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A Workingman’s Guide to MERS and the Shadow Banking System
by Vermont Trotter

In the last year and a half I have come to learn a lot of confusing truths about the way the money in this world really works.   The mainstream media is talking more and more about the foreclosure scandal and at the heart of it all is MERS.   Mortgage Electronic Registry Service.  It’s the biggest littlest company you have never heard of and in the thirteen years of its existence,   it has utterly destroyed the real property ownership records system in every county in the United States.

The purpose of The Workingman’s Guide to MERS & Mortgage Banking is to provide the every day average Joe &; Joie the information they need to understand this tremendous scandal unfolding ahead.   More importantly,  use this information to arm yourself with truth so you can cry BULLSHITTE when the talking heads try to spin the story for you.  And they will.

Be warned.  The story has so many facets that to sit down and take it from one end to the other leaves one a bit befuddled.  Smoke comes out of your ears,  if you know what I mean.  Thinking and operating in the world of MERS is a testament to the infinite adaptability of the human condition.  I recall when I first came to the realization of the Meaning of MERS and the smoke started to pour from my ears.  It was late at night and I had been researching what had happened to me about a week earlier.

I had just invoked the “Produce the Note” defense in court and had won a stay on the sale in the foreclosure of my house.  After the euphoria wore off,  I really started to wonder what had just happened.  I was geeking out trying to understand.  It was late at night.   I had been finding and reading court cases for about a week,  the lights were out except for the screen,  the kids were all asleep,  and I sat bolt upright in my chair when the realization struck.

“My God,  they can’t deliver clear title~!”

I blinked into the darkness for about five minutes as the full impact of that washed over me.  That was almost a year ago and I have managed to withstand the MERS monster’s siege upon my castle since then (not to worry,  still plenty of food & water).

Living and thinking in a MERS world is common for me now.   Newcomers look at their surroundings as if it were their first foray into Toon Town,  the refuge of Roger Rabbit when he was running from the law.    I’ve been here for a while and I’m used to it.   ‘Oh,  yeah,’  I tell them,  ‘that happens all the time. ‘

In order to really get into what is going on,  you have to pile through a lot of boring mundane stuff.  PJ O’Rourke calls it ‘Dictatorship by Tedium’.   Any time regular people try to figure out what’s going on they feel like they are back in High School Algebra class and not having a clue as to what is going on.  That’s how “they” get away with it.  It’s not that you can’t understand.  You can.  It’s that they make it so boring,  you don’t want to.  In today’s specialized world,  to a certain extent,  you have to trust that “they” who are “the experts” are as well studied in their subject matter as you are in yours.  Leave all that to people who are interested.

This is a complicated story.  It is actually six stories interwoven into a larger narrative.  Part of the problem is it is so easy to get caught up with one or two pieces of the story and miss the real story.  It goes deeply into the arcane runes of the financial world.  To tell it in detail would leave you glassy eyed and wondering what you were doing for lunch.  So I leave a lot of details out and as a result,  it may seem overly simple.   That’s because it is.  But it’s not.

This is a quick tour so you can understand the big picture.  You will,  no doubt,  find various aspects of it curious and you will want to go back to explore more.  All the subjects in here are available for further study through the internet.  That’s what I did.  This whole story is pulled together from late night google searches.

In order to make this easy,  let’s start out with the shockers.

•    If you have MERS on your mortgage,  unless you take action to quiet title,  you will NEVER see clear title to your house.

•    If MERS is on the title history of a house you are thinking about buying,  you need to know there is an immense cloud on that title.  Don’t believe it?  Read the commitment to title in the proffered closing documents.

•    If your mortgage is securitized,  meaning it was used as part of a securitization vehicle,  you are paying rent to the Shadow Banking System (SBS) no part of which has an enforceable encumbrance upon your house.

•    And finally,  if you have MERS on your mortgage,  and there are over 62 MM of us,  your house has become the gold coin of the shadow banking system.

