You should see these bird houses Mr. Geeai is building. They really are fun. He took me into his shop to show off his work. Lined up on his workbench were a series of seven birdhouses in various stages of construction. My favourite looks rather like the sorting hat from Hogwarts only it is covered in beehive paper. Only from Mr. Geeai.
After the appropriate ooh’s and ah’s on my part (genuine, I assure you, for I do enjoy his work) he looked up at me and grinned. “Guess what?”
“What?” I ask.
“I checked all eight of my houses on MERS’s own website and I don’t have MERS on any of my mortgages.” He seemed rather pleased with himself.
Something didn’t sit right with this news. You see, there are 60MM+ mortgages on the MERS system. Countrywide was one of the worst offenders of the MERS system and Countrywide did bang up business in this area during the hay days. I could see not having one house with MERS on the mortgage, but all eight? Something just didn’t add up. I’m no statistician, but I took enough of it in college to know that there was just something wrong with this information.
“Mr. Geeai”, I said. “Something is just not right here.”
“Hey, I did what you said, I checked with the website and it showed no records on my name and addresses.”
I explained to him the idea of statistical abnormalities and why it didn’t make sense that all of his houses should not be in the system. Then I asked him if I could take his tax information, go to the courthouse and do a little title search of my own on his behalf. I knew he wouldn’t, and I knew something was wrong. He heartily agreed with this idea and was well pleased he was going to get the information without having to deal with the courthouse. So he gave me the information on his eight houses and I left.
As work was awaiting me, piling up, actually, I wasn’t able to get to the courthouse until later that afternoon. I finally got to the recorder’s office about 4:30. I had to get help finding what I was looking for and I ran out of time before I was able to look up all eight properties. MERS was on four out of the four I was able to find before I was kicked out.
I stopped by Mr. Geeai’s house on the way home and found him happily ensconced in his workshop playing with his birdhouses. I waved the printouts at him and said “Guess what? You have MERS on every mortgage I was able to find. Four out of four. I would have gotten the others but before I was able to get to them, the nice lady came into the room to tell me that while I didn’t have to go home, I couldn’t stay there.”
Mr. Geeai put down his paper mache goo, wiped his hands, looked over his glasses at me and said, “what do you mean? Let me see those”
So I showed him the printouts and where the Mortgage Identification Numbers (MIN) was.
“Those numbers right there means you have MERS on your mortgage.”
Mr. Geeai was not pleased with the information. “Now what do I do?” he asked?
“Now”, I said, “you have a choice. You can choose to do nothing with the full knowledge that you are buying into a fraud, or, you can take action to make sure that you aren’t.”
“What do I do?”
“Well, the first thing you should do is file a request to your service provider in accordance with 15 USC whatever it is asking them to provide you with the name and contact information of the person or entity who holds the beneficial interest in your mortgage. When they blow you off, which they probably will, you file it a second time. When they blow you off the second time, you hire an attorney and tell them you want to file a chain of title action to make sure your title is clear.”
He looked at me for a few moments. I could tell his mind was ticking as he weighed information and possible consequences of various courses of action. “What’s up? I asked.
He shook his head. “I don’t like it,” he said.
“What don’t you like?”
He sighed, pulled his glasses from his nose and looked at me for about 10 seconds. “There are several things I don’t like,” he finally began. “I don’t like having to hire a lawyer, I don’t like having to take action, and I feel …. weird about going down this road because from what you are telling me, if I am successful, I end up with my house and no mortgage. I feel weird about that because I did borrow the money and if you borrow the money, you are obligated to pay it back. And I worry that if I take action, they will foreclose on me while I go through it and I have too much to lose to risk that.”
“Well,” I began, “let’s look at this. Do you see the danger of having MERS on your mortgage?”
He nodded.
“Do you understand that if they are not able to show a clear chain of title and you take no action, you will never see clear title to your houses or worse, that you may believe your house is paid off only to have someone show up years later claiming to have a valid assignment trying to force you to pay a second time?”
“Yes”
“And do you see that if that last part happens you will have to hire an attorney to figure a way out of it 20 years down the road?”
“Yes”
“I understand your fear,” I said. “But there is a way you can do away with the issue of foreclosure while you are in this lawsuit, assuming it goes there. There is a thing called an interpleader action which is where you pay the money to the court while the action is pending. The court then demands your mortgage service provider not do anything until the suit is resolved. The service provider is secure because all of your mortgage payments are going to the court. You won’t have to pay any penalties, that whole issue goes away. Do you understand that?”
“Yes”
“As far as hiring a lawyer, let me ask you something. Supposing you spend $10K on attorney fees only to end up owning several hundred thousand dollars worth of property free and clear. Is that a good business decision?”
Long pause, “yes. But I feel weird.”
“Why do you feel weird, Mr Geeai?”
“I borrowed the money, I made an agreement.”
“But they are stealing from you.”
“Yes”.
“Mr. Geeai, I understand your reluctance to pursue this because you feel you are getting something for nothing. But I ask you, what is the greater moral hazard, you supporting the fraud or you calling a stop to it even though in the process you come out ahead? And let me ask you another question; we talked last week about how dangerous it is to have a second, very private database where the chain of title is hidden from view, where there is no public, transparent record of just who owns what. What is the greater moral hazard? Letting them get away with stealing all of this property AND controlling critical information with absolutely no oversight, or you coming out ahead because you stopped them from stealing your property from you and putting you at risk from their bogus data?”
Mr. Geeai did not respond. He just looked at me. And then he looked at the papers I had handed him.
“And let me point out to you Mr. Geeai, they lied to you. You went to the MERS website and they told you that you didn’t have anything to worry about. They told you that their private database which they control absolutely was correct, that you did not have MERS on your mortgage, that you had nothing to worry about. They told you everything was fine. I went to the courthouse, which is the only database that matters, and looked. They lied to you. You do have MERS on your mortgage.”
Mr. Geeai just looked at me.
I looked at my watch. “My goodness, will you look at the time. I have to go home and prepare dinner for the little ones.”
I started to leave. “I hate you” he called out in a friendly voice as I let myself through his back gate.
“I know,” I called back.
“I don’t want to deal with this. I just want to play with my birdhouses.”
“I know Mr. Geeai. But while you are playing with your birdhouses, they are playing with your real houses.”
I’ll let you know what happens.
Source: Chink In The Armor
I was told “I haven’t seen anything yet” stay tuned folks this is going to get interesting!
