Lexology-

On April 23, 2012, the plaintiff in State of Ohio ex rel. David P. Joyce, Prosecuting Attorney of Geauga County Ohio v. MERSCORP, Inc., et al., N.D. Ohio Case No. 1:11-cv-02474, filed its motion seeking an order certifying the action as a class action, appointing Geauga County as class representative, and appointing plaintiff’s counsel, the New York law firm of Bernstein Liebhard LLP, as class counsel. The plaintiff argues that the case, which the plaintiff is attempting to bring on behalf of all 88 Ohio counties for relief relating to the allegedly unlawful failure of MERS and its member institutions to record millions of mortgages and mortgage assignments throughout Ohio, meets all requirements of Rule 23(a) and that certification is proper under any one of the 3 subsections of Rule 23(b). The plaintiff hopes to persuade the court that the MERS/member institution policy concerning recordation of mortgages and assignments is a “common scheme or course of conduct” that has given rise to claims “ideally suited for class certification.”

[LEXOLOGY]

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IN THE COURT OF COMMON PLEAS
GEAUGA COUNTY, OHIO

STATE OF OHIO, ex.rel.
DAVID P. JOYCE
PROSECUTING ATTORNEY OF GEAUGA
COUNTY, OHIO
Courthouse Annex, 231 Main St. Suite 3A
Chardon, Ohio 44024

On behalf of Geauga County and all others similarly
situated,

Plaintiff,

v.

MERSCORP, INC.
1818 Library Street, Suite 300
Reston, Virginia 20190

and

MORTGAGE ELECTRONIC REGISTRATION
SYSTEMS, INC.
1818 Library Street, Suite 300
Reston, Virginia 20190

[...]

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Gretchen Morgenson tears this one up… gotta love this piece of the story

“Only Lender Processing Services had more — 91 — than Fannie and Freddie. (Perhaps they robo-signed their registrations.)”

NYT-

THE mortgage business is moribund. New loans are down. New foreclosures are up.

But why let a little sorry news get in the way of a good party? Last week, almost 3,000 people descended on the Hyatt Regency in Chicago for the 98th annual convention of the Mortgage Bankers Association.

The price of admission: about $1,000 a head. But for that grand, you got to hear the band Chicago play hits from the ’70s. And David Axelrod and Jeb Bush give speeches. And experts discuss things like demographics, the politics of housing and the future of the mortgage industry, according to a flier for the event.

[NEW YORK TIMES]

I would urge the AG’s investigating MERS to turn to MISMO next because it’s beginning to appear they are taking crucial parts away from MERS. Something is definitely up?

But why? On July 30, 2010 MBA went before the SEC begging them to adopt MERS:

The major participants in the residential mortgage industry utilize the MIN. Fannie Mae, Freddie Mac and Ginnie Mae all utilize the MIN. MISMO encourages the SEC to adopt the MERS Mortgage Identification Number (MIN) as the primary loan identifier for real estate finance ABS.

Scott Cooley an independent mortgage technology consultant, analyst and author once said “Calling on MERS”:

“Today, most of the aforementioned parties are shipping the documents at great cost through carriers such as Federal Express. With VLF, all such shipping and the manual handling of the traditional loan folder is eliminated. In fact, all the paper in the process is gone. Yes, this is a form of imaging that some mortgage companies are using today. However, it goes much further, in that it would be used by all parties involved with each loan. In addition, it would also store the electronic data file of the loan and do so in a Mortgage Industry Standards Maintenance Organization Inc . (MISMO) format.”

VIA HW-

The Mortgage Bankers Association is going to take back management of its MISMO platform from MERS, according to a HousingWire source familiar with the plans.

The crossover will be complete Dec. 1 and a press release providing more details is said to be in the works.

[HOUSING WIRE]

An “unprecedented crackdown.” That’s how Commissioner David Stevens described a get-tough program that took place under him at the Federal Housing Administration from mid-2009 until April of this year. As part of the push, the FHA’s Mortgage Review Board issued more administrative actions against lenders in Stevens’ first year than it had in the prior eight years combined.

[AMERICAN BANKER]

The American Banker-

David Stevens arrived as a commissioner at the Federal Housing Administration in 2009 vowing to restore financial discipline to a government housing body facing the stresses of a post-crash world. A former mortgage banker himself, Stevens, now 54, bolstered the agency’s finances and pursued alleged wrongdoing at nonbank lenders including Berkshire Hathaway and Goldman Sachs & Co. affiliates.

One group the FHA did not feud with during Stevens’ tenure: top industry players, such as Bank of America Corp. and Wells Fargo & Co. A collection of emails between Stevens and the Mortgage Bankers Association may help explain why.

