the past week from Pro Se litigants claiming that they don’t know what to do because their Florida judge laughs at them for demanding the wet inked copy of their note. This is one of those misconceptions out on the blogosphere that had its origin from the Living Lies site. The misconception is that if the servicer or the Trustee cannot produce the original wet inked note, then they lack legal standing to execute a foreclosure and therefore the debt obligation is now nullified. This is absolutely false. In Florida, the transfer affidavit or note must officially be on record with the county 60 days prior to a servicer or Trustee filing the initial foreclosure complaint. When the attorney files the foreclosure complaint, all they are required to do is attach a copy of the original note.

    For those you who don’t know who Neil Garfield is, he is a self-proclaimed Foreclosure Expert who holds seminars across the country for lawyers and Pro-Se litigants helping them fight foreclosures. According to his biography, was an Economist, Accountant and he is a “Chairman Emeritus” of a consortium of financial service companies and claims to be the “ultimate insider” on Wall Street. (Page 4, Garfield Continuum Handbook) Yet, he never mentions which companies he has worked with or the positions he held. The state of Florida also has no license on file for him being an accountant.

    If he was a Wall Street “Insider,” he was like Lon Chaney aka The Man of Thousand Faces because friends of mine in the media who cover Wall Street had never heard of him until he started doing seminars. He was a trial attorney in Florida from 1977 until 1993 and by his own admission to me when I attended his seminar in Orlando last May, has not done any litigation work since then.

    He preaches that, “homeowners can walk into a foreclosure hearing and walk out owning their house free and clear.” (Page 5, Garfield Continuum Handbook)

    He even preaches this on his website and it is over-simplified comments like this that draw people to his website looking for easy answers. Like a late night televangelist, Garfield delivers a lot of what on the surface appears to be easy solutions but in reality are very complex legal arguments. Unfortunately, for the homeowner, foreclosure defense is not easy. It is a lot of painstaking detective work and TILA rescissions happen in only one of out of 50-75 loans.

    Neil Garfield’s theories make for great legal debate and table talk for foreclosure defense junkies and conspiracy theorists. However, in reality his theories are impractical for the average homeowner due to the astronomical fees of legal research and litigation that they would require. What Neil Garfield fails to understand or express to his seminar participants is that judges do not like going out on the proverbial limb and therefore will not make precedent making decisions.

    In other words, Neil Garfield is great at talking the talk but is a little short on walking the walk. He lacks the practical litigation experience to transform his theories into reality. Even now if you read his blogs, attorneys as well as Pro Se litigants who are frequent contributors phrase their comments as if expressing opinion instead of fact.

    Garfield has created a problem in judicial foreclosure states such as Florida. He has unleashed an army of Pro Se litigants who have clogged the courts trying to argue their foreclosure cases using theories they barely understand. They lack not only legal expertise but lending expertise. They are totally unprepared to argue their own cases and fail to learn or obey court procedure. Many of them go in to court trying to argue constitutional law or TILA and find themselves summarily dismissed by a judge. They then write comments on the blogosphere claiming the judicial system is corrupt and that corruption is a result of some mass government conspiracy.

    What the Garfield seminars fail to express to these litigants is that foreclosure laws vary from state to state and if you are fortunate enough to live in a judicial state like Florida or New York, judges want to hear state statute not federal statute unless it is relevant to your case.

    This also creates another problem for the court system. The problem consists of the homeowners who have been successful in getting their foreclosures postponed. Fed by what they read on Living Lies, these pro se litigants begin having delusions of grandeur and begin believing they are the next Alan Dershowitz or Gerry Spence. They begin dispensing legal advice on the internet. The reality is, it was not the Gospel of Neil Garfield or the Pro Se litigant’s superior linguistic or legal abilities that got the foreclosure postponed but forces beyond the homeowner’s control.

    In his 683 page handbook which is riddled with errors, he claims, “Neil has come out of retirement with one purpose in mind – to do all he can to counter the effects of the mortgage meltdown and save the people and the country from the disaster of created by free money using derivative securities that not even experts understood and targeting the least sophisticated members of society.”

    This may sound charitable, but don’t believe the hype. At the end of the day, it’s all about the Bejamins. Garfield and his partner Brad Keiser use these seminars to market future consulting work and forensic audits from law firms and Pro Se litigants that attend their conferences.

    Don’t get me wrong, I have no problem with people making money and I don’t have a problem with the fees Garfield and Kaiser charge their clients, I do have an issue with what they preach and how they manage the expectations of what they preach to the average homeowner. This industry is filled with enough wannabe Elmer Gantrys or messianic types with no practical mortgage industry experience and the last thing it needs is to encourage more unqualified “healers” to come into this business which is what Garfield and Keiser are doing.
    http://www.mfi-miami.com/2010/04/debunking-the-gospel-of-garfield/

  73. carie, if you quote a BK professor and I quote the guy who made my sandwich at Subway, they both have the same overall effect – they just don’t matter.

    i’m starting to think Neil posts something like this every so often to chum the waters for his own entertainment…

  74. @tny
    Those words in the deed of trust, “it’s successors and or assigns” dictate that one must look to contract law and laws pertaining to interests in real property in determining the validity of those words.
    And here I depart from my limited knowledge of contract law. But even I know how significant the validity / enforceabillity would be. I don’t think they have anything to do with the closing table, however. They refer to subsequent events. I guess that could be debatable (was it a subsequent event) when loans have been sold forward (sold before the loan is in place) and maybe that’s what you mean, and that might lead to a worthy debate as to whether or not the ‘forward’ buyer of the loan is a successor or assignee. I don’t see it as that significant, though it might be. We’d need to hear more of the argument. I can’t formulate it, anyway.

