29 Responses

  1. Careful with Bob Hurt. The only explanation I can think of for what he says is that he is paid to say it. He tries to remain credible but pick any topic in which the banks are weakest and he will tell you that it is no weakness.

  2. david, the owner of the note is the owner of the security interest i the res (res) in the debtors estate. The debt is discharged (in rem) with the death of the debtor.

  3. As to Bob Hurt and his allegiance to MERS:
    PORTLAND, Maine — In the second half of 2014, new home foreclosure filings in Maine fell off a cliff, by more than 50 percent.

    It’s not that the economy suddenly improved or that the number of delinquent payments plummeted in three months, but that banks pulled back, unsure how to prove their rights to a property before a judge, in the wake of a ruling by the Maine Supreme Judicial Court.

    The drop of filed foreclosures is one clear result of the court’s July 2014 ruling in the foreclosure case regarding the Casco home of Scott and Kristina Greenleaf, which since has been a topic of heated debate in the legal community and caused what mortgage industry representatives have called a crisis.

    The issue could insert defects into the chain of title for more than half of mortgages in the state, creating problems when a homeowner prepares a property for sale, adding costs and time to the closing process. It also adds costs and complications for lenders in foreclosure cases.

    For those reasons, banks, credit unions and the real estate industry have now turned to the Legislature to make the problem go away.

    But foreclosure defense attorneys argue a bill headed to the Legislature would give the mortgage industry an unnecessary pass in future foreclosure cases for a legal quandary the industry should have seen coming.

    Greenleaf and MERS

    In the Greenleaf case, which is bouncing between the courts for appeals on separate issues, Bank of America filed to foreclose. The Law Court ruled the records the bank relied on to prove its interest in the mortgage were insufficient.

    For the majority of mortgages in Maine, other lenders rely on those same types of records, managed by the parent company of Mortgage Electronic Registration Systems, or MERS. The membership organization estimated there were 13,382 loans registered on its system in Maine last year, a market share of about 65 percent.

    The Greenleaf case in Maine is not the first time MERS records have been challenged, here and elsewhere. Rulings in other states and Maine led the company to end its practice in 2011 of filing foreclosures on behalf of a lender.

    Before foreclosure, the company assigns a mortgage back to the lender, who is then the plaintiff in the foreclosure.

    Last year, MERS won cases in U.S. District Court in Minnesota, upholding its right to assign mortgages to banks before a foreclosure. It’s cleared in most other states, too.

    The Law Court ruling in Maine, which also challenged standards for verifying other records used in foreclosures and how homeowners should be notified of delinquencies, made clear MERS did not prove its ability under state law to assign the mortgage to Bank of America.

    The bank, in turn, had no right to foreclose, the court found.

    That makes MERS a weak link in any chain of title for a home in Maine and, without the proper records, puts a lender’s claim to a delinquent mortgage or potentially a homeowner’s claim to a property they want to sell into question.

    David Jones, an attorney at the firm Jensen-Baird specializing in real estate law, said correcting that title defect in foreclosure cases could be simple if the original lender was a bank or credit union that’s still in business.

    “This just adds one more issue,” Jones said in a telephone interview. “If [the original lender] was a mortgage company that went out of business, then it could be a significant challenge and delay.”

    Standard practice

    MERS records serve as a placeholder at local registries of deeds for mortgage lenders. If a lender wants to sell the mortgage to the secondary market rather than hold on to the loan until it’s fully paid, it can do that without having to return to the registry of deeds and pay a fee for every transfer of title in a property.

    That avoids millions in fees that would otherwise go to county registries of deeds. A U.S. District Court judge in Pennsylvania last year found Montgomery County’s claims that it lost out on more than $15 million in recording fees between 2000 and 2012 were sufficient for a trial, which is ongoing. MERS has had similar lawsuits in other states dismissed.

    That system played a role in subprime mortgage lenders bundling up and selling bad mortgages to Wall Street investors leading up to the financial crisis of 2007, but it wasn’t MERS that made the underlying loans good or bad.

    Selling to the secondary market has been a standard practice of lenders for years, according to the Maine Bankers Association. MERS makes that easier and less expensive.

    “When the mortgage was granted to MERS, the assumption was that they would have the ability to discharge it or give a partial release or assign it to someone else,” John Cunningham, with the Maine Bankers Association, told the Legislature’s judiciary committee. “That’s just what we assumed.”

