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AG Coakley Following Up On Essex County’s O’Brien’s MERS Inquiry

AG Coakley Following Up On Essex County’s O’Brien’s MERS Inquiry


Firm may skirt millions in property fees

Attorney general, others probe system created by lenders

By Jenifer B. McKim Globe Staff / December 15, 2010

Attorney General Martha Coakley is trying to determine whether a lender-created company that tracks mortgage loan data has failed to pay millions of dollars in property recording fees in Massachusetts.

Coakley is taking aim at the little-known but powerful Reston, Va., company whose members include Bank of America Corp., JPMorgan Chase, and other major lenders.

The company, Mortgage Electronic Registration Systems Inc., oversees a database of about 31 million mortgages, about half of the active loans in the United States.

As concern about foreclosure practices mounts across the country, Mortgage Electronic Registration Systems is increasingly being questioned by regulators, lawyers, and housing advocates about the way it operates.

Essex County’s register of deeds, John L. O’Brien Jr., last month asked Coakley to investigate the company, known as MERS. He said that by using its own database for property transfers, MERS does not pay recording fees or disclose the transactions, as Massachusetts law requires.

O’Brien estimated that in Essex County alone, $10 million was lost over the past decade because MERS failed to pay a $75 fee each time a mortgage was transferred between lenders.

“They created their own registry of deeds,’’ he said. “They have to record these assignments. The taxpayers deserve these fees.’’

A spokeswoman for Coakley said her office is looking at the issues O’Brien raised.

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OK CIV. APPEALS COURT REVERSAL “CONFLICTS IN NOTE OWNERSHIP”, “MERS BIFURCATION” BAC HOME LOANS fka COUNTRYWIDE v. White

OK CIV. APPEALS COURT REVERSAL “CONFLICTS IN NOTE OWNERSHIP”, “MERS BIFURCATION” BAC HOME LOANS fka COUNTRYWIDE v. White


Via: Brian Davies

IN THE COURT OF CIVIL APPEALS OF THE STATE OF OKLAHOMA. DIVISION I.

BAC HOME LOANS SERVICING, L.P.
f/k/a COUNTRYWIDE HOME LOANS

v.

RONALD R. WHITE and TERI L. WHITE

Excerpt:

Therefore, in Oklahoma it is not possible to bifurcate the security interest from the note. An assignment of the mortgage to one other than the holder of the note is no effect.

[…]

The record on summary judgment in the present case contains conflicting evidence as to the ownership of the note. The note, in which the White’s ppromised to pay a sum certain to the order of Lender, is a negotiable instrument pursuant to 12A O.S.2001 30104(a).

[…]

The note in the record appears to be indorsed to Countrywide Document Custody Services, a division of Treasury Ban, NA; we are unable to determine from the record submitted to us that the instrument was later indoresed in blank and transferred to BAC.

Continue below to read the research this judge has done…

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Read more on Bifurcation from James McGuire and Alvie Campbell below

“OREO COOKIE”: How They Bifuricated Our Mortgage Loan 101

© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



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Testimony of Christopher L. Peterson “Foreclosed Justice: Causes and Effects of the Foreclosure Crisis

Testimony of Christopher L. Peterson “Foreclosed Justice: Causes and Effects of the Foreclosure Crisis


United States House of Representatives
Committee on the Judiciary
Hearing on: “Foreclosed Justice: Causes and Effects of the Foreclosure Crisis”

Written Testimony of
Christopher L. Peterson

Associate Dean for Academic Affairs and Professor of Law
University of Utah, S.J. Quinney College of Law
Salt Lake City, Utah
December 2, 2010
10:00 a.m.

It is an honor to appear today before this Committee. Thank you for the opportunity to share some thoughts on our national foreclosure crisis. My name is Christopher Peterson and I am the Associate Dean for Academic Affairs and a Professor of Law at the University of Utah where I teach contract and commercial law classes. I commend you, Chairman Conyers, Representative Smith, and other members of the Committee for organizing these hearings and for providing an opportunity to discuss this important and timely national issue.

The foreclosure crisis is an extremely complex problem. With so many fundamental changes, opportunities for moral hazard, agency cost problems, consumer abuses, and impending lawsuits, it is easy to lose track of some of the basic legal and business practice problems that departed from past traditions and helped bring us to our present situation. In particular, it is somewhat perplexing that relatively little attention has been paid to the one company that has been a party in more problematic mortgage loans than any other institution. Mortgage Electronic Registration Systems, Inc., commonly known as MERS, is a corporation registered in Delaware and headquartered in Reston, Virginia.1 MERS operates a computer database that includes some information on servicing and ownership rights of mortgage loans.2 Originators, servicers, and other financial institutions pay membership dues and per?transaction fees to MERS in exchange for the right to use and access MERS records.3 In addition to operating its computer database, MERS also pretends to own mortgage loans in order to help its members avoid paying fees to county governments.

My testimony is largely derived from two scholarly articles I have written on this topic which I invite the committee to review for further information.4 My prepared statement today will: (1) discuss the Origin and Business Practices of MERS; (2) explore the problematic legal foundation of MERS; (3) suggest that MERS is a deceptive and anti?democratic institution designed to deprive county governments of revenue; (4) explain how MERS is undermining mortgage loan and land title record keeping; (5) argue that MERS was a contributing factor in the foreclosure crisis and has made resolving foreclosures more difficult; and (6) propose some solutions for the committee to consider.

Continue below…

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© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in STOP FORECLOSURE FRAUDComments (1)

MERS COULD COST BANKS MORE FOR DODGING FEES

MERS COULD COST BANKS MORE FOR DODGING FEES


Dodging fees could cost banks more

Michelle Conlin and Curt Anderson,
Posted: 11/14/2010 06:53:42 PM PST
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NEW YORK – It used to be that every time a bank sold a mortgage, the county land recording office received a fee. It wasn’t much – $30 or so – but then real estate boomed in the 1990s and banks pooled millions of mortgages into securities that investors bought and sold.