    I think more the question is can a contract, the dot, bind parties not parties thereto, that is, the successor and or assignee for the dot? It seems akin to a reservation and any successor or assignee would take the dot subject to. I don’t think this would necessarily preclude renouncement, (and who is there to argue?) but the renouncement would nonetheless have to be made somehow. Assuming the legitimacy of that phrase, one must still demonstrate that one is a successor or assignee and that takes a complete chain of title for the dot.
    Just because MERS stayed as a nominee placeholder in public records, it doesn’t change the fact that assignments from a to b to c to d must have been done, though unrecorded. That, however, leads to an argument that
    MERS and its members meant to bifurcate the note and the dot or simply did, and what all that might mean. I prefer the first argument, especially after reading the NV SC’s recent rulings in Pasillas and Levya regarding assignments in title-theory states.

  75. “If mortgages were not properly transferred in the securitization process, then mortgage-backed securities would in fact not be backed by any mortgages whatsoever,” Adam J. Levitin, a bankruptcy expert and professor at Georgetown University Law Center, said at a House panel last November. Levitin said the problem could “cloud title to nearly every property in the United States” and could lead to trillions of dollars in losses…
    “While several investigations remain ongoing at the state and federal level, no agency has systematically examined loan-level documents to ensure the creation of mortgage securities complied with state laws or to examine the scope of sloppy paperwork in foreclosure proceedings, like the so-called “robo-signing” fiasco…
    “In essence, banks may be unable to prove that they own the mortgage loans they claim to own,” the panel said.”

    THEY CAN’T PROVE IT…THEY MUST FAIL.

  76. dny,

    The nominee issue goes exactly to the “agency relationship” that you ask tnharry about.

    Now, as to the lender filing a lien, lender in this case would be the note holder or beneficial interest in the loan.

    Ruling MERS unlawful would certainly create a logjam trying to sort who had the note, but in actuality, that may not be as big a problem as one would think. I have reviewed files pulled from Trust Custodians and I have seen the original Note in every case. I have also seen the same with portfolio lenders.

    Also, in most states, it is legal since the invention to use a photocopy, as long as it has been “certified”.

    There may also be ways to substantiate claims through other methods, as the Ibanez case and others appeared to suggest.

  77. This is what my IndyMac servicer said when I asked him how the hell can a database (MERS), be a beneficiary:

    “MERS is a corporation that was established to maintain a database of assignments of promissory notes. So, although its principal purpose was to track the assignments of promissory notes since it is a legal entity – a corporation – it has the ability to act in other capacities, such as being designated as the beneficiary – for purposes of expediting the assignments — in the deed of trust or mortgage.”

    LEGAL ENTITY MY A**.

  78. @usedkar – the realignment is an okay theory, but do you want an unwilling co-plaintiff? as i understand realignment (and it’s definitely not my strong point) it relates more to the order of proof and the actual conduct at the trial than it does anything more substantive. you can’t force them to sue. and procedurally, you may want to keep them on the opposite side. if you get to a trial, it may be more advantageous for them to be opposite so that you can use leading questions as if you are cross examining them

  79. Carie,

    Credit cards? Though trying to compare apples to zebras, where do you think that the money comes from when you do make a charge? It is funded right at the point of the charge.

    More irrational thinking.

  80. dny,

    FYI, your comment about judges around the country implies more than is what is true. And in most cases, close inspection finds that there was more to the issue that just MERS.

    A few BK judges have hammered MERS, I agree. But, if you take how many cases are filed, how many are adversarial and how many rulings go against MERS, it is minimal. In fact, most adversarial proceedings go for MERS.

    Then, in state issues, MERS is all about whether the terminology creates an agency relationship or not. Most states have found that such an agency relationship exists.

    Michigan was about MERS right to foreclose, and Michigan law stated that only the beneficial interest could actually foreclose. An agent would not have standing.

    California law in the 4th Appellant Court (Gomes) finds that MERS has an agency relationship and that MERS can foreclose and not just by agency, but also by the wording in the Deed which authorizes MERS to foreclose. There have been a couple of Trial Court rulings, but those were later overturned. A handful of BK judges have ruled against MERS, but now with the Gomes decision, most attorneys feel that it gutted their arguments.

    So, yes there have been rulings, but they are few in number and usually extenuating circumstances exist.

  81. usedkarguy,

    Interesting scenario for sure. It may be difficult to include the Insurer’s if no claim has been filed and no payments made for claims filed.

    The problem with Triad is that they have a close working relationship with lenders. Under their agreements, their can file claims on up to 25% of the loans for fraud, etc. However, if they do this, then they can count on not receiving any more business from lenders. So they have a precarious situation.

    If the CDS insurer has paid a claim to the Trust, you may have something there. But I doubt that they would get involved without a claim, and not even then, and maybe not even then.

    I have not seen anything where insurers and lenders have joined together against lenders. In fact, I actually proposed last year to one Mortgage Insurance Company about joining forces for just that type of action, and let’s just say that they were not receptive in the least.

  82. HOW DO YOU “FUND” A CREDIT CARD??????

  83. I’m pretty happy to see this attention being given to the tweaked machinations of MERS. MERS records are no where near accurate and even MERS makes disclaimer as to those records. The assignments have to have basis in something, and that basis is allegedly the MERS’ database.
    Challenge its accuracy. Print out MERS’ own disclaimer about its own alleged records. It’s at scribd and at MERS’ website.
    Underlying every action taken in MERS’ name by its army of alleged certifying/straw officer is status as a member. I researched a company
    (original lender shown on dot) which had been out of business for over
    4 years and it still showed on MERS’ ‘records’ as an active member.
    People must challenge every action done in MERS’ name.
    A court may not rightfully assume that a bankster is a MERS’ member.
    Such membership is derivative of the bankster’s ability to do anything at all in MERS’ name. Joe certifying officer / MERS’ vp # 8614 can have only that ridiculous designation if he or his employer is a MERS’ member.

    Unless there is an amendment to MERS” membership rules which I’ve missed, and that’s entirely possible, those rules ONLY allow a member to
    execute an assignment using its straw officer when the beneficial interest in the note is being transferred to a non-member. In that case, the assignment is to recorded in the land records since MERS cannot act as the nominee for non-members. The point here is MERS membership rules do NOT (as known to me) authorize members to assign deeds of trust to one another.
    And that’s exactly what they’re doing, including self-assignments.
    Remember, that’s why MERS allegedly exists – to avoid those assignments between members and keep MERS as nominee for its members.