    The attorneys who argued the Greenleaf case said that assumption by the mortgage industry is not the fault of Maine law or the courts and a problem the mortgage industry will have to handle.

    “The source of this problem is not Greenleaf,” said Jack Clifford, a Lisbon Falls attorney who argued the Greenleaf case. “It’s a reiteration of what has been the law of this state for over 200 years.”

    Linda Gifford, a title attorney and lobbyist for the Maine Realtors Association, wrote to the Legislature’s Judiciary Committee that the Greenleaf ruling’s implications for that system “shocked the marketplace in Maine” and is prompting title attorneys to require title insurance for mortgages, adding to closing costs.

    Title insurance companies are willing to cover the issues raised by Greenleaf, Gifford wrote, but she warned the committee that might not be a permanent solution.

    “Title insurance companies could just as easily decide not to allow coverage of this issue in the future,” Gifford wrote.

    William Hultman, a vice president of legislative affairs for MERS owner Merscorp Holdings, testified before the Judiciary Committee that one major lender has stopped purchasing loans with MERS assignments. Industry representatives said they’re concerned about being an outlier in a system used nationally for recording mortgages.

    Banks push for change

    To get rid of those problems, the Maine Bankers Association, the Maine Credit Union League and the Maine Association of Realtors came out in support of LD 321, which split committee members on whether to recommend passage. The committee has yet to formally file a recommendation and minority report.

    “It’s a simple but elegant [part of the] process that MERS plays and that now unfortunately has been undermined,” said Ben Marcus, a lobbyist for Drummond Woodsum. “LD 321 provides an opportunity to fix that.”

    Lobbyists for the bank and credit union organizations listed the bill in multiple lobbying reports through January and March, and the Realtors and bankers associations were among the top donors to members of the Judiciary Committee in 2014, including the bill’s sponsor, Rep. Matthew Pouliot, R-Augusta.

    The amount contributed by the Bankers Association made up less than 6 percent of its $41,020 in state political contributions for the year and less than 2 percent of the $77,518 from the Realtors group.

    Peter Hatem, an attorney based in Scarborough, said the mortgage industry’s concerns are overblown and that the proposed law goes too far.

    “LD 321 is like shooting a mosquito with a bazooka right now,” said Hatem, who works to defend homeowners from foreclosure through the program Maine Attorneys Saving Homes. “It has not stopped lenders from lending in Maine, it hasn’t even come close. It’s an issue that has to be dealt with because the foreclosure process didn’t work because the plaintiffs didn’t prove their case.”

    Frank D’Alessandro, an attorney with Pine Tree Legal Assistance, said the bill is a “judicial bailout,” exempting MERS from the state’s standards for evidence.

    “The application of the Rules of Evidence and Civil Procedure to foreclosure cases has been critical in uncovering both past bad acts of mortgage servicers and the continuing failure of servicers in foreclosure actions to establish that they are entitled to judgment,” D’Alessandro said.

    The committee in an April 27 work session tabled another bill, LD 1261, sponsored by House Minority Leader Ken Fredette, R-Newport, and drafted by the Maine State Bar Association’s Real Estate and Title Section and supported but less preferred by the banks and real estate groups because it doesn’t deal with future MERS issues.

    “It is narrowly tailored to address a specific problem with assignments of mortgage, discharges of mortgage and partial releases of mortgage that was created by an arguably unexpected opinion of the Maine Supreme Court,” wrote Robin Watts, head of the Maine State Bar Association’s Real Estate and Title Section subcommittee.

    Pouliot said LD 321 “is more comprehensive” and that Fredette also supported the broader bill.

    “It’s important for us to keep that in mind when making a decision on this that consumers are stuck in the middle with a title that is not marketable,” Pouliot said.

    The legal fight

    Pierce Atwood attorney John Aromando picked apart the court’s decision in a fall issue of the Maine Bar Journal. Tom Cox, the attorney arguing the Greenleaf case, co-authored a response in the spring issue.

    The two first tangled in the case that made Cox’s name nationally, over a foreclosure case in the town of Denmark that prompted national scrutiny of mortgage lenders’ practice of hastily approving foreclosure documents, dubbed “robo-signing.” Aromando represented GMAC mortgage in that case.

