Advice of Counsel on MERS: Covington’s Legal Opinion


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Covington 2004 Legal Opinion to MERSCORP

Editor’s Comment: In my opinion the purpose of this letter was to provide CYA to MERS and its founders and members. Since it was dated in 2004 and questions were already emerging about the legality of MERS and what it would do to the title registries, MERS sought a legal opinion so that they could say they were proceeding “on advice of counsel.” Generally, this takes the operation out of range for criminal prosecution, but not always. It could land both MERS and the lawyers (including members of the our justice department in hot water depending upon the full circumstances surrounding the request from MERS and the answer from Covington.

Considering the fact that the leading members of the department of justice worked at Covington, it is imperative that we have an independent special prosecutor appointed to review the whole process. Such action has been taken on a lot less facts than what we have now.

The letter implies that a private system of title registry is legal and valid without committing itself to the fact that such a private registry would and should have no probative value in case there was litigation regarding the transfers. MERS was not certified or even allowed to proceed as a substitute for the public records of each state nor did they even apply for such status. Records of MERS should be ignored in any contested proceeding.

But the big question is what would this opinion look like if they had been told that the parties were manipulating the data, fabricating documents, forging signatures and otherwise violating the documents of record?

Particularly troublesome is this quote from the opinion issued by Covington:

“In this manner, the eRegistryenables the rightful eNote owner to demonstrate conclusive legal control of the transferable record.Further, it is our understanding that, in performing initial registration of eNotes,the eRegistry: [Editor’s Note: They are parsing words. They are saying that by contract the party claiming ownership of the RECORD has it. That might be true, but what about the actual existence of documents referred to in the record and whether they were validly executed, prepared and filed? They don’t answer that. Instead they bootstrap the reasoning to mean that if a contract exists concerning some bookkeeping records, then everything supporting those entries in the record must be presumed as true — binding the State, who was not a party,, the borrower, who was not a party, and the investor who was not a party.
confirms the validity of the issuer; -[never happened]
confirms that the registration dataset is complete; -[never happened]
confirms that the eNote is not already registered by assigning a uniqueMortgage Identification Number (MIN) and hash value to each eNote;
creates a unique registration record; and -[never happened]
sends a confirmation to the issuer. -[never happened]
Likewise, in recording a transfer of eNotes, the eRegistry:
validates both the transferor and transferee; -[never happened]
compares the hash value stored in the eRegistry with the value submitted by the transferor; and
In brief, the person who controls a transferable record has the same rights as a holder of an equivalent paper instrument under the U.C.C., including, where applicable, rights as a holder in due course. -[never happened]
 MERSCORP, Inc.October 21, 2004Page 5
requires confirmation by the transferee within a specified time period after the transfer request [never happened]
UETA § 16(d); 15 U.S.C. § 7021(d). Likewise, the obligor is entitled to the defenses that it would have under the U.C.C. See UETA § 16(e); 15 U.S.C. § 7021(e). “[pretender lenders ignore this part admitting that the borrower has the same rights against the ultimate “owner” as they would have against the originator]

12 Responses


    Not “Mic check” Mr. President. The Peoples’ “Smell check” of SOTU received unanimous score of ‘outrageous!’ To name ‘Your Boys’ in the same thought structure as “US MILITARY TEAM” is blasphemy.

    Mr. Holder appeared more a deer caught in the headlights. Storming Bin Laden’s compound? I don’t think so, or maybe if he could have used Hillary as cover. Observing ongoing RICO fraud, the Nation crumbling, his heroic best move? Do Nuh-thing.

    Will United States Attorney Generals Holder and Breuer arrest themselves for crimes against this Nation? Anyone from Covington? Honorable men would already have recused.

    Day 1: Revisionism: Erase history and fact and replace with ‘MERs didn’t do anything wrong.’

    You are appointing criminals Mr. President.

    Your SOTU demonstrates that you miss-take Americans for fools (who intentionally & wrecklessly took out loans we KNEW we could not afford), criminals for heroes, and yourself…? Well… you finish it.

    Bring back BILL BLACK !! Let’s find out what is is.