    Now MERS has told its members it must record assignments before initiating foreclosure. Is this recognition by MERS that the beneficial interest in the notes is held by non-members? Securitized notes when proper endorsements were done are held by the trustee for the trust, but the trustee does not have the beneficial interest. (or does he and that’s a whole ‘nother story). MERS made it a point to use the words “beneficial interest”. Only the investors in the trust have that, not its trustee. If this is true, than all these assignments by law and by MERS own rules should have been recorded. This would include ‘by law’ because notice must be given that MERS no longer holds nominee status. If it’s true, members could avoid recordation up to but not including assignment to the trust. But even this may not be true in title-theory states where a complete chain is required for title to the deed of trust. The PSA’s called for assignments to be in recordable form but apparently not recorded.

    MERS is telling its members to record assignments. On the surface, that looks like a step in the right direction. Or is it merely MERS acknowledging they should have been executed and recorded pursuant to its rules regarding non-member recordations?

    MERS missive to its members does not necessarily indicate a change; it may be more a missive to tell members to do what should by its own rules already have been done, unless I have missed a MERS’ change to its rules authorizing assignments among members.

    One thing is clear to me: MERS is trying to take itself out of the liability picture. MERS wants to move the liability to its members and leave
    the assignments to the members when determining who what where.
    This new directive does not necessarily indicate a change. It may be more to tell the members to do what should have been done – record assignments to non-members. Then, before proceeding to foreclosure, a member seeking to foreclose must find a path/source other than hiding behind MERS for its alleged authority to foreclose. I think this is the biggie. And if so, we are left to ponder what authority that would be and what would properly demonstrate that authority.

    If anyone has seen a MERS directive changing its rules of membership to allow members to assign deeds of trust to one another, please post it.

  84. A fair critique of MERS must include recognition of the dated, expensive, and cumbersome nature of county real property records and state recording statutes. Unlike the relatively homogenous personal property lien recording systems governed by Article 9 of the Uniform Commercial Code, the National Conference of Commissioners on Uniform State Laws and the American Law Institute have not been able to prevail on state legislatures to standardize real property mortgage and recording laws. Moreover, unlike personal property lien records, which are usually maintained by a Secretary of State, real property records are generally maintained by each county. This further diversifies record keeping standards and operating procedures. It is only fair to say that, even with the use of title insurer plant copies, recording and searching in county property records is time consuming, expensive, and often not especially reliable. In contrast, MERS gives each loan a unique identifier, is accessible through the internet, and is organized n one nationwide system.

    Still, the consumer protection critique of MERS is not just about what MERS does wrong, but also what the process of creating MERS prevented. By taking upon itself the reformation of the county recording systems created by state law, MERS and the mortgage finance industry circumvented the state and national debate that normally precedes significant legislative change. The MERS system, while digital and nationwide in scope, is not equally available to all. It has given a single corporation the opportunity to grant special “vice president” status to its favored side in foreclosure disputes. It has been manipulated into a device to make foreclosure easier and more anonymous for financiers. The financial industry could have channeled its dissatisfaction with county property records into a campaign for legal reform. This would have necessitated a debate where consumers, county officials, researchers, poverty advocates, and anyone else could have participated. Fifteen years ago, if the finance industry put its formidable legislative muscle behind a public reformation of county recording systems, perhaps today we would have a national system maintained by a federal regulator, or a statewide systems supported by a new Article of the Uniform Commercial Code. Instead financiers chose to act alone, creating an entirely new system that competes financially with public records, undermines the accuracy of public records, and was never authorized by the elected leaders that guide a republican system of law.

    In a moment of refreshing candor, not long ago a MERS senior vice president concluded an extolling public relations piece with the explanation that “MERS is owned and operated by and for the mortgage industry.” It is ironic and perhaps not coincidental that the syntactical form of the sentence bears such close resemblance to President Lincoln’s Gettysburg address. One will no doubt recall that Americans have generally aspired to “government of the people, by the people, for the people,” rather than of, by, and for the mortgage bankers. MERS’ attempt to “capture every mortgage loan in the country” is an effort to supplant the public land title recording systems’ lien records, many of which predate the Constitution itself, with a purely private system. Perhaps MERS, Inc. is correct that doing so is more efficient; is more modern; and, maybe they are right that it is even be better for the American people at the margin. But, this effort is without question a surrender of the messy compromises inherent in representative democracy to the seductively easy lure of mercantile oligarchy. Bankers just complain so much less when courts, regulators, and legislators let them do whatever they want. Still, perhaps those of us with romantic attachments to our Republic and the rule of law will be excused for supposing that if the mortgage bankers wanted a newer, more efficient, national land title recording system, they should have asked Congress or the legislatures first.

    From:

    FORECLOSURE, SUBPRIME MORTGAGE LENDING, AND THE MORTGAGE ELECTRONIC REGISTRATION SYSTEM

    Christopher L. Peterson

  85. tnharry: An issue that some states’ judges are seriously grappling with is what is just beyond the words “MERS as nominee for Lender” which is, “its successors and or assigns.” The question arises whether a “nominee” or “agent” cannot be a legitimate “nominee” (or “agent,” if construed as MERS sometimes implies) for un-named off-record “assigns” or “successors” (principals) that may exist and may have existed even at the closing table. Especially true for entities like trusts that – to my understanding – are not and never were “members” of MERS. Often times, MERS (the purported “agent”) is informing that its “principal” has changed, or the “agent” is self-dealing with regards to transactions involving undisclosed purported “principals.”

    Pat: If all that securitization stuff actually happened as you outlined below, and “the trust” is the owner of the note and mortgage with MERS “as nominee” for “the trust,” then what has happened to “the lender?” As to your comment that “the lender could file a lien” – exactly WHO is “the lender” now that the loan has allegedly been “securitized,” which practice, in your opinion, necessitated MERS creation in the first place?