    That duel will continue as the case heads back to the Law Court this summer over a lower court’s decision to dismiss Bank of America’s foreclosure case but keep the door open to them bringing that case forward again.

    Cox, who in 2008 came out of retirement to volunteer at Pine Tree Legal Assistance and ended up on a crusade against bad mortgage lending practices, argues the Greenleaf ruling denies the bank the right to file that foreclosure again.

    On the horizon

    In the background of the disputes over Greenleaf is a possible shortfall in the budget for the state’s foreclosure counseling program, started in 2009. The program draws revenue in part from foreclosure auctions.

    The state’s Bureau of Consumer Credit Protection administers the program, which contracts with certified housing counselors around the state who can help homeowners deal with foreclosure.

    Will Lund, superintendent of Maine’s Bureau of Consumer Credit Protection, said it’s still too early to tell how the Greenleaf decision’s impact on filed foreclosures will affect the budget for the program with laws before the Legislature in flux. Pre-foreclosure notices, which tell a homeowner of their ability to get free counseling, were on the decline at the end of 2014 but still on par with most of 2010.

    The program plugged a $300,000 budget gap for the current fiscal year with a portion of Maine’s money from two national settlements with mortgage lenders and servicers.

    It’s a voluntary program. Parties foreclosing on a home are required to notify the state, which then sends out a packet of information to homeowners that includes contact information for counselors, like Jason Thomas, with Coastal Enterprises Inc.

    Thomas said CEI counselors attend required mediations between a homeowner and a lender.

    “Very few homeowners have the ability or the financial ability to be represented by legal counsel,” Thomas said. “And because of that, the legal process is sometimes an unequal playing field.”

  4. Visit “Landtegrity.com” and sign the petition.

    Some dunce from Texas- I know that will really narrow it down…

    Wait a minute, I just remembered: his is Jeb Hensarling, anyway, this particular Texas Dunce wants to allow the MERS to survive.

    In fact, he wants the new MERS to be hopped-up on steroids.

    Land records have always been, and should always remain available to the public. Carpenter v. Longan, SC. 1872 recognized, in the wake of the Civil War, why this is the case and also why it should remain so, from now into infinity.

    Readers of this site also understand the importance and efficacy of why this is so. Any submission to the contrary, renders present bank and court behaviors acceptable. It is redundant to explain they are anything but acceptable.

    In one comment above, “bobhurt” says: “County clerks have no “right” to recording fee every time a note changes hands.”.

    This particular comment betrays a fundamental misunderstanding of the system, even as it implies “County clerks” are the intended recipients of those funds…


    There are roughly 1300 municipal entities countrywide. The funds denied these communities through the bogus mechanism of the MERS may be counted in the BILLIONS of dollars.

    School programs, pensions, community projects are the losers- NOT COUNTY CLERKS.

    In fact, this shortfall to these communities was an early focus of AG Schneiderman and at least one multi-billion dollar settlement.

    I believe the MERS was created as a type of holding company wherein participants purchased ownership to the revenue streams of the mortgages claimed as owned by any number of the fraudsters inherent to the site.

    Industry participants, ennobled by Eric Holder’s law firm, were allowed to purchase participatory rights through the purchase of a $25.00 rubber stamp, usually conferring “SVP” status.

    I also believe the MERS is used to dispense pro-rated shares of the “short-sale”-derivatives swaps taken against the Borrowers’ ability to pay.

    I also believe the Notes were destroyed, after they were digitized (“dematerialized”) and then counterfeit claimants to the debt surfaced to claim ownership once they had forged ownership (through “re-hypothefication”).

    Of course, shares to the fraud were sold numbers of times (bogus titles replicated ad infinitum) as any number of phony claimants to the debt piled on to capitalize on the “short-sales” once the property was entered into foreclosure- whether the owner was current or not.

    The same private bankers that own and operate the intentionally mislabeled “Federal Reserve”, also own and operate the DTCC and DTC, neither of which is presently reporting activity on derivatives despite the fact they were created to do just that from the outset.

    Foreclosures are a foregone conclusion. They must be allowed to go forward or 682 TRILLION DOLLARS will come do as funds owed an international shortfall that was intentionally created by the very same bankers that have destroyed themselves and the system they should have endeavored to protect.

