MERS Is NOTHING — The Correct Translation of “MIN”

Without a contract in writing executed with the formalities required for transfer of interests in real property, it is highly probable that any instrument executed on behalf of MERS means nothing without the necessity of drilling into the authority or knowledge of the signor. In fact, it might just be that the execution of an assignment might be the utterance of a false instrument for purposes of recording, which in and of itself constitutes illegal activity.

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Upon close inspection, investigation and research of hundreds of cases we have found no evidence that MERS ever enters into any contract for agency or anything else with originators who are not lenders. So we conclude that in cases where the originator is named on the note as Payee and on the Mortgage as Mortgagee or on the Deed of Trust as beneficiary, no such written contract exists and no correspondence or other communication exists between the originator and MERS.
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The current consensus is that MERS is a naked nominee, something I have repeated myself. But that appears to be true only in cases where the originator is a member of MERS and has therefore entered into an agency agreement with MERS.
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Entities like Broker One and American Brokers Conduit, whose name tells the whole story, are not likely to have had any contract, email, correspondence directly with MERS and are probably not party to any agreement in which the originator, if it exists at all, has agreed to let MERS be its agent and if so, under what conditions and for how long.
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I think the mistake we might have all made is in accepting the implied agency contract inferred from the face of the Mortgage or Deed of Trust. In many if not most courts the assignment by MERS of a Mortgage or Beneficial interest in a Deed of Trust is seen as the act of a “disclosed” naked nominee.
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First, basic law dictates that any contract in which the transfer of title to real property is involved must be written not oral, inferred or implied. Second, each state varies but all require the recording of the instrument.
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Third, there was no disclosure prior to closing which violates TILA disclosure requirements. This raises possibilities  of claims in a lawsuit by the homeowner or affirmative defenses of a homeowner if they are sued. As affirmative defenses they would claims of recoupment.
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Nobody tells the prospective borrower that when they sign the Mortgage or Deed of Trust they will be handing over an interest in their new or existing home to an entity that might serve the interests of just anyone. But, in fact, that is what is happening which means that on the face of the Deed of Trust or Mortgage, the originating parties are violating the provisions of TILA that make table funded loans against public policy. And as any 1st year law student will tell you any contract that violates public policy is probably void.
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At closing, if the borrowers are reading at all, MERS doesn’t show up until the day of closing and it is never pointed out by closing agents, originators or anyone else acting as mortgage broker or lender. Nor is the written agreement appointing MERS as “nominee” appear anywhere ever.
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If the appointment of MERS is void it might void the Mortgage or Deed of Trust. Or, it might be surplusage which is more likely. That means the mention of MERS means nothing.
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Hence the assignment of the Mortgage or Deed of Trust would be required to be executed by the named lender, who in turn probably could not assign the mortgage because at the time they are asked to sign such an instrument they (a) don’t exist and/or (b) don’t own the debt and probably never did. As such they would be uttering a false instrument for recording which amounts to two illegal acts probably constituting crimes.
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PRACTICE NOTE: ASSIGNMENT OF A MORTGAGE WITHOUT TRANSFER OF THE DEBT IS A NULLITY. Lawyers for the foreclosure mills are often using MERS assignments as a substitute for transfer of the debt.