I’ll say that last one again because it really needs to soak in.

Your house is the gold coin of the Shadow Banking System. (SBS)

It’s very complicated,  but it’s very simple.  Let me tell you what was really going on in the entire mortgage banking collapse of 2007 –  ???

Factoring is a time honoured business practice.  Wikipedia defines factoring as a financial transaction whereby a business sells its accounts receivable (i.e., invoices) to a third party (called a factor) at a discount in exchange for immediate money with which to finance continued business.

In this case,  the mortgage originators (the banks who originated the loan) were factoring their paper to the SBS so they could make more loans so they could factor more paper all to feed the insatiable appetite of the SBS for the security of their periodic,  temporary,  large cash positions as well as to give pension funds,  sovereign wealth funds, and money market funds a place where they could receive “an above average return with little to no risk”.

All of it,  the entire scandal destroying the world today boils down to one word.


Welcome to the Rabbit Hole.

Buy This Book

30 Responses



  3. Vermont Trotter –

    Excellent. Living Lies can you fix the link?

    Paper on Chink in the Armor:

    Shadow Banking System (“SBS”) White Collater Crime –
    can we alternate SBS for “Shadow Banking Sanctions”

    Criminal acts lurking in the shadows are sanctioned if benefactor federal government, legislature, where insider trading leglaized gambling!

    Elizabeth Warren caught NAILED TO THE FLOOR Wells Fargo commerical bank panning for gold coin as benefactor of pay day loans using the SBS.

  4. esther9,

    As to slicing and dicing — only for receivable cash flows. And, CDOs are derivatives from actual cash flows. Security investors in these security/non-security investments are not the creditor. In my opinion, the confusion about investors and security investors is a major misconception and the reason why homeowners have encountered so much difficulty in preventing foreclosure.

  5. yep I think you have it about right.

    Don’t know where his case went but one persons loan on a 500,000 note was parlayed into over 90 million, less than .05 cents on the dollar

    Banks and Insurance companies only needed to have .10 cents for every dollar at risk in the 80’s&90’s and in Oregon you could start an insurance company with as little as 100,000.00 yep 100K

  6. It seems that CDOs are a type of ABS (Asset-backed security) and these are examples of derivatives, according to this statement on Wikipedia. (Just trying to sort out the terminology for myself).

    “A few academics, analysts and investors such as Warren Buffett and the IMF’s former chief economist Raghuram Rajan warned that CDOs, other ABSs and other derivatives spread risk and uncertainty about the value of the underlying assets more widely, rather than reduce risk through diversification.”

  7. Aha. Thanks.
    The financial lingo is out of control…more stuff to keep us confused.

  8. I believe the slicing and dicings are called CDO’s

  9. The book can be found there and it can also be printed. That’s what i did.

  10. Sorry, Colleen…I have been stressed and “overwhelmed” myself—and was being pulled in many different directions as the clock ticked…I had an emergency situation, and I apologize for not responding to you immediately.
    I guess what I SHOULD have said in my earlier post is that the government is “overwhelmed” by their own massive corruption…that would have been more accurate…

  11. THANK YOU.

  12. Why would you state I’m “hostile?-You stated the government is “overwhelmed”. Meaning to me? YOUR DEFENDING THIS PRIVATE CORP. of gangsters And because of all the assumptions and pre-sumptions that has stolen our way of livin?- I CAN ONLY ASSUME YOU are ONE OF THEM-cause the trust IS forever gone. OR?- as I DO REMEMBER givin you a remedy BY WRITING YOU and have you even looked into what I sent you?- Or do you like martyrism?-go ahead…IF you’ve made an attempt, how would I know? You never wrote me back that you got it one way or another and you excuse this false god-soooo, what should I believe?- really prove me wrong.

  13. Government and Congress allowed deregulation. Deregulation is another name for secrecy.

    Secrecy protected in courts.

    Government has allowed scapegoats — victims are scapegoats.

