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The Big Lie: MERS Mortgages in Massachusetts by Jamie Ranney, Esq.

The Big Lie: MERS Mortgages in Massachusetts by Jamie Ranney, Esq.


This is a repost from a previous post dated 11/30/2010

by Jamie Ranney, Esq.
Jamie Ranney, PC
4 Thirty Acres Lane
Nantucket, MA 02554
jamie@nantucketlaw.pro
508-228-9224

This memo will focus on MERS-designated mortgages in Massachusetts.

In this author’s opinion two (2) things are evident after a survey of Massachusetts law.

First, MERS cannot be a valid “mortgagee” under Massachusetts law and thus MERS designated mortgages are invalid in the Commonwealth of Massachusetts.

This is because MERS-designated mortgages by definition “split” the security instrument (the mortgage) from the debt (the promissory note) when they are signed. This “split” invalidates the mortgage under Massachusetts law. Where the security interest is invalid upon the signing of the mortgage, MERS cannot occupy the legal position of a “mortgagee” under Massachusetts law no matter what language MERS inserts into their mortgages that purports to give them the legal position of “mortgagee”. Since MERS-designated mortgages are invalid at their inception, it follows logically therefore that MERS mortgages are not legally capable of being recorded in the Commonwealth of Massachusetts by its Registers of Deeds.

Second, even if a MERS-designated mortgage were found to be a valid security instrument in Massachusetts, each and every assignment of the mortgage and note “behind” a MERS-designated mortgage must be recorded on the public land records of the Commonwealth in order to comply with the Massachusetts recording statute at M.G.L. c. 183, s. 4 which requires that “conveyances of an estate” be recorded to be valid. A mortgage is a “conveyance of an estate” under Massachusetts law. Since MERS-designated mortgages exist for the primary purpose of holding “legal” title on the public land records while the “beneficial” interest is transferred and sold multiple times (and a mortgage cannot exist without a note under Massachusetts law), MERS-mortgages unlawfully avoid recording fees due the Commonwealth for the transfer(s) of interests under MERS-designated mortgages.

“If you tell a lie that’s big enough, and you tell it often enough, people will believe you are telling the truth, even when what you are saying is total crap.”1

Continue reading below…

[ipaper docId=44370743 access_key=key-1en9gd3bwhh0zs2atypk height=600 width=600 /]

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Massachusetts Home Seizures Threatened in Loan Case: Mortgages

Massachusetts Home Seizures Threatened in Loan Case: Mortgages


“If you’re going to take someone’s home away, you’ve got to prove you have the right to do it, and you have to follow the law when you do it,” Atty Glenn Russell said.

Busines Week-

The highest court in Massachusetts is poised to rule as soon as this month on a foreclosure case that could lead to a surge in claims from home owners seeking to overturn seizures.

The justices are deciding whether to uphold a lower court ruling that gave a Boston home back to Henrietta Eaton after Sam Levine, a 25-year-old Harvard Law School student, argued in front of the nation’s oldest appellate court that the loan servicer made mistakes when it foreclosed because it didn’t hold the note proving she was obliged to pay the mortgage.

“If the Massachusetts court says this defense works, that would have a huge ripple effect across the country,” said Kurt Eggert, a professor at Chapman University School of Law in Orange, California.

[BUSINESS WEEK]

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Massachusetts Home Seizures Threatened in EATON vs FANNIE MAE: Mortgages

Massachusetts Home Seizures Threatened in EATON vs FANNIE MAE: Mortgages


The Massachusetts Supreme Judicial Court justices signaled last month they may rule in favor of Eaton when they asked parties in the case to submit briefs arguing whether such a decision should be applied retroactively or only to future lending. If retroactive, it would cloud the titles of the 40,000 Massachusetts properties seized in the last five years and while the ruling only applies to the state, it could serve as a model for homeowners trying to overturn foreclosures in other states.

Bloomberg-

The highest court in Massachusetts is poised to rule as soon as this month on a foreclosure case that could lead to a surge in claims from home owners seeking to overturn seizures.

The justices are deciding whether to uphold a lower court ruling that gave a Boston home back to Henrietta Eaton after Sam Levine, a 25-year-old Harvard Law School student, argued in front of the nation’s oldest appellate court that the loan servicer made mistakes when it foreclosed because it didn’t hold the note proving she was obliged to pay the mortgage.

“If the Massachusetts court says this defense works, that would have a huge ripple effect across the country,” said Kurt Eggert, a professor at Chapman University School of Law in Orange, California.

[BLOOMBERG]

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REQUIRED READING: Marie McDonnell’s Supplemental Brief in EATON vs. FANNIE MAE

REQUIRED READING: Marie McDonnell’s Supplemental Brief in EATON vs. FANNIE MAE


If you want to know where the bodies are buried, look no further. Here are a few snips from Marie’s brief:

In what has become common parlance among those
investigating these securitization failures (including
the Securities and Exchange Commission and the
Department of Justice), we refer to this type of
transfer as an “A to D” assignment because it skips
over parties “B” and “C” and creates a “wild deed
(especially in title theory states such as
Massachusetts).

The assignment of mortgage is the “breeder
document” from which all other paperwork necessary
to bring the foreclosure action; notice the sale;
obtain judgment; and transfer title depends.

The Eaton Defect” as described in our amicus brief occurs when an entity, such as Green Tree Servicing LLC takes the mortgage by assignment and prosecutes a foreclosure in its own name when it neither owns nor holds the note.

The Ibanez Defect” as described in this amicus brief occurs when an entity, such as Option One Mortgage Corporation, sells the loan for securitization purposes and later, after the loan has been sold multiple times, assigns the Note and Mortgage (or just the Mortgage) directly to the Trustee of the Issuing Entity (securitized trust).

Supreme Judicial Court
FOR THE COMMONWEALTH OF MASSACHUSETTS
NO. SJC-11041
SUFFOLK COUNTY

HENRIETTA EATON,
PLAINTIFF-APPELLEE,

v.

FEDERAL NATIONAL MORTGAGE ASSOCIATION & ANOTHER,
DEFENDANTS-APPELLANTS.

ON APPEAL FROM AN INTERLOCUTORY ORDER OF THE SUFFOLK SUPERIOR COURT

SUPPLEMENTAL BRIEF OF
AMICUS CURIAE MARIE MCDONNELL, CFE

[ipaper docId=80055062 access_key=key-2jczy7ahsbjdgr7u6vbg height=600 width=600 /]

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US Treasury: New HAMP Mortgage Modification Program Includes GSE Principal Reductions

US Treasury: New HAMP Mortgage Modification Program Includes GSE Principal Reductions


I posted the quoted text below back on Nov ’10… I wonder who exactly signs off for MERS, if this is so?

The standard modification agreement
is between the Borrower and
the Lender. The agreement amends
and supplements (1) the Mortgage,
Deed of Trust or Deed to Secure
Debt (Security Instrument) and (2)
the Note bearing the same date as,
and secured by, the Security
Instrument. Prior to MERS, the
standard agreement worked
because the Lender was the mortgagee
of record and could modify
the mortgage and also had the
authority to modify the Note.

However, if MERS is the mortgagee
of record, the Lender can’t
modify the mortgage without the
“mortgagee’s” consent.

MNINEWS-

The Obama Administration Friday announced it is expanding its flagship mortgage modification program and will now encourage lenders to reduce the principal loan balance for Fannie Mae and Freddie Mac loans.

The announcement comes just three days after President Obama said he would do more to support the struggling housing market and two days after Federal Reserve Chairman Ben Bernanke said housing is holding back the economic recovery.

Assistant Secretary for Financial Stability Timothy Massad in a blog post Friday outlined the changes to HAMP — including extending the end-date by one year and refocusing on principal reductions.

Massad said Treasury notified the Federal Housing Finance Agency, the regulator for Fannie Mae and Freddie Mac, that they will pay principal reduction incentives to the GSEs if they allow servicers to forgive principal — if done in conjunction with a HAMP modification.

Massad also said Treasury will triple the incentives for HAMP principal reduction modifications by paying from 18 to 63 cents on the dollar, depending on how much the loan-to-value ratio is reduced.

[MNINEWS]

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Guest Post: Eaton – Dividing the Mortgage Loan and Affirming the Consequent

Guest Post: Eaton – Dividing the Mortgage Loan and Affirming the Consequent


Written by Gregory M. Lemelson

In January the Massachusetts supreme judicial court held in US Bank National Association vs. Antonio Ibanez that a note holder may not foreclose on a property in order to redeem a debt, if they are not also the holder of a valid mortgage (that is to say also with a valid assignment). We outlined the details of this case and its implications in our article “Ibanez – Denying the Antecedent, Suppressing the Evidence and one big fat Red Herring” on January 11th, 2011.

The issue before the SJC in Henrietta Eaton v. Federal National Mortgage Association and Green Tree Servicing, LLC is whether the assignee of a mortgage security alone (fraudulent assignments aside), without any direct or indirect interest in or claim to the underlying debt, can seek to recover the debt through foreclosure.

Oral arguments in the case were heard on Oct. 3rd, 2011.

It is important to note that in Ibanez, the SJC was not willing to overturn long standing legal principles simply because of recent “innovation” in the way banks chose to record their security interest in real property (e.g. MERS), or because of the extraordinary liability such a ruling would have on what basically amounted to four years of mostly illegal foreclosure activity in the Commonwealth.

The Ibanez article published last January predated Eaton by some ten months, and since the SJC reviewed Eaton “sua sponte”, there was no way to know at the time, that Eaton would make it all the way to the SJC, so the following comments taken from the article are perhaps prescient:

” It is possible that from the banks perspective an invalid assignment of the note is the more serious concern for the following reasons:

1. Without first having proper ownership of the debt, the bank can not initiate any collection activity, let alone foreclosure.

2. Notes (ownership of the debt asset), may be subject to further contention in bankruptcy proceedings where many creditors have a vested interest in the assets of a defunct mortgage lender, particularly since these notes are often sold in bankruptcy for a fraction of their face value.

3. The trusts that are supposed to contain the validly conveyed notes will in fact, not actually contain them (because they are not bearer paper), thus violating the representations and warranties made to investors who purchase these securities. Therefore, it is unsecured debt, and potentially, no debt at all upon which to collect payments.

6. Even if the notes obtain a valid conveyance, or confirmation of conveyance at a later date, it is still may be impossible to place them into the MBS’s:

a. It will have been longer than 90 days (the typical expiry period to transfer assets into the trust)

b. If it is a foreclosure matter, the loan is in default (the PSA’s do not allow for the addition of defaulted loans)

c. Any effort on the part of the trust to insert old or defaulted loans would jeopardize the trusts favorable REMIC status – thus further harming already impaired returns.”

As pointed out in the Ibanez article, clear title to the property is important. If the assignment of the mortgage is invalid, then there is a “cloud on title”. The banks recognizing this, brought Ibanez before the land court of their own volition in order to clear this “cloud on title”. One of the key mistakes counsel for Eaton made, perhaps in their effort to establish the more serious problem of legitimate possession of the note, was overlooking the validity of the Mortgage assignment, (still incredibly important) which, as with most securitized loans, was so clearly fraudulent (see Amicus brief of Marie McDonnell). Incidentally, this was of particular interest to the court during oral arguments, however, because the issue was never raised by Eaton’s counsel in its complaint, it could not be addressed by the court. Thus the opportunity to cite the authority of Crowley v. Adams 22 Mass. 582 (1917) which concerned the fraudulent conveyance of a mortgage without a note, was lost. Within the context of discussing the assignees knowledge of the fraud, the court held:

“[the assignee] should be held to have known as to each transaction, the possession of the note was essential to an enforceable mortgage, without which neither mortgage could be effectively foreclosed.” Id. at 585.

This was a error on the part of counsel, and eliminated a potential fifth source of authority in Eaton, as we wrote in January:

“1. If there must be a perfected interest in the mortgage (according to MA law) at the time of foreclosure, then how many foreclosures have taken place in Massachusetts with the same profile as Ibanez, and are thus invalid?

2. Clear title is important – In the statement of the case, the banks actually brought the complaint before the land court as independent actions in order to “remove a cloud on the title” – thus the banks recognize that such defects are a problem for future conveyance. All MA homeowners should be worried about the same (discussed further below).

3. To foreclose on a mortgage securing property in the commonwealth, one must be the holder of the mortgage. To be the holder of the mortgage, the bank must:

a. Be the original mortgagee

b. Be an assignee under a valid assignment of the mortgage

c. It is not sufficient to possess the mortgagor’s promissory note (bearer paper). Apparently most if not all securitized mortgages were endorsed in “blank”, in other words to the bearer.

4. The notice requirements set forth in G.L.c. 244, ss 14 unequivocally requires that the foreclosure notice must identify the present holder of the mortgage. This likely was not the case in past foreclosures in MA. For future foreclosure actions the question is can the real mortgage holder be found and will they cooperate in assigning the security interest?