    The ANSWER IS: Prosecute the bankers, Jail the bankers, Renounce the third manifestation of a central bank (in this country, in this case, the intentionally mislabeled “Federal Reserve”).


    Murder the MERS in its crib; to do otherwise is to irreparably damage the rule of law.

    Pro-rate issues of new “Greenbacks” as dispensed vis-a-vis collections of the wholly discredited “Federal Reserve Notes”.

    Re-task the IRS to thwart counterfeit land titles and hold corporations accountable for their share of the tax burden.

  5. Agreed Christine!

  6. SC,

    True. Funny, in many countries (mine included), anyone contracting a mortgage loan MUST have a life insurance, even if it’s term life, just to protect the family if/when the breadwinner dies: certain countries are very concerned about families being kicked out in the street for want of a mortgage payment. In case of two co-signatories whose income was used to obtain the loan, both MUST have a policy in place.

    This country was completely deregulated years ago for all kinds of reasons, one of them being that “everyone should have a crack at homeownership”. Big mistake. Not imposing regulations at the onset can result in catastrophic consequences not just for individuals but for an entire country. Having 25% of 16 year-old or younger homeless for a few month in any given year is a catastrophe civilized societies would rather prevent than cope with. In the US, people call it “Big Brother”. That Big Brother doesn’t bother me.

  7. Unless she is a tenet in entirety with a right of survivorship or he had life insurance.

    The widow a d kids get kicked to the curb.

  8. The note is called due upon his death and the mortgage enforced with the settlement of his estate.

    The widow is kicked to the curb unless ……

  9. i had a interesting talk with a lawyer yesterday, he stated a few things to me, that i really dont understand. maybe someone could help me. understand it more clearly.

    i have been working on this mortgage crap for over 5 yrs now, for my father-inlaw, he has past away as of may 5, 2013. so what the lawyer said was that the mortgage note, in now worthless as the maker of the note has past away. really making it a non anything. but said the mortgage is still good. how could that be.

    does anyone know what he was thinking, the mortgage secures the note, so if note is worthless, as to the death of the maker. then ??

  10. to bobhart,

    as to my question i ask. how can a court in mass, still say that it’s ok for a mortgage and a note to go in different ways. if my mortgage states , what i wrote.

    i have a question for our experts on here. on my mortgage doc’s it states the following.

    # 20. Sale of Note; Change of loan servicer ; Notice of grievance. The
    Note or a partial interest in the Note ( together with this Security Instrument ) can be sold one or more times without prior notice to borrower.

    so as i see this. that this note can NOT be SOLD unless THIS SECURITY INSTUMENT GO’S WITH IT.??? am i reading it correctly?

    again am i reading the mortgage wrong?

  11. Bob .. I agree the note and mortgage are inseperatable but that’s Exactly what happened…they were separated.

    I disagree with your view of MERS.
    They hide the identity of the creditor and when people have issues with a servicer they can not find the creditor to to forward their complaints.
    As I did in the early 2000s when I rescinded a refi.

    MERS is Legal but still confined within the law.

  12. from a blog of mine in 2011 (in rebuttal to Mr Hunt):

    3) Who may authorize the assignment of the dot? The note transferer? The note transferee?
    The answer to that question depends on whether or not a deed of trust “follows a note”. If it does, it’s possible the current note owner could command an assignment of the collateral instrument. If not, the answer is the last transferor / owner of the Note. The UCC does not regulate real property collateral instruments. Even if it did, it’s by far not the only law bearing on real property collateral instruments. They are regulated, in part, by the Statute of Frauds, which calls for a writing in order to establish or convey an interest in real property.
    A deed of trust is an interest in real property: the deed of trust does not, cannot, “follow” a note. A RIGHT to an assignment of the collateral instrument may very well follow the note, but not the instrument nor its interest. Many claimants today want to rely on a very old case, Carpenter v Longan, for the proposition that a mortgage (a two party instrument) follows a note. The Carpenter court did not address the statute of frauds when making its decision. (It may be that the statute of frauds didn’t exist then)

    Significantly, there is no jurisdiction for a court to find an ‘equitable’ assignment of the deed of trust in a contest between the guy who wants an assignment (alleged current note owner) and the borrower. In the absence of the guy (former note owner) who may owe someone an assignment, the court has no jurisdiction to entertain the issue. That guy’s rights may not be adjudicated in his absence; he must be a party to the action. The only appropriate forum for a contest regarding an assignment is one between the guy who wants the assignment and the guy he claims owes him one, and even then imo, the court is limited to ordering a written assignment (v. finding an ‘equitable’ assignment). ”

    And, A) anyway, disregarding the sof arguendo, on what basis would one who is relying on poss of a bearer note be entitled to an assgt of the collateral instrument?