  86. Pat, I found the CDS’s for the M7-8-9 certificates in Maiden Lane. The PMI provider (Triad) sent me a letter asking me to contact Wells Fargo to seek resolution or modification (already did that). I received correspondence from them indicating “no claim has been filed”, although they were noticed of previous defaults that were “cured”. No regular payment from me since July 2008. Made 8 payments (3 trial, 5 post-modification from August 2010 to May 2011) and still no claim. here’s the statement from the PMI provider:After our call, I had someone check our files and was advised that a 4/11 default was reported to us in 6/11, as we discussed, which is the latest default that we have a record of. However, additional research revealed three other reported defaults (12/06 cured 1/07; 6/07 cured 7/07; and 11/07 cured 1/11). Generally, a default update is provided monthly so there may be many references between 7/07 and 1/11 in the servicer’s notes. I regret the confusion this morning.

    Unfortunately, I don’t know the identity of “client 708”.

    So that’s their story, and they’re sticking to it.

    “Yerrronnner, evidently, no default exists!”

    Their certificate number appears in the mortgage loan schedule.

  87. to tnharry

    after I was ousted and went to Florida to put a roof over my head, I wrote a little book entitled Astoria Federal S & L stole my two Condos.
    and sent it, sent it ,sent it
    .

    One Federal Judge I sent my book to, using your same words said the States actions are coram non judice – there are no latches, go back and open up the cases in NYSC.

    In September 2008 I sought two motions to vacate the void ab initio judgments for lack of state court jurisdiction pursuant to US Supreme Court case Elliot v. Piersol. At our first hearing Judge Schlesinger stated why would the Federal Court even remand this case.

    The banks new attorneys apparently looking at what MJRF did,, and knowing all the facts stated It’s Indemnify Indemnify Indemnify.

    This should have been a very simple case for Judge Schlesinger except for the fact, the Title companies Fidelity National Title and one that calls himself Coronet Title and that they had “equity”
    for the Judge.

    And Judge Schlesinger stated in her decision, the judgments were not good on the day they were signed but then went on to tell a hokus pokus story of how invalid judgments become good.

    This was before the courts had any idea that this massive foreclosure fraud was going to explode front and center. or that I was going to fight back.

    Plain and simple Judge Schlesinger took a bribe to rule against the law issued by the US Supreme Court in Elliot v. Piersol. Her opinion and the opinion from the appellate court reads like an LPS DOCX document including changing the dates and protecting Judge Schlesinger and refuse to give me a final determination.

    If this illegal ruling by Judge Schlesinger stands it destroys the Supremacy Clause of the Constitution and the March 3, 1875 Act of Congress which states: It was the duty of the State C
    ourt to accept a Petition and jproceed no further in such suit C137 Sect. 3 Stat . pt 3 P470. The Record vested the Federal
    Court with complete jurisdiction.

    I was and always was the true owner of these two NYC Condos.

    One is one the seventh floor of a high rise. Do you know spiderman?

  88. usedkarguy,

    Is the bond insurer for a Credit Default Swap? If so, was the CDS cited in the PSA or ISDA?

    This is important because CDS are considered a separate contract between parties and only use the Pool as a reference point and nothing else, if not named in the PSA or ISDA.

    That could pose issues in that regard. As to the other, then tnharry can answer.

  89. harry, while I have you here: I want to name the bond insurer (a John doe defendant who is now known) and ask for a realignment of parties (as they also stand to suffer a loss from the fraudulent underwriting).

    make sense? I think I understand this.

  90. Carie,

    The loans were funded. When homes were bought and sold between two parties, and the home financed, then the seller received cash. Where did that money come from, if loans were not funded?

    When cash out refinances occurred, and either creditors were paid off, or the homeowner received cash, where did that money come from , if not funded?

    Your arguments are completely irrational and totally off base. They have no merit and make no sense. They can be proven to be factually incorrect.

  91. Yeee-Haaa.

  92. that just makes no sense carie.

  93. tn—LOANS WERE NEVER FUNDED…BOTTOM LINE.

  94. oh please… i was wondering when carie would ride in on her one trick pony. if the loan was never funded, how did the seller get paid so you took title at closing? if the loan was never funded, what consideration changed hands for the purchase? make that argument and move out of the house because you never bought it.

    i think the argument you’re really trying to make is that the “lender” didn’t lend its OWN funds, which can be a whole different can of worms.

  95. Z – your whole argument ignores the phrase “as nominee for the Lender”. Therefore, the Lender IS the beneficiary, but has nominated that MERS acts in its stead for certain purposes.

  96. @Pat—you say—“As all know, when a loan is funded,”

    “LOANS” WERE NEVER FUNDED. PERIOD.

    CRAP FROM THE START…FRAUD FROM THE START…HELLO???

  97. Tn,
    My other point is that, even though MERS was named as beneficiary in the Deed of Trust, it was obviously the intent of the “lender” for the lender to be the beneficiary, not MERS. MERS even acknowledges this on its website in its California foreclosure instructions which talk about the existence of a “true beneficiary”–i.e., a party other than MERS–which will receive the property and proceeds in a foreclosure. So unequivocally saying in a Deed of Trust that MERS is the beneficiary is not only false, it is intentionally deceptive.

    I don’t see how it can be anything other than fraud to do something like that. If you or I entered into a contract with someone and inserted a straw man into the contract, it would be called what it is, i.e., fraud. Why is it so hard to call it that when a bank is involved?

    One last thing–yes, the Deed of Trust generally names as lender the same party that the Note names as lender, but that doesn’t matter. There is no “lender” of a Deed of Trust–the Deed of Trust is not a negotiable instrument. Pointing out that because the same lender’s name appears on both Note and Deed of Trust is irrelevant, because the relevant party on a Deed of Trust is the beneficiary, not the lender. It used to be, and should be, de rigeur, for the same lender that was named in the Note to be also named as such in the Deed of Trust and also named beneficiary of the Deed of Trust. That is the straightforward way to do it. The MERS way is fraudulent.

  98. Pat: Cry me a river. Judges around the country are looking at your MERS rationalization (which is the same as that put forth by securitization industry) and saying to the “securitization players,” sometimes quite directly, “Too bad.” And that judicial conclusion usually doesn’t even acknowledge the harm that MERS and the securitizers have caused to the land records of this country, the American economy or to the millions of your American brothers and sisters.