  2. @hman – you can get a copy of an older one in Upke, NJ
    09-cv-01710. Don’t know how old and you’ll have to hunt and peck on the docket because it’s an attachment to some pleading. I don’t think I have it. I’ll look, but don’t count on it. You didn’t agree to MERS as an agent. No one did. Read your dot again. See the word ‘agent’ anywhere? Agency must be expressed when dealing with r.e,. and it wouldn’t matter what it said in MERS’ manual. You may find the membership agreement pretty instructive, anyway.

  3. Isn’t covington the firm holder and Bruer worked for?? So f#ing crooked. The devil surely reigns. Debi

  4. rb – well, I the plebe didn’t know about it. Your stuff makes sense, though, and it’s outrageous to go after a few sportsman and ignore WS. Your comments make it sound like prosecution is discretionary, which maybe it is. I still think state statutes need to be scoured to see if there is a time when prosecution isn’t discretionary.

  5. While there’s still a chance to use it PLEASE consider this strategy:

    **=>THIS is an issue that the MASSES are AWARE of – and can UNDERSTAND – and will be OUTRAGED! By exemplifying the D.O.J.’s “CHOICE” to aggressively prosecute athletes (most minority) who were NOT hurting the entire US economy – and were NOT throwing people out of their homes… but yet the DOJ CHOOSE to NOT prosecute blatant ADMITTED fraud – to intentionally CREATE and SUBMIT formal affidavits to a court… The lawyers on this blog are tragically missing the major POLITICAL significance of the Dept. of.Justice CHOOSING to spend millions of U.S taxpayer dollars to prosecute athletes who “committed perjury” – and JUSTIFIED it to the mass of U.S. citizens who complained (“why bother?”) by vehemently insisting that the D.O.J. MUST prosecute “ANY” intentional attempt by ANYONE to “lie” under penalty of perjury “or our whole system of justice will be compromised”

    Well if you dont see the POLITICAL significance – and therefore the political POWDERKEG – of an obvious well thought out CHOICE by the Dept of Justice to prosecute minority athletes who committed one instance of “victimless” perjury … while also CHOOSING NOT TO prosecute RICH INSTITUTIONS who intentionally created thousands of fraudulent affidavits to victimize “the 99 percent” in order to illegally benefit the “one percent” ILLEGALLY…

    then you are missing a TREMENDOUS OPPORTUNITY to acquire exactly what you NEED to succeed – IE: to use an easy to understand example that would be VERY attractive to Media; civil rights groups etc. (From a “lawyers view” you might not see this – but to the masses; media; etc – THIS would be PERFECT for exactly what those on this blog are seeking (an effective way for the masses to NOTICE just how bad the banks’ “perjury” is – and WHY they should be OUTRAGED<={this IS exactly what you are looking for… WHY are we not USING this WEAPON?}

  6. Mr. G says it all. MERS has never told anyone or any court the truth of how it operates. No one who knows S from shortcakes would call the truth legitimate, not to mention all the laws being broken by the acts and omissions.

    MERS is a shell entity which is acting as a collection agent for its
    members by allowing them to assign deeds of trust to themselves in its name, and before that, to do foreclosures in its name. It’s a FRONT for what is actually imo organized crime.
    I am so looking forward to a national, general consensus on the issue of the straw officer. Is the straw officer a MERS’ officer or not? The only court to rule on this that I know of is In re Koontz, Indiana. That court didn’t actually use the words “you, Ms Hodgins (made that up), are not an officer of MERS’, but the result was the same; the court threw out the assignment. The judge did state that Ms Hodgins was not an employee of MERS and its reasonable to assume that was the reason he threw out the assignment.
    And speaking of shell entities, is it kosher to make such an entity
    an (alleged) party to an instrument, the dot, in the first place? I think that’s a very important question and I think the answer is NO.