5. Assignees of a mortgage must hold a written statement conveying the mortgage that satisfied the statute of Frauds or even the most basic elements of contractual requirements.

AG Coakley acknowledges that “the securitization regime was required to conform to state law prior to foreclosing, to ensure simply that legal ownership ‘caught up’ in order that the creditor foreclose legally in MA. The lenders, trustees and servicers could have done this, but apparently elected not to, perhaps on a ‘Massive Scale’ ” Saying that they “could have done this” within the context of MA law is one thing, within the context of IRS tax code, or NY trust law, is another.”

Further the article points out that a holder of the mortgage without the note, really only holds the security instrument in trust for the debt holder (thus anticipating Eaton), as pointed out in the following taken from the Ibanez article:

“4. The holder of the mortgage holds the mortgage in trust for the purchaser of the note, who has an equitable right to obtain an assignment of the mortgage, which may be accomplished by filing an action in court and obtaining an equitable order of assignment. If the average MBS has 5,000 notes for example, then we have to assume 5000 separate actions would have to be filed in court to ensure they are truly “Mortgage Backed Securities”, and that is only if the REMIC status isn’t jeopardized by such a revelation or action.”

However, the impasse for banks is the fact, that even if the court recognizes the authority of MERS to assign the mortgage to the foreclosing entity (usually the servicer), the following conditions still must be met:

a) The assignment must still be a valid assignment (most are not)

b) There must also be a valid assignment of the note to establish who exactly owns the debt.

The vast majority of these loans were sold into securitization trusts and are merely endorsed “in blank” (if they can even be found in the trust at all). Most schedules attached to the trust documents include little or no information on the details of the particular loans (as was the case in Ibanez), or sometimes include the address of particular properties, but no information on the barrowers, or curiously the loan amounts. Other failures include post-dated or otherwise invalid notarizations, and fraudulent signatures etc., which are all suggestive of fraud.

Given this, to speak of Eaton merely as a question over the validity of MERS and its assignments is incorrect. Even if Eaton is not affirmed by the SJC, the issue of validly conveyed notes, remains of vital importance.

That having been said, we believe the Appellants chances of prevailing are precisely zero, or maybe less. Taken together with Ibanez, this means serious problems for the bond holders in these securitization trusts and their bank administrators. With all the nuance of every day speak we could muster, we think it is put best by saying just; some of the debt-servants might escape. That isn’t to say that all measures won’t be taken to try to prevent this outcome.

On contemporary Pheronic thinking and the Pyramids that debt-servants build

We believe that this situation lends itself to the possibility of violence, as tragic an outcome as that is and would be. On June 3rd, 2011 we published our follow up to the Ibanez article entitled simply “On the ethics of mortgage loan default“. Four days later, the Essex county registrar of deeds John O’Brian, who we quote in the article, stopped recording fraudulent mortgage assignments (which many if not most are). It seems logical that this would be a “wake-up” call to the average homeowner, particularly since other registrars are prepared to follow suit. With the registrar’s decision, it has become a fact that title may no longer be recordable and ownership is in question.  As it turns out, the homeowner who faithfully sends in monthly mortgage payments for years or decades (in an effort to “do the right thing”), may have no more clear ownership rights in the related property than a perfect stranger.

As the article “On the ethics of mortgage loan default” spread throughout the Internet with countless links and references, we were surprised to find comments that included (not unlike the allegory of the cave) the desire that the author “be shot“. We were equally surprised when the Hacktivist group “Anonymous” (which was not our target audience either) featured the article prominently in several of their sites.

shadows_on_the_wall_3It has been said “the rich rules over the poor, and the borrower is servant to the lender”. Perhaps in our Naiveté, we did not understand the sensitivity around the suggestion that a servant might want to be free one day. Nor did we recognize that the powerful human inclination to denial might elicit more than just a passive reaction.  Like the prisoner who is freed from the cave and comes to understand that the shadows on the wall do not make up reality at all – later puts their life in danger from those who remain in the cave. Yet, the source of the light is truth and intelligence and those who would act prudently must see it.

These implications give rise to powerful questions in the current context. One such question regards the difference between a debt and a moral obligation? Why do we confuse the two so often in our society? Such that those who seek forgiveness of debt, are made to feel as if they are violating a moral code, or a cultural taboo? Perhaps the explanation lies in a more clear definition of the two. A moral obligation is something that can be forgiven with some flexibility, there is hardly exactness involved.

A monetary debt on the other hand can be calculated with the accuracy and immutability of math and the related science of accounting, and grown with the power of compounded interest, and therefore, in proper monetary debt, exist the possibility of subjugation in perpetuity, or at least for the entire natural life of the debtor.

Oddly, our society adds insult to injury in this failing of human civilization, and as if this dreadful revelation were not enough, adds on top of these accurately calculated and compounded financial obligations, the fallacy of a moral obligation, and in so doing the debt-servant is made to feel guilt regarding his moral character as well as his failure to pay.

When this sleight of hand is wedded to exhaustion (a pre-existing condition of many debt-servants), the odds of one actually fighting back against such a system, corrupt though it may be, are only minute. It must have been a genius who figured out that slavery with chains is inefficient. If a human could be conditioned to believe he is a free man, when he is not, and that already disillusioned he might be convinced that he is also a rich man, when he is not, then chains and their related complications are wholly unnecessary. All that is necessary then is to lower his idea of freedom and wealth substantially, and provide him with cut-rate imitations.

Under these circumstances, the average man would in fact work extraordinary hours, even if his paycheck was essentially diminished to less than zero by his existing debts (thus requiring him to take on new ones), and if by chance he was able to save, those funds too would be safely transferred to the hands of strangers (through “innovations” such as 401K’s, which could be convenient deducted from his paycheck electronically and instantly). These strangers are there to help the debt-servant loose what meager savings might be possible through sub-par investments (like internet stocks) which he never understood, but which is broker was always paid for trading.

Notably, this shell game can never be revealed to a debt-servant, because then he would understand that he is not really a free man, even though the real law is “…not on tablets of stone but on tablets of human hearts”, and yet this inclination of the heart is often resisted, even with violence. Nonetheless, In this law of the heart lies “a desire” which is so great that it over powers all other human constructs, including offensive debts.

In this respect, surely a few folks in Europe must have believed that the entire trade in chained slaves made the United States look like an economically and operationally primitive bunch – for the cost of that variety of servant is actually much higher, and had a far smaller pool of candidates, namely those with a particular tint to their skin. Yet, telling someone that they are inferior based merely on the color of their skin is a hard sell year after year. Conversely, telling someone they are free, when they have never tasted real freedom because they were born into debt, is easier to maintain, because it deals with more subtle issues, and the likelihood of confusion with moral obligation, and exploits the power of human denial.

The earliest evidence regarding market places and trade indicate that if you have something to sell that is of far lesser value than you are indicating, than it is wise to have the greatest physical distance possible between yourself and your counterpart – for in such a trade lies the inherent possibility of a violent reaction to the discovery on the part of the unsuspecting buyer, particularly when accurate accounts of credit and debt are kept and ruthlessly enforced. Some of the oldest recorded documents in history are of this variety; they are surprisingly, accounts of credit and debt. Perhaps human history is really a history of subjugation then. Cultural anthropologists are quite familiar with this idea of credit and debt in (even ancient) market places. It’s an old story. However, Americans are bread as consumers, not as economic or cultural anthropologist, because in that knowledge rests power, and power, by definition must belong to a coterie. For the greater the number of those subdued, the greater the power of the few who would subdue, just as with money, power deals only in transfers.

That is why the average American home owner is not allowed to have the true owner of their mortgage debts revealed – they are the counter party to an impolite deal. In these trades great profits were made, and in the pricing of the assets, great misrepresentations regarding intrinsic value. Wealth destruction therefore is a misleading expression in describing what happened; the accurate term is wealth transfer. During the housing “Pyramid” (this term is far more accurate than “bubble”, because it accurately describes an order) one of the greatest logical errors of all time was sold; that the intrinsic value of a home, which had within it the possibility of calculating (accurately) fair price was tied instead to a hyper speculative measure, that which is inherently impossible to price with any degree of accuracy, and which is immaterial; our notion of an ideal. As one might imagine, no price is too high to live an “ideal” – think of it as a seller’s paradise. After, a difficult stock market collapse, and an even more difficult terrorist attack, why would anyone be interested in mere stocks or bonds? After all the very place where these electronic slips are traded was very nearly destroyed. This new investment was allegedly concrete, and also patriotic. Americans were led to believe they had “…discovered a pearl of great value”, the only security whose price could never go down – it was like a “Dream”, like an “American Dream”.

However, when loan documents were to be signed a new broker suddenly appeared.  Without any forewarning, with a name that was not before heard, or with anyone who had actually seen him, or understood how he operated, he made a subtle but powerful arrival on the scene. His name is Mr. MERS, and he instituted even greater secrecy than stock brokers and fund managers. Few have seen his physical appearance, or pulled back the curtain, it’s uninteresting anyways, because Mr. MERS is nothing more than a relational database, which only a very small fraction of the world’s population have access to (even democratically elected bodies, such as county recorders have no such access). He brokers the movements of trillions of dollars in capital. He is a construct of your trading partner, and because of his existence, you can never have a “level playing field”, or hope of a fair trade. In this brave new world, the requisite distance that precedes a bad trade, is no longer a measure of geography, it is a piece of software.

With this surreptitious matrix of relational database fields safely in place, how are all those houses, like so many stone blocks cut by ancient hands, turned into a pyramid? The answer seems self-evident; through a pyramid scheme naturally.

How would a contemporary mass exodus from such bondage look? Just as Fannie Mae and Green Tree divided the essential components of their security, It might look like ordinary debt-servants parting and dividing a sea of concrete, and traversing the depth of high rise buildings in New York, just as “by faith the people passed through the Red Sea as on dry land”.

The people in New York are criticized for their lack of direction, the fact that they appear to be lost in a veritable desert – but they are free, and in their hearts live an almost child-like innocence that we should desire to have. After all, their predecessors spent a good deal more time lost, and through it discovered a greater revelation, one that would lay the foundation to ultimate answers.

The popular accounts promulgated by Adam Smith and the contemporary science of modern economics as we were made to understand them, rely on more than one myth regarding the engineering of debt, and its related instrument – money. These underlying misrepresentations give rise to the possibility of great abuses, for the very nature of trade, and all else which rests upon it is thus misunderstood.

There are many reasons to despair over the future of our fragile state in the US today. However, the Massachusetts Supreme Judicial Court is not one of those reasons. By upholding the rule of law, and observing the incredibly important, and notably democratic foundations of land recording practice in the commonwealth they serve as a beacon for the rest of the country to follow and impart hope. This comes at a time when such hope is in scarce supply. If it is God’s will, than the light of wisdom handed down from prior ages on this point will shine through the darkness that has been created by corrupt forces. We can only hope.

A Road Map for Homeowners: Four Authoritative Guidelines

In Massachusetts law there exists four authoritative guidelines by which property may be foreclosed upon in order to redeem a debt (Five if Crowley v. Adams is included from above). Incidentally division is not a problem for these four authorities, for they stand equally well alone as they do in combination as requirements to validly exercise the power of sale of real property. Both the spirit and the letter of these sources are echoed in laws of other states, and as such can be taken as fundamentally universal. They are as follows:

 The Common Law and the problem of Division

In Summary Eaton dealt with the following three realities of long standing Massachusetts law:

1. The assignee of a mortgage with no claim to the underlying debt cannot foreclose.

2. A mortgage separated from the debt it secures has no value in and of itself; it can only be held in trust for the note holder (naked title)

3. The trust relationship implied for the benefit of the note holder does not empower a mortgage assignee to foreclose as a “fiduciary” at any time.

It should be offensive even to the casual observer that in the case of Eaton, as would be the case for most home owners today, a valid promissory note memorializing the debt was and is missing. Who held it at the time of the foreclosure, how they obtained it, and what relationship they had if any to the appellants was and is still unknown.

Although a photo copy of the note was produced with the typical “endorsement in blank” markings, the appellants provided no document or other information indicating when the note was endorsed or who held it either then or now. The required assignments between intermediaries were never produced. Interestingly neither of the defending entities offered any testimony or other evidence in either court action to resolve these all important questions or otherwise identify the holder of the note. However, they did concede, that it was not the foreclosing entity Green Tree, LLC.

Conceivably this is because they do not know, and they do not want to know, and maybe they would even like to forget. Perhaps the note it is evidence.

Not surprisingly counsel for the appellants, despite this revelation, argued that the whereabouts and history of the promissory note was “irrelevant” and that they were entitled to foreclose nonetheless.

After a careful review of the full history of the mortgage foreclosure law in Massachusetts, as well as the related statutes and appellate decisions, The Superior court didn’t exactly see it that way – determining that no decision had ever overturned the established common law rule that a mortgage assignee must hold the note in order to enforce it through foreclosure.