    “Problems arise when securitization is involved.” Understatement of the century.

  99. Tnharry,

    Unfortunately, most people here do not want to hear the other side, or legal arguments or facts that contradict what they believe or hurts their own case.

    You are absolutely correct about the wording of MERS as nominee for the beneficiary. As well, most deeds stated that the homeowner gives MERS the right to foreclose as nominee. Homeowners argue that they did not know this, but if they had read the documents, instead of being in a hurry to sign, they might have understood more.

    MERS was not set up to steal homes, as people claim. It was set up to facilitate lending, as I described in my previous post. And until the housing crisis occurred, except in random foreclosure cases, MERS was not a point of contention.

    What are the implications of MERS being ruled unlawful? Does it void the Note? No. The borrower is still obligated to pay and a lender could file a lien, which would make resale or refinance problematic. Or the lender could take them to court for court ordered foreclosure. Would this be successful? Likely. Can the file bk? Yes, but other issues may pose problems.

    More important, if MERS is ruled unlawful, it could cloud titles going back to 1996 when the first MERS loans occurred. How far back would people be affected? How could such an event be resolved?

    What would happen to securitized loans, and the debt?

    The bottom line is that any rulings against MERS and securitization on a nationwide basis would completely destroy both the financial system and the real estate property ownership. A complete Depression would occur, leading to far greater problems than the last Depression.

    People here have no problem with such a result, but they do not see the true harm. The government and the court system by now knows and understands the situation. Therefore, as I have indicated before, either the US Supreme Court will rule in favor of MERS and Securitization, or the government will legislate in favor.

    It is national suicide to have any other result.

  100. well marilyn i would agree that advice is only as good as the facts presented. that’s the first time you’ve unequivocally stated the case was properly removed and that the judge remanded the case. what was the timing of those things in relation to the judgment for sale? better yet, post the docket number and i’d be happy to look at it.

  101. I’m not defending the crooks marilyn, just discussing legal procedure with you. now, after all these posts, you say your case was actually removed. was there a formal notice of removal filed? I just don’t believe that a state court would proceed if there was. and if so, then it’s going to be VERY easy to get those sales undone. what are you doing about that?

  102. to tnharry

    You appear to be very knowledgable about the law, but sometimes your answers don’t seem to connect to the actual facts of the case.
    Prehaps because you are only getting a brief summary from us.

    I am not ready to ship you a couple of truckloads of papers.
    Take it from me, my case was removed .

    A Federal judge never remands a case that wasn’t removed.

  103. When the ‘LENDER’ is generating the paperwork for a loan, a MIN number for that mortgage is acquired. I coin the term ‘imMERSification’ for this action.

    The ‘imMERSification’ should have only been allowed for mortgages where the LENDER identified on the Deed/Mortgage AND the Note was a MERS member.

    Depositions of Hauptman or R K Arnold have questioned HOW loans can be ‘imMERSified’ when the NAMED LENDER does not exist. The answer was that they even allowed actual members to acquire MERS MIN numbers for loans that do not have that members name on them as the LENDER.

    The loan documents do NOT name any D/B/A relationship with the MERS member that acquired the MIN.

    The loan documents I cite name the LENDER as “America’s Wholesale Lender”. The DOT or Mortgage continues on to cite that the “LENDER is a CORPORATION under the laws of the state of New York”. It also gives an address for said lender. Said ‘LENDER’ did not exist until another group formed it in NY on 12/16/2008. That is well after all the “America’s Wholesale Lender” mortgages were written.

    COUNTRYWIDE tries to claim these loans via their D/B/A. But I have yet to see any state that allows a corporation such as CountryWide to claim they have a D/B/A that is ALSO a CORPORATION. That designation is one of several that is prohibited in the filings for a ‘D/B/A’ name. The rules prohibit things like ‘Inc’, ‘Incorporated’, ‘Corp’, ‘Corporation’, ‘LLC’ and the like from being part of the name that is claimed as a ‘D/B/A’ and the entity claimed as a D/B/A is not supposed to be such an entity.

    CountryWide did originate some mortgages that DO properly designate the LENDER as “CountryWide D/B/A America’s Wholesale Lender” (notice no attempt to put ‘corporation’ in anywhere with that ‘AWL’?). The fact that mortgages were written both ways for a number of years underscores the fact that these were not simple ‘mistakes’. These were loans that CountryWide chose not to be named as the lender on.

    BNY already found out in NY state that the ‘Alderazi’ case did not go their way for a SECOND time. No one bothers to point out that the mortgage never should have gotten a MIN. Instead the court looked at the point that there was no way the assignment to the BNY trust could be valid. The court found that no one could validate the authorization to assign the mortgage from the initial party.

    Some judges are still being fooled with attorneys who claim they represent the named AWL entity in law suits. But all they have is the claimed D/B/A. These litigants should do more to get those attorneys barred from asserting to represent the named LENDER, AWL Corporation.

    I contend the ability for a loan to be entered into the MERS system when there is NO legitimate membership shows an additional cause for MERS to be invalidated.

  104. @marilyn – court records don’t equal property records. bona fide status is not defeated by court cases. did you file a lien lis pendens before the sale? if not, then there was no “notice to the world” that there’s a problem.

    i don’t doubt that you believe you were wronged and that your heart is in the right place. it sounds like you were out-lawyered, which is why I keep pushing people not to go pro se if at all possible. it sounds like the “noise” you made at the sale scared off buyers who may have bid the property up to a point where you could possible have seen some equity returned to you, leaving just the bottom feeders.

  105. to tnharry
    My case WAS removed.

    You can’t change history even if you want to try to defend the crooks.

  106. to tnharry

    I forgot to mention, I was not a silent foreclosure victim.
    I decorated my property in the style for someone stealing my property

    There are no bona fide buyers. Everything was in the court records
    including all the dates of Jurisdiction and the woman living in my one bedroom apartment WAS my friend for thirty years and knew everything about the illegal foreclosure. She waited silently for Fang Li to flip her forged deed to her. Cheetah Realty flipped his forged deed to an investor from Aruba who flipped her forged deed to her brother for almost double the price and he now rents i out that apartment a studio.