One mortgage transaction became a dozen or more, and the tab grew ever larger. So the banks came up with a way around the fees. And now they are fighting to avoid perhaps tens of billions of dollars in penalties that have added up over the years.

In 1997, when the banks’ burgeoning business in mortgage securities was clashing with the unwieldy nature of written forms, the industry created its own alternative, an electronic system that would track the ever-changing ownership of home loans.

The banks formed a private company called Mortgage Electronic Registry Systems Inc., or MERS. Its motto: “Process loans, not paperwork.” It has registered more than 65 million loans, three out of every five on the market.

MERS’ owners are all the big mortgage companies, including Bank of America, Citigroup, Wells Fargo, JPMorgan Chase and GMAC. They are all facing a foreclosure fraud investigation launched by all 50 state attorneys general.

Counties complained about the lost revenue after MERS was implemented, but they rarely tried to challenge the new way of doing business. Now, three years after the housing crash and two months after allegations that some banks submitted fraudulent documents to foreclosure courts, every aspect of the nation’s mortgage machine is under scrutiny.

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Two lawyers in Reno, Nev., have filed suit in 17 states alleging that banks cheated counties out of billions of dollars. In Virginia, a lawmaker has asked the state’s attorney general to investigate MERS over its failure to pay recording fees. And everywhere elected officials and class-action lawyers turn, the back-office procedures of MERS are being called into question.

The lawsuits challenge MERS’ authority to act on behalf of banks or other investors that own a mortgage. With so many loans registered to MERS, it’s a claim that goes to the heart of the mortgage-fraud scandal.

With MERS ostensibly keeping track of who owns what, counties still get their paperwork and fees the first time a mortgage is filed. Typically, that county fee is rolled into the closing costs homeowners pay when they buy a home.

MERS is “an admitted fee-avoidance scheme,” says Robert Hager, the Nevada lawyer who, along with his partner Treva Hearne, is filing the suits against MERS and its bank owners, including the government-backed mortgage- finance companies Fannie Mae and Freddie Mac. Fannie and Freddie provide a low- cost flow of funding to the nation’s mortgage markets by buying mortgages from lenders, packaging them into securities and then selling them to investors.

The suits were filed in California, Nevada and Tennessee and 14 undisclosed states where the cases are still under court seal. Hager and Hearne chose the states because their laws allow what are called false claims suits, in which citizens can take legal action against companies that may have cheated the government.

© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



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Lawmaker Questions Power to Foreclose “MERS”

Lawmaker Questions Power to Foreclose “MERS”


  • NOVEMBER 1, 2010, 7:53 P.M. ET

Lawmaker Questions Power to Foreclose

By ROBBIE WHELAN

A Virginia lawmaker asked the state’s attorney general to launch an investigation of Mortgage Electronic Registration Systems, the middleman firm in millions of court filings that helps keep the mortgage-securitization machine moving.

Robert G. Marshall, a Republican member of the Virginia House of Delegates, requested that Virginia Attorney General Ken Cuccinelli determine whether the Reston, Va., company violates state law because it doesn’t pay a fee every time a loan changes hands. Opinions differ as to whether MERS must pay local fees every time it sells an interest in a loan.

“There are too many people getting foreclosed on not properly,” said Mr. Marshall, who represents two counties near Washington, adding that he is drafting a Virginia law that would require lenders to pay county fees before being allowed to proceed with foreclosures. “The disdain with which the conditions of law have been treated by those who want to make money too fast is very troubling to me.”

Brian J. Gottstein, a spokesman for Mr. Cuccinelli, said the attorney general is required to produce an opinion on the matter but declined to comment “on any particular industry participant right now.”

R.K. Arnold, MERS’s chief executive, said the company’s activities are legal in all 50 states and have held up under previous scrutiny.

The challenge is the latest sign lawmakers and lawyers for borrowers are taking aim at MERS as the foreclosure mess drags on. Created 13 years ago by Fannie Mae, Freddie Mac and several large U.S. banks as an electronic registry of land records, the company’s name is listed as the agent for mortgage lenders on documents for 65 million home loans. But that same streamlining has made MERS a target of critics who say the company might not have the legal right that it claims to foreclose on borrowers.

In a state-court lawsuit filed in Georgia last week seeking class-action status, lawyer David Ates says MERS isn’t a secured creditor, meaning it lacks the power to foreclose on behalf of lenders, mortgage servicers or other parties.

Mr. Ates said he is seeking to have all Georgia foreclosures by the company “be declared invalid and the title be returned to the debtor.”

Mr. Arnold said the company’s role in foreclosing on a mortgage is unquestionable because every time a loan is registered with MERS, the borrower must sign a document saying the company assumes all rights and responsibilities on behalf of the creditor or lender.

“The legal concept is as sound as any concept in America: You made a loan to a homeowner,” Mr. Arnold said in an interview. “They granted you a mortgage, and that’s recorded in the land records, and the company that has the mortgage and can foreclose is MERS.”

Mr. Arnold added: “We can foreclose in all 50 states, and we will continue to do that.”

Tom Kelly, a spokesman for J.P. Morgan Chase, said last month that the New York bank hasn’t used the MERS record-keeping system since at least 2008 to foreclose in the bank’s name because “some local courts wouldn’t accept MERS.” J.P. Morgan still uses MERS for mortgages originated by other banks or brokers.

© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



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Two Faces: Demystifying the Mortgage Electronic Registration System’s Land Title Theory by Christopher L. Peterson

Two Faces: Demystifying the Mortgage Electronic Registration System’s Land Title Theory by Christopher L. Peterson


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Christopher Lewis Peterson

University of Utah – S.J. Quinney College of Law
Real Property, Probate and Trust Law Journal, Forthcoming

Abstract:

Hundreds of thousands of home foreclosure lawsuits have focused judicial scrutiny on the Mortgage Electronic Registration System (“MERS”). This Article updates and expands upon an earlier piece by exploring the implications of state Supreme Court decisions holding that MERS is not a mortgagee in security agreements that list it as such. In particular this Article looks at: (1) the consequences on land title records of recording mortgages in the name of a purported mortgagee that is not actually mortgagee as a matter of law; (2) whether a security agreement that fails to name an actual mortgagee can successfully convey a property interest; and (3) whether county governments may be entitled to reimbursement of recording fees avoided through the use of false statements associated with the MERS system. This Article concludes with a discussion of steps needed to rebuild trustworthy real property ownership records.

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© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in assignment of mortgage, bifurcate, Christopher Peterson, deed of trust, foreclosure, foreclosure fraud, foreclosure mills, foreclosures, STOP FORECLOSURE FRAUDComments (1)

Lord Have ‘MERScy’, Lenders Brace Yourselves

Lord Have ‘MERScy’, Lenders Brace Yourselves


JPMorgan, Bank of America Face `Hydra’ of State Foreclosure Investigations

By Margaret Cronin Fisk – Oct 6, 2010 12:01 AM ET

JPMorgan Chase & Co., Bank of America Corp. and Ally Financial Inc., defending allegations of fraudulent home foreclosures from customers and Congress, may face the most financial peril from investigations by state attorneys general.

Authorities in at least seven states are probing whether lenders used false documents and signatures to justify hundreds of thousands of foreclosures, and the number of these inquiries will grow, according to state officials and legal experts.

“You’re going to see a tremendous amount of activity with all the AGs in the U.S.,” Ohio Attorney General Richard Cordray said in an interview. “We have a high degree of skepticism that the corners that were cut are truly legal.”

JPMorgan, Bank of America and Ally have curtailed foreclosures or evictions in 23 states where courts have jurisdiction over home seizures.

While homeowners in those states and elsewhere must usually show damages to win a lawsuit, “attorneys general can just sue over deceptive sales practices and get penalties,” said Christopher Peterson, a University of Utah law professor who specializes in commercial and contract law.

In Ohio, penalties include fines up to $25,000 per violation, with each false affidavit or document considered a violation, according to state law enforcement officials. In Iowa, fines rise to a maximum of $40,000 for each violation.

Foreclosure Freeze

This penalty would apply to “every instance of an affidavit that was filed improperly or every time facts were attested to that weren’t true,” said Cordray. His counterpart in Connecticut, Richard Blumenthal, has called for a freeze on foreclosures and said the submissions are a “possible fraud on the court.”

Officials in Ohio and Connecticut, along with Florida, Texas, North Carolina, Iowa and Illinois, said they are investigating mortgage foreclosure practices.

Continue reading …BLOOMBERG

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© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in assignment of mortgage, foreclosure, foreclosure fraud, foreclosure mills, foreclosures, forgery, MERS, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC., STOP FORECLOSURE FRAUDComments (3)

NO. THERE’S NO LIFE AT MERS

NO. THERE’S NO LIFE AT MERS


NO. THERE’S NO LIFE AT MERS

By DinSFLA

Mortgage Electronic Registration Systems, Inc (MERS) has a very long history. The beginning stages have remained a mystery until now.

In 1989, Brian Hershkowitz developed the “Whole Loan Book Entry” concept while serving as a director for the Mortgage Bankers Association (MBA). In 1990, he first introduced this concept to seven different industry groups; Document Custodian, Originators, Servicers, Title Insurers, County Recorders, Government Sponsored Enterprises (GSE’s) and Warehouse/Interim Lenders. The reception was very positive and it was viewed as a very useful recording system to be used for how equity and debt securities could be identified and managed.

In 1991, Mr. Hershkowtiz published Farming It Out in Mortgage Banking Magazine. His main discussion in this article is primarily about getting the opinion of the experts in the technology outsourcing service industry. In 1992, Mr. Hershkowitz published another article called Cutting Edge Solutions in Mortgage Banking Magazine. In this particular article he mentions the actual meeting that took place at the Mortgage Bankers Association of America (MBA) headquarters with many key players that are known today as some of MERSCORP’s shareholders, such as, Fannie Mae and Freddie Mac. In this meeting they discussed a “System” that will bring changes in mortgage records.

Mr. Hershkowitz went on to become President and COO of LandSafe Credit, a leading settlement service provider that was a subsidiary of Countrywide. Mr. Hershkowitz also spent several years serving Countrywide in the areas of strategic planning and executive management.

In 2001, Mr. Hershkowitz became Executive Vice President at Fidelity National Information Services (FNIS) and President of its mortgage and information services division. His responsibilities included management of the Company’s data offerings, including public records information, credit reporting information, flood hazard compliance data, real estate tax information and collateral valuation services. He left FNIS in November of 2006 to become Chief Executive Officer of Maximum Value Group, a consulting firm focused on providing advice to private equity and other market participants in the area of banking and mortgages.

ENTER THE X-FILES

MERS has evolved into a totally different purpose today.

Mortgage Electronic Registration Systems, Inc. is a wholly owned subsidiary of MERSCORP Inc., located at 1595 Spring Hill Rd Ste 310 Vienna, VA 22182.

MERS was founded by the mortgage industry. MERS tracks “changes” in the ownership of the beneficial and servicing interests of mortgage loans as they are bought and sold among MERS members or others. Simultaneously, MERS acts as the “mortgagee” of record in a “nominee” capacity (a form of agency) for the beneficial owners of these loans.

To ensure widespread acceptance within the industry, MERS sought to have security instruments modified to contain MERS as the original mortgagee (MOM) language. MERS began to change decades of business practices after the two biggest mortgage funders in the U.S. the Federal Home Loan Mortgage Corporation (Freddie Mac) and the Ferderal National Mortgage Association (Fannie Mae) modified their Uniform Security Instruments to include MOM language. Their approval opened the doors to incorporate MERS into loans at origination.