  14. can not fine the book by vermont trotter

  15. I see. Factoring is the method (the vehicle) that creates (leads to) Derivatives.

    They have to keep factoring to keep the engine of the derivative “factory” going.

    Now there is little or no value in the derivatives, so the last person holding the bag loses. That is the Ponzi scheme. Everybody at the top (in this case, the beginning sellers) makes money. Does that sound about right? Close?

  16. @carie
    I agree, the government is part of the problem, because the corruption goes all the way to the roots. There is a subtranet below the government you see, where the industrial military complex lives in luxury. As long as money and politics are entwined, it will be so; the malignant tumor will kill the Republic. Not all of government is evil or corrupt, just seems that way. Properly reducing government to constituttional size and power, ending the Fed and weeding out the corruption will be the “cancer vaccine” that restores health.

  17. Neil:

    Exactly. When I read you article in January of 08 I jumped for joy. I still had my head in the sand though and tried for 3 years at Modifications until they changed servicers and forced me in to BK7. Now lets hope that the with res judicata we can get them to up hold the law and grant me quiet title.

  18. Why are you so hostile? There is no need for it.

  19. Oh Carie, you so disappoint. you state,,,they are overwhelmed and don’t give a damn about we the people—only corporations and the illusion of real money-(let’s pitty the poor gubermint-cause they’re so overwhelmed-give me a break-you WRITE like your ONE of them-OR?
    Ignorant as hell.
    Please put an effort to sound plausible or just stop writing all together.

  20. This is a blog posting of Trotter’s MERS Guide (unsure if it is 100% the same as what he is selling)

  21. So which is it, factoring or table funding

    Need to settle on a theory I think

    Everyones confused enough

  22. Sunday 20 November 2011


    Superb work! Your appellant brief is quite cohesive and well-presented.
    An example of why lawyers are so unnecessary. A salute to you!

    People, you do not “send a book” to a judge in the false hopes she
    or he will read it an make your case for you. Vermont provides an
    outstanding template on how to procede. Do as he has done and
    suggests, some googling to find the answers someone like Mary is
    too lazy to do.

    If “Buy this book” were a dead end, she stopped there. There was
    NO dead end on google. Take some initiative. If-it-ain’t-spoon-fed-
    it-ain’t-being-shared is such a false presumption. Try it and see the
    difference in results.

    Thank you, Vermont…

  23. Colleen, please do share

  24. The government keeps it going because they let it happen in the first place and they are overwhelmed and don’t give a damn about we the people—only corporations and the illusion of real money….

  25. Thank you Vermont for sharing, well explained, and this word was new to me, but it makes a lot of sense. I wish I could tell you that I have a remedy or answers to share, but certainly could use some. You are also right about letting the system be purged especially since over 60 mm of us are affected by it.

    It would not be a bad idea to pass this book along to attorneys and judges, not that they don’t know by now it’s just they don’t think that we know enough. What I don’t understand is why would the banks and the government want to keep MERS going knowing that it has mangled up the recording system and clouded the titles?

  26. When you click on Buy this book, it is a dead end.

    And Chris if you get a reply from colleen, let me know. Colleen should clue us all in here, I thought that is what why we are all here, to share.

    Thanks Mary

  27. Well Colleen: You can certainly clue me in, as many here have suggested they will share and don’t. It’s looking like the vast majority who do have answers are tight lipped and by being “silent” the wheel goes round and round. The best thing that could happen is the system be purged. The banks are too big to do anything, but FAIL.

    If people are so confident, let them make a run on the bank and try and get their money. Those at the end of the line…sorry, banks closed. Banks do not have the money. When will folks learn?

  28. I think I’ll get that book and send it to the judge on my case…

  29. EXCELLENT RESEARCH! Factoring-WHAT a verb.
    And Vermont, I’m sure with this research you’ve done?
    YOU have also found it’s remedy. If not send me your email and I’ll clue you in.

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