    This fraud was not only against me, but banks, and the NY County Land Records.

  107. @Marilyn – the cases you cite are correct but it sounds like your case simply wasn’t removed from state to federal court.

  108. Tnharry,

    You are certainly correct that the backlog of documents at County Recorder offices was a very significant factor. But let me add to that.
    As all know, when a loan is funded, the Note and Deed would need to go from the original lender, to warehouse lender, to sponsor, to depositor and finally to the trust. This would involve at least four transfers, unless the original lender was also the sponsor, as in Countrywide loans, and others. For those transactions, only two transfers would be required.

    Trusts would have from as little as a hundred loans, up to over 8000 loans. These loans, to disperse risk, contained loans from all across the US. Hundreds of counties would be represented in each offering.
    At this time, less than 800 counties offer electronic filing of deeds, and there are over 3200 counties in the US. Non electronic counties would involve recording of deeds by hand, and by personal visit.

    Here is the other reason that MERS was created. Without MERS:
    When the originating lender sold the loan, an assignment would have needed to be executed to the warehouse lender. That would be no problem.

    When the warehouse lender received it, it would need to be recorded in the particular county, and recording fees paid. If electronic recording existed, then no problem would exist. But without electronic recording, the document would need to be sent, with payment to the recorder’s office. The recording would be executed, and the document returned. If there were delays in the process, then provided no other transactions were involved, a delay would not be an issue.

    Problems arise when securitization is involved. Without MERS:

    1. Loans for the trust must be identified by the Cut-Off date. The Cut-Off date is usually 25-30 days until the Closing date.

    2. For each loan, dependent upon the number of parties involved, there would need to be from 2 to 4 assignments executed within this time frame.

    3. It was not logistically possible to take 8000 loans, complete assignments for each from the originating lender to the warehouse lender, cut checks for each, mail documents to the non-electronic filing counties, get documents recorded and returned to the warehouse lender in a timely fashion.

    4. Once all the documents were returned from the 8000 loans, the same process had to again occur to the sponsor, then the depositor, and finally to the trust.

    There was no conceivable way that this process could have been accomplished in the 30 day period, even if electronic filing existed in all counties. The amount of time and manpower needed to complete and execute assignments for just one transfer of all loans from one entity to another made this process impossible to meet in 30 days.

    MERS was created to facilitate this process, and without MERS, securitization of loans in the private market would have been next to impossible.

    At some point, a MERS like entity would be needed for successful private securitization to occur. Whether the current version of MERS is lawful or not, is dependent upon state statutes and agency relationships created in the state.

    Remember this, without securitization, large numbers of people would never have received loans because they did not qualify under Fannie and Freddie guidelines. This included all jumbo loans. One can argue that the banks could have carried the loans in their own portfolios, but banks did not have the funds to do so. So securitization was needed.

  109. to tnharry
    My argument is like it has always been.
    The two judgments are void ab initio.

    Even before the auction when I tried to appeal the court clerks told me you can’t appeal the judgments, they are a nullity. You can’t appeal a nullity.

    At the illegal auction I hand out papers with the history of the case and all the attorneys that came to bid left, saying these sales are no good.
    What was left were straw buyers Fang Li and Cheetah Realty. I gave them papers too, but they were not interested they were part of the crooks network.

    Back to what the law is:
    Under Federal law which is applicable to all States, the United States Supreme Court stated that if a court is
    “without authority, its judgments and orders are regarded as nullities.
    They are not voidable but simply void and form no bar to recovery sought, even prior to reversal in opposition to them. They constitute
    no justification and all persons concerned in executing such judgments
    or sentence are considered in law as trespassers.
    US Supreme Court case Elliot v. Piersol
    1 Pet 328 349 26 US 328 340

    What made it possible for these crooks to carry out their fraudulent scam at that time was not many people thought a bank would do anything corrupt…

  110. except that the Borrower consents to the situation by signing the documents. it may be something, but it’s not fraud.

  111. Nice article. I remember first coming across Mers in ’04. I noticed the f/c section of my local newspaper was several pages and started reading the notices. The majority of the f/c were being done by this company called Mers. I didn’t know who they were. I quit paying attention and then several months ago the robo-signing scandel broke. I spent days on the Mers website curious as to what this company was. To say I was shocked is an understatement. I think I read every bulletin they put out. I have now have a file full of Mers docs. They were constantly changing things as new issues were raised regarding their procedures and state laws. They were pretty good about staying on top of things in the beginning and for several years they updated regularly, then things died down. I realize now that it wasn’t that their procedures were lawful but rather that they just got lax. The members just quit reporting all the transferring so the system lost what little integrity it was created to have. This is where it stands today. Those loans were transferred so many times, companies opening and closing it became an excersize in futility to keep the record straight. Now we have homeowners trying to unravel all of this. No homeowner should have to do this. We have courts and law enforcement agencies that should not have to do this. The real estate record should be clear.

    A homeowner should be able to go to any title company in their county and find out who owns their loan. No title company can answer this question today. Mers is 100 percent responsible for this mess and the parties that created Mers know it.

  112. Tn,

    Only the lender can be the beneficiary, unless the lender wants to not have a lien on the property, which they don’t when they give it away at closing to MERS. The reason only the lender can be the beneficiary is that note and deed are inseparable. Therefore, MERS is not and cannot be the beneficiary, even if deed says otherwise. That’s the ab initio fraud.

  113. @Marilyn – here’s a quote from the case you cite “Upon the filing, therefore, of the petition and bond, — the suit being removable under the statute, — the jurisdiction of the State court absolutely ceased, and that of the Circuit Court of the United States immediately attached.The duty of the State court was to proceed no further in the cause. Every order thereafter made in that court was coram non judice, unless its jurisdiction was actually restored.” The “petition” they refer to is the petition to remove.