Soon after, U.S. government agencies like the Veterans Administration, Federal Housing administration and Government National Mortgage Association (Ginne Mae), and several state housing agencies followed both Fannie/Freddie to approve MERS.

More than 60 percent of all newly-originated mortgages are registered in MERS. Its mission is to register every mortgage loan in the United States on the MERS System. Since 1997, more than 65 million home mortgages have been assigned a Mortgage Identification Number (MIN) and have been registered on the MERS System.

The mortgage-backed security (MBS) sector tested the viability of MERS because a substantial number of mortgages are securitized in the secondary market. In February 1999, Lehman Brothers was the first company to include MERS registered loans in a MBS.

Moody’s Investor Service issued an independent Structured Finance special report  on MERS and it’s impact of MBS transactions and found that where the securitzer used MERS, new assignments of mortgages to the trustee of MBS transactions were not necessary.

Since MERS is a privately owned data system and not public, all mortgages and assignments must be recorded in order to perfect a lien. Since they failed to record assignments when these loans often traded ownership several times before any assignment was created, the legal issue is apparent. MERS may have destroyed the public land records by breaking the chain of title to millions of homes.

IN MERS CEO’S OWN WORDS

In or around the summer of 1997, MERSCORP President and CEO R.K. Arnold wrote, “Yes, There is life on MERS” Mr. Arnold stated, “Some county recorders have expressed concerns that MERS will eliminate their offices nationwide or destroy the public land records by breaking the chain of title. As implemented, MERS will not create a break in the chain of title, and, because MERS is premised on an assignment recorded in the public land records, MERS cannot work without county recorders.”

In this same article Mr. Arnold also states “The sheer volume of transfers between servicing companies and the resulting need to record assignments caused a heavy drag on the secondary market. Loan servicing can trade several times before even the first assignment in a chain is recorded, leaving the public land records clogged with unnecessary assignments. Sometimes these assignments are recorded in the wrong sequence, clouding title to the property”. Mr. Arnold never mentions the fact that the mortgage notes have been securitized, thereby becoming “negotiable securities” under the Uniform Commercial Code.

In an interview for The New York Times, Mr. Arnold said, “that his company had benefited not only banks, but also millions of borrowers who could not have obtained loans without the money-saving efficiencies MERS brought to the mortgage trade.”

Mr. Arnold went on to say that, ” far from posing a hurdle for homeowners, MERS had helped reduce mortgage fraud and imposed order on a sprawling industry where, in the past, lenders might have gone out of business and left no contact information for borrowers seeking assistance.”

“We’re not this big bad animal,” Mr. Arnold said. “This crisis that we’ve had in the mortgage business would have been a lot worse without MERS.”

Unfortunately, even a simple search in the Florida Land Records proves the opposite to be the case. Researchers have  easily found affidavits of lost assignments actually stating, “the said mortgage was assigned to Mortgage Electronic Registration Systems, Inc., from “XXXXXXX”, the original of the said assignment to Mortgage Electronic Registration Systems, Inc., was lost, misplaced or destroyed before same could be placed of record with the Florida Land Records County Clerk’s office; That, “XXXXXXX”, it’s successors and/or assignee is no longer in business/or do not respond to our request for a duplicate assignment, and therefore, a duplicate original of said assignment cannot be obtained.”

According to affidavits such as these, not only have the borrowers lost contact with the lenders, but the same is true that MERS did as well.

On September 25, 2009, Mr. R.K. Arnold was deposed in Alabama. Mr. Arnold admitted MERS does not have a beneficial interest in any loan, does not loan money and does not suffer a default if monies are not paid. On November 11, 2009, William C. Hultman was deposed in Alabama and made the same admissions.

Yet again, researchers have easily located affidavits recorded in the Florida Land Records stating “That said Deed of Trust has not been assigned to any other party and that MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, Inc. is the current holder and owner of the Note and Deed of Trust in question.”

NO. THERE’S NO LIFE AT MERS

Aside from not recording assignments, Mr. Arnold failed to mention that the certifying officers given authority to execute sensitive loan documents would not be paid employees of MERS. This raises the critical legal question as to how one can act as a certified officer and execute any equitable interest on behalf of any security instruments without being an employee of MERS.

On April 7, 2010, in the Superior Court of New Jersey, MERS Treasurer and Secretary William C. Hultman gave an oral sworn video/telephone deposition in the case of Bank Of New York v. Ukpe.:

Q Do the assistant secretaries — first off, are
you a salaried employee of MERS?
A No.

Q Are you a salaried employee of MERS Corp,
Inc.?
A Yes.

Q Are any of the employees of MERS, Inc.
salaried employees?
A I don’t understand your question.

Q Does anyone get a paycheck, if they are an
employee of MERS, Inc., do they get a paycheck from
Mercer, Inc.?
A There is no MERS, Inc.

Q I thought, sir, there’s a company that was
formed January 1, 1999, Mortgage Electronic Registration
Systems, Inc. Does it have paid employees?
A No, it does not.

Q Does it have employees?
A No.

Q Does MERS have any employees?
A Did they ever have any? I couldn’t hear you.

Q Does MERS have any employees currently?
A No.

Q In the last five years has MERS had any
employees?
A No.

<SNIP>

Q How many assistant secretaries have you
appointed pursuant to the April 9, 1998 resolution; how
many assistant secretaries of MERS have you appointed?
A I don’t know that number.

Q Approximately?
A I wouldn’t even begin to be able to tell you
right now.

Q Is it in the thousands?
A Yes.

Q Have you been doing this all around the
country in every state in the country?
A Yes.

Q And all these officers I understand are unpaid
officers of MERS?
A Yes.