Needless to say, this is of great concern to the banks, as predicted in the Ibanez article (cited above). Given the audacity of their claims, we believe it is reasonable to assume these folks would, if given the opportunity “send an orphan into slavery or sell a friend”. It has been difficult and time consuming to discover that notes were sold multiple times into multiple trust, thus creating a out-and-out pyramid of securities, upon which even more derivatives could be sold. However, something even more simple and obvious has been taking place in broad daylight, something peculiar that has been overlooked – the awkward problem of entire houses being stolen, by folks who have categorically no financial interest or otherwise is the properties.

Since this is the direct opposite of “The American Dream”, possibly the moniker “the American Nightmare” is appropriate.

Taking a step back, it is awful to consider that GreenTree, LLC had no interest in the debt, no interest in holding the property pre or post foreclosure, and had no material interest in the entire affair whatsoever, and yet they were the entity which sought to foreclose (or steal). Does it not appear as Les Trois Perdants with GreenTree, LLC acting as a shill?

For centuries promissory notes and the mortgages securing their repayment were held or assigned together. The separation of these two instruments, until recently was an anomaly and exception. Albeit no longer an anomaly, but rather the general business practice of approximately the last ten years, the SJC reaffirmed in Ibanez, that a trust implied by operation of law gave the note holder the right to sue to obtain an equitable assignment of the mortgage (U.S. Bank v. Ibanez, 458 Mass. 637 (2011) – which implies surprising possibilities (e.g. every note allegedly held in every securitized pool, would have an individual and related suit to perfect it’s claim). Implications aside, the court’s ruling established nonetheless a method by which the note holder (the person to whom the debt is owed) could be empowered to collect payment.

Incidentally, long before the bifurcation of the notes and mortgages was ubiquitous, this operation of law was periodically challenged by mortgage assignees who believed that they, as “mortgagees” could simply foreclose in their own names. However, since the 19th century, and as pointed out above, the SJC has ruled otherwise. In a series of decisions it articulated the rule that a mortgagee who has no interest in the debt underlying the note cannot conduct a foreclosure, insisting instead that that right is reserved for a holder of a valid note along with a valid mortgage.

Green Tree, LLC and their Government handlers suggest that the parts of the whole, when taken independently have the properties of the whole. That is to say in this case, that since the mortgage contains the power to foreclose, the mortgage must have with it all the powers of the note – this proposition is patently wrong, and is the fallacy of Division. The instruments may function properly together, but have incomplete authority independently – and that is exactly what long standing statute (as outlined below) has upheld.

In Summary, Ibanez brought to light that banks holding only notes have only an unsecured debt – that is to say one that could be negotiated like any other. Eaton, on the other hand brings to our attention something of far greater importance; namely that a holder of a mortgage alone (even if validly assigned), without proper ownership of the underlying debt, has in fact nothing.

Call us speculators, but if SJC affirms the lower court’s decision we have a funny feeling more than one banks share price might be adversely affected.

In the end, suggesting independent authority of the mortgage, regardless of any concern for the note or the debt is just a bad argument – it’s not only “Division” it is also a great candidate for the “Non Sequitur” argument of the year award.

 GreenTree, LLC – Affirming the Consequent

A thorough discussion of Massachusetts foreclosure law can be found in Howe v. Wilder, 77 Mass. 267 (1858). which resolved a foreclosure dispute by holding that a mortgagee, without the note, could not foreclose on the mortgage.

The court goes on to elaborate that because the party who would otherwise seek to foreclose was owed no debt, he cannot recover possession:

“For in pursuing such a suit [the party] has only the rights of a mortgagee, and is limited by the restriction imposed upon him…if nothing is found due to the plaintiff, it follows by necessary implication, from the provisions of the statute, that he can recover no judgment at all; none to have possession at common law, because that is expressly prohibited; and none under the statute, because where there is no condition to be performed, there can be no failure of performance, and no consequences can follow a contingency which in nature of things can never occur.”

Suggesting that by being an assignee of the mortgage, encompasses the right to foreclose is simply “Affirming the Consequent” and is just another logical fallacy.

 MGL 244 § 14 and the Straw Man

Bifurcating the note and the mortgage was an extraordinary circumstance when the legislature decided the subject laws. At the time these laws were ameliorated there was no reason to explicitly delineate between the debt and the mortgage instrument securing it. To argue, as Green Tree has, that the term “Mortgagee” as used in MGL 244 § 14 means also “naked mortgagee”, (a mortgage holder not having any interest in the underlying debt) is a “Straw Man“. This suggestion overlooks the historical context in which the law was authored, the rise of the mortgage securitization industry, its related practices and the compulsory changes to recording which has taken place over the last decade. It is to overlook the privatization of land records that (as far as we know), no elected official or law maker had blessed beforehand.

If Green Tree’s argument were accurate, they would not assign the mortgages to third party servicers at all, and rather continue to foreclose in MERS name (more efficient) as had been the practice until several states supreme courts ruled against it, citing the fact that MERS had no economic interest in the mortgage, which is “but an incident to the note” or “a mere technical interest” (Wolcott v. Winchester) – this of course reaffirms the spirit of the law which Henrietta Eaton asserts in her complaint.

In particular the court stated that the assignee of a “naked Mortgage”:

“…must have known that the possession of the debt was essential to an effective mortgage, and that without it he could not maintain an action to foreclose the mortgage.” Wolcott v. Winchester, 81 Mass. 462 (1860)

Despite all of this, the bright idea of the securitization industry was to simply transfer the mortgage instrument to the servicer – a related party, sort of.

If Eaton is not affirmed by the SJC, we might as well make Three Card Monte our national pastime and get rid of baseball altogether. In such a scenario handicapping the future of the US economy and the ability to affectively and profitably speculate in the CDS market will be “duck soup”.

 The authority of the UCC codified at G.L.c. 106

Because the common law involves a great deal of common sense, it just so happens to be mirrored in the Uniform Commercial Code. In particular G.L.c. 106. Article 3 of the UCC governs the negotiation and enforcement of negotiable instruments, including promissory notes secured by mortgages. Section 3-301, like the common law, provides that one must hold a (valid) note in order to validly enforce it. This rule serves the purpose of protecting consumers and barrowers against the very real possibility of double liability created when a debt is enforced. As in the current matter, Green Tree, LLC or any other mere mortgagee (even if they could get a valid assignment), would have no power or authority to discharge the actual debt. Thus if the operation of law were in any other capacity than it currently is, the mortgagee could foreclose on a property, while the debtor would still be left with a valid debt outstanding to an entirely unrelated party.

This lends itself to the requirement for transparency. During the oral arguments before the SJC, one justice asked why it mattered if the homeowner knew to whom they owed their debt. The answer is that homeowners have an important role to play in the outcome of the final settlement and discharge of their debt, and are above all the most interested party in ensuring that their payments are in fact reducing the outstanding principle balance as they are made. Otherwise, they may as well be directed to make their payments to any random stranger. It is absurd to suggest that a debtor be required to simply make payments to anybody who asks for it. That is to suggest that he is not only a debtor-servant, but also a mindless sheep – then again, perhaps that is the desired outcome.

In fact the entire matter may only be possible in a non-judicial foreclosure state, for if it were a civil complaint for the collection of an amount due, than would the debt instrument itself not be scrutinized as a first priority in the proceedings? Perhaps small unimportant questions like who actually owns the debt and is bringing the action would be relevant under such circumstances.

 The authority of loan contracts

In the end, the entire action by Fannie Mae and Green Tree, violates the very contract which is being disputed. Even if no other statues or laws had operated or ever existed, Eaton’s argument would survive on this one point alone – and Eaton is not unaccompanied – she stands with some 60 million other homeowners in the US with virtually identical contracts.

In the case of Eaton standard mortgage loan documents were used, and they essentially all look alike. The terms of Eaton’s mortgage contract, as with virtually all others, authorizes only the note holder to exercise the power of sale. The one concession Green Tree, LLC made was that they are not the note holder and have neither argued, nor provided evidentiary support for the claim, that a foreclosure by anyone other than the note holder was necessary (not that it would be possible).

 A bitter Fruit: Double Liability

It has been said, “By their fruit you will recognize them. Do people pick grapes from thorn bushes, or figs from thistles?”. No, because “every good tree bears good fruit, but a bad tree bears bad fruit” . Is Green Tree’s lawyer actually advocating that homeowners should just rely on the banks and servicers to be “nice guys” and not go after the debtors twice? It is already known that certain elements in the industry were willing to sell the same note multiple times into multiple pools which given Burnett v. Pratt, 39 Mass. 556 (1839), presents interesting problems for RMBS investors, who were essentially their business partners. If the architects of these systems can sell the same note twice, to their own business partners and customers, why would they not try to also collect twice from their debt-servants, who rank many orders below business partners and real customers?

If the severity of compound interest is not enough, the result may be plan “B” – “doubling up” where needed.

If the fact that being named on a valid mortgage is not sufficient to authorize a foreclosure, than automatically the question becomes who holds the note? The answer to the latter question is a bit more serious, for in the answer lies a good deal more than the banks would like to reveal.

Does greed have rational limits? It does not and it cannot because greed is not rational to begin with. Since nobody knows how the foreclosing mortgagee would actually go about paying the note holder, are homeowners to rely on a system of document management (which usually involves an Iron Mountain truck, and a whole lot of paper shredding) to ensure that debt-servants are set free if they ever pay off their “debts”?

Did barrowers really sign up for that when they signed their mortgage and note? If not, when and where are the limits?

 It’s only a matter of time

Homeowners must examine the assignments on their mortgages and notes. If a foreclosure is imminent, a preliminary injunction should be sought in order to have an opportunity to examine the documents thoroughly and also to give time to the SJC to issue its ruling – Jurisprudence matters. When the final Eaton ruling is taken together with Ibanez, there will be a sea change – it’s only a matter of time.

It seems reasonable that in a world where bandwidth intensive videos can be encoded and uploaded over a high speed 4G network from the New York Stock Exchange and on the Internet in 30 sec. using a smartphone with 64 gigs of memory (that can fit on a SanDisk card the size of your fingernail), and join billions of other files that have highly accurate GPS data embedded in their metadata, that finding a note for multiple six or seven figures debt and bringing it to court with you would really be no big deal – but apparently it is.

Foreclosures that took place before Ibanez, likely involve an assignment of the mortgage which is invalid because it would have been assigned post foreclosure (as was the common practice at the time), thus invalidating a huge number of existing foreclosures.

For foreclosures or those facing foreclosure in the post Ibanez era, than it is highly likely that the assignment of the mortgage is both invalid and fraudulent, as Mrs. McDonnell so accurately points out is endemic in most registry of deeds.  If it’s the note than that servicers intend to rely on, they may need to dream  up a new strategy, because those are all “missing” as we see in Eaton.  New strategies it seems are now in short supply.

A few more questions and thoughts

The “pump and dump” is as old as “market places” are. Whether it’s a street vendor in morocco extolling the virtues of his wares he wants to sell, or a the salesmen of shares in Netflix and Linkedin at impossiblele valuations – this “pump and dump” technique often is done with considerable misrepresentations, which result in artificially high prices for a time, and makes true price discovery impossible for buyers.

If you’re on the wrong side of the transfer, as a buyer of such stocks or bonds, you would have claims against the salesman – it’s called securities fraud. Now this ‘old time’ operation has been executed in the real estate market as well, and real estate, although most people don’t think of it this way, is also a security just like any other (it’s really not the American Dream, as has been sold – because as pointed out above, when something goes beyond the parameters of a mere security, to that of a “dream”, no price is too high). Just like stocks, these securities were pumped, and then dumped (but only after the related CDS’s were purchased by the architects).

What’s being described is an activity based on fraudulent misrepresentations, like most other such schemes. The “Pump” part involved a lot of paper shuffling, so that when the “dump” took place, the profiteers could not be easily identified. The same is true today. That is why debt-servants are not allowed to know their lender-masters – because it is the beginning of the paper trail, and as any certified fraud examiner will indicate, it all starts with the paper trail.

By focusing the attention of the court and the people on the intricacies of the letter of the law – even though they are wrong at that as well, the banks are taking attention away from the more obvious question, which is why? Why fight to interpret the law that way? That is the real question: Why. Why not produce the note. Why not reunite the note with the Mortgage?

Why would notes go missing? These are not credit card bills, they are documents outlining typically multi-six figure sums, or seven figure sums in some cases. Isn’t it logical that these documents would be kept in a safe place? And tracked? How could so many notes just disappear?

Why would the SJC and the American people at large not be alarmed by entities who foreclose on a property and yet have no idea who actually holds the debt?

The securitization process, in which so many notes were resold is subtle, but complex and riddled with a taxonomy that makes it as understandable as a foreign language to the casual observer. Yet, more careful scrutiny reveals that there is nothing even vaguely sophisticated about it’s operation.

The business of taking homes without any debt being owed is so obvious and simple so as to lend itself to denial. For example, one member of the SJC panel actually asked the attorney for Eaton why the barrower needed to know who owned the debt that they were paying? We thought maybe it was a joke – sadly it may not have been.