    If you properly removed the state court action to federal court, then you are absolutely correct. If, however, you did not properly procedurally remove (and the facts you recited sound like maybe you didn’t), then the state court retained jurisdiction of the case it had already pending.

    What about the Ch13 angle? That argument sounded pretty good to me if the timing was right.

  114. This was the law when my case was in under Federal Jurisdiction.
    You file the Petition in Federal Court and Federal Court makes the decision, whether to remove or not. And once you were under Federal jurisdiction Federal Court made all the dfecisions and state court NONE.

  115. to tnharry

    In a civil action a State Court cannot proceed by law and statute

    Accordingly, in Steamship v. Tugman 106 U.S. 118 122 Since 1882 with the filing of the Petition in Federal Court and the filing of the copy in State Court state jurisdiction absolutely ceases and Federal Jurisdiction attaches if and till the case is remanded by the Federal Court. (A certified letter must be sent by the Federal Clerk to the State Clerk remanding the case)

    Criminal cases might have some different laws.

  116. You might also wish to read the post on http://www.cloudedtitles.com about MERS’ new policies and procedures.

  117. @Marilyn – removal to federal court is something that would have been filed in the state court action to remove all pending matters to the federal court. recording a copy of your federal petition in the registers office doesn’t accomplish removal. nothing wrong with the state court matter proceeding while the federal was pending unless there was an injunction preventing same.

    now the real interesting thing i pulled from your facts was the Chapter 13 filing. did they have relief from the stay before their sale? was it still pending when they received their judgment and conducted their sale? if so, or if they didn’t have relief, that’s your best argument for the sale being void. easy case to make that sale was invalid in BK Court too – it will even wipe out the claim that the third party (bona-fide purchaser) may have

  118. to tnharry

    Four of my mortgage checks were hidden by Fidelity NY FSB (two each on two NYC condos) in order to fake a default, accelerate and foreclose in NYSC

    Fidelity went under and Astoria Federal S & L became successor in interest with the same attorneys MJRF.

    Trying to prevent them from playing out their scam, I filed a Chapter 13.
    While researching a 510 motion I discovered why Fidelity had hid my checks.

    The Hon. Cornelius Blackshear of Bankruptcy Court told me to file a
    Secus Federal Petition upon Federal Question, which I did.

    The Hon. Louis L Stanton of District Court, read it, accepted it for filing, sent me to the Federal clerk to pay my fee and get a docket number . I demanded a Trial by Jury and attached the Record.

    Filing a copy of the Petition in the County Clerk office (NY State)
    effect the removal and the State Court can PROCEED NO FURTHER
    unless and until remand.

    The Hon. Louis L Stanton issued his first orders setting conference pursuant to rule 16 b . The order also made a directive that I write a money demand letter to the bank which I did.

    While my case was under Federal jurisdiction State Judge Carol Arbor signed the two void ab initio judgments.

    In MJRF’S rush to fraudulently foreclose, they used the void ab initio judgments as their authority to auction for my two properties to straw buyers one named Fang Li and the other Cheetah Realty.

  119. I’m looking at a Fannie/Freddie uniform Deed of Trust with MERS language right now. It clearly defines Borrower, Lender, and states that MERS is the beneficiary solely as nominee for the Lender. It goes on to state that the security instrument secures to Lender the repayment of the loan and the Borrower’s performance of covenants and agreements under the Deed of Trust.

    Now I ask you, what is deceptive about that? Putting aside the issues of straw man, table-funding, and all that other stuff, the Borrower and Lender are clearly defined on page 1 of the Deed of Trust.

    And if the borrower was at all unsure, the borrower could have walked away. When these documents are clear on their face, courts don’t delve deeper to look for fraud.

  120. But it wasn’t clearly disclosed on the Deed of Trust. What was clearly disclosed, in bold lettering, was that MERS was the beneficiary, even though MERS is only a computer database with no employees or ability to do anything on its own. It is impossible for a computer to reap financial or property benefits from a contract. And its “members” knew that–that’s why it is fraud and that MERS security interests are void ab initio.

    In my non-attorney opinion…

  121. ok, i understand the original document issue you’re discussing. i thought you had tied it to the registers office somehow, and my point was that they don’t protect originals either.

    as to your last point though, banks aren’t supposed to be serving us. they are supposed to be serving their shareholders. don’t think for one minute that the bank is your friend or protector. the minute you borrowed money from them, an adversarial relationship was formed.

  122. Tnharry: By no orignal document, I mean the original note and mortgage have gone missing in most of these cases. The legal transfer of the mortgage and note must be the originals, not a copy. MERS COPIES everything into their database, but that is not the original. In addition, MERS separates the note and mortgage, because they are only interested in the money. The mortgage does not represent the money. I think the property laws in nonjudicial states should stay just the way they are. Those laws protected Americans’ property rights. I think all states should be judicial. The banks are supposed to be serving us, not the other way around.

  123. this thread is a distraction from the real issues. in most cases MERS isn’t at the heart of the problem. it’s a bit player certainly, but not usually the real source of the problem. it’s fun to bash MERS and frankly pretty easy to do. but they admit and it’s pretty common knowledge that MERS doesn’t claim ownership of any loans or claim beneficiary status on mortgages. filing quiet title actions or anything else against them may be a slam dunk, but doesn’t really accomplish anything. the focus needs to be on the entities actually claiming an ownership interest in the note, the right to the payment stream represented by that note, and the lien on the property. THAT entity is who your quiet title action or other litigation needs to be directed to.

  124. @Marilyn – how was the case under Federal jurisdiction? be specific please. did they file their state court foreclosure action and then you filed the federal action? or was the state court matter removed to federal court?

  125. mortgages ARE being recorded – it’s the assignments that are not.

