Florida Duval County Clerk, Delaware AG Sue MERS

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The MERS System is not a legal system of record or a replacement for public land records. No interests are transferred on the system—they are only tracked,” Smith, Merscorp vice president of corporate communications, wrote in a response to emailed questions. “MERS does not have or maintain any document recording system, public or private, and does not do anything to compete with or supplant the public records for land located in the County records.” MERSCORP Spokesperson

Florida Clerk, Delaware AG Sue MERS

County and state officials are turning up the heat on MERS, as recent lawsuits filed in Florida and Delaware challenge the validity and accuracy of the mortgage industry-controlled loan registry.

The most recent lawsuit was filed by a county clerk in Florida, and seeks class action status to represent the state’s 67 counties. The complaint alleges the use of MERS does not comply with state property laws and has cost municipalities millions in unpaid recording fees.

Jim Fuller, the clerk of Duval County, filed suit against Merscorp Inc. and its wholly owned subsidiary, Mortgage Electronic Registration Systems, Inc., on Oct. 31, claiming civil conspiracy, unjust enrichment, as well as fraudulent and negligent misrepresentation. The suit also seeks a hearing to determine the validity of tracking note transfers on the MERS System and a court injunction to prohibit the use of MERS in Florida.

“MERS has usurped the rights and privileges of the Florida Clerks of Court by establishing, maintaining and inducing lenders to use its private recording system, which unlawfully interferes and competes with the public recording system,” the suit, filed in state circuit court, reads.

Merscorp spokesperson Janis Smith said the suit’s allegations are inaccurate and false.

“The MERS System is not a legal system of record or a replacement for public land records. No interests are transferred on the system—they are only tracked,” Smith, Merscorp vice president of corporate communications, wrote in a response to emailed questions. “MERS does not have or maintain any document recording system, public or private, and does not do anything to compete with or supplant the public records for land located in the County records.”

Tim Volpe, a Jacksonville, Fla.-based attorney serving as outside counsel for Duval County, claims that when MERS is named on county land records, it creates an illegal disconnect between the mortgage document and the promissory note that allows the owner of the promissory note to change without being recorded in land records—keeping borrowers in the dark about who holds their debt.

“Both the note and mortgage are to be recorded. The principle issue we’re trying to get at is the punitive distinction of MERS being the mortgagee while the note is shifted from one to another up through the typical securitization process,” Volpe said in a phone interview. “The principle concern about the disconnect is that the public records are not complete insofar as the true beneficial owner of the mortgage is not reflected in the public records.”

In previous challenges to mortgage liens filed in the name of MERS, the Reston, Va.-based company has relied on agency laws to defend its position as both the legal holder of the mortgage, and as an agent acting on behalf of the owner of the promissory note.

Smith said MERS is the true owner of the mortgage, and is not, in the complaint’s words, a “straw man” placeholder listed in public records.

“The ‘owner of the loan’ is the party who has possession of the promissory note, but the promissory note is not, and has never been, and is not required to be disclosed or filed in the public records,” she wrote.

Following a subpoena issued against MERS earlier this year, on Oct. 27, Delaware Attorney General Joseph “Beau” Biden filed a lawsuit claiming MERS engages in deceptive trade practices. The complaint cites a review of 100 foreclosures in New Castle County during 2010 that showed discrepancies between MERS records and the entities that participated in the foreclosure.

In a press statement, Smith said the claims in the Texas case are without legal or factual merit and that MERS complies with state laws. In a separate statement about the allegations in Delaware, Smith said the MERS business model is “straightforward and transparent,” adding that “[T]he lawsuit they filed was unexpected, and we disagree with the allegations made in their complaint.”

22 Responses

  1. Peter

    Good points.

    Know you did not intend — but I am not the “anonymous” investor.

    Unfortunately, believe some here — may be.

  2. Glad to see Florida getting on board with this mess. I refinanced with Taylor Bean & Whitaker in 2007. MERS is listed as “mortgagee” and TB&W as “lender” on the mortgage. Fraud in my opinion. TB&W went bankrupt in 2009 and Cenlar became my mortgage servicer. No “assigment” has been recorded in the county records and so the only lien shown is the one with TB&W who is out of business. Freddie Mac says they have my loan,MERS says it is Cenlar and an investor choosing not to be identified, and Cenlar only has a copy of the original TB&W mortgage and note which is worthless in my opinion since there is no legal assignment of this mortgage. Now if I refinance again or sell, I am concerned of liability to some unseen “lienHolder” who may appear at a later date. I am contemplating suing to quiet title to force the hand of Cenlar to come up with a legal chain of title.

  3. this story from Florida PISSES ME THE F@&# OFF

    http://www.miamiherald.com/2011/11/04/v-fullstory/2487628/mortgage-fraud-victim-ends-up.html

    The Government has just proved itself to be the support structure securing the ongoing economic torture of ALL Americans, the very same kind of threat that they were created to protect us from.

  4. https://www.efanniemae.com/sf/guides/ssg/relatedsellinginfo/mers/pdf/merspolicy.pdf

    Federal Home Mortgage dba FANNIE MAE (FORCE UPON ‘COMMERCE’ UTILIZING ‘MIN#’ ASSIGNMENT PRIOR TO SECURITIZATION.

