Mortgage Electronic Registration Systems Inc. and Bank of America Corp. asked a court to dismiss a lawsuit brought by Texas counties accusing MERS of filing false claims in property records.
The counties allege Merscorp Inc.’s MERS was established by lenders including Bank of America to avoid paying filing fees as well as to ease mortgage transfers. The Texas Legislature approved of MERS’s appearance as a mortgagee in filings in county land records, the defendants said in a filing March 9 in federal court in Dallas.
“No false, fraudulent or otherwise wrongful activity occurred by filing security instruments naming MERS as beneficiary or mortgagee,” MERS and the bank said in their motion to dismiss. “There is no duty to record assignments, or other documents, since Texas’s property recording system is permissive not mandatory.”
Harris County Texas, which includes the city of Houston, won a bid to join a group lawsuit seeking damages from the Mortgage Electronic Registration Systems Inc., Bank of America Corp. and Stewart Title Co.
U.S. District Judge Reed C. O’Connor allowed Harris and nearby Brazoria County (66583MF) to enter the case that could result in payouts of a much as $10 billion for all Texas counties, according to court papers filed by the plaintiffs.
Think about why MERS would want this case moved? Do they have a connection there? hmmm
National Mortgage News-
A federal judicial panel denied a motion to include the Dallas County district attorney’s lawsuit against Merscorp in the ongoing multidistrict litigation against the private loan registry in Phoenix.
In its motion, Merscorp, the Reston, Va.-based parent company of the Mortgage Electronic Registration Systems, argued the claims in the Dallas County case are common with the other MDL cases and meet the panel’s requirements that consolidation would promote the convenience and “just and efficient conduct of the action.” But the judicial panel ruled there are important distinctions between the MDL and Dallas County cases.
“Most importantly, all existing MDL actions were brought by homeowners or borrowers who brought suit concerning their impending or completed foreclosure. In contrast, Dallas County involves the propriety of the MERS system’s failure to pay recordation fees under Texas’s recording statutes,” the judges’ order reads.
MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., AS NOMINEE FOR GREENPOINT FUNDING v. NANCY GROVES; from Harris County; 14th district (14/10/00090/CV, ___ SW3d ___, 04/12/11)
In The Fourteenth Court of Appeals
NO. 14-10-00090-CV
MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., AS NOMINEE FOR GREENSPOINT FUNDING, Appellant
V.
NANCY GROVES, Appellee
On Appeal from the 334th District Court Harris County, Texas Trial Court Cause No. 2009-29112
EXCERPT:
A justiciable controversy between the parties must exist at every stage of the legal proceedings. Williams v. Lara, 52 S.W.3d 171, 184 (Tex. 2001). We cannot decide moot controversies. Nat’l Collegiate Athletic Ass’n v. Jones, 1 S.W.3d 83, 86 (Tex. 1999). In order to maintain a suit to quiet title, there must be an assertion by the defendant of a claim to some interest adverse to plaintiff‘s title; and the claim must be one that, if enforced, would interfere with the plaintiff‘s enjoyment of the property. Mauro v. Lavlies, 386 S.W.2d 825, 826–27 (Tex. Civ. App.—Beaumont 1964, no writ) (internal quotation omitted) (no justiciable controversy existed because the judgments defendants obtained against plaintiffs asserted no claims against plaintiffs‘ property and defendants made no attempt to create a lien upon property or to have property sold to satisfy judgments).
Groves alleged in her petition that MERS‘s deed of trust purported to create a lien for security purposes on Plaintiff‘s property as described.? This alleged lien constitutes an adverse interest to Groves‘s title, which, if enforced, would interfere with her enjoyment of the property. See id. Therefore, a justiciable controversy existed, and the trial court had subject matter jurisdiction over the case. See Williams, 52 S.W.3d at 184; Mauro, 386 S.W.2d at 826–27.4
We overrule MERS‘s second issue.
CONCLUSION
Having overruled both of MERS‘s issues on appeal, we affirm the trial court‘s judgment.
Nueces County could join a group of Texas counties suing Bank of America and a related corporation over unpaid courthouse filing fees.
Nationwide, counties are claiming that a mortgage database created by banks is cheating the counties out of billions of dollars in filing fees.
Dallas County is leading the charge with a class-action suit against the bank and Mortgage Electronic Registration Systems Inc. Dallas County District Attorney Craig Watkins told NPR his county has lost about $100 billion in filing fees.
We know for a fact and the government knows for a fact that if MERS is on your documents, a cloud also exists.
Their “quick fix” might come as simple as accepting a modification, principal reduction or a refi, to cover this all up and creating new paper.