  126. When one puts it all together, it is clear the objective was to defraud the investors by selling the same Note multiple times. The only way this could be achieved without the investors catching on, was
    through the use of a “third party” like MERS to hold the mortgages for
    the investors. Also, in most cases, the mega bank “ware house” lenders did not want their own name on the loan documents, so they had the Notes and mortgages placed in the name of a “third party” broker so they could not be blamed for the fraudulent Ponzi scheme
    they were running. They could blame the defunct third party broker for
    the fraud and the counterfeit Notes.
    It seems to me, that for the homeowner, it makes no sense to wait
    for a foreclosure notice, but rather be proactive and file a Quiet Title
    against the defunct third party broker named on the loan documents, MERS and the servicer. If it turns out the servicer was collecting under
    false pretenses, than sue the servicer to get back all the money falsely
    collected from the homeowner.

  127. Question: if MERS is, as you said, illegal and should be dismantled, how would that be accomplished? From what I understand, no act of congress ever santioned its creation. As a result, I would suspect that no act of congress would be needed either to erase it once and for all. In that case, what do we, homeowners vitcimized by banks, do to speed up that dismantling and the redress of that horrendous situation? Whose decision would it be to dismantle and how would it be implemented? How do we make sure that all mortgages are being adequately recorded, even if it is retroactively, and that banks take full responsibility for the correction of their wrongdoing?

    I am all in favor of action and I am willing to do my part but I need to know if I have one to play and what it is…

  128. to tnharry

    They proceeded to fraudulent foreclosures with void ab initio
    judgments since the State judgments were signed when the case was under Federal Jurisdiction.

    Timothy Rooney of MRJF response to me saying you do not own these two condos and you can’t auction them off was “who is going to stop us?”

    Sure looks like foreclosure mill ethics.

  129. to tnharry-
    Why I brought this up is that they operate with the ethics of the foreclosure mills and MJRF’s apparent connection to the network at Fidelity National Title .

    MJRF no longer works for the bank.

    And in 2008 in NYSC, Astoria Federal S & L/successsor in Interest to Fidelity NY FSB new attorney Mr. Arthur Walsh of O’Reilly, Marsh & Corteselli stated “it indemnify, indemnify, indemnify we are stepping aside and the title companies are stepping in.

    In steps Thomas P Malone of Fidelity National Title whose company says it is propert to fight for a forged deed and David K Fiveson from a phantom title company called Coronet Title.

    Why when MJRF had not worked for the bank for over eight years, would Fidelity’s attorney send a copy of a decision to MJRF?

    There is a connection with the crooks I am dealing at at the title companies and these crooked debt collectors MJRF.

  130. @Louise – that argument only applies to those states where assignments must be recorded. many do not have that requirement. i get “quasi-illegal”, but what did you mean by “no original document”? I’m not familiar with that issue

  131. @venu – i think you’ve gotten some incorrect or incomplete information. MERS doesn’t hold notes and never has. MERS generally doesn’t foreclose in its own name, and has taken steps to make that not happen going forward where it was previously happening. your concepts are sound, but need some fleshing out to make them work in courts.

    @marilyn – that “this is from a debt collector” is known as the “mini-Miranda” warning and is placed there out of an abundance of caution. its inclusion in correspondence alone does not necessarily make one a debt collector within the meaning of the statute. if they’re proceeding with a judicial foreclosure, then that makes them a debt collector.

  132. Another issue is that MERS kept the banks from paying the recording fees which has added to the loss of income to the counties involved in transfer and recording of properties. There are other ways to speed up documentation at the Recorder’s office than creating a quasi-illegal, out of plain sight, no original document organization that violates 300 years of property law. Personally, I do not think the laws of the states should be changed except to make more states judicial rather than non judicial foreclosure states. I think the recording fees should go up significantly which will result in the counties hiring more employees, because of the income amounts. More employees will result in more speed in the recording of the property documents.

    The pretender/lenders are also debt collectors, and debt collectors operate in violation of the Fair Debt Collections Practices Act and other state debt collection laws. Their business model advocates operating in violation of the law. The Ponzi scheme is vast and complicated. As you can readily see, our charming and delightful Congress is trying to screw the individual American again. When will it end? Keep suing them!

  133. to tnharry-
    I am in New York, a Judicial lien state.

    Included in Mullooly, Jeffrey, Rooney & Flynn’s foreclosure papers
    is the statement “This communication is from a debt collector.”

    Makes me know they are debt collectors.

    Mullooly, Jeffrey, Rooney & Flynn papers also state
    “her papers seem to give her a “Montana Militia” idealogy as she accused Statqe judges of being corrupt, lawyers of perjury, the Bank of Racketeering and creating bogus money to loan her.”

    Wasn’t I ahead of the times?

  134. A computer system can only hold a scanned copy- not the original of a Note. A scanned copy is not a legal document as any electronic medium could be manipulated or tampered with. This is why MERS cannot be a mortgagee. A copy of check or a copy of a copy of check cannot be cashed as they are not negotiable trade instrument. If a check is not written properly with some non-sense written on it, it is null and void. The same applies to mortgages. Therefore, any mortgage with MERS on it must be null and void and mortgagor must have the right for quite title.

  135. they weren’t duped Venu if it was clearly disclosed on the deed of trust. they may not have understood it, but that’s not the same thing as “duped”.

  136. MERS is bogus as any computer system or its database has no ability to hold the original of any promissory note. A computer system has no ability to assign mortgage by itself not does it have any ability to make decision by itself. Any mortgage with MERS as mortgagee on it must be considered as invalid. The people who have MERS on their mortgages may be given quite title as they cannot be duped by entering into an illusive, imaginary and unreal party as a mortgagee. This is like giving wrong document and the consequence remains with the issuer with null and void result.

  137. @marilyn – an atty is appointed as substitute or successor trustee by the servicer, lender, etc. then they follow the power of sale as enumerated in the deed of trust. and enforcing a security interest does not necessarily equal debt collector. they’re not trying to collect a debt in the foreclosure process. it really depends on your jurisdiction, as judicial always = debt collection. nonjudicial varies by jurisdiction.

    as to the idea that MERS was created because the banks thought they were above the law, i think there is more to it than that. during the refi and mortgage boom time, many registers offices were operating on huge backlogs. i know many in my area were behind by as much as 6 months! that, and the ease of transfers were real factors that were behind the creation of MERS

  138. How do debt collector attorneys get the authority to foreclose?

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