Follow the Money Trail: It’s the blueprint for your case

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The selection of an attorney is an important decision  and should only be made after you have interviewed licensed attorneys familiar with investment banking, securities, property law, consumer law, mortgages, foreclosures, and collection procedures. This site is dedicated to providing those services directly or indirectly through attorneys seeking guidance or assistance in representing consumers and homeowners. We are available to any lawyer seeking assistance anywhere in the country, U.S. possessions and territories. Neil Garfield is a licensed member of the Florida Bar and is qualified to appear as an expert witness or litigator in in several states including the district of Columbia. The information on this blog is general information and should NEVER be considered to be advice on one specific case. Consultation with a licensed attorney is required in this highly complex field.
Editor’s Analysis and Comment: If you want to know where all the money went during the mortgage madness of the last decade and the probable duplication of that behavior with all forms of consumer debt, the first clues have been emerging. First and foremost I would suggest the so-called bull market reflecting an economic resurgence that appears to have no basis in reality. Putting hundred of billions of dollars into the stock market is an obvious place to store ill-gotten gains.
But there is also the question of liquidity which means the Wall Street bankers had to “park” their money somewhere into depository accounts. Some analysts have suggested that the bankers deposited money in places where the sheer volume of money deposited would give bankers strategic control over finance in those countries.
The consequences to American finance is fairly well known here. But most Americans have been somewhat aloof to the extreme problems suffered by Spain, Greece, Italy and Cyprus. Italy and Cyprus have turned to confiscating savings on a progressive basis.  This could be a “fee” imposed by those countries for giving aid and comfort to the pirates of Wall Street.
So far the only country to stick with the rule of law is Iceland where some of the worst problems emerged early — before bankers could solidify political support in that country, like they have done around the world. Iceland didn’t bailout bankers, they jailed them. Iceland didn’t adopt austerity to make the problems worse, it used all its resources to stimulate the economy.
And Iceland looked at the reality of a the need for a thriving middle class. So they reduced household debt and forced banks to take the hit — some 25% or more being sliced off of mortgages and other consumer debt. Iceland was not acting out of ideology, but rather practicality.
The result is that Iceland is the shining light on the hill that we thought was ours. Iceland has real growth in gross domestic product, decreasing unemployment to acceptable levels, and banks that despite the hit they took, are also prospering.
From my perspective, I look at the situation from the perspective of a former investment banker who was in on conversations decades ago where Wall Street titans played the idea of cornering the market on money. They succeeded. But Iceland has shown that the controls emanating from Wall Street in directing legislation, executive action and judicial decisions can be broken.
It is my opinion that part or all of trillions dollars in off balance sheet transactions that were allowed over the last 15 years represents money that was literally stolen from investors who bought what they thought were bonds issued by a legitimate entity that owned loans to consumers some of which secured in the form of residential mortgage loans.
Actual evidence from the ground shows that the money from investors was skimmed by Wall Street to the tune of around $2.6 trillion, which served as the baseline for a PONZI scheme in which Wall Street bankers claimed ownership of debt in which they were neither creditor nor lender in any sense of the word. While it is difficult to actually pin down the amount stolen from the fake securitization chain (in addition to the tier 2 yield spread premium) that brought down investors and borrowers alike, it is obvious that many of these banks also used invested money from managed funds as gambling money that paid off handsomely as they received 100 cents on the dollar on losses suffered by others.
The difference between the scheme used by Wall Street this time is that bankers not only used “other people’s money” —this time they had the hubris to steal or “borrow” the losses they caused — long enough to get the benefit of federal bailout, insurance and hedge products like credit default swaps. Only after the bankers received bailouts and insurance did they push the losses onto investors who were forced to accept non-performing loans long after the 90 day window allowed under the REMIC statutes.