If any of your new docs have MERS or a like, what have you done again?
Statesman-
The ownership of tens of thousands of Central Texas home loans could be in question because of the actions of a national private registry that officials say has sidestepped the filing of proper documents with county clerks, the American-Statesman has learned.
The Mortgage Electronic Registration System was created in the 1990s by 3,000 of the nation’s largest lenders to “streamline the mortgage sale process by using e-commerce to replace paperwork,” according to the company’s website.
In recent years, the Virginia-based registry has exploded across the U.S. as mortgages increasingly were bundled and sold as commodities in rapid churn to investors.
Here’s exactly where the issue always was, Counties are being cheated from their cut and in return schools, government agencies and tax payers suffer. This was nothing more than a wall street “self stimulus”, “bailout” from the get go.
What Universal Law exist permitting MERS? A self made Wall Street Law.
Besides this all, MERS can’t even keep track of who owns what. MERS is not a nominee and not a beneficiary because it never loaned One Cent.
KTSM-
EL PASO – Between record home foreclosures and devastating budget cuts, El Paso County has seen a rough couple of years recently. We usually think of these crises as separate, but some argue there’s a common link between these challenges, that lies with a company known as Mortgage Electronic Registration Systems, or MERS.
El Paso County is in a foreclosure crisis. According to the real estate information company, CoreLogic, more than 5,000 homes have gone into foreclosure since the recession began in late 2007.
Attorney Richard Roman has represented dozens of homeowners in foreclosure cases; he argues the real problem is MERS (Mortgage Electronic Registration Systems).
Even those that continue to make payments on a house that no longer exists aren’t immune to foreclosure.
Brad Gana, of Seabrook, Texas is being threatened with foreclosure over a home that hasn’t existed since it was destroyed by Hurricane Ike in 2008, local Houston 2 News reports. Furthermore, after the hurricane, which cost the Texas shoreline an estimated $11 billion in damages, reduced the property to an empty slab of concrete, Gana alleges he continued to make payments.
In the meantime, Bank of America, the mortgage lender, took out a forced homeowner’s policy on the property and raised monthly payments. Gana, however, says he was never notified of the change since his mailbox was destroyed by what’s come to be known as the third-most destructive hurricane ever to hit the United States.
Oh my, this is getting very interesting. Now who is going to pay for MERS’ attorney fees? Oops there isn’t anyone. Where will the Counties get the money they claim? The lenders? Shareholders?
We’re talking in excess of Billions and Billions if every state files one of these for every county. This is going to get interesting very quick.
It’s quite easy because most information is already on this site.
It’s so simple and no tax dollars will go to waste…. Trust me.
Bloomberg-
The Texas county that includes Houston will ask the state attorney general to investigate suing Mortgage Electronic Registration Systems Inc. over unpaid filing fees on behalf of all the counties in Texas, an official said.
“If this is something that affects county government all over the state, why isn’t the state attorney general pursuing it?” Harris County Judge Ed Emmett said in an interview today. Emmett is a member of the Harris County Commissioners Court and the highest elected official of the county.
“MERS has jeopardized the clear title of every Texas homeowner with a mortgage and has cheated Texas counties out of millions of dollars in property recording fees,”
– County Attorney Vince Ryan
My San Antonio-
Bexar County is poised to challenge a private mortgage-tracking system that officials claim has cost it millions of dollars in filing fees.
The district attorney’s office will ask the Commissioners Court at its Nov. 1 meeting for the go-ahead to hire a law firm to sue Mortgage Electronic Registration Systems Inc., which claims to hold title to some 60 million loans around the country.
HOUSTON – It was a simpler time when Edward Mahar bought his home in 1980. He has lived there ever since in southwest Houston.
“It was procedurally easy and we had a Realtor involved and basically the process was getting bank approval to buy the property,” says Mahar.
There were no mortgage swaps or complex transactions in the financial market that could leave your head spinning as is the case currently. For years, he knew exactly who held the note on his property.
“Since two years ago, everything is complicated,” says Mahar.
This involvesTywanna Thomas, who we all know worked for Lender Processing Services’ DocX.We learned a lot from the deposition of Cheryl Denise Thomasaka Tywanna’s Mother who also worked with her.
My San Antonio-
Ezequiel Martinez, a San Antonio real estate investor who helps homeowners avoid foreclosure, recently found himself in the same predicament as his clients.
Rather than simply fight to stop the foreclosure on his Live Oak investment home, Martinez filed suit against his lender, saying the mortgage should be voided because of phony loan documents and because he doesn’t think the bank can prove it owns the mortgage note.
If Martinez wins the case, he just might be done making mortgage payments on the house at 7502 Forest Fern.