    Rules and Instructons to Correspondent Lenders

    – For new mortgage deliveries to Fannie Mae, the lender must report the MERS registration when it delivers the mortgage to us (by entering the applicable MIN on the Loan Schedule or Schedule of Mortgages). After we purchase or securitize the mortgage, we will notify MERS to ensure that the MERS records are updated to reflect our ownership interest. (PLEASE NOTE THAT IT IS IMPORTANT TO REGISTER THE MIN ON THE MERS SYSTEM PRIOR TO DELIVERY OF THE LOAN (AND THE ASSOCIATED MIN) TO FANNIE MAE.)

    -For mortgages in existing Fannie Mae servicing portfolios, the lender will need to report our ownership interest to MERS when it registers the mortgage. (Note: If the original assignment of the mortgage to Fannie Mae was recorded in the public records, the servicer will first need to prepare an assignment from Fannie Mae to MERS and send it to us for execution.) MERS will promptly notify us when a lender reports that we have an ownership interest in mortgages that it is registering with MERS.

    • The lender will not need to include in the delivery package for a MERS-registered mortgage a copy of the assignment of the mortgage to MERS, nor will the lender be required to prepare and submit an unrecorded assignment of the mortgage to Fannie Mae, unless we specify otherwise for a particular transaction or transactions.

    • If a loan is registered with MERS and the servicing of the mortgage is subsequently transferred to another lender that is a MERS member, the transferee will not need to prepare an unrecorded assignment of the MERS-registered mortgage as part of the custody documents unless we specify otherwise for a particular transaction or transactions. However, if servicing of a MERS-registered mortgage is transferred to a lender that is not a member of MERS, or if the MERS registration for an active mortgage is terminated for any reason, an assignment from the servicer to Fannie Mae in recordable form but unrecorded will be required.

    • The lender will be responsible for the accurate and timely preparation and recordation of security instruments, assignments, lien releases, and other documents relating to MERS-registered mortgages and must take all reasonable steps to ensure that information on MERS is updated and accurate at all times. The lender will also be solely responsible for any failure to comply with the provisions of the MERS Member Agreement, Rules, and procedures and for any liability that it or Fannie Mae incurs as a result of the registration of mortgages with MERS or any specific MERS transaction.

    Fannie Mae Guides and with the terms and conditions of the lender’s Master Agreement or any negotiated contract that it has with us, unless we specify otherwise. In addition, MERS’ failure to perform any obligation with respect to a MERS- registered mortgage does not relieve the lender (or the mortgage servicer) from its responsibility for performing any obligation required by the terms of its Fannie Mae contracts or the provisions of the Fannie Mae Guides.

    For more information, please visit the AllRegs® website (http://www.allregs.com/efnma/) and perform a search under Fannie Mae Single Family for MERS.
    MORNET is a registered trademark of Fannie Mae. MERS is a registered trademark of Mortgage Electronic Registrations Systems, Inc. and AllRegs is a registered trademark of Mortgage Resource Center Corporation.

  5. EMPLOYEES OF MERS ‘DONT’ TRACK YOUR LOAN THEY SERVICE CLIENTS OF MERS. YOU HAVE NOTHING TO DO WITH MERS. THE LAND RECORDS HAVE NOTHING TO DO WITH MERS. THE LAND RECORD THAT IS RECORDED IS THE ONLY LAND RECORD THAT NEEDS TO BE RECORDED. YOU SIGNED PROMISE TO PAY OVER 30 YEARS ZERO COUPON BOND AND IN EXCHANGE YOUR ALLOWED TO LIVE IN THE PROPERTY. YOU DID NOT KNOW YOU SIGNED A REAL BOND ALSO CALLED A NOTE. YOU DID NOT KNOW THAT THE SECURITY INSTRUMENT IS ALSO CALLED A DEED OF TRUST.

  6. ALL ALT-A LOANS WERE RECORDED AS ‘UNSECURED CREDIT’ THE SAME AS ‘CREDIT CARD DEBT’

  7. DTC AND MERS
    ELECTRONIC BOOK ENTRY
    CTS-LINK A LIMITED VIEW OF ‘INDENTURE TRUSTEE’
    ORGANIZED BY SHELF COMPANY AND INSTITUTONAL INVESTORS
    SOURCE OF INFORMATION
    MASTER BALANCE SHEET

  8. why do you all make up stuff about MERS

    MERS has nothing to do with your money and everything to do with their money – Shelf Companies & Institutional Investors. Do you know how much it costs for one transaction? All the information is on google.

  9. @Wondering. You might want to double check at the Assessor’s office. It’s highly unlikely the B of A paid the property taxes. They usually make the new buyer of the foreclosure take care of that.

  10. Transparent, eh? When I look up mine, it says something like, “The investor chooses to remain anonymous,” courtesy of Wells Fargo.

  11. One of my first conclusions — when I started — many moons ago —- whoever originally gave you a loan to purchase your home — was NEVER going to it let it go to anyone else. NEVER. (of course –unless it was Freddie/Fannie — who were never the lender/mortgagee — and were searching for high yield). This was before any of my research. But — it is just common business sense practice.