And that is why attorneys defending Foreclosures and other claims for consumer debt, including student loan debt, must first focus on the actual footprints in the sand. The footprints are the actual monetary transactions where real money flowed from one party to another. Leading with the money trail in your allegations, discovery and proof keeps the focus on simple reality. By identifying the real transactions, parties, timing and subject moment lawyers can use the emerging story as the blueprint to measure against the fabricated origination and transfer documents that refer to non-existent transactions.
The problem I hear all too often from clients of practitioners is that the lawyer accepts the production of the note as absolute proof of the debt. Not so. (see below). If you will remember your first year in law school an enforceable contract must have offer, acceptance and consideration and it must not violate public policy. So a contract to kill someone is not enforceable.
Debt arises only if some transaction in which real money or value is exchanged. Without that, no amount of paperwork can make it real. The note is not the debt ( it is evidence of the debt which can be rebutted). The mortgage is not the note (it is a contract to enforce the note, if the note is valid). And the TILA disclosures required make sure that consumers know who they are dealing with. In fact TILA says that any pattern of conduct in which the real lender is hidden is “predatory per se”) and it has a name — table funded loan. This leads to treble damages, attorneys fees and costs recoverable by the borrower and counsel for the borrower.
And a contract to “repay” money is not enforceable if the money was never loaned. That is where “consideration” comes in. And a an alleged contract in the lender agreed to one set of terms (the mortgage bond) and the borrower agreed to another set of terms (the promissory note) is no contract at all because there was no offer an acceptance of the same terms.
And a contract or policy that is sure to fail and result in the borrower losing his life savings and all the money put in as payments, furniture is legally unconscionable and therefore against public policy. Thus most of the consumer debt over the last 20 years has fallen into these categories of unenforceable debt.
The problem has been the inability of consumers and their lawyers to present a clear picture of what happened. That picture starts with footprints in the sand — the actual events in which money actually exchanged hands, the answer to the identity of the parties to each of those transactions and the reason they did it, which would be the terms agreed on by both parties.
If you ask me for a $100 loan and I say sure just sign this note, what happens if I don’t give you the loan? And suppose you went somewhere else to get your loan since I reneged on the deal. Could I sue you on the note? Yes. Could I win the suit? Not if you denied you ever got the money from me. Can I use the real loan as evidence that you did get the money? Yes. Can I win the case relying on the loan from another party? No because the fact that you received a loan from someone else does not support the claim on the note, for which there was no consideration.
It is the latter point that the Courts are starting to grapple with. The assumption that the underlying transaction described in the note and mortgage was real, is rightfully coming under attack. The real transactions, unsupported by note or mortgage or disclosures required under the Truth in Lending Act, cannot be the square peg jammed into the round hole. The transaction described in the note, mortgage, transfers, and disclosures was never supported by any transaction in which money exchanged hands. And it was not properly disclosed or documented so that there could be a meeting of the minds for a binding contract.
KEEP THIS IN MIND: (DISCOVERY HINTS) The simple blueprint against which you cast your fact pattern, is that if the securitization scheme was real and not a PONZI scheme, the investors’ money would have gone into a trust account for the REMIC trust. The REMIC trust would have a record of the transaction wherein a deduction of money from that account funded your loan. And the payee on the note (and the secured party on the mortgage) would be the REMIC trust. There is no reason to have it any other way unless you are a thief trying to skim or steal money. If Wall Street had played it straight underwriting standards would have been maintained and when the day came that investors didn’t want to buy any more mortgage bonds, the financial world would not have been on the verge of extinction. Much of the losses to investors would have covered by the insurance and credit default swaps that the banks took even though they never had any loss or risk of loss. There never would have been any reason to use nominees like MERS or originators.
The entire scheme boils down to this: can you borrow the realities of a transaction in which you were not a party and treat it, legally in court, as your own? So far the courts have missed this question and the result has been an unequivocal and misguided “yes.” Relentless of pursuit of the truth and insistence on following the rule of law, will produce a very different result. And maybe America will use the shining example of Iceland as a model rather than letting bankers control our governmental processes.