Yet, we know that notes have been sold multiple times into multiple pools and trusts, thus creating multiple creditors.

Any consumer should want to know if there debt is actually going to be discharged, and in order to know this, they would have to know who the actual debt holder is.

These debts are not secured. They are negotiable. This week alone, there was talk of bankruptcy proceedings for Eastman Kodak and American Airlines, Friendly’s, after more than 80 years in business, including operating during the last depression, actually did file. As commercial entities, they will be allowed before, during and after bankruptcy to work with their creditors in a completely transparent way.

Why is the average American expressly forbidden this simple aspect of business dealing? Though they entered into such obligations at far greater disadvantage than their corporate cousins?

It is clear that by introducing multiple parties that there are conflicting incentives and interests. It was surprising that the SJC brought up inadvertently during the oral arguments that the lender may have contractually sold their rights to have any say whatsoever in negotiations with the debt holder.

It is now well established that the servicers have the greatest financial incentives to foreclose, and apparently answer to no one, perhaps not even the lender, who nobody appears to be able to find.

The following question regarding Green Tree, MERS and the Eaton case are worth asking:

– Why would they go to such great lengths to keep the “lender” or holder of the debt in “secret”? What is there to gain? Would it not be much more expeditious to just reunite the note with the mortgage and then foreclose?

– Foreclosing with just a mortgage used to be an anomaly? But now it is the rule – what changed? Why would lenders take such an extraordinary risk with trillions of dollars?

– Does the claim that the notes are “lost”, or “missing” seem credible in light of the extraordinary technological world we live in?

– Is the imbalance in power between the home buyer (as signer) and the lawyer (as author) of the contract important? 99% of home buyers had no clue what they were signing – their attorney’s didn’t understand the assignee aspect of MERS or how it functioned either.

– Why would the servicer hide the debt holder? Why go through all of this trouble? Is it because it is really the US government by proxy of Fannie and Freddie?

– Were the notes used in a pyramid scheme? Were they sold multiple times intentionally in order to accommodate increasing degrees of leverage that the derivatives market required to sustain itself?

– What is the size of the global derivatives market which rest (at least in part) upon RMBS securities?

– Are RMBS pools really “Dark Liquidity” or simply “Dark Pools” and is that why MERS is necessary?

 A final note on reverse transfers

In the Commonwealth of Massachusetts servicers in possession of mortgages only (which is basically all of those who represent securitized notes) are barred by common law rule, by statute, by the Uniform Commercial Code, and by the terms of the mortgages themselves from conducting foreclosures. If they have already done so, those foreclosures are void. We believe these principles do and will extend beyond the commonwealth eventually to all of the US.

The reason the banks are fighting this is because there exists a very real fear that homeowners stuck with inflated debts, which are the equivalent to indentured servents, might actually gain some negotiating power to settle these debts, at prices which not only reflect the prudent risk management which should have taken place in prior years, but also the related and more realistic asset prices which should have prevailed at the time of the original transactions.

From a purely business point of view, the asset prices were inflated, and the average home buyer with a home loan vintage 2002-2007 had little or no choice in the setting of those prices. However, there is another group who did, and they were writing “loans” and selling them as fast as the CPU and the RAMM on MERS’ servers would allow them (thankfully cloud computing, with its superior ability to process data, and elastic memory and bandwidth wasn’t yet widely used).

Yet the securitization industry and their very elite and very wealthy captains are not having any of that – because it is a reverse transfer. To be a debt-servant is to be the servant of another man by force. Humans are not designed or built for that – that is a construct of an unfortunate human condition, which we should want to change.

How a mortgage payment can be made with fidelity every month into a authentic black hole, and the attendant psychology which enables this behavior is beyond the scope of this article. The Common Law, the MGL and UCC and even the contracts themselves make it clear though, if a mortgagor expects a discharge of the debt, they need to know who exactly they are paying.

Taking a step forward requires some courage, but less than those who have taken to the streets in NY, Boston or other cities – they are doing really hard and courageous work. Not paying a mortgage in light of the a priori evidence cannot even qualify as an act of civil disobedience. The average homeowner and mortgagor is not called to such a high calling in this instance – they are merely called to follow the mundane laws of the land which have been set down for over 150 years. It is just simple prudence. It is the lack of denial, and a willingness to recognize the truth, no matter how unpleasant. Participation in the system as it is, while concurrently declining to examine the issues intelligently is not defensible.

Paradoxically the hand of the strong which moved to Divide (the notes) and Affirm (title interest) – when taken in God’s hands, has destroyed (the notes) and preserved (the legitimate ownership).

About Gregory M. Lemelson

Author – Amvona.com blog. Entrepreneur. Find joy in teaching and writing. Founded companies in retail, real estate and Internet technology.

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EATON v. FANNIE MAE – ORAL ARGUMENTS

EATON v. FANNIE MAE – ORAL ARGUMENTS


You may access all briefs and hear oral arguments by following the links below.

You will hear the cutting edge offense and defense regarding MERS authority (or lack thereof) to foreclose.

Please listen to Judge Gants hammer the Fannie Mae attorney about the Assignment!

 

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Docket # SJC-11041
Date October 3, 2011
Video View oral argument with Windows Media Player
Summary
(prepared by Suffolk University Law School)
Mortgage Foreclosure– This case deals with the validity of a foreclosure sale conducted by a mortgagee who did not hold the underlying promissory note.
Appealed From Appeals Court, Single Justice, Justice Judd J. Carhart
Briefs See selection available in PDF format at Supreme Judicial Court website
Counsel for Appellant
(Appearing)
Federal National Mortgage Association:  Joseph P. Calandrelli, Richard E. Briansky
Counsel for Appellee
(Appearing)
Eaton:  David A. Grossman
Amici Curiae Adam J. Levitin

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AMICUS CURIAE BRIEF OF MARIE MCDONNELL, CFE FOR EATON v. FANNIE MAE

AMICUS CURIAE BRIEF OF MARIE MCDONNELL, CFE FOR EATON v. FANNIE MAE


Supreme Judicial Court
FOR THE COMMONWEALTH OF MASSACHUSETTS
NO. SJC-11041

HENRIETTA EATON,
PLAINTIFF-APPELLEE,
v.
FEDERAL NATIONAL MORTGAGE ASSOCIATION & ANOTHER,
DEFENDANTS-APPELLANTS.

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ON APPEAL FROM THE APPEALS COURT SINGLE JUSTICE

BRIEF OF AMICUS CURIAE MARIE MCDONNELL, CFE

“It is incumbent upon consumers, their attorneys,
registry staff, clerks of court, and judges to learn
how to recognize these sham assignments because they
are corrupting the chain of title in our land records;
and because, once recorded, courts afford them
deference rather than seeing them for what they are:
counterfeits, forgeries and utterings.

The MERS System is no replacement for the timehonored
public land recording system that is the
foundation of our freedom, our prosperity, and our
American way of life. By privatizing property transfer
records MERS has been allowed to set up a “control
fraud” of epic proportions that has facilitated the
largest transfer of wealth in human history, and it
should be abolished.”

[ipaper docId=67303689 access_key=key-2gv5ryhjwbjm1c62c1a1 height=600 width=600 /]

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AMICUS CURIAE BRIEF OF PROFESSOR ADAM J. LEVITIN FOR EATON v. FANNIE MAE

AMICUS CURIAE BRIEF OF PROFESSOR ADAM J. LEVITIN FOR EATON v. FANNIE MAE


COMMONWEALTH OF MASSACHUSETTS
SUPREME JUDICIAL COURT
S.J.C. NO. 11041

HENRIETTA EATON
Plaintiff-Appellee
V.
FEDERAL NATIONAL MORTGAGE ASSOCIATION & ANOTHER
Defendants-Appellees

ON APPEAL FROM MASSACHUSETTS
SUPERIOR COURT

CIVIL ACTION NO. 11-1382

AMICUS CURIAE BRIEF OF
PROFESSOR ADAM J. LEVITIN

[ipaper docId=67236937 access_key=key-2buu4oi55aj4pquiykeb height=600 width=600 /]

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Scalia Sets Standard for Massive Mortgage Fraud Class Action Law Suit

Scalia Sets Standard for Massive Mortgage Fraud Class Action Law Suit


Via: The Economic Populist

by Michael Collins

There hasn’t been much in the way of justice for the average citizen for quite a while. Often, those accused of crimes cannot afford adequate representation and are subject to “let’s make a deal justice.” If you’re unfortunate enough to be sued or party to a divorce proceeding, you soon learn that the court system is an entitlement program for attorneys, not a civilized means of settling disputes. (Image)

The last decade has been devastating for what many thought were inviolable fundamental rights. The Bush administration dismantled as much of the Constitution as time allowed including habeas corpus which prevents detention without a charge. Through a presidential directive, an even older legal tradition went by the way, the right to be indicted and tried before facing capital punishment. I am, of course, referring to President Obama’s declared option to assassinate citizens of the United States identified as terrorists by anonymous bureaucrats.

The Scalia opinion in Wal-Mart Stores, Inc. v. Dukes seems like another brick in the wall that protects the powerful against the intrusions of civil rights and equal treatment sought by the rest of us. Brought in behalf of Wal-Mart’s female employees, the suit sought compensation for 1.5 million women subjected to wage discrimination.

Scalia’s opinion killed the case before the evidence was considered. He argued that the group of women suing failed were not a true “class” that met the requirements for a class action lawsuit. The women bring suit needed to show that Wal-Mart had a discriminatory evaluation procedure or “operated under a general policy of discrimination” (Wal-Mart v Dukes, pages 16-27).

Outcomes don’t matter to Scalia. The very real disparities in income highly correlated with gender were not relevant. Never mind that there was evidence of massive financial discrimination. It was all about a lack of evidence for specific prior acts by the company. Is he serious?

This doesn’t sound very good for class action law suits in general. What company has openly discriminatory assessments for promotion or an explicitly documented “general policy of discrimination?” Were Scalia any more obvious as a blocking back for the corporate elite, he’d have to wear company logos on his judicial robe while rendering decisions.

Lenders had a Specific Uniform Policy to Commit Illegal Acts against Borrowers

The Mortgage Electronic Registration System (MERS) was created by Fannie Mae, the Mortgage Bankers Association, and key big bank lenders in the real estate finance industry. Gretchen Morgenson reported that MERS is involved in 60 million mortgages. MERS created the electronic recording system and operates it through a subsidiary. It neither loans nor collects mortgage payments. You’d never know that reading a majority of mortgages.

Professor Christopher L. Peterson of the law school at the University of Utah noted the pervasive presence of MERS in United States mortgages:

“In boilerplate security agreements included in mortgages all around the country, lenders include this clause:

MERS is Mortgage Electronic Registration Systems, Inc. MERS is a separate corporation that is acting solely as a nominee for Lender and Lender’s successors and assigns. MERS is the mortgagee under this Security Instrument. MERS is organized and existing under the laws of Delaware, and has an address and telephone number …” Peterson, September 19, 2010

This language represents a legal contradiction, clearly stated by lenders when they included this boilerplate in mortgages, notes and other lending documents. You are either a “nominee” (proxy) for the lender or the lender. This is a misrepresentation on its face. MERS could never be the mortgagee because it didn’t fund the mortgage, collect payments, or service the loans. Professor Peterson provided a detailed review of the flaws I MERS claims of legal standing in 2010. (Also see ForeclosureGate Deal – The Mandatory Cover Up re Peterson’s analysis)

The foundation of over of the 60 million MERS tainted mortgages is based on misrepresentation. MERS was not what said it was. It was something entirely different. The misrepresentation represents the most basic form of contract fraud.

On June 7, the Supreme Court of the State of New York, Appellate Division: Second Judicial Department dismissed a foreclosure action by the Bank of New York (Bank of New York, etc., respondent, v Stephen Silverberg, et al., appellants, et al., defendants). The New York Court stated: “In sum, because MERS was never the lawful holder or assignee of the notes described and identified in the consolidation agreement, the corrected assignment of mortgage is a nullity, and MERS was without authority to assign the power to foreclose to the plaintiff. Consequently, the plaintiff failed to show that it had standing to foreclose.” (Decided June 7, 2011)

In the opening line of the Wal-Mart decision, Justice Scalia noted, “We are presented with one of the most expansive class actions ever.”

How about a class action brought by tens of millions of citizens, Mr. Justice (sic)?

Had the homeowner signed a name other than his or hers, the contract would be deemed null and void. The same applies to the misrepresentation of MERS as the mortgagee.

The behavior of MERS was and remains fraudulent. The lender contracts through MERS should all be declared null and void.

Proof that the Misrepresentation was Intentional

As mortgage backed securities (MBS) were taking off, Moody’s investment issued an opinion on the legal risk to mortgage backed securities (MBS) investors faced form investments based on MERS. This was the green light for the orgy of derivative trading based on mortgages, including the subprime fiasco.