    The intent from day one was deception. Since MERS has no employees, it CANNOT be argued that foreclosures were ever meant to be done by MERS’ and yet the MERS-crafted deed of trust has language which (allegedly) authorizes MERS to do foreclosures. (It does not authorize them to do assignments ftr) AT THE TIME that language was put in the dot, MERS and its
    members KNEW full well “MERS” would never do any foreclosures. The members would, under MERS’cover. The members executed all docs, hired and paid for substitute trustees, hired and paid any law firm involved, hired and paid
    everyone, including “inspectors”, and paid any related recording fees. The whole thing was and is willfully deceptive. Can there be any doubt?
    It also CANNOT be argued that the business plan of this shell entity didn’t always MEAN – as in INTEND – that assignments and substitutions of trustees would be executed by its members in its name, the name of a shell entity. And MERS oversaw exactly zero of this.
    On info and belief, MERS’ business plan provides that members must pay for and handle any litigation relevant to the actions taken by members in MERS’ name and this has routinely been undertaken without MERS’ knowledge of the cases prosecuted or defended in its name. At one time, I’d say MERS didn’t
    give a hoot what was done, until recently, as all this what-looks-like-RICO-to-me activity went on unchalleged. I would hazaad a
    guess that MERS now cares when lawyers purport to represent MERS as we and the judiciary come to understand what is being perpetrated here, starting with some stinking, I mean smelly, very smelly, shell entity being named in anything about our HOMES. Our hearths. Geez oh man, what a load. It’s a stinking, I mean smelly, and oppressive load. If this isn’t a shell entity, I don’t know what is, I guess.

    It’s a legal labyrinth (commonly known as a cluster-xxxx), starting with the deed of trust instrument itself.
    MERS avoided the word “agent” in the deed of trust. Agency goes back to the principal – the principal is liable for the acts of the agent. MERS purposefully didn’t call itself the agent. They were trying to take out as many birds with one stone as possible in that deed of trust instrument they created.
    They avoided agency – used “nominee” instead – for its legal consequences, but later were forced to allege an agency existed. The bad act of the agent goes back to the principal. But in this really weird and illegitimate deal, it was the principal who was and is doing the bad act in the name of the (now-alleged) agent!
    Is the alleged agent liable for the bad acts of the principal in its name? Dunno, never heard of such a deal before. Certainly the principal is liable for its own bad acts in anyone’s name.

    I think the most important querry, given what we now know, and which is also the one with the broadest and, depending on where you’re standing, scariest consequences is the appropriateness and legitimacy / validity of naming a shell entity in a deed of trust in the first place. I’m not even an attorney and I can spot this stuff – what if a group of dedicated attorneys put their minds to this, starting with supporting the proposition that MERS is in fact nothing but a shell entity and then go down the list from there?

  7. […] Link: Advice of Counsel on MERS: Covington’s Legal Opinion […]

  8. Oh, Happy Days! Bring in the Edwin Hawkins singers please.
    The MO SC just ruled In the case of
    CACH, LLC, Respondent, vs. Jon Askew, Appellant.
    (Overview Summary)
    Missouri Supreme Court – SC91780
    Basically they held 2 things:

    1. If the person suing the debtor is NOT the original entity that was
    owed the debt then the assignee must prove all valid assignment in the
    case or they have no standing to sue the alleged debtor. AND

    2. The custodian of records testifying for the collection attorney
    or collection agency (read here MERS’ member – sic) must have PERSONAL knowledge of how the original creditor prepares and keeps records and WHEN the record was prepared.

    Here is the summary:

    Standing cannot be waived and must be established as to every link in
    chain of debt’s assignment. Statute sets forth elements of foundation
    for a document’s entry into (think declarations) evidence as a business record exception to the hearsay rule. Document’s “appear[ance] in the files of the business that did not create the record” is not enough. Testimony as to the procedures, including mode and time, of preparation is necessary as to that document. Judgment for creditor reversed.

    Demand STARE DECISIS, the legal principle by which judges are obliged to respect the precedents established by prior decisions. If your court has held as the MO SC did above on credit cards or other debts allegedly assigned, they must so hold in these cases.
    Cite this case, too even if not precedent in your venue. Yeehaw.
    Knock those bricks down one at a time. Soon the real powder keg will hit: MERS is a shell and sham entity.

  9. hman….do not have that specific info…but have two docs that might be helpful…send me email and I will forward…

  10. Dear Niel: This is all rubbish. The NY Justice ruled in Feb 2010 that it was not a valid business. It was posted on you site although he said it would not have legal standing they were a straw man.

  11. Anyone know where to get a copy of the MERs Manual in 2006? I’d like an older copy. My servicer stated that I was aware and agreed to MERs as an agent by my signature on the DOT. I can’t really dispute that.

    I’m thinking maybe I can dig thorough an older MERs manual and take the position I was only bound & agreed to the procedures effective in 2006 when I signed my DOT. Hopefully, I can find a loop hole in an older MERs manual.

  12. William Black

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