Banking Chief Calls For 15% Looting of Italians’ Savings
http://www.infowars.com/banking-chief-calls-for-15-looting-of-italians-savings/

California Trial Court INserts Reason Into Chaotic World of Foreclosure

Editor’s Comment: There is no question that the primary tactic of all pretender lenders in the false claims of securitization is that they should not have to prove the transactions. According to the banks they only have to bring a storybook to class that talks about the transaction. The story book consists of the original promissory note, deed of trust (mortgage) and alleged sales or transfers of the note or loan. These documents talk ABOUT the transaction in which money exchanged hands but here are no pictures showing the transaction itself — like a picture of me handing you $100 on a note you signed saying you owe me $100.

But what if you signed the note to get the loan and then I didn’t give you the loan? No money exchanged hands. The answer appears to be that I can still sue you as the holder of the note but the presumption that I am the owner of the note or that the note is evidence of the debt is rebutted by your testimony and denial of ever having received the money. So I can sue but I can’t win.

Suppose you got the real loan from someone else the same day. I could point to that transaction to show that you DID receive the money and if you didn’t know  how to handle that argument, you would end up paying off a loan you never received. Or you would point out to the Judge that the cancelled check is made out from someone else than me and that I failed to show privity or agency between me and the third party.

The problem is that in most cases, the storybook is a fairy tale. The payee never loaned the money and was a naked nominee along with MERs who was also a naked nominee, leaving no party in interest on either the note or the mortgage (deed of trust). Neither the designated “lender” nor the designated nominee holder of the security (MERS) handled, funded or accepted any money from the borrower.

The reason why the banks have gotten this far is that the illusion was complete when the money arrived at the closing table. It was assumed that the money came from the payee or secured party. It was further assumed that assignments and transfers of the loan would not have taken place unless there was proof of payment exhibited by the assignor. It never occurred to anyone that the money had not come from the originators but from an undisclosed third party whose name should have been on the note and mortgage. It never occurred to anyone, despite the clear provisions of TILA, that there was a duty to disclose to the borrower with whom he or she was dealing and how much they were making in profit or fees or other compensation out of this little loan. In some cases the profit exceeded the loan itself.

In Discovery, the principal thing you want to see is the proof of payment and proof of loss. The proof of loss is a showing that the holder actually paid money for the loan. In nearly all cases, no such transaction exists. Proof of payment is the same thing but together they require an answer to whether the trust still exists and whether the mortgage bond has since been renegotiated or sold or reconstituted into a different asset pool.

This is why most cases end in discovery. The bankers are the ones with unique access to the information you need, without which they submit a credible explanation of where the documents went, where they were last seen and to whom they were being sent. At some point, the bankers are forced to fess up that they don’t have the original note, they didn’t pay for the loan, they don’t own the loan, and thus have no right to submit a credit bid at auction. They will be forced to admit that the funding for the loan came from a third party undisclosed to Borrower and whose compensation was undisclosed to borrower, and that this was intentionally hidden from both the investor/lenders and the borrowers — for the sole purpose of collecting insurance and credit default swap money diverting it from the investors.

If the investors prove that they are entitled to the insurance and credit default swap money, then their loan balances will be correspondingly reduced with each dollar received (which they should have received in the first place). The investors’ receivable account would be correspondingly reduced which means that the receivable from borrowers would be correspondingly reduced since the creditor is not entitled to more than one payment. This in turn would have substantially reduced the principal due by borrowers, the number of “defaults”, the number of underwater borrowers and increased the number of settlements and modifications.

Further, the terms agreed to by the borrower were changed and contradicted by the conversion of the loan receivable to a bond receivable based upon indentures of a bond wherein a trust or REMIC was supposedly buying the loans.

But if you look for the actual monetary transaction between the trust and the party supposedly endorsing the note or selling the loan to the trust, the transaction in which money exchanged hands is entirely missing. No cancelled check, no wire transfer receipt, no wire transfer instructions, no ACH confirmation, no check 21 confirmation. It simply isn’t there which means that the investor money never funded the trust, and thus the trust lacked the funds to purchase the loans.

The bankers do a perfect two-step at this point. First they they ARE agents of the trust or REMIC and that is what made the transaction legal and enforceable, then they say they were NOT agents of the investors when it came to receiving insurance, credit default swaps proceeds or federal bailouts. I can find no support in the law of principal and agent that supports their position and I doubt if there is any such support.

In the case below, the bankers are essentially saying that for purposes of the discovery the claims of the borrower should be treated as a story book with no likelihood of success whereas the stories in the bankers’ comic book (i.e., the note and mortgage) should be taken seriously. The trial Court disagrees and lands squarely on its feet simply following common sense, precedent and existing rules. Discovery granted.