Without citing one single court case or authority and absent any contradiction from lenders or MERS, Moody’s argued that “common law principles” supported the use of MERS. Moody’s predicted that foreclosures would not be “materially impacted” and that, after an “adjustment period,” courts and attorneys would “get familiar with MERS.”

This was wrong at the time it was published. The stunning inaccuracy has been demonstrated in court decisions acrosscountry. But the Moody’s opinion of 1999 was issued, ex cathedra, as it were. It stood unchallenged by the lenders. They knew or should have known that there was no legal support for this arrangement. the

MERS and lender behavior during foreclosure proceedings provides another powerful demonstration of illegal intent. Even though it was not entitled to do so as the mortgagee and note holder, MERS was the named party in tens of thousands of foreclosure actions.

The lenders also showed a clear pattern of knowing disregard for the law by filing defective claims in bankruptcy courts. Professor Katherine Porter of the University of Iowa and Harvard University law schools examined 1700 Chapter 13 bankruptcy filings. The study reported that over half of foreclosure claims lacked “one or more of the required pieces of documentation for a bankruptcy claim.” Lender fees were “poorly identified” and “seemed unreasonable.” Porter concluded:

“The bankruptcy data reinforce concerns about the overall reliability of the mortgage service industry to charge homeowners only the correct and legal amount of the debt and to comply with applicable consumer protection laws.” Katherine M. Porter, 2008

With all of their resources, lenders filing mortgage claims in court should be expected to make very few mistakes and almost never leave out documents required by law to make the foreclosure enforceable. They knew or should have known that this was happening. Their behavior shows major contempt for the law and is likely illegal.

MERS Mortgage Holders Meet Scalia’s Requirement for a “Class”

They have a common grievance, the fraudulent misrepresentation by MERS that it was the mortgagee.

They can prove specific violations of law prior, during, and after the fact. The contract contained a fundamental misrepresentation; one that MERS and lenders knew was a misrepresentation. For a subclass, those who were subject to foreclosure proceedings as part of a MERS contract, the illegality is demonstrated by the pattern of repeated incomplete filings while attesting to the court that the filings were complete.

Will the court ever hear a class action by millions of homeowners demanding the cancellation of mortgages contracted through MERS?

Will it cancel existing mortgages and reverse foreclosures with damages paid? Of course not. But it should. It meets the Scalia standard for class actions to a tee.

END

This article may be reproduced entirely or in part with attribution of authorship and a link to this article.

Original Source: [THE ECONOMIC POPULIST]

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EATON v. FANNIE MAE, GREEN TREE SVCING | MASS SUPERIOR COURT “Mortgagee NOT in Possession of the Note, MERS, IBANEZ, Prelim. Injunction”

EATON v. FANNIE MAE, GREEN TREE SVCING | MASS SUPERIOR COURT “Mortgagee NOT in Possession of the Note, MERS, IBANEZ, Prelim. Injunction”


mortgagee without mortgage note holds “naked legal title” in trust


COMMONWEALTH OF MASSACHUSETTS

SUPERIOR COURT
CIVIL ACTION
N0.-11 1381 E

HENRIETTA EATON

vs .

FEDERAL NATIONAL MORTGAGE ASSOCIATION & another1

Excerpts:

The Defendants have produced a photocopy of the Note. It is endorsed in blank and does not bear an allonge indicating when it was endorsed or who held it at the time of the foreclosure. For the purposes of this motion only, Defendants stipulate that Green Tree did not hold the Note when the foreclosure occurred.

[…]

There is no inconsistency between this analysis and the recent decision in U.S.Bank National Association v. Ibanez, 458 Mass. 637 (2011). Ibanez restated common law of the Commonwealth to the effect that the assignment of a mortgage must be effective before foreclosure in order to be valid. In Ibanez, it was undisputed that the foreclosing entities were the note holders. The plaintiffs argued that, as note holders, they had a sufficient financial interest to foreclose. Not so, said the Court; as note holders separated from the mortgage due to a lack of effective assignment, they had only a beneficial interest in the mortgage note. The Court held that the power of sale statute, by its terms, granted that authority to the mortgagee, not to the owner of the beneficial interest.2 The SJC did not address the authority of the assignee of the mortgage not in possession of the note to foreclose.

[…]

In finding that Eaton is likely to succeed on her claim, the court is cognizant of sound reason that would have historically supported the common law rule requiring the unification of the promissory note and the mortgage note in the foreclosing entity prior to foreclosure. Allowing foreclosure by a mortgagee not in possession of the mortgage note is potentially unfair to the mortgagor. A holder in due course of the promissory note could seek to recover against the mortgagor, thus exposing her to double liability. See 5- Star Mgmt., Inc. v. Rogers, 940 F. Supp. 512, 520 (D. E.D.N.Y. 1996); Cf. Cooperstein v. Bogas, 317 Mass. 341, 344 (1944) (noting that allowing a creditor ofthe mortgagee to reach and apply the interest of the debtor in the mortgage itself would “leav[ e] the note outstanding as a valid obligation of the mortgagor to the holder of the note who might possibly be a person other than the mortgagee.”).

CONCLUSION AND ORDER

For the reasons set forth above, Eaton’s motion for preliminary injunction is ALLOWED. Fannie Mae is hereby enjoined until further order of this court from proceeding with its previously commenced summary process action Housing Court Docket 2010-2010-SP-0379 with respect to Eaton’s residence at 141 Deforest Street, Roslindale, Massachusetts, or from interfering with the Eaton’s possession and enjoyment thereof. 9

[…]

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Fannie Mae warns of SIGNIFICANT RISK, Half of FNMA’s mortgages registered in MERS name

Fannie Mae warns of SIGNIFICANT RISK, Half of FNMA’s mortgages registered in MERS name


Two things… she’s either trying to scare you since they just announced she seeks billions from taxpayers last week, or they are trying to come clean in case this all folds up… knowing they ALWAYS knew this system was wrong.

After all, if you recall she made another announcement last year, MERS May NOT Foreclose for Fannie Mae effective 5/1/2010 and then her mate followed, Freddie Mac Tells Servicers NOT To Foreclose In MERS.… so she was possibly working on this for some time. Both shareholders of MERS from the beginning.

Coincidence? Do you have a choice to remove MERS off your loan at the closing table?

Dont’cha wonder what was the point of saving on recording fees or the amount it take$ to defend MERS? Betcha either was well worth it as it made wall street CEO’s billions and others many millions.

Housing Wire-

Roughly half of the mortgages owned or guaranteed by Fannie Mae are registered in the Mortgage Electronic Registration System name, according to a filing by the government-sponsored enterprise last week.

Fannie’s guaranty book of business totaled $2.9 trillion at the end of the first quarter, meaning about $1.45 trillion of loans are registered in MERS’ name. The connection, Fannie said, poses a significant risk.


© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in STOP FORECLOSURE FRAUDComments (2)

In foreclosure? Can’t be found? More Twisted, Conflicts of Interest.

In foreclosure? Can’t be found? More Twisted, Conflicts of Interest.


As if it hasn’t been a conflict when MERS is the nominee for the plaintiff but is also named or is the mortgagee for the defendant…what a total state of confusion.

Oh wait there’s more, and who signs and notarizes these documents entered as evidence in most cases?

TBO.com

TAMPA – When a lender fails to find a homeowner to notify them of a foreclosure lawsuit, a judge often appoints a guardian ad item. That attorney is supposed to represent the property owner’s interests.

But guess who typically picks the guardian? The lender’s attorney.


© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in STOP FORECLOSURE FRAUDComments (2)

John O’Brien, the Essex County register of deeds, isn’t buying it, and neither should you

John O’Brien, the Essex County register of deeds, isn’t buying it, and neither should you


Our View: Avoiding another mortgage mess

The Salem News Thu Dec 16, 2010, 06:00 AM EST

They did such a good job depressing the housing market and sending the economy into a tailspin, why not trust the banking cabal with keeping track of all property titles?

John O’Brien, the Essex County register of deeds, isn’t buying it, and neither should you.

O’Brien, of Lynn, is in the forefront of a national effort to challenge the policies and practices of the Mortgage Electronic Registration Systems Inc. (MERS). The agency was established in 1995 by a group of banking conglomerates including Bank of America, Countrywide Home Loans and Wells Fargo, to keep track of loans issued against property titles — a task previously performed by the public registries of deeds.

In a Nov. 18 letter to Attorney General Martha Coakley, O’Brien alleged that MERS “has failed to pay the proper recording fees required under Massachusetts statute when a lender assigns a mortgage to another entity.” And this week Coakley announced that she will join her colleagues in several other states in an investigation to see whether MERS is skirting laws regarding such transactions.

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in STOP FORECLOSURE FRAUDComments (0)

The Big Lie: MERS Mortgages in Massachusetts by Jamie Ranney, Esq.

The Big Lie: MERS Mortgages in Massachusetts by Jamie Ranney, Esq.


by Jamie Ranney, Esq.
Jamie Ranney, PC
4 Thirty Acres Lane
Nantucket, MA 02554
jamie@nantucketlaw.pro
508-228-9224

This memo will focus on MERS-designated mortgages in Massachusetts.

In this author’s opinion two (2) things are evident after a survey of Massachusetts law.

First, MERS cannot be a valid “mortgagee” under Massachusetts law and thus MERS designated mortgages are invalid in the Commonwealth of Massachusetts.

This is because MERS-designated mortgages by definition “split” the security instrument (the mortgage) from the debt (the promissory note) when they are signed. This “split” invalidates the mortgage under Massachusetts law. Where the security interest is invalid upon the signing of the mortgage, MERS cannot occupy the legal position of a “mortgagee” under Massachusetts law no matter what language MERS inserts into their mortgages that purports to give them the legal position of “mortgagee”. Since MERSdesignated mortgages are invalid at their inception, it follows logically therefore that MERS mortgages are not legally capable of being recorded in the Commonwealth of Massachusetts by its Registers of Deeds.

Second, even if a MERS-designated mortgage were found to be a valid security instrument in Massachusetts, each and every assignment of the mortgage and note “behind” a MERS-designated mortgage must be recorded on the public land records of the Commonwealth in order to comply with the Massachusetts recording statute at M.G.L. c. 183, s. 4 which requires that “conveyances of an estate” be recorded to be valid. A mortgage is a “conveyance of an estate” under Massachusetts law. Since MERS-designated mortgages exist for the primary purpose of holding “legal” title on the public land records while the “beneficial” interest is transferred and sold multiple times (and a mortgage cannot exist without a note under Massachusetts law), MERS-mortgages unlawfully avoid recording fees due the Commonwealth for the transfer(s) of interests under MERS-designated mortgages.

“If you tell a lie that’s big enough, and you tell it often enough, people will believe you are telling the truth, even when what you are saying is total crap.”1

Continue reading below…

[ipaper docId=44370743 access_key=key-1en9gd3bwhh0zs2atypk height=600 width=600 /]

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in STOP FORECLOSURE FRAUDComments (4)

[VIDEO] Dylan Ratigan Show: Rep. Marcy Kaptur, MERS, FRAUDCLOSURE FRAUD COVER UP

[VIDEO] Dylan Ratigan Show: Rep. Marcy Kaptur, MERS, FRAUDCLOSURE FRAUD COVER UP


© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in STOP FORECLOSURE FRAUDComments (2)

Lender can’t modify the mortgage without the “mortgagee’s” consent

Lender can’t modify the mortgage without the “mortgagee’s” consent


This according to Straight Talk by Sharon Horstkamp, MERS Vice President and Corporate Counsel. Below is an excerpt of the newsletter:

The standard modification agreement
is between the Borrower and
the Lender. The agreement amends
and supplements (1) the Mortgage,
Deed of Trust or Deed to Secure
Debt (Security Instrument) and (2)
the Note bearing the same date as,
and secured by, the Security
Instrument. Prior to MERS, the
standard agreement worked
because the Lender was the mortgagee
of record and could modify
the mortgage and also had the
authority to modify the Note.

However, if MERS is the mortgagee
of record, the Lender can’t
modify the mortgage without the
“mortgagee’s” consent. Therefore,
Fannie Mae and Freddie Mac
changed the modification agreements
to reflect MERS as the mortgagee
of record.

Their change states the Agreement
amends and supplements the
Mortgage, Deed of Trust or Deed to
Secure Debt (Security Instrument)
granted or assigned to Mortgage
Electronic Registration Systems,
Inc., as nominee for the Lender.
The change also recommended a
signature line be added for MERS to
sign the agreement in its mortgagee
capacity. A MERS certifying officer
can sign the Agreement. It is important
to note that a MERS signature
doesn’t replace the Lender’s signature,
because MERS isn’t modifying
the note. Therefore, the Lender and
MERS must sign the document.