Q And there’s no live person who is an employee
of MERS that they report to, is that correct, who is an employee?
A There are no employees of MERS.

If so, how does anyone have any authority to sign security instruments encumbered by any loan documents, if these certifying officers are not paid employees and never attend corporate meetings in the capacity as Vice President, Assistant Secretary, etc. with Mortgage Electronic Registration System, Inc..

COURTS FIND ISSUES WITH MERS

Federal and state judges across America are realizing that the mortgage industry’s nominee is backfiring.

In Mr. Arnold’s own words, “For these servicing companies to perform their duties satisfactorily, the note and mortgage were bifurcated. The investor or its designee held the note and named the servicing company as mortgagee, a structure that became standard.” What has become a satisfactory standard structure for the mortgage industry has not been found by many courts to be legally sufficient to foreclose upon the property.

Again, MERS only acts as nominee for the mortgagee of record for any mortgage loan registered on the computer system MERS maintains, called the MERS System. MERS cannot negotiate a security instrument. Therefore, MERS certifying officers cannot have legal standing to assign what MERS does not own or hold.

The Supreme Court of New York Nassau County:
Bank of New York Mellon V. Juan Mojica Index No: 26203/09

Justice Thomas A. Adams stated, “Not only has plaintiff failed to establish MERS’ right as a nominee for purposes of recording to assign the mortgage, more importantly, no effort has been made to establish the authority of MERS, a non-party to the note, to transfer its ownership.”

The Supreme Court of Maine:
Mortgage Electronic Registration Systems, Inc. v. Saunders, No. 09-640, 2010 WL 3168374,
(Me. August 12, 2010) The Court explains that the only rights conveyed to MERS in either the Saunders’ mortgage or the corresponding promissory note are bare legal title to the property for the sole purpose of recording the mortgage and the corresponding right to record the mortgage with the Registry of Deeds. This comports with the limited role of a nominee. A nominee is a “person designated to act in place of another, usu[ally] in a very limited way,” or a “party who holds bare legal title for the benefit of others or who receives and distributes funds for the benefit of others.” Black’s Law Dictionary 1149 (9th ed. 2009).

In Hawkins, No. BK-S-07-13593-LBR, 2009 WL 901766
The Court found that the deed of trust “attempts to name MERS as both beneficiary and a nominee” but held that MERS was not the beneficiary, as it had “no rights whatsoever to any payments, to any servicing rights, or to any of the properties secured by the loans.”

In Re: Walker, Case No. 10-21656-E-11 Eastern District of CA Bankruptcy court rules MERS has NO actionable interest in title. “Any attempt to transfer the beneficial interest of a trust deed without ownership of the underlying note is void under California law.” “MERS could not, as a matter of law, have transferred the note to Citibank from the original lender, Bayrock Mortgage Corp.” The Court’s ruled that MERS and Citibank are not the real parties in interest.

In re Vargas, 396 B.R. at 517-19. Judge Bufford found that the witness called to testify as to debt and default was incompetent. All the witness could testify was that he had looked at the MERS computerized records. The witness was unable to satisfy the requirements of the Federal Rules of Evidence, particularly Rule 803, as applied to computerized records in the Ninth Circuit. See id. at 517-20. “The low level employee could really only testify that the MERS screen shot he reviewed reflected a default. That really is not much in the way of evidence, and not nearly enough to get around the hearsay rule.”

FRAUD ON THE COURT

In US Bank v. Harpster the Law Offices Of David J. Stern committed fraud on the court by the evidence based on the Assignment of Mortgage that was created and notarized on December 5, 2007. However, that purported creation/notarization date was facially impossible: the stamp on the notary was dated May 19, 2012. Since Notary commissions only last four years in Florida (see F .S. Section 117.01 (l)), the notary stamp used on this instrument did not even exist until approximately five months after the purported date on the Assignment.

The Court specifically finds that the purported Assignment did not exist at the time of filing of this action; that the purported Assignment was subsequently created and the execution date and notarial date were fraudulently backdated, in a purposeful, intentional effort to mislead the Defendant and this Court. The Court rejects the Assignment and finds that is not entitled to introduction in evidence for any purpose. The Court finds that the Plaintiff does not have standing to bring its action.

The Court dismissed this case with prejudice.

In Duval County, Florida another foreclosure case was dismissed with prejudice for fraud on the court. In JPMorgan V. Pocopanni, the Court found that Fishman & Shapiro representing JPMorgan had actual knowledge at all times that the Complaint, the Assignment, and the Motion for Substitution were all false. The Court found that by clear and convincing evidence WAMU, Chase and Shapiro & Fishman committed fraud on this court.

Both these cases involved Mortgage Electronic Registration Systems Inc. assignments.

FRAUD INVESTIGATIONS

Two RICO Class Action lawsuits have commenced against Foreclosure Law Firms and MERSCORP for fabricating and forging documents that are entered into courts as evidence in order to have standing to foreclose. Unknown to judges and the borrowers, they accept these documents because they are executed under perjury of the law. These “tromp l’oeil” actions have finally surfaced and the courts has taking notice.

The lack of supervision and managing of MERS “Robo-Signers” has led to a national frenzy of fabrication, forgery and certifying officers wearing multiple corporate hats. Anyone who compares signatures of these certifying officers will see a major problem with forgery in hundreds of thousands affidavits and assignments which creates an enormous dark cloud of title defects to millions of homes across the US.

On August 10, 2010 Florida attorney general Bill McCollum announced that he is investigating three foreclosure law firms for allegedly providing fraudulent assignments and affidavits relating in foreclosure cases.

In a deposition taken in December 2009, GMAC employee Jeffrey Stephan said he signed 10,000 affidavits or similar documents a month without personally verifying who the mortgage holder was. That means many foreclosures could have taken place based on false documentation and many homes may have been unlawfully foreclosed on.