250068 – Taylor v. JP Morgan Chase
On 4 Dec.2012, Plaintiff served deposition notices for Deborah Brignac (hereafter “Brignac”) and Colleen Irby (hereafter “Irby”), officers of Defendant California Reconveyance Co. (hereafter “CRC”), along with a deposition notice for another person not involved in this motion, Luis Alvarado (hereafter “Alvarado”).  (Naicker Dec., ¶2, Ex.A).   Plaintiff set the depositions for 10 Jan.2013.  (Ibid.)  Defendants served objections on January 4, 2013, asking P to withdraw the deposition notices.  (Id., ¶4, Ex.B).  Defendants asserted that the depositions would cause unnecessary burden, expense, and intrusion which would outweigh the benefits of the discovery, arguing that certain of Plaintiff’s claims lacked merit, thus rendering the discovery unwarranted.  (Ibid.)  Defendants also objected on the ground that Plaintiffs had “unilaterally” served the deposition notices with a chosen date without first meeting and conferring with Defendants about acceptable dates.  (Ibid.)  Defendants move to quash the deposition notices of Brignac and Irby, or, in the alternative, to issue a protective order. Defendants argue that Brignac and Irby can have no information likely to lead to discovery of admissible evidence because Brignac only signed an assignment (the 1st Assignment) of the deed of trust (Deed) which was rescinded and Irby’s sole alleged role was to sign the subsequent assignment  (2nd Assignment), and Plaintiff’s claims regarding the conduct in which they may have been involved, are invalid.
Plaintiff opposes this motion, arguing that the deponents both possess likely relevant information because they are officers of CRC, they both signed assignments of the Deed involved in this case, so were personally involved in Plaintiff’s transactions at some point, and Plaintiff needs information on the murky transactions amongst the Defendants, about which he is otherwise unable to obtain information.
A party may serve written objections or risk waiving any problems with a deposition notice.  (Code of Civ. Proc. § 2025.410(a)).  A party may also file a motion for an order staying the deposition and quashing the deposition notice.  Code of Civ. Proc. § 2025.410.  A “deposition is stayed pending determination of motion.”  (Code of Civ. Proc. § 2025.410(c)).
A party may “promptly” seek a protective order before, during, or after a deposition.  (CCP section 2025.420).
On a motion for a protective order, the court, “for good cause shown, may make any order that justice requires to protect any party… from unwarranted annoyance, embarrassment, or oppression, or undue burden and expense.”   (Code of Civ. Proc. § 2025.420).   The burden of proof is on the party seeking the protective order to demonstrate “good cause.”  (Emerson Elec. Co. v. Sup.Ct. (1997) 16 Cal.4th 1101, 1110).
Defendants’ arguments appear to be entirely groundless.  Defendant’s argue, essentially, that P’s claims are invalid on the merits so any deposition of these witnesses would be a waste of time and thus the burdens would outweigh the benefits.  That argument is completely invalid since there is no basis for a party to argue that another party has no right to obtain evidence supporting a claim simply because the claim may fail.  The appropriate methods for raising such arguments are demurrer, which has failed, or judgment on the pleadings, or summary judgment or adjudication and Defendants present no authority indicating that this is a valid basis for avoiding deposition.   Defendants also argue that the deponents will not likely provide relevant information because Plaintiff has been able to allege nothing more than the fact that they signed two assignments of his Deed.  This is unpersuasive since, as Plaintiff argues, he is not likely to have any information of the inner workings of the Defendant corporations absent discovery.  What Plaintiff has shown, and Defendants admit, indicates that these two witnesses clearly have at least some personal involvement beyond simply beyond being potentially knowledgeable officers, and thus are to some degree percipient witnesses to some of the events at issue in this action.  Defendants also argue that the notices are improper because Plaintiff served them without first warning Defendants that he was going to notice the depositions or without first obtaining an agreed deposition date.  These arguments are not supported by authority.
Accordingly, Defendant’s motion to quash and for a protective order is denied.
 
Sanctions
Code of Civil Procedure section 2025.420(d) states that on a motion for a protective order the court “shall” impose monetary sanctions on the losing party unless that party acted with substantial justification or other circumstances make sanctions unjust.
Both parties seek monetary sanctions.  In this case, the motion lacks merit and Plaintiff’s opposition was warranted.  Plaintiff seeks sanctions of $875 for about 2.5 hours spent at $350 an hour; Defendants seek sanctions of $3,460. The court awards sanctions to Plaintiff in the amount of $875.  Defendant’s request for sanctions is denied.
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