“We’re not trying to get a free house,” he explained. “We’re trying to save the house from foreclosure fraud.”
In case anyone hasn’t noticed but lately there is a PR move supporting MERS…but those moves will not help once every county in the US wakes up and begins to sue the machine.
Bloomberg-
Attorneys for the Texas county that includes Houston will seek permission Tuesday to hire outside counsel to sue Mortgage Electronic Registration Systems Inc. over unpaid mortgage-filing fees.
The plan was posted today on the agenda for the Harris County Commissioners Court, the governing body for the county. County attorneys will hire the same law firm, Malouf & Nockels, that handled a similar lawsuit filed by Dallas last month, County Attorney Vince Ryan said in an interview today.
The Dallas County District Attorney’s lawsuit claimed Merscorp Inc.’s MERS, which runs an electronic registry of mortgages, cheated the county out of tens of millions of dollars in uncollected filing fees. MERS tracks servicing rights and ownership interests …
IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXAS AUSTIN DIVISION
DAVID A. HAWKINS, and TRACY J. HAWKINS, on behalf of themselves and all others similarly situated, Plaintiffs
v.
WELLS FARGO BANK, N.A., Defendant
Excerpt:
Defendant made Texas home equity loan modifications that did one or more of the following in violation of the Texas Constitution’s homestead protection provisions: (1) turned past-due interest into new principal; (2) featured a loan-to-value ratio to a figure above 80%; and (3) failed to include mandatory disclosures concerning the protections afforded by the Texas Constitution concerning home equity loans. These problems are unique to home equity loans, as opposed to original purchase-money mortgage loans, which are not at issue in this case.
IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION
HSBC BANK USA, N.A., as Trustee, etc., Plaintiff,
v.
ROBERT GRAD, et al., Defendants.
MEMORANDUM OPINION AND ORDER
This action is part of the current cottage industry of mortgage foreclosures that have been flooding this District Court (like other courts around the country, no doubt). This Complaint To Foreclose Mortgage adheres to the kind of pattern consistently followed by the mortgagee’s counsel in the numerous cases filed by that counsel’s office–but one glitch in the current filing has triggered the sua sponte issuance of this memorandum opinion and order.
As with all complaints that seek to invoke federal subject matter jurisdiction on diversity of citizenship grounds, Complaint ¶¶3 through 5 address the citizenship of the parties. Those allegations are unexceptionable except as to the party defendant referred to in this fashion in Complaint ¶5:
MORTGAGE ELECTRONIC REGISTRATION SYSTEM INC., AS A NOMINEE FOR DHI MORTGAGE COMPANY, LTD.-is a limited partnership organized under the laws of Texas and having its principal place of business in Texas. The listed partner for DHI Mortgage Company, Ltd. Is DHI Mortgage Company GP, Inc. which is a corporation incorporated in Texas and having its principal place of business in Texas. MERS is its Nominee.
That clearly does not do the job, for it has been firmly established for more than two decades (see Carden v. Arkoma Assocs., 494 U.S. 185, 192-96 (1990)) that where a partnership (even a limited partnership) is named as a “party” to a lawsuit, the relevant citizenship for federal diversity purposes is that of all partners and not merely the “listed partner” (whatever that means). That principle has been reiterated time and again (see such cases as Smart v. Local 702 Int’l Bhd. of Elec. Workers, 562 F.3d 798, 803 (7th Cir. 2009), citing Carden and Cosgrove v. Bartolotta, 150 F.3d 729, 731 (7th Cir. 1998)).
For a good many years this Court was content simply to identify such failures to the lawyers representing plaintiffs in pursuance of its mandated obligation to “police subject matter jurisdiction sua sponte” (Wernsing v. Thompson, 423 F.3d 732, 743 (7 Cir. 2005)). But there is really no excuse for counsel’s present lack of knowledge of such a long-established principle. Hence it seems entirely appropriate to impose a reasonable cost by reason of counsel’s failing.
Accordingly not only the current Complaint but also this action are dismissed (cf. Held v. Held, 137 F.3d 998, 1000 (7th Cir. 1998)), with plaintiff and its counsel jointly obligated to pay a fine of $350 to the District Court Clerk if an appropriate Fed. R. Civ. P. 59(e) motion were hereafter to provide the missing information that leads to a vacatur of this judgment of dismissal. Because this dismissal is attributable to the lack 1 of establishment of federal subject matter jurisdiction, by definition it is a dismissal without prejudice.
___________________________ Milton I. Shadur Senior United States District Judge
Date: September 28, 2011
Footnote ________________________________________ 1 That fine is equivalent to the cost of a second filing fee, because a new action would have to be brought if the defect identified here turns out to be curable.