On September 20, 2010, GMAC halted foreclosures in 23 different states. Two of the three firms being investigated by the Florida attorney general, the Law Office of Marshall C. Watson and the Law Offices of David J. Stern PA, have represented GMAC in foreclosure proceedings.

This is not limited to only GMAC Mortgage. There are many hundreds of thousands of these same documents that are being created by many foreclosure law firms across the nation.

University of Utah law professor Christopher L. Peterson has raised the issue that MERS should be regarded as a debt collector. He argues that some of MERS’ methods are just the sort of deceptive practices that ought to be regulated under The Fair Debt Collection Practices Act (FDCPA), 15 U. S. C. §1692(a),(j).

CONCLUSION

Finally in May, 2009, Mr. Arnold said in Mortgage Technology Magazine, “Every system in the mortgage industry can switch MERS registry on or off at will,” referencing that both the Obama administration and Congressional leaders are aware of this.

President Obama and Congressional leaders it is time to permanently switch MERS lifeless device off!

Not until MERS became the primary focus for challenges to legal standing in foreclosure courts as reported by the alternative media, have the main stream media and the mortgage industry have begun to realize that property records cross the United States have become totally unreliable.

It has taken more than a decade for the courts to recognize that MERS has become a mortgage backfire system leaving clouded titles in over 65 million loans since 1997.

Courts across the nation must comply with the law.  Any documents submitted to the courts regarding property ownership should be assumed to be nothing but smoke in a mirror.

No, Mr. Arnold, there’s no life at MERS.


DinSFLA, “nominee” of stopforeclosurefraud.com, a blog on Foreclosure Fraud.

© 2010 FORECLOSURE FRAUD | by DinSFLA. All rights reserved. www.StopForeclosureFraud.com

© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in featured, STOP FORECLOSURE FRAUDComments (33)

“Mortgage Electronic Registration Systems, Inc.: A Survey of Cases Discussing MERS’ Authority to Act “

“Mortgage Electronic Registration Systems, Inc.: A Survey of Cases Discussing MERS’ Authority to Act “


John Hooge Co-Writes Article Surveying MERS Mortgage Loan Cases

Half the residential loans in this country are MERS mortgage loans and are being given increased scrutiny both in bankruptcy cases and foreclosure actions.   John Hooge and Laurie Williams, the Wichita, KS. Chapter 13 Trustee, have co-written an article,  “Mortgage Electronic Registration Systems, Inc.: A Survey of Cases Discussing MERS’ Authority to Act “.

Click image below for Article:

© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in chain in title, Christopher Peterson, conflict of interest, conspiracy, CONTROL FRAUD, corruption, fannie mae, foreclosure, foreclosure fraud, foreclosure mills, foreclosures, forgery, Freddie Mac, mbs, MERS, mortgage, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC., Notary, note, R.K. Arnold, robo signersComments (0)

Homeowner fights foreclosure in lawsuit claiming documents are fraudulent

Homeowner fights foreclosure in lawsuit claiming documents are fraudulent


Marcia Heroux Pounds, Sun Sentinel
August 20, 2010
After months of wrangling with CitiMortgage, Dennis and Joyce Brown got fed up and hired an attorney to fight CitiMortgage’s foreclosure on their Lauderdale Lakes home. The Browns claim they are victims of fabricated documents used to foreclose after CitiMortgage failed to credit them for mortgage payments.

“They ran my blood pressure up so bad,” said Dennis Brown, who hired Fort Lauderdale lawyer Kenneth Eric Trent to fight the foreclosure.

CitiMortgage and its lawyers, David Stern Law Offices, voluntarily withdrew the case against the Browns in Broward County Circuit Court on June 16. But the Browns can’t rest easy. Recently, they’ve received new foreclosure letters from another lawyer representing CitiMortgage.

The Browns’ story is just one example of foreclosures resulting from allegedly fraudulent mortgage assignments and other tactics that “eliminate due process for the homeowner,” Trent said.

He also is suing Stern and his Plantation law firm in federal court in a separate foreclosure case with similar allegations.

In that lawsuit, on behalf of Oakland Park homeowner Ignacio Damian Figueroa, Trent contends that Stern and a mortgage registration firm generated fraudulent mortgage documents that are intentionally ambiguous to cloud the real ownership of the Figueroa’s mortgage note.

The foreclosure practices of Stern and two other law firms are under investigation by the Florida Attorney General’s Office. The attorney general recently requested records going back to Jan. 1, 2008, from Stern as well as The Law Offices of Marshall C. Watson, P.A., and Shapiro & Fishman, LLP.

Thousands of Florida homeowners may have lost their homes as a result of improper actions by the firms under investigation. In announcing the probe, Attorney General Bill McCollum, a Republican who is a running for governor, said the law firms may have presented fabricated documents in court to speed the foreclosure process and obtain judgments against homeowners.

Jeffrey Tew, a Miami attorney who represents Stern’s firm, said while the attorney general may have received complaints, there “will not be evidence of fraud.” Due to the large volume of foreclosures, there may have been clerical mistakes, he said. “In past two to three years, the Stern law firm has processed probably 100,000 foreclosures.”

But he disputes that Stern’s law firm fabricated any documents. “I haven’t seen any example where a bank didn’t have a mortgage in default,” Tew said.

Stern represents well known mortgage lenders including Bank of America, Chase, CitiMortgage, Inc., Fannie Mae, Freddie Mac, HSBC, SunTrust, and Wells Fargo. These lenders also are the shareholders of Mortgage Electronic Registration Systems (MERS).

MERS is at the heart of the matter for Trent and other lawyers trying to stop what they view as illegal foreclosures in the nation.

The mortgage registry was created by lenders in the early 1990s to track home loans, including those repackaged as securities and sold to investors. When such loans were in foreclosure, MERS – not the original lender — was often the entity foreclosing. Some lawyers have successfully fought foreclosures by contending that MERS doesn’t own the note, or the borrower’s obligation to repay.