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in STOP FORECLOSURE FRAUDComments (2)

LOAN DOCUMENT CUSTODIAN TRAINING MANUAL

LOAN DOCUMENT CUSTODIAN TRAINING MANUAL


  • Initial Certification
  • Recertification
  • Transfer Requirements
  • Refreshment break
  • Q & A
  • Annual or Recurring Reporting Requirements
  • Custodial Responsibilities
  • Audit Tips and Most Common Findings
  • Q & A

[ipaper docId=42544365 access_key=key-19jcnws60d9x2vd8wysh height=600 width=600 /]

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in STOP FORECLOSURE FRAUDComments (1)

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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.

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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.

[ipaper docId=39287904 access_key=key-t9fm5292wmd8fg9fz88 height=600 width=600 /]

© 2010-17 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)

Statement by CEO of Mortgage Electronic Registration Systems (MERS)

Statement by CEO of Mortgage Electronic Registration Systems (MERS)


RESTON, Va. – (Business Wire) Mortgage Electronic Registration Systems (MERS) Chief Executive Officer R.K. Arnold today issued the following statement regarding the organization and clarifying certain aspects of its operations:

“MERS is one important component of the complex infrastructure of America’s housing finance system. Billions of dollars of mortgage money flow through the financial system every year. It takes many, often-unseen mechanical processes to properly get those funds into the hands of qualified homebuyers.

Technology designed to reduce paperwork has a very positive effect on families and communities. They may not see it, but these things save money and time, creating reliability and stability in the system. That’s important to keep the mortgage funds flowing to the consumers who need it.

With millions of Americans facing foreclosure, every element of the housing finance system is under tremendous strain. What we’re seeing now is that the foreclosure process itself was not designed to withstand the extraordinary volume of foreclosures that the mortgage industry and local governments must now handle.

MERS helps the mortgage finance process work better. The MERS process of tracking mortgages and holding title provides clarity, transparency and efficiency to the housing finance system. We are committed to continually ensuring that everyone who has responsibilities in the mortgage and foreclosure process follows local and state laws, as well as our own training and rules.”

Facts about MERS

(NOTE TO EDITORS: The following is attributed to MERS Communications Manager Karmela Lejarde)

FACT: Courts have ruled in favor of MERS in many lawsuits, upholding MERS legal interest as the mortgagee and the right to foreclose.

This legal right springs from two important facts:

1) MERS holds legal title to a mortgage as an agent for the owner of the loan
2) MERS can become the holder of the promissory note when the owner of the loan chooses to make MERS the holder of the note with the right to enforce if the mortgage loan goes into default.

MERS does not authorize anyone to represent it in a foreclosure unless both the mortgage and the note are in MERS possession. In some cases where courts have found against MERS, those cases have hinged on other procedural defects or improper presentation of MERS’s legal interests and rights. Citations can be found at the end of this document.*

FACT: MERS does not create a defect in the mortgage or deed of trust

Claims that MERS disrupts or creates a defect in the mortgage or deed of trust are not supported by fact or legal precedents. This is often used as a tactic by lawyers to delay or prevent the foreclosure. The mortgage lien is granted to MERS by the borrower and the seller and that is what makes MERS the mortgagee. The role of mortgagee is legal and binding and confers to MERS certain legal rights and responsibilities.

FACT: The trail of ownership does not change because of MERS

MERS does not remove, omit, or otherwise fail to report land ownership information from public records. Parties are put on notice that MERS is the mortgagee and notifications by third parties can be sent to MERS. Mortgages and deeds of trust still get recorded in the land records.

The MERS System tracks the changes in servicing rights and beneficial ownership. No legal interests are transferred on the MERS System, including servicing and ownership. In fact, MERS is the only publicly available comprehensive source for note ownership.

While this information is tracked through the MERS System, the paperwork still exists to prove actual legal transfers still occurred. No mortgage ownership documents have disappeared because loans were registered on the MERS System. These documents exist now as they have before MERS was created. The only pieces of paper that have been eliminated are assignments between servicing companies because such assignments become unnecessary when MERS holds the mortgage lien for the owner of the note.

FACT: MERS did not cause mortgage securitization

MERS was created as a means to keep better track of the mortgage servicing and beneficial rights as loans were getting bought and sold at a high rate during the late 1990s.

At the height of the housing market, low interest rates prompted some homeowners to refinance once, twice, even three times in the space of months. Banks were originating loans at more than double their usual rate. Assignments – the document that names the holder of the legal title to the lien – primarily between servicing companies, were piling up in county land record offices, awaiting recording. Many times the loans were getting refinanced before the assignments could get recorded on the old loan. The delay prevented lien releases from getting recorded in a timely manner, leaving clouds on title.

MERS was created to provide clarity, transparency and efficiency by tracking the changes in servicing rights and beneficial ownership interests. It was not created to enable faster securitization. MERS is the only publicly available source of comprehensive information for the servicing and ownership of the more than 64 million loans registered on the system. The Mortgage Identification Number (MIN), created by MERS, is similar in function to a motor vehicle VIN, which keeps track of these loans. Without MERS the current mortgage crisis would be even worse.

FACT: Lenders cannot “hide” behind MERS

MERS is the only comprehensive, publicly available source of the servicing and ownership of more than 64 million loans in the United States. If a homeowner needs to identify the servicer or investor of their loan, and it is registered in MERS, they can be helped through the MERS website or via toll-free number at 888-679-6377.

FACT: MERS fully complies with recording statutes

The purpose of recording laws is to show that a lien exists, which protects the mortgagee and any bona fide purchasers. When MERS is the mortgagee, the mortgage or deed of trust is recorded, and all recording fees are paid.

*NOTABLE LEGAL VICTORIES:

a. IN RE Mortgage Electronic Registration Systems (MERS) Litigation, a multi-district litigation case in federal court in Arizona who issued a favorable opinion, stating that “The MERS System is not fraudulent, and MERS has not committed any fraud.”

b. IN RE Tucker (9/20/2010) where a Missouri bankruptcy judge found that the language of the deed of trust clearly authorizes MERS to act on behalf of the lender in serving as the legal title holder.

c. Mortgage Electronic Registration Systems, Inc. v. Bellistri, 2010 WL 2720802 (E.D. Mo. 2010), where the court held that Bellistri’s failure to provide notice to MERS violated MERS’ constitutional due process rights.

Mortgage Electronic Registration Systems
Karmela Lejarde, 703-772-7156


Copyright © 2010 Business Wire. All rights reserved.

RELATED LINKS:

MERS 101

.

NO. THERE’S NO LIFE AT MERS

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MUST READ |E-Discovery…Electronic Registration Systems WORST NIGHTMARE!

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ALTER EGO DOCTRINE: ‘Pierce the Corporate Veil’

R.K. ARNOLD Pres. & CEO Of MERS (Photo Credit) Daniel Rosenbaum for The New York Times

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Posted in assignment of mortgage, foreclosure, foreclosure mills, foreclosures, forgery, MERS, MERSCORP, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC., R.K. Arnold, robo signers, STOP FORECLOSURE FRAUDComments (3)

MERS is NOT in FACT a “MORTGAGEE”| MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC. v. SAUNDERS

MERS is NOT in FACT a “MORTGAGEE”| MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC. v. SAUNDERS


MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC. v. SAUNDERS

2010 ME 79

MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC.,
v.
JON E. SAUNDERS et al.

Docket: Cum-09-640.

Supreme Judicial Court of Maine.

Argued: June 15, 2010.

Decided: August 12, 2010.

Michael K. Martin, Esq. Petruccelli, Martin & Haddow 50 Monument Square Portland, Maine 04101, Thomas A. Cox, Esq. (orally), PO Box 1314 Portland, Maine 04104, Attorneys for Belinda and Jon Saunders.

John A. Turcotte, Esq. (orally) Ainsworth, Thelin & Raftice, P.A. 7 Ocean Street PO Box 2412 South Portland, Maine 04116-2412, Attorneys for Mortgage Electronic Registration Systems, Inc.

Panel: SAUFLEY, C.J., and ALEXANDER, LEVY, SILVER, MEAD, GORMAN, and JABAR, JJ.

GORMAN, J.

[¶ 1] Jon E. Saunders and Belinda L. Saunders appeal from entry of a summary judgment in the District Court (Bridgton, Powers, J.) in favor of Deutsche Bank National Trust Company[ 1 ] on Mortgage Electronic Registration Systems, Inc.’s (MERS) complaint for foreclosure and sale of the Saunderses’ home, pursuant to 14 M.R.S. §§ 6321-6325 (2009). The Saunderses contend that the court erred in granting summary judgment to the Bank because: (1) MERS did not have a stake in the proceedings and therefore had no standing to initiate the foreclosure action, (2) the substitution of parties could not be used to cure the jurisdictional defect of lack of standing and was therefore improper, and (3) there are genuine issues of material fact.

[¶ 2] We conclude that although MERS is not in fact a “mortgagee” within the meaning of our foreclosure statute, 14 M.R.S. §§ 6321-6325, and therefore had no standing to institute foreclosure proceedings, the real party in interest was the Bank and the court did not abuse its discretion by substituting the Bank for MERS. Because, however, the Bank was not entitled to summary judgment as a matter of law, we vacate the judgment and remand for further proceedings.

I. BACKGROUND

[¶ 3] In June of 2006, Jon Saunders executed and delivered a promissory note in the amount of $258,750 to Accredited Home Lenders, Inc. At the same time, both Jon and Belinda Saunders executed a mortgage document, securing that note, in favor of MERS, solely as “nominee for [Accredited] and [Accredited]’s successors and assigns.”

[¶ 4] When the Saunderses failed to make certain payments on the note, MERS filed a complaint for foreclosure in the District Court on February 4, 2009. The Saunderses filed an answer that denied the complaint’s allegations and asserted, among others, the affirmative defense of lack of standing. MERS moved for summary judgment on its complaint on May 27, 2009. In its accompanying statement of material facts, MERS asserted that it was the “holder” of both the mortgage and the note, but neither indicated whether real property secured the note nor identified the real property of the Saunderses. The Saunderses controverted MERS’s ownership of the note in their opposing statement of material facts, citing admissions that MERS had made pursuant to M.R. Civ. P. 36 that the Bank was in fact the holder of the note. The parties also disputed whether the Saunderses had received proper notice, whether the Saunderses were in default, and the amount owed on the loan. The court denied summary judgment on September 9, 2009, stating only: “Motion for summary judgment is denied as to [MERS], as there are issues of material fact preventing same and [MERS] is not entitled to judgment as a matter of law.”

[¶ 5] One day after the court denied that motion, the Bank moved pursuant to M.R. Civ. P. 25(c) to substitute itself for MERS in the foreclosure proceedings and also filed a reply to the Saunderses’ additional statement of material facts. Just over one week later, the Bank, which was not yet a party, filed a motion to reconsider or amend the order denying MERS’s motion for summary judgment, pursuant to M.R. Civ. P. 59(e), and a motion for further findings pursuant to M.R. Civ. P. 52(b).[ 2 ] In support of its motions, the Bank filed: (1) an undated, two-page allonge indicating that Accredited transferred the note to the Bank, and (2) an assignment indicating that MERS had transferred any rights it had in the note or mortgage to the Bank. These transfers occurred on July 8, 2009, during the course of litigation. The Saunderses opposed both motions and filed a cross-motion for summary judgment arguing that they were entitled to judgment as a matter of law because neither MERS nor the Bank could show that MERS held the note at the time the suit commenced.

[¶ 6] On November 18, 2009, the court granted the Bank’s motion for substitution of parties, denied the Saunderses’ cross-motion for summary judgment, and granted summary judgment to the Bank. On December 16, 2009, the court entered a judgment of foreclosure and sale. The Saunderses filed a timely appeal pursuant to M.R. App. P. 2 and 14 M.R.S. § 1901 (2009).

II. DISCUSSION

A. MERS’s Standing

[¶ 7] The Saunderses contend that MERS had no stake in the outcome of the proceedings and therefore did not have standing to institute foreclosure. We review the threshold “issue of a party’s status for standing to sue de novo.” Lowry v. KTI Specialty Waste Servs., Inc., 2002 ME 58, ¶ 4, 794 A.2d 80, 81. At a minimum, “[s]tanding to sue means that the party, at the commencement of the litigation, has sufficient personal stake in the controversy to obtain judicial resolution of that controversy.” Halfway House Inc. v. City of Portland, 670 A.2d 1377, 1379 (Me. 1996) (citing Sierra Club v. Morton, 405 U.S. 727, 731 (1972)). Typically, a party’s personal stake in the litigation is evidenced by a particularized injury to the party’s property, pecuniary, or personal rights. See, e.g., Tomhegan Camp Owners Ass’n v. Murphy, 2000 ME 28, ¶ 6, 754 A.2d 334, 336; Stull v. First Am. Title Ins. Co., 2000 ME 21, ¶ 11, 745 A.2d 975, 979; cf. Fitzgerald v. Baxter State Park Auth., 385 A.2d 189, 196 (Me. 1978).