    And, that is why you need to GO BACK.

  12. Wondering

    And, was this a refinance or a new purchase???

    If refinance — you need to go back and get all prior documents since the purchase of your home.

  13. @Wondering

    Are you in a judicial or non-judicial state?
    Do you have all the docs about your loan and your house? Do you have the county recorder’s docs re.: transfers, assignments, etc? Do you have the complete ledger since the first payment you made? Have you gone into the MERS system lately to see how many entities may end up filing against you? MERS won’t but someone will if foreclosure hasn’t yet been started.

    Don’t panic. Document, document, document.

  14. Ok guys , I have a MERS loan , you know what I mean , my loan was transferred into this system . My question , does this mean my loan is null and void ? I have been a squatter in my own house for 2 years now . B of A has paid the property taxes and the insurance has been paid by us , so what next ?

  15. In my own case, MERS admitted it never owned or held the note. MERS said it could not assign the note even though the MERS assignment purported to do just that. MERS said it holds “title to the deed of trust,” a form of title which doesn’t even exist! Yes, MERS’ days are numbered and yes, they do know it!

  16. Attorney General – Delaware – Beau Biden invertivew
    FREDDIE/Fannie privitized residential system – NO THEY DID NOT
    THEY RECORD THE ONE LAND RECORD ATTACHING A LIEN

    http://sn136w.snt136.mail.live.com/default.aspx#fid=1&fav=1&n=76969665&mid=6f22f6e6-0bb6-11e1-a158-00215ad7b214&fv=1

  17. ‘Title Exchange’
    Tracks ‘assignments’ of transactions ‘other than land records.’

    MERS ‘Title Exchange’ changed hands 1993-1997
    MORSERVICES,
    MORServ, Inc.
    Chase Manhattan Corp – c/o Mortgage Electronic Registration Systems, Inc.

    Joint Venture – Strategic Partnership MERSCORP,Inc.
    c/o DE

    1998 ‘MER S’ Merrill Lynch…

    Anyway – does not matter.

    What does is that MERS ‘TITLE EXCHANGE’ tracks all assignments related to ‘UCC3 notes’ that are unrelated to Land Records.

    The reason clear why there are only 2 assignments in land records
    Sale of promissory note where borrower signed promises to pay for cash back. Borrower did not seek information where cash came from.
    BOND, Indenture, Ownership Agreement not part of deal with consumer.

  18. MERS’ own “Terms and Conditions” (available on their website) denies any interest in the payments or the properties. And they don’t service loans or make loans. They are NOT a beneficiary by any definition, especially that of Black’s Law Dictionary, as cited by Judge Linda Riegle in In Re Mitchell, the popular Nevada bankruptcy case that slammed MERS and was upheld on appeal. Also, since the usage of the MERS “system” did accomplish its goal of evading the payment of property transfer taxes when the Notes changed hands several times while the Deeds of Trust (or Mortgages) remained stationary in the name of MERS acting as “nominee” (the exact purpose of a “strawman” or “placeholder”), they cannot now claim that the “mortgage follows the note” because, as stated in In re Agard, “While it is generally true that a mortgage travels a parallel path with its corresponding debt obligation, the parties in this case have adopted a process which by its very terms alters this practice where mortgages are held by MERS as ‘mortgagee of record.’ MERS admits that the very foundation of its business model as described herein requires that the Note and Mortgage travel on divergent paths.” (p. 23) Also, in Residential Funding v. Saurman, it is stated, “The separation of the note from the mortgage in order to speed the sale of mortgage debt without having to deal with all the ‘paper work’ of mortgage transfers appears to be the sole reason for MERS’ existence.” (p. 11) MERS’ days are numbered, and they know it.

  19. So true, dny! MERS says whatever it thinks a judge in a given case wants to hear, contradicting itself over and over. There can be no owner of the mortgage that is a different party than the note holder–note and mortgage are inseparable. MERS just acts like they’re separable.

  20. First, Ohio. Now, Florida. Has anyone been able to verify whether, since MERS does not have money of its own, its directors can be personally, jointly and severally liable?

    Ill-gotten goods never prosper. Somewhere, somehow, the monies stolen by bnaks and given as obscene bonuses to racketeers for their job “well done” will be repaid. Question of time. The time is getting closer by the day.

  21. Nemo dat—in every court in every situation where the foreclosurer doesn’t own it.

  22. Janis Smith must have a “hard job,” as MERS’ spokesperson “late in the game,” having to ‘slpain all MERS’ shifting positions. Could make her job “easier” if, in addition to tracking millions of “interests in loans,” MERS would also more carefully “track” its dozens of “official” yet completely contradicting and self-negating statements regarding “what it is” or “what it does.”

    She apparently states: “MERS is the true owner of the mortgage” – Huh? MERS has, under oath in Nebraska, specifically disavowed that assertion. Is that truly what she said?

    And, “the owner of the loan” is a party separate from MERS, the alleged “owner of the mortgage?” – Say what? If that’s true, how many millions of loan contracts has that breached?

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