University of Utah law professor Christopher Peterson said MERS mortgage processing system goes against long-standing principles of property law in assigning rights to a note or mortgage. He said the “owner” of a mortgage can’t be the same as the “agent” representing the homeowner, for example.

Yet MERS records “false documents” with names of people who are not executives of the registry system, but often paralegals and clerks of law firms, he said. “It’s an extremely controversial and arguably fraudlent practice,” Peterson said.

Merscorp spokeswoman Karmela Lejarde declined to comment on the criticism of MERS or Trent’s lawsuit, citing company policy not to comment on pending lititgation.

Tew, who represents Stern’s Law Offices, called Trent’s lawsuit “fiction.” He points to Florida’s 5th District Court of Appeal that ruled in July against a homeowner who tried to fight foreclosure on the basis that MERS didn’t own the note or mortgage.

For the Browns’, foreclosure troubles began with not getting credit for their payments from CitiMortgage, their mortgage servicer.

The couple says they couldn’t clear it up with the lender. “They were claiming I was behind in payment, but I was paying every month,” said Brown, a carpenter who works for the Broward County School System and whose three children and four grandchildren also live in his Lauderdale Lakes home.

They stopped paying on their mortgage in late 2007 and sought legal help.

Another issue in Browns’ case is the signature on the assignment of Brown’s mortgage, giving rights to CitiMortgage, Trent said. The signature is by Cheryl Samons, who is identified as “assistant secretary of Merscorp.” In reality, Samons is an employee of Stern’s law office.

Tew confirmed Samons’ employment by Stern, but said “it’s very common for companies to appoint a registered agent. That process is absolutely legal and normal.”

But Trent contends that mortgage assignments need to be made on personal knowledge, not hearsay, to be admissible in court.

The Browns could be facing another foreclosure action, but Trent said he is confident he can fight it again. “They don’t have the basis to foreclose,” he said.

CitiMortgage spokesman Mark Rodgers said privacy restrictions prevent the financial institution from discussing a customer’s foreclosure action. But Rodgers said procedures may resume in cases “where, despite our best efforts, we have been unable to arrive at a satisfactory resolution acceptable to all the parties involved.”

Tew said foreclosure defense lawyers are portraying homeowners who have defaulted on their mortgages as helpless victims. “Everyone is sympathetic, including us, for the homeowner who can’t pay his mortgage. But it’s not fair to paint the banks and law firms that represent them as wearing the black hats.”

Marcia Heroux Pounds can be reached at mpounds@sunsentinel.com or 561-243-6650.

Browns’ Assignment of Mortgage & Vol. Dismissal below:

DEPOSITION OF NOTARY SHANNON SMITH OF THIS CASE

[ipaper docId=34340050 access_key=key-1eb2fh5kgjs1rbxhfwhq height=600 width=600 /]

MORE ON THIS CASE & FIRM BELOW

_________________

Take Two: *New* Full Deposition of Law Office of David J. Stern’s Cheryl Samons

_________________

Law Offices of David J. Stern, MERS | Assignment of Mortgage NOT EXECUTED but RECORDED

_________________

Cheryl Samons | No Signature, No Notary, 1 Witness…No Problem!

_________________

STERN’S CHERYL SAMONS| SHANNON SMITH Assignment Of Mortgage| NOTARY FRAUD!

In accordance with Title 17 U.S.C. Section 107, any copyrighted work in this message is distributed under fair use without profit or payment for non-profit research and educational purposes only. GRG [Ref. http://www.law.cornell.edu/uscode/17/107.shtml]

© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in Christopher Peterson, citimortgage, class action, concealment, conspiracy, CONTROL FRAUD, corruption, fannie mae, foreclosure, foreclosure fraud, foreclosure mills, foreclosures, Freddie Mac, Law Offices Of David J. Stern P.A., law offices of Marshall C. Watson pa, MERS, MERSCORP, mortgage, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC., Mortgage Foreclosure Fraud, non disclosure, Notary, notary fraud, note, RICO, shapiro & fishman pa, STOP FORECLOSURE FRAUDComments (1)

QUI TAM: MERS et al sued for FRAUD, Billions in Penalties

QUI TAM: MERS et al sued for FRAUD, Billions in Penalties


I am definitely confident on this one going far!

Mortgage registration firm sued for fraud, billions in penalties in Nevada, California

By Frank X. Mullen Jr. • June 25, 2010 RGJ.com

A Reno law firm has filed two lawsuits alleging fraud against a nationwide mortgage registration firm, and if those legal actions prevail, the firm and dozens of mortgage lenders could be liable to Nevada’s counties for billions of dollars in compensation and penalties.

Law partners Robert R. Hager and Treva J. Hearne, with Reno attorney Mark Mausert, have filed a case in Nevada and one in California against Mortgage Electronic Registration Systems, which operates an electronic registry of mortgage loans in the United States. MERS serves as the mortgagee of record for lenders, investors and loan servicers in county land records, but doesn’t own any mortgages.

By using the firm’s names on deeds and other paperwork, the lenders are able to avoid county recording fees, according to the firm. MERS has no financial interest in the loans, but is listed as actual owner or surrogate for the owner on millions of deeds of trust, even as individual mortgages are repeatedly traded and packaged inside of mortgage pools.

The lawsuits argue that listing the firm as the owner of mortgages in which it has no interest in order to avoid filing fees and taxes that are legally required constitutes fraud.

“We look forward to holding these financial institutions and foreclosure mills responsible for their actions that have deprived the states and counties of much-needed revenue,” said Hager.

Karmela Lejarde, communications manager, for the Reston, Va.-based firm, noted that the attorneys general of two states declined to take on the cases as false claims suits pressed by the government, instead leaving the plaintiffs to pursue the civil suits in the court systems.