    B) Is your argument the coll instr follows 1) possession of the note or 2) ownership of the note or 3) either / both?

  13. Here’s a case where a judge got it.

    “Judge Slams MERS et al Head-On over Bogus MERS’ Assignment

    The court was not amused upon learning the person who signed the “MERS” assignment was in fact an employee of a processing company, and was not an employee of MERS. This is the first time I’ve seen this particular issue addressed head-on in a case…..

    Attorney Lyn Syzmoniak has done a very good job with her analysis of this case…….:

    “On September 30, 2010, U.S. Bankruptcy Judge Harry C. Dees, Jr., Northern District of Indiana, South Bend Division, confronted head-on the widespread practice of employees of mortgage servicing companies signing Mortgage Assignments with false job titles, in Koontz v. EverHome Mortgage and Mortgage Electronic Registration Systems, Inc., Case No. 09-30024, Proc. No. 10-3005. In this contested foreclosure, EverHome and MERS moved for summary judgment, while the plaintiff homeowners argued that there were genuine issues of material fact that precluded summary judgment. One such issue involved a Mortgage Assignment signed by Bethany Hood as Vice President of Mortgage Electronic Registration Systems, Inc. (“MERS”). (Regular readers of Fraud Digest will recognize that Bethany Hood is a clerical employee of Lender Processing Services who works in the Mendota Heights, MN office and who signs thousands of mortgage documents monthly using at least 20 different job titles.)

    Here is what the Court said about this: “MERS, in its Answer to the plaintiff’s Complaint, admit(ted) that Bethany Hood is not an employee of MERS. (cite omitted). The debtor claimed that the document [assignment signed by Bethany Hood as a MERS officer] was fabricated and MERS has offered no other explanation, nor has it submitted properly authenticated documentation of an assignment. It appears to this Court that a fraudulent recorded Assignment of Mortgage might still be found today in the St. Joseph’s County Recorder’s Office, despite MERS’ knowledge of the false signature.

    Indeed, MERS has completely sidestepped the fact that this Assignment was signed by someone representing herself to be a Vice President of MERS, and it has declined to explain why this false document was attached to the amended Proof of Claim… In the view of this court, the conduct of the EverHome defendants and the MERS defendant – reflecting a lack of transparency and determination not to provide information or documents until required – has burdened both the debtor and this Court…

    On this case, the Creditors have been forced to admit that a non-employee signed the Assignment of Mortgage, representing herself to be a Vice President of MERS and other banks or mortgage companies held the Mortgage and or Note at issue… Having determined that genuine issues of material fact exist, the Court denies the Motions for Summary Judgment filed by the EverHome defendants and MERS…..”

    How many other Mortgage Assignments signed by individuals falsely claiming to be Vice Presidents of MERS have been filed since 2008? It is likely that the number is greater than ten million.”

    jg: I note the judge also stated, “…. the debtor identified the bogus MERS’ employee signing the documents and thus demonstrating the assignment’s invalidity and fabrication.”

    This decision also has an interesting discussion of the applicable rules regarding proofs of claims in bankruptcy cases.The court found the alleged creditor had not met its burden on that score. The court pointed to the the lack of a chain of title as another genuine issue. MERS, as indicated, declined to answer regarding the bogus MERS’ assignment.

    The homeowner was awarded fees.