[THE AMERICAN BANKER]

We all know where very similar words got MERS…

“E-signatures will reduce the volume of lost paperwork, reduce signature fraud, reduce the time required to close a loan, and may lead to lower borrower costs.”

MERS cannot even keep track of who owns what loan and with all the alleged fraudulent signatures originating from it’s certifying officers signing virtually any number of documents to land records… special caution to permit e-signatures that can easily be cut and pasted.

What if this ever gets “hacked”… nothing is bullet proof.

Read the letter below…

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Come hungry…close a loan electronically within 15 minutes and with doughnuts. Not like it took any longer the paper route!

Providing all the ‘errors’ and ‘mistakes’ currently happening in foreclosure land, just hope your eNote/eMortgage doesn’t get deleted by accident.

via Housing Wire:

Harry Gardner, president of SigniaDocs, said the perfect infrastructure is one that manages all mortgage documents electronically, but the number of loans in the Mortgage Electronic Registration Systems’ eRegistry is about 200,000, or “a small fraction of mortgages written in the last 10 years.”

“And by eMortgage, we mean truly paperless not some hybrid of some paper and some electronic documentation,” Gardener said. “Ten years ago, we were saying mainstream eMortgage documentation was three to five years away, and I’m happy to say that mainstream eMortgage documentation is now three to five years away.”

continue reading….  Housing Wire

For you to understand the plan the financial institutions have you need to grasp the following. Will MERS patterns continue? Imagine the price you will pay when these files are hacked or manipulated.

Everyone knows by now that MERS was ‘invented’ to keep costs low for the banks, reduce the risk of record-keeping errors and make it easier to keep track of loans for the banks not the borrowers. By these actions, not only has MERS eliminated crucial chain in title documents, has proven in many court cases to assign absolutely nothing because it had no power to negotiate the note but also eliminated an enormous amount of county revenues.

Last week SFF wrote about the latest invention planned to coexist with MERS called SmartSAFE, which will be used for creating, signing, storing, accessing and managing the lifecycle of electronic mortgage documents. According to Wave’s eSignSystems Executive VP Kelly Purcell, “Mortgages are sold several times throughout the life of a loan, and electronic mortgages address the problem of the ‘lost note,’ while improving efficiency in the process.”

This goes a step forward of what MERS can do today.

Will this process eliminate recording paper mortgages/deeds from county records? Eliminate fees that counties in trouble desperately need? THIS IS VERY DANGEROUS.

Still with me? Finally, according to CUinsight, a sample eNote in the form of a MRG Category 1 classified SMARTDoc, was successfully delivered to Xerox’s BlitzDocs eVault, a virtual repository that connects directly to the MERS^® eRegistry and eDelivery systems, where it was electronically signed and registered.

Adding the finishing touches to permit MERS access to future eNotes? I say this is the master plan.

Looking forward to what MA John O’Brien, the Essex County register of deeds, NC Register of deeds Jeff Thigpen and NY Suffolk County, former county clerk Ed Romaine’s approach is after they read what they plan on doing to land records. If they thought it was limited to the elimination of recording fees for assignments of mortgage, they are mistaken.

Questions remain as to why replace something that has been working for so long? Why continue with MERS, a system which has failed in many ways? MERS is under investigation for fraud is it not? Why in a time where mortgage fraud is wide spread, will anyone even trust using electronic devices to manage possibly future trillions of dollars worth?

Say farewell to a tradition that has been here for well over 300 years. Eliminating ‘paper’ will put promissory notes and  mortgage related documents in great jeopardy. No computer system in the world is secure [PERIOD].

Before you go down to the “New Device” take a look back when THE FLORIDA BANKER’S ASSOCIATION ADMITTED THAT NOTES ARE DESTROYED:

This is a direct quote from the Florida Banker’s Association Comments to the Supreme Court of Florida files September 30, 2009:

“It is a reality of commerce that virtually all paper documents related to a note and mortgage are converted to electronic files almost immediately after the loan is closed. Individual loans, as electronic data, are compiled into portfolios which are transferred to the secondary market, frequently as mortgage-backed securities.

The reason “many firms file lost note counts as a standard alternative pleading in the complaint” is because the physical document was deliberately eliminated to avoid confusion immediately upon its conversion to an electronic file. See State Street Bank and Trust Company v. Lord, 851 So. 2d 790 (Fla. 4th DCA 2003). Electronic storage is almost universally acknowledged as safer, more efficient and less expensive than maintaining the originals in hard copy, which bears the concomitant costs of physical indexing, archiving and maintaining security. It is a standard in the industry and becoming the benchmark of modern efficiency across the spectrum of commerce—including the court system.”