Again, this is what I’ve been waiting for. As Professor Peterson says, “This case is scary because if Dallas wins then there are a lot of other counties around the country that are going to follow.” … And follow they will.
I already see them lining up one by one. You see just because you can develop a system and input data, doesn’t mean it relieves you from any responsibility of some 67+ million “errors”. They knew what they had from its inception.
BLOOMBERG-
Bank of America Corp. (BAC) is among a group of lenders that may face a wave of new lawsuits claiming the system they’ve used for more than a decade to register mortgages cheated cash-strapped counties out of millions of dollars.
Dallas County District Attorney Craig Watkins said state attorneys general and county officials across the U.S. have expressed interest in his lawsuit against Mortgage Electronic Registration Systems Inc. and Bank of America, filed in Texas state court on Sept. 21. Dallas County could be owed as much as $100 million in filing fees, he said.
Listen up carefully because this is what we’ve been waiting for. Only wished all shareholders were named but it’s all about strategy and taking one bite at a time!
I have posted about this doctrine HERE and HERE in hopes someone would pick up on this.
Abigail C. Field-
Dallas County has just filed this complaint seeking billions from Bank of America for the 285,000+ MERS documents recorded in the the Dallas County land records. Dallas calls MERS a fraud by design, and says MERS’s shareholders should be liable for MERS has done.
The complaint explains that in recorded mortgages and other documents, MERS claims to be a “beneficiary”, “mortgagee” and “grantee”, but that MERS is none of those things under the law of Texas for the past 100 years. As a result, the complaint says, all those documents are false. Texas law prohibits using a document with the “knowledge that the document is a fraudulent court record or fraudulent lien or claim against real…property or an interest in real…property”
MERSCORP, INC.; MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC.; STEWART TITLE GUARANTY COMPANY; STEWART TITLE COMPANY; BANK OF AMERICA, NATIONAL ASSOCIATION; AND ASPIRE FINANCIAL, INC. D/B/A TEXASLENDING.COM, DEFENDANTS
EXCERPTS:
III. AGENCY AND CORPORATE VEIL/ALTER-EGO 10. At all times material hereto, each Defendant was acting by and through its actual, apparent, ostensible, or by estoppel agents and/or employees.
11. Plaintiff moves the Court pierce the MERSCORP and MERS corporate veils and impose liability upon Defendants Stewart and BOA as shareholders in MERSCORP for the activities of MERSCORP and MERS alleged herein. Recognizing the corporate existence of MERSCORP and MERS separate from their shareholders, including Stewart and BOA, would cause an inequitable result or injustice, or would be a cloak for fraud or illegality. MERSCORP and MERS were undercapitalized in light of the nature and risk of their business. The corporate fiction is being used to justify wrongs, as a means of perpetrating fraud, as a mere tool or business conduit for others, as a means of evading existing legal obligations, to perpetrate monopoly and unlawfully gain monopolistic control over the real property recording system in the State of Texas, and to circumvent statutory obligations.
There could be $50-$100 MILLION in unfiled fees due to Dallas County!
PegususNews-
In an interview with Dallas South News, Dallas County District Attorney Craig Watkins says he plans to file a lawsuit against a company representing organizations who he says owes the county millions of dollars.
A group of private attorneys is working with the county on a claim against Mortgage Electronic Registration Systems (MERS) who they say has avoided paying county fees. The suit will be filed in Dallas County District Court sometime next week.
Today Dallas County District Attorney (DA) Craig Watkins announced that the DA’s office is considering asserting claims against Mortgage Electronic Registration Systems, Inc. (MERS) for the possible loss of millions in revenues to Dallas County.
MERS, a subsidiary of MERSCORP, Inc., was established and is owned by banks and members of the mortgage finance industry. MERS was established to act as a shadow recording system for the millions of mortgages in the United States and facilitate the buying and selling of mortgage rights as commodities.
A Citigroup Inc. (C) unit was sued by an Iraq War veteran who claims the lender illegally foreclosed on his home while he was on active military duty.
Jorge Rodriguez, a U.S. Army sergeant, claimed in a complaint filed today in federal court in Manhattan that he was in training in preparation for deployment to Iraq in 2006 when CitiMortgage filed a foreclosure suit against his home in Del Valle, Texas.
CitiMortgage lawyers falsely said in an affidavit that Rodriguez wasn’t on active service at the time, depriving him of protection under the Servicemembers Civil Relief Act, or SCRA, according to the complaint. Rodriguez is seeking to have the suit certified as a class action against CitiMortgage on behalf of other service members whose homes were foreclosed.
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