  14. okay, neil, like a good reader of yours, i’m going to read this amicus. But, having read the outline, I see it doesn’t appear to address the illegitimacy of the mers’ m.o. – the facilitation, in fact, design to allow (in fact force) members who make strictly voluntary entries into the database to 1) rely on those entries as factual and 2) allowed if not allows employees of the assignEE who were neither trained nor overseen by ‘mers’ to execute assgts of real property interests in mers’ name. There was if not is nothing to stop any club member (and in the heyday of mass robo-signing, even employees of non-club members), from executing anything in mers’ name at will. A servicer, for instance, and this isn’t even the worst of it, could if not does use its own employee to execute an assgt of a note and dot to itself even though the servicer has no interest in either. They show up in court with those handy ‘mers’ assgts and it’s end of story for all but the most astute borrowers. Any amicus which doesn’t address this enterprise misses the mark imo. IF congress approved this m.o. in l997, now there’s a case of someone drinking some funny kool-aid. Actually, imo, if any one with a brain approved this racket, they had to have been misguided and or hood winked royally.
    I believed this when I wrote it and I believe it now:


  15. Note and mortgage inseparable. See Carpenter v Longan.

    Regarding MERS, I consider it an excellent service for creditors to have because it avoids the expense of recording the mortgage in a new name every time the note changes hands. County clerks have no “right” to recording fee every time a note changes hands. Furthermore, the sale and ownership of the note can have a confidential nature and does not belong in the public record any more than the amount of cash in your wallet or bank account belongs in the public record.

  16. NPV,

    “It seems the real solution is to seize MERS from the bankers, title companies and GSE’s and clean the mess up by using it for the public recordings from this point forward.”

    You’re perfectly right that MERS status is way beyond an amiscus curiae filed in one state court. MERS-eRegistry was Congress approved in 2000. Congress didn’t realize what it was giving its blessings to but please, read the entire document: Congress implicitly approved everything MERS.

    It will take an act from Congress to reconsider MERS and put limits to it. Bill Black testified 3 times before Congress to have it review MERS as a concept and its poorly understood ramifications. He went as far as spell out how much money governments (federal and local) were losing because of everything MERS. Did that make a dent?

    It took since 1968 to get where we are (fiat money) and many steps since to retrace all the laws that allowed MERS into existence and repeal them. Do we have a Congress with enough integrity, balls and muscle to do that?

    Hell no! If we did, there wouldn’t be a BRICS, AIIB an the battle going on at IMF level for drawing rights.

    Homeowners have to stick with what works. What works is… contract 101.

  17. I’m not sure why this is relevant to mortgagors? This was battled in NY by Ed Romaine, the than Suffolk Clerk. Chief Judge in NY said MERS was legal, maybe not ethical, but legal all the same.

    It seems the real solution is to seize MERS from the bankers, title companies and GSE’s and clean the mess up by using it for the public recordings from this point forward.

  18. It took me 4 years to get the CW LP released and the slander removed from title and before we get a chance to wink an eye….BAC and their army of Goonies slandered it again.

  19. The better question is how does a bank that no longer exists accept assets in 2012.

    The Majical “ALL IN ONE” MERS assignments of the note mortgage together.

  20. the question is this, where do mers/mers and mers get it’s authority from a non-existent entity well after it has gone by the waist side. and the assignment is still done under that entity???? using that’s entity name as signing for a dead, non-existent, bk, entity?? as vp or sec for dead entity.

    i have a question for our experts on here. on my mortgage doc’s it states the following.

    # 20. Sale of Note; Change of loan servicer ; Notice of grievance. The
    Note or a partial interest in the Note ( together with this Security Instrument ) can be sold one or more times without prior notice to borrower.

    so as i see this. that this note can NOT be SOLD unless THIS SECURITY INSTUMENT GO’S WITH IT.??? am i reading it correctly?

  21. Remains unanswered.

  22. As true as this is…. Its nothing I have not heard before.

    The question of ownership still remains ……

  23. Can’t wait to read this one!

  24. Gabriel
    Click on link then the next link

  25. Great read, and I told the this years ago!

  26. Beautifully said.

  27. i
    No. 14-4315
    and through NANCY J. BECKER, in her official capacity as the Recorder of
    Deeds of Montgomery County, Pennsylvania,
    Appeal from the July 11, 2014 decision of the United States District
    Court for the Eastern District of Pennsylvania Civil Action No. 11-CV-06968
    (Honorable Curtis Joyner) certified for interlocutory appeal on
    September 8, 2014
    120 Boylston Street
    Jamaica Plain, MA
    (617) 390-2694
    March 16, 2015

  28. Neil, thanks for keeping all the foreclosure defense warriors informed of the current legal issues as to the 8 year battle we have all been fighting. You are doing a great job!

  29. So, where is the Brief?
    all I get is ads!

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