[¶ 8] The relationship of MERS to the transaction between the Saunderses and Accredited—mortgagors and the original mortgagee—is “not subject to an easy description” or classification. See Landmark Nat’l Bank v. Kesler, 216 P.3d 158, 164 (Kan. 2009). Then Chief Judge Kaye of the New York Court of Appeals described the role and purpose of MERS thusly:

[MERS’s] purpose is to streamline the mortgage process by eliminating the need to prepare and record paper assignments of mortgage, as had been done for hundreds of years. To accomplish this goal, MERS acts as nominee and as mortgagee of record for its members nationwide and appoints itself nominee, as mortgagee, for its members’ successors and assigns, thereby remaining nominal mortgagee of record no matter how many times loan servicing, or the [debt] itself, may be transferred.

MERSCORP, Inc. v. Romaine, 861 N.E.2d 81, 86 (N.Y. 2006) (Kaye, C.J., dissenting). In Maine, we follow the title theory of mortgages; a mortgage is a conditional conveyance vesting legal title to the property in the mortgagee, with the mortgagor retaining the equitable right of redemption and the right to possession. See Johnson v. McNeil, 2002 ME 99, ¶ 10, 800 A.2d 702, 704. To determine whether MERS has standing in the present case, we must first examine what rights MERS had in the Saunderses’ debt and the mortgage securing that debt.

[¶ 9] In the note that Jon Saunders executed in favor of Accredited, there is no mention of MERS, and the Bank admitted in its statement of material facts that MERS never had an interest in the note. MERS is, however, included in the Saunderses’ mortgage document. The mortgage first defines MERS as:

(C) “MERS” is Mortgage Electronic Registrations Systems, Inc. MERS is a separate corporation that is acting solely as a nominee for Lender and Lender’s successors and assigns. MERS is organized and existing under the Laws of Delaware, and has an address and telephone number of P.O. Box 2026, Flint, MI 48501-2026, tel. (888) 679-MERS. FOR PURPOSES OF RECORDING THIS MORTGAGE, MERS IS THE MORTGAGEE OF RECORD.

The remaining references to MERS in the mortgage document are in the subsequent sections conveying the mortgage and describing the property conveyed:

[Borrowers] mortgage, grant and convey the Property to MERS (solely as nominee for Lender and Lender’s successors and assigns), with mortgage covenants, subject to the terms of this Security Instrument, to have and to hold all of the Property to MERS (solely as nominee for Lender and Lender’s successors and assigns), and to its successors and assigns, forever.

. . . .

[Borrowers] understand and agree that MERS holds only legal title to the rights granted by [Borrowers] in this Security Instrument, but, if necessary to comply with law or custom, MERS (as nominee for Lender and Lender’s successors and assigns) has the right:

(A) to exercise any or all of those rights, including, but not limited to, the right to foreclose and sell the Property; and

(B) to take any action required of Lender including, but not limited to, releasing and canceling this Security Instrument.

. . . .

[Borrowers] grant and mortgage to MERS (solely as nominee for Lender and Lender’s successors in interest) the Property described [below].

Each reference to MERS within the Saunderses’ mortgage describes MERS solely as the “nominee” to the lender.

[¶ 10] The only rights conveyed to MERS in either the Saunderses’ 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); see also E. Milling Co. v. Flanagan, 152 Me. 380, 382-83, 130 A.2d 925, 926 (1957) (demonstrating the limited role of a nominee in a contract case). The remaining, beneficial rights in the mortgage and note are vested solely in the lender Accredited and its successors and assigns. The mortgage clearly provides that, by signing the instrument, the Saunderses were “giving [the] Lender those rights that are stated in this Security Instrument and also those rights that Applicable Law gives to Lenders who hold mortgages on real property.” (Emphasis added.) Not one of the mortgage covenants in the document, including the Saunderses’ obligations to make timely payments on the note, pay property taxes, obtain property insurance, and maintain and protect the property, is made to MERS or in favor of MERS. Each promise and covenant gives rights to the lender and its successors and assigns, whereas MERS’s rights are limited solely to acting as a nominee. The Bank argues that MERS’s status as a “nominee” for the lender and as the “mortgagee of record” within the document qualifies it as a “mortgagee” within 14 M.R.S. § 6321. We disagree.

[¶ 11] As discussed above, MERS’s only right is the right to record the mortgage. Its designation as the “mortgagee of record” in the document does not change or expand that right; and having only that right, MERS does not qualify as a mortgagee pursuant to our foreclosure statute, 14 M.R.S. §§ 6321-6325. Section 6321 provides: “After breach of condition in a mortgage of first priority, the mortgagee or any person claiming under the mortgagee may proceed for the purpose of foreclosure by a civil action . . . .” (Emphasis added.) It is a “fundamental rule of statutory interpretation that words in a statute must be given their plain and ordinary meanings.” Joyce v. State, 2008 ME 108, ¶ 11, 951 A.2d 69, 72 (quotation marks omitted); accord Hanson v. S.D. Warren Co., 2010 ME 51, ¶ 12, ___ A.2d ___, ___. The plain meaning and common understanding of mortgagee is “[o]ne to whom property is mortgaged,” meaning a “mortgage creditor, or lender.” Black’s Law Dictionary 1104 (9th ed. 2009). In other words, a mortgagee is a party that is entitled to enforce the debt obligation that is secured by a mortgage.[ 3 ]

[¶ 12] In order to enforce a debt obligation secured by a mortgage and note, a party must be in possession of the note.[ 4 ] See Premier Capital, Inc. v. Doucette, 2002 ME 83, ¶ 7, 797 A.2d 32, 34 (describing a note associated with a mortgage as a negotiable instrument). Pursuant to Maine’s adoption of the Uniform Commercial Code, the only party entitled to enforce a negotiable instrument is:

(1) The holder of the instrument;

(2) A nonholder in possession of the instrument who has the rights of a holder; or

(3) A person not in possession of the instrument who is entitled to enforce the instrument pursuant to section 3-1309 or 3-1418, subsection (4). A person may be a person entitled to enforce the instrument even though the person is not the owner of the instrument or is in wrongful possession of the instrument.

11 M.R.S. § 3-1301 (2009). MERS does not qualify under any subsection of section 3-1301 because, on this record, there is no evidence it held the note, was in possession of the note, was purporting to enforce a lost, destroyed, or stolen instrument pursuant to 11 M.R.S. § 3-1309 (2009), or was purporting to enforce a dishonored instrument pursuant to 11 M.R.S. § 3-1418(4) (2009).

[¶ 13] Alternatively, the Bank asserts that because the mortgage document itself purported to give MERS the right to foreclose the mortgage, MERS was entitled to enforce the mortgage as the “mortgagee of record.” In other jurisdictions utilizing non-judicial foreclosure, MERS has been able to institute foreclosure proceedings based on its designation in the mortgage as the “mortgagee of record.” See, e.g., In re Huggins, 357 B.R. 180, 184 (Bankr. Mass. 2006) (concluding that MERS had standing to institute foreclosure proceedings pursuant to the statutory power of sale in Massachusetts); Jackson v. Mortg. Elec. Registration Sys. Inc., 770 N.W.2d 487, 500-01 (Minn. 2009) (approving MERS’s ability to commence foreclosure as the legal title holder of the mortgage in non-judicial foreclosure proceedings in Minnesota). These cases are inapposite because non-judicial foreclosures do not invoke the jurisdiction of the courts. Non-judicial foreclosures proceed wholly outside of the judiciary, typically utilizing local law enforcement to evict a mortgagor and gain possession of the mortgaged property.

[¶ 14] Here, MERS sought to foreclose on the Saunderses’ mortgage by filing a lawsuit, and, like any other plaintiff filing suit within our courts, must prove its standing to sue. Halfway House, 670 A.2d at 1379. Because standing to sue in Maine is prudential, rather than of constitutional dimension, we may “limit access to the courts to those best suited to assert a particular claim.” Lindemann v. Comm’n on Govtl. Ethics & Election Practices, 2008 ME 187, ¶ 8, 961 A.2d 538, 541-42 (quoting Roop v. City of Belfast, 2007 ME 32, ¶ 7, 915 A.2d 966, 968). In the present context, MERS, as the complaining party, must show that it has suffered an injury fairly traceable to an act of the mortgagor and that the injury is likely to be redressed by the judicial relief sought. See Collins v. State, 2000 ME 85, ¶ 6, 750 A.2d 1257, 1260 (citing Allen v. Wright, 468 U.S. 737, 751 (1984)); see also Stull, 2000 ME 21, ¶ 11, 745 A.2d at 979.

[¶ 15] Nothing in the trial court record demonstrates that MERS suffered any injury when the Saunderses failed to make payments on their mortgage. When questioned directly at oral argument about what injury MERS had suffered, the Bank responded that MERS did not need to prove injury to foreclose, only that it was a “mortgagee.” As we have already explained, MERS is not a mortgagee pursuant to 14 M.R.S. § 6321 because it has no enforceable right in the debt obligation securing the mortgage. In reality, the Bank was unable to suggest an injury MERS suffered because MERS did not suffer any injury when the Saunderses failed to make payments on their mortgage. See Mortg. Elec. Registration Sys., Inc. v. Neb. Dep’t of Banking & Fin., 704 N.W.2d 784, 788 (Neb. 2005) (stating that “MERS has no independent right to collect on any debt because MERS itself has not extended credit, and none of the mortgage debtors owe MERS any money”). The only right MERS has in the Saunderses’ mortgage and note is the right to record the mortgage. The bare right to record a mortgage is unaffected by a mortgagor’s default. The Bank admitted in its statement of material facts that Accredited had never assigned, transferred, or endorsed the note executed by Jon Saunders to MERS, and represented that Accredited had transferred the note directly to the Bank. Without possession of or any interest in the note, MERS lacked standing to institute foreclosure proceedings and could not invoke the jurisdiction of our trial courts.

B. Substitution of the Bank for MERS

[¶ 16] Having determined that MERS lacked standing, our next inquiry is whether the substitution of the Bank for MERS allowed the proceedings to continue. The Saunderses contend that the substitution of the Bank for MERS pursuant to M.R. Civ. P. 25(c) was improper because: (1) MERS did not have standing, and a substitution of parties cannot be used to cure a jurisdictional defect; and (2) the Bank, as a non-party, cannot file a motion to substitute parties. The Bank argues that the substitution of parties cured any impropriety in MERS commencing the foreclosure proceedings and that M.R. Civ. P. 17(a) prohibits dismissal until there has been a reasonable time to substitute the real party in interest.[ 5 ] We review the grant or denial of a party’s motion to substitute parties pursuant to both M.R. Civ. P. 17(a) and 25(c) for an abuse of the court’s discretion. See M.R. Civ. P. 25(c) (“In case of any transfer of interest, the action may be continued by or against the original party . . . .” (emphasis added)); Tisdale v. Rawson, 2003 ME 68, ¶ 17, 822 A.2d 1136, 1141 (stating that Rule 17 authorizes “a court to substitute an incorrectly named plaintiff with the real party in interest”); Bates v. Dep’t of Behavioral & Developmental Servs., 2004 ME 154, ¶ 38, 863 A.2d 890, 901 (“Judgmental decisions . . . in areas where the court has choices will be reviewed for sustainable exercise of the court’s discretion.”).

[¶ 17] Both Rule 17 and 25 are concerned with ensuring that the real party in interest is conducting the litigation. Rule 17 is used to correct an action that was filed and then maintained by the wrong party, or was filed in the name of the wrong party. See Tisdale, 2003 ME 68, ¶¶ 15-19, 822 A.2d at 1140-42 (approving the court’s substitution of the road commissioner as the plaintiff for an unincorporated association that lacked capacity to sue); Royal Coachman Color Guard v. Marine Trading & Transp., Inc., 398 A.2d 382, 384 (Me. 1979); 1 Field, McKusick, & Wroth, Maine Civil Practice § 17.1 at 348 (2d ed. 1970) (“The purpose of Rule 17(a) is to provide that the plaintiff in an action shall be the person who by the substantive law possesses the right to be enforced.”). Rule 25, in comparison, is used to substitute a second party for the original party when, in the course of litigation or pendency of an appeal, the original party’s interest ends or is transferred, or the original party becomes incompetent. See Estate of Saliba v. Dunning, 682 A.2d 224, 225 n.1 (Me. 1996) (noting the substitution of an estate, pursuant to Rule 25, for the plaintiff after his death during the pendency of the suit); Gagne v. Cianbro Corp., 431 A.2d 1313, 1315 n.1 (Me. 1981) (noting the Rule 25 substitution of Cianbro for the original defendant on appeal after the originally named defendant transferred its interest to Cianbro).

[¶ 18] The present case involves both situations: a suit brought by the wrong party and a transfer of interest mid-litigation. Although the court granted the Bank’s Rule 25(c) motion for substitution, the proper procedural vehicle for substitution in this case was Rule 17(a). See Bouchard v. Frost, 2004 ME 9, ¶ 8, 840 A.2d 109, 111 (indicating we may affirm a judgment on a ground not relied upon by the trial court). Our cases allow the Rule 17(a) substitution of plaintiffs when the correct party is difficult to determine or an understandable mistake has been made and the substitution “does not alter in any way the factual allegations pertaining to events or participants involved in th[e] suit.” Tisdale, 2003 ME 68, ¶¶ 18-19, 822 A.2d at 1142.