Now if there is no issues surrounding what everyone is shouting from their roof tops, then why integrate a new software that was suppose to have been implemented already to “Improves Efficiency & Transparency of Electronic Mortgage Transactions” within MERS itself?

THEY KNOW THEY HAVE A PROBLEM!

Now from SYS-CON on SmartSAFE

“During the foreclosure crisis of the last few years we saw many instances where the original and subsequent paperwork was lost, destroyed or misfiled when loans were bought and sold,” commented Kelly Purcell, Executive Vice President for Wave’s eSignSystems division. “Mortgages are sold several times throughout the life of a loan, and electronic mortgages address the problem of the ‘lost note,’ while improving efficiency in the process.”

This will debut during next week’s MBA National Technology in Mortgage Banking Conference and Expo 2011 (at the Westin Diplomat Resort & Spa in Ft. Lauderdale, Fla.).

Will this be the new system that will eventually take over MERS as MOM?

This one is both “Smart & Safe” <wink>

By Lorraine Woellert – Mar 15, 2011 5:46 PM ET

Federal Housing Administration Commissioner David H. Stevens will become head of the Mortgage Bankers Association after he leaves his government post this month, the trade group said.

Stevens last week announced his intention to resign from the housing agency. He will join the Washington-based bankers group in May.

Michael D. Berman, chairman of the bankers group, called Stevens “uniquely qualified” for the job.

“He has had a tremendous impact at FHA,” Berman said in a statement today.

We’re all in this together.

Interesting article came out yesterday from PB Post’s Christine Stapleton where some homeowners, who can afford the mortgage, still default as a strategy.

from PB Post:

They crunched the numbers: $525,000 outstanding on their first mortgage and a $245,000 second mortgage on a home now worth about $319,000. His business was way down, her company was laying off workers and other investments had tanked. It made no sense to hang on to their underwater home. So they stopped paying their mortgage and waited for the foreclosure notice. It came in October.

Reading this article made me think about Fannie Mae announcing that she was going to start to penalize people who walk away from underwater mortgages.

Fannie said:

Fannie also will lengthen to seven years, from five, the amount of time borrowers who go through a foreclosure must wait before getting a new loan.

Did you read that? Now here’s the best strategic default yet but may leave us with their debt.

There is a very good chance that both Fannie and Freddie won’t be around in the next 5-7 years because the White House is planning to end Fannie, Freddie by winding it down and eventually eliminating them.

No matter how it’s sliced and diced…You, We, Us are all in this T O G E T H E R.

By LOUISE STORY
Published: January 20, 2011

As the Obama administration prepares a report on the future of Fannie Mae and Freddie Mac, some of the nation’s largest banks are offering a few suggestions.

Wells Fargo and some other large banks would like private companies, perhaps even themselves, to become the new housing finance giants helping to bundle individual mortgages into securities — that would be stamped with a government guarantee.

The banks have presented their ideas publicly through trade groups. Housing industry consultants and people familiar with recent meetings at the Treasury Department say these banks view the government’s overhaul of the mortgage market as a potential profit opportunity. Treasury officials have met with executives from several institutions, including Wells Fargo, Morgan Stanley, Goldman Sachs and Credit Suisse, according to a public listing of the meetings.

Fed wants to strip a key protection for homeowners

Posted on Wednesday, December 1, 2010

By Tony Pugh | McClatchy Newspapers

WASHINGTON — As Americans continue to lose their homes in record numbers, the Federal Reserve is considering making it much harder for homeowners to stop foreclosures and escape predatory home loans with onerous terms.

The Fed’s proposal to amend a 42-year-old provision of the federal Truth in Lending Act has angered labor, civil rights and consumer advocacy groups along with a slew of foreclosure defense attorneys.

They’re not only asking the Fed to withdraw the proposal, they also want any future changes to the law to be handled by the new Consumer Financial Protection Bureau, which begins its work next year.

In a letter to the Fed’s Board of Governors, dozens of groups that oppose the measure, including the National Consumer Law Center, the NAACP and the Service Employees International Union, say the proposal is bad medicine at the wrong time.

“At the depths of the worst foreclosure crisis since the Great Depression, we are surprised that the Fed has proposed rules that would eviscerate the primary protection homeowners currently have to escape abusive loans and avoid foreclosure: the extended right of rescission.”

Because the public comment period on the Fed’s proposal is still open until Dec. 23, a spokesman declined comment on the matter.

But in a September passage in the Federal Register, the Fed said the proposal was designed to “ensure a clearer and more equitable process for resolving rescission claims raised in court proceedings” and reflects what most courts already require.