“The lawsuits are completely without merit,” Lejarde said. “…The suits were filed by the same lawyers who have brought countless lawsuits against MERS, and every single one of them has failed. The most recent (fraud case) actions are just the latest in a line of baseless claims.”

Christopher Peterson, a law professor and associate dean of the University of Utah Law School, has written articles and lectured about MERS’s activities. He said the firm being listed as proxy owner of more than half the nation’s mortgages is contrary to 200 years of American legal precedent.

Continue here…

[ipaper docId=33678143 access_key=key-2e2hbv3rz6ob70ofx5fq height=600 width=600 /]

Part II

http://www.scribd.com/full/33679187?access_key=key-795n4c7e7xreprv28yr

[ipaper docId=33679187 access_key=key-795n4c7e7xreprv28yr height=600 width=600 /]

Part III

http://www.scribd.com/full/33679319?access_key=key-16v5sbgda4zf6ka6eox5

[ipaper docId=33679319 access_key=key-16v5sbgda4zf6ka6eox5 height=600 width=600 /]

RELATED STORY:

MERS Good Information Foreclosure Subprime Mortgage Lending and MERS, VP MERS, AUTHORIZED SIGNATORY

Posted in bank of america, Christopher Peterson, citimortgage, CONTROL FRAUD, foreclosure, foreclosure fraud, jpmorgan chase, MERS, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC., QUI TAM, wells fargoComments (4)

Foreclosure, Subprime Mortgage Lending, and the Mortgage Electronic Registration System

Foreclosure, Subprime Mortgage Lending, and the Mortgage Electronic Registration System


Via: b.daviesmd6605

Included here is a short excerpt that discusses the way MERS allows nearly any member have MERS authority to sign documents. The article says that some states require the signor to be a VP of the actual member. Eventually some states allow them to be an authorized signatory despite not being an employee. If any late assignments apply to you this is then a must read.

[ipaper docId=30807513 access_key=key-2jtfrih99eg7hyj51oi0 height=600 width=600 /]

© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in Christopher Peterson, foreclosure fraud, MERS, mortgage electronic registration system, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC., robo signer, robo signersComments (0)

Peterson Scholarship Highlighted in SL Trib Article on Loan Registry

Peterson Scholarship Highlighted in SL Trib Article on Loan Registry


April 26, 2010 by Barry Scholl

An April 25 Salt Lake Tribune article on the legal controversy surrounding the loan registry system known as MERS prominently mentions the scholarship of Christopher Peterson, a professor at the University of Utah S.J. Quinney College of Law, and also includes an interview with Peterson.

MERS, an acronym for Mortgage Electronic Registration Systems, was created by the nation’s largest lenders in the early 1990s as a mechanism to reduce paperwork and recording fees.  The private computer system allowed lenders to “in effect, put[] loans under MERS’ name, “ thus enabling lenders to “avoid having to file public documents each time a mortgage was bought and sold,” according to the Tribune article.


Peterson, the author of a forthcoming scholarly article on MERS in the University of Cincinnati Law Review, described it as “one of the buried, yet-to-emerge bombs in the whole mortgage crisis.” He also describes MERS as “a tax evasion broker,” that prevents counties from collecting millions in recording fees.

To read the Salt Lake Tribune article, click here.

© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in Christopher Peterson, foreclosure, foreclosure fraud, foreclosures, MERS, MERSCORP, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC.Comments (0)

Loan registry raises legal questions: MERS

Loan registry raises legal questions: MERS


Excellent Article on MERS

Loan registry raises legal questions

Foreclosures » Courts, legal scholars question company’s role.

By Tony Semerad

Updated: 04/24/2010 11:18:14 PM MDT

A small real estate data-management company is the focus of a widening legal controversy that could affect millions of U.S. foreclosures, including thousands filed against distressed homeowners in Utah.

The nation’s largest lenders created Mortgage Electronic Registration Systems (MERS), of Reston, Va., in 1994 as a loan registry designed to save millions of dollars on paperwork and recording fees. By registering mortgages with the private computer-tracking system and, in effect, putting loans under MERS’ name, lenders could avoid having to file public documents each time a mortgage was bought and sold.

The arrangement served its purpose well as markets went up. By MERS’s own estimates, it saved mortgage lenders more than $1 billion during a decade, and the efficiencies it brought to mortgage trading played a key role in the growth of mortgage-backed securities and the housing boom.

But with the economic downturn and crush of foreclosures, MERS is now showing up on tens of thousands of foreclosure notices sent to delinquent homeowners, including nearly 3,000 sent in Utah since July 2008, most of them in Salt Lake County.

Here and nationally, the company’s legal status as a party in these actions is increasingly being challenged.

“This is one of the buried, yet-to-emerge bombs in the whole mortgage crisis,” said Christopher Peterson, a University of Utah law professor and author of the first scholarly analysis of MERS and its legal underpinnings, to be published this spring in the University of Cincinnati Law Review . “This has the potential to fundamentally affect the trajectory of our recovery.”

‘A tax evasion broker’ » MERS officials vigorously disagree, but Peterson contends the MERS system has violated a deep-seated principle of American law — transparency in land-ownership transactions — by effectively removing much of that information from the public record. In so doing, Peterson says, MERS also has served as “a tax evasion broker,” denying counties millions of dollars in recording fees — revenue that might otherwise have funded essential public services.

And now, by allowing actual lenders to pursue foreclosures under MERS’ name instead of their own, Peterson says the company is acting as a “foreclosure doppelganger.”

“Throughout history, executioners have always worn masks,” the U. professor writes in his article, Foreclosure, Subprime Mortgage Lending, and the Mortgage Electronic Registration System .

“In the American mortgage lending industry, MERS has become the veiled man wielding the home foreclosure ax.”

continue reading… SLTribune

© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in concealment, conspiracy, corruption, foreclosure fraud, MERS, Mortgage Foreclosure FraudComments (2)

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