[¶ 19] Accredited, as the party entitled to enforce the rights granted in the mortgage, was the real party in interest at the time MERS instituted foreclosure proceedings. Five months after MERS filed for foreclosure, the Bank became the real party in interest when Accredited transferred the Saunderses’ mortgage and note to it. As we had not previously spoken on MERS’s standing to foreclose a residential mortgage, the prosecution of the case in its name is an understandable mistake to which Rule 17(a) can be applied. See Tisdale, 2003 ME 68, ¶ 19, 822 A.2d at 1142. Further, the transfer of interest did not alter the cause of action or create any prejudice to the Saunderses. MERS sought to foreclose on the Saunderses’ real property after they failed to make payments on the note, and the Bank now seeks to foreclose on the same mortgage for their failure to make payments on the same note. See id. (pointing to the unchanged facts and circumstances after substitution). In defending MERS’s motion for summary judgment, the Saunderses themselves argued that the Bank was the proper party to bring this action.[ 6 ] The substitution of parties in this case was proper, and the court did not abuse its discretion by granting the Bank’s motion for substitution. See Bates, 2004 ME 154, ¶ 38, 863 A.2d at 901.

C. Summary Judgment

[¶ 20] Finally, the Saunderses contend that the court erred in granting summary judgment because of the flawed procedure that led to the court’s entry of foreclosure and sale and because there are genuine issues of material fact and summary judgment was inappropriate.[ 7 ] We agree with both contentions.

[¶ 21] First, the procedure leading up to the summary judgment was fatally flawed. Except in certain circumstances not applicable here, substitution relates back to the date of the original complaint, and the effect of the substitution of parties was to treat the Bank as if it had been the party that commenced the litigation. See M.R. Civ. P. 17(a); 1 Field, McKusick, & Wroth, Maine Civil Practice § 17.1 at 349. As previously noted, the Bank filed a motion to alter or amend the order denying MERS’s motion for summary judgment, which the court granted. Our rules do not allow a motion to alter or amend pursuant to M.R. Civ. P. 59(e)—or a motion for further findings of fact pursuant to M.R. Civ. P. 52(b)—in the absence of a final judgment. Because the denial of MERS’s motion for summary judgment in the present case was not a final judgment upon which the Bank could file its motion, the court erred by granting the motion. See Dep’t of Human Servs. v. Hart, 639 A.2d 107, 107 (Me. 1994) (stating the general rule that a “denial of a summary judgment motion does not result in a final judgment”). After substitution, the Bank should have filed its own independent motion for summary judgment with a statement of material facts and supporting affidavits. The Saunderses would then have had the opportunity to respond to the new motion and appropriately defend the foreclosure action against the real party in interest.

[¶ 22] Second, the summary judgment record does not support the Bank’s entitlement to judgment as a matter of law. See Chase Home Fin. LLC v. Higgins, 2009 ME 136, ¶ 10, 985 A.2d 508, 510. “We review the grant of a motion for summary judgment de novo,” and view “the evidence in the light most favorable to the party against whom judgment has been entered to decide whether the parties’ statements of material facts and the referenced record evidence reveal a genuine issue of material fact.” Wells Fargo Home Mortg., Inc. v. Spaulding, 2007 ME 116, ¶ 19, 930 A.2d 1025, 1029; see also Salem Capital Grp., LLC v. Litchfield, 2010 ME 49, ¶ 4, ___ A.2d ___, ___. We consider “only the portions of the record referred to, and the material facts set forth, in the [M.R. Civ. P. 56(h)] statements to determine whether . . . the successful party was entitled to a judgment as a matter of law.” Higgins, 2009 ME 136, ¶ 10, 985 A.2d at 510 (quotation marks omitted). Further, we have said that

[i]n the unique setting of summary judgment, strict adherence to the Rule’s requirements is necessary to ensure that the process is both predictable and just. Even when a hearing is held in a summary judgment motion, the only record that may be considered is the record created by the parties’ submissions.

Deutsche Bank Nat’l Trust Co. v. Raggiani, 2009 ME 120, ¶ 7, 985 A.2d 1, 3; see also Camden Nat’l Bank v. Peterson, 2008 ME 85, ¶ 21, 948 A.2d 1251, 1257 (stating that a mortgagee seeking foreclosure must strictly comply with all the steps required by the foreclosure statute).

[¶ 23] In Higgins, we outlined the minimum facts, “supported by evidence of a quality that could be admissible at trial [that] must be included in the mortgage holder’s statement[] of material facts.” 2009 ME 136, ¶ 11, 985 A.2d at 510-11. Pursuant to 14 M.R.S. § 6321, a party attempting to foreclose a mortgage must provide proof of the existence of a mortgage and its claim on the real estate and intelligibly describe the mortgaged premises, including the street address of the mortgaged property, if any, and the book and page number of the recorded mortgage. See also Higgins, 2009 ME 136, ¶ 11, 985 A.2d at 510-11 (explaining the remaining facts that must be submitted in the statements of material facts before foreclosure can proceed by summary judgment).

[¶ 24] The requirements of a street address and the book and page number were added to section 6321 after the commencement of foreclosure, but before the Bank filed its motion to alter or amend the judgment pursuant to M.R. Civ. P. 59(e). See P.L. 2009, ch. 402, § 17 (effective June 15, 2009). The prior version of the statute, in effect at the time MERS filed for foreclosure, only required the complaint to “describe the mortgaged premises intelligibly.” 14 M.R.S. § 6321 (2008). As we explained in Higgins, amendments to the foreclosure statute apply to all summary judgment motions filed after their effective date, regardless of the date foreclosure proceedings commenced. 2009 ME 136, ¶ 11 n.2, 985 A.2d at 510.

[¶ 25] In the present case, even if the Bank’s motion to alter or amend were deemed procedurally sound, it would fail under either standard because it failed to include any mention of the location of the mortgaged property in its statement of material facts. While the book and page number—but not the mortgaged property’s address—were included in the affidavit supporting one of MERS’s original statements of material fact, facts not set forth in the parties’ statements of material facts are not part of the summary judgment record and not properly before us on appeal. See M.R. Civ. P. 56(h)(1); Higgins, 2009 ME 136, ¶ 12, 985 A.2d at 511 n.4. Viewed in the light most favorable to the Saunderses, the summary judgment record does not establish what property owned by the Saunderses actually secures the mortgage and the court erred by granting summary judgment to the Bank. See 14 M.R.S. § 6321 (2009); Higgins, 2009 ME 136, ¶ 13, 985 A.2d at 512.

III. CONCLUSION

[¶ 26] In summary, we hold that MERS could not institute this foreclosure action and invoke the jurisdiction of our courts because it lacks an enforceable right in the debt that secures the mortgage. Although MERS lacked standing in the present case, the jurisdictional flaw was corrected when the court appropriately granted the Bank’s motion for substitution. The court erred, however, in granting the Bank’s “renewed” motion for summary judgment, both because the Rules of Civil Procedure do not allow for reconsideration or amendment in the absence of a final judgment, and because the motion, even as amended, did not support a conclusion that the Bank was entitled to judgment as a matter of law.

The entry is:

Judgment vacated. Remanded to the District Court for further proceedings consistent with this opinion.

1. The Bank was substituted as a party for Mortgage Electronic Registration Systems, Inc., pursuant to M.R. Civ. P. 25(c). Rule 25 provides:

(c) Transfer of Interest. In case of any transfer of interest, the action may be continued by or against the original party, unless the court upon motion directs the person to whom the interest is transferred to be substituted in the action or joined with the original party. Service of the motion shall be made as provided in subdivision (a) of this rule.

M.R. Civ. P. 25(c).

2. M.R. Civ. P. 59(e) provides that “[a] motion to alter or amend the judgment shall be served not later than 10 days after entry of the judgment. A motion for reconsideration of the judgment shall be treated as a motion to alter or amend the judgment.” M.R. Civ. P. 52 provides:

(b) Amendment. The court may, upon motion of a party made not later than 10 days after notice of findings made by the court, amend its findings or make additional findings and, if judgment has been entered, may amend the judgment accordingly. The motion may be made with a motion for a new trial pursuant to Rule 59. When findings of fact are made in actions tried by the court without a jury, the question of the sufficiency of the evidence to support the findings may thereafter be raised whether or not the party raising the question has made in the trial court an objection to such findings or has made a motion to amend them or a motion for judgment.

3. We do not address the situation where the mortgage and note are truly held by different parties. See, e.g., Averill v. Cone, 129 Me. 9, 11-12, 149 A. 297, 298-99 (1930); Wyman v. Porter, 108 Me. 110, 120, 79 A. 371, 375 (1911); Jordan v. Cheney, 74 Me. 359, 361-62 (1883). When MERS filed its complaint against the Saunderses, Accredited was both the mortgagee and holder of the note, and MERS held only the right to record the mortgage.
4. We note that recent amendments to the foreclosure statute, although not applicable when MERS filed its complaint for foreclosure, mandate that a party seeking foreclosure provide evidence of both the mortgage and the note to proceed with the foreclosure. 14 M.R.S. § 6321 (2009) (“The mortgagee shall certify proof of ownership of the mortgage note and produce evidence of the mortgage note, mortgage and all assignments and endorsements of the mortgage note and mortgage.”).
5. M.R. Civ. P. 17(a) provides in relevant part:

No action shall be dismissed on the ground that it is not prosecuted in the name of the real party in interest until a reasonable time has been allowed after objection for ratification of commencement of the action by, or joinder or substitution of, the real party in interest; and such ratification, joinder, or substitution shall have the same effect as if the action had been commenced in the name of the real party in interest.

6. Rule 17 does not designate which party should file the motion. Because the Bank had standing to prosecute this foreclosure, it had standing to file the motion for substitution of parties. We also note that Rule 25(c) does not require the originally named party to move for substitution. M.R. Civ. P. 25(c) (“In case of any transfer of interest, the action may be continued by or against the original party, unless the court upon motion directs the person to whom the interest is transferred to be substituted . . . .” (emphasis added)).
7. The Saunderses also raise several other arguments regarding the allonge and note that we do not address.

This copy provided by Leagle, Inc.

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Posted in concealment, conflict of interest, conspiracy, deutsche bank, foreclosure, foreclosure fraud, foreclosure mills, foreclosures, MERS, MERSCORP, mortgage, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC., note, reversed court decision, trade secretsComments (1)

NY passes Bill for a borrower, can recover attorneys’ fees if a lender’s foreclosure action fails

NY passes Bill for a borrower, can recover attorneys’ fees if a lender’s foreclosure action fails


WooHoo! I tell you what…EVERY State needs to follow by this example!

Banks Oppose ‘Access To Justice In Lending Act’? Well, Let’s See What It Provides



Submitted by Steven Meyerowitz on Fri, 07/09/2010 – 9:06am



A rose by any other name may smell as sweet, Juliet says. A nice thought for the theatre, but perhaps not for the law. A New York bill that has passed both houses of the state legislature is called the “Access To Justice In Lending Act.” And the New York Bankers Association opposes it. What?

The bill governs a mortgagor’s right to recover attorneys’ fees in foreclosure actions. It provides that whenever a residential mortgage provides that in any action to foreclose, the mortgagee may recover attorneys’ fees and/or expenses, “there shall be implied in such mortgage a covenant by the mortgagee to pay to the mortgagor the reasonable attorneys’ fees and/or expenses incurred by the mortgagor . . . in the successful defense of any action or proceeding commenced by the mortgagee against the mortgagor arising out of the contract.” Translation: a borrower can recover attorneys’ fees if a lender’s foreclosure action fails.

The bank group, represented by the Wilson Elser law firm, opposes the bill, declaring that it “would create a new implication in any contract that provided attorneys’ fees and costs to foreclosing parties a right for the party being foreclosed on to also collect attorneys’ fees and costs if he or she is successful.” In its view, the legislation “is unconstitutional on its face as applied to existing mortgages, is unnecessary and would create uncertainty in the foreclosure process.”

The Wilson Elser letter adds that the bill “is so broadly drafted that it could give defendants in foreclosure actions the right to attorneys’ fees even where a mortgagee would have no such rights…. In typical foreclosure actions in New York, foreclosure notices may be filed three, four, five or even more times without a foreclosure being actually completed. If a mortgagor elected to hire an attorney and then brought his or her mortgage up to date by paying off arrears, this legislation would provide the mortgagor with the right unfairly to collect attorneys’ fees for those uncompleted actions.”

We’ll keep you up-to-date on the status of this legislation as developments warrant.

Source: Financial Fraud Law

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in bill, foreclosure, foreclosure fraud, foreclosures, lawsuitComments (0)

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