Hi/5 Dan Marsh

IN THE UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

IVAN HOOKER, KATHERINE HOOKER

v.

NORTHWEST TRUSTEE SERVICES, INC.;
BANK OF AMERICA, N.A.; MORTGAGE ELECTRONIC
REGISTRATION SYSTEMS, INC.,

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Oregon Live-

A late attempt by the finance industry to change Oregon mortgage recording laws is dead.

Oregon House Judiciary co-chair Wayne Krieger opened a hearing this afternoon and said the amendment sought by loan servicers, title companies and credit unions would not pass out of the committee today. Minutes later, the committee voted to approve Senate Bill 519, the bill that the financial industry lobby attempted to amend.

At least they agree a cloud hoovers over foreclosures…

Oregon Live-

A bid by major financial institutions to retroactively waive Oregon recording requirements blocking foreclosure sales appears in jeopardy but will get at least one more day, a legislative leader says.

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Poll: Should Oregon lawmakers give foreclosures, MERS a do-over?

OregonLive-

A federal judge this week issued a stern rebuke to big banks and the Mortgage Electronic Registration System in its handling of foreclosures and what he called a violation of a long-standing Oregon recording law.

Now, the financial industry lobby wants the Oregon Legislature to amend an affordable housing bill to retroactively waive those reporting requirements.

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IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON

IVAN HOOKER, KATHERINE HOOKER

v.

NORTHWEST TRUSTEE SERVICES, INC.; BANK OF AMERICA, N.A.; MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC.,

Excerpts:

Considering what is commonly known about the MERS system and the secondary market in mortgage loans, plaintiffs allege sufficient facts to make clear that defendants violated the Oregon Trust Deed Act by failing to record all assignments of the trust deed. 3 Therefore, defendants’ motion to dismiss is DENIED.

[…]

Although not affecting my conclusion here, the MIN Summary raises an additional concern relevant to numerous cases pending fore me. As noted above, GN is listed as Lender on both the trust deed and the note. The MIN Summary, however, makes no mention of GN. In fact, MIN Summary is silent as to how or when Guaranty Bank became an “Investor” holding the beneficial interest in the trust deed. (Jan. 31, 2011 McCarthy Decl., Ex. 1, 2.) The MIN Summary indicates only that on December 1, 2005, Guaranty Bank registered the in the MERS system. What occurred before registration, and how or when Guaranty Bank obtained any interest the loan (from GN or another) is not revealed.

The apparent gap in chain of title is not the only issue that causes me concern….

[…]

Foreclosure by advertisement and sale, which is designed to take place outside of any judicial review, necessarily relies on the foreclosing party to accurately review and assess its own authority to foreclose. Considering that non-judicial foreclosure of one’s home is a particularly harsh event, and given the numerous problems I see in nearly every non-judicial foreclosure case I preside over, a procedure relying on a bank or trustee to self-assess its own authority to foreclose is deeply troubling to me.

I recognize that MERS, and its registered bank users, created much of the confusion involved in the foreclosure process…. [T]he MERS system creates confusion as to who has the authority to do what with the trust deed. The MERS system raises serious concerns regarding the appropriateness and validity of foreclosure by advertisement and sale outside of any judicial proceeding.

Additionally, the MERS system allowed the rise of the secondary market and securitization of home loans. A lender intending to immediately sell a loan on the secondary market is not concerned with the risk involved in the loan, but with the fees generated. If a lender aims to quickly pass a loan off onto an investor, a stated-income loan appears not as an unacceptable risk, but as an income stream. MERS makes it much more difficult for all parties to discover who “owns” the loan. When a borrower on the verge of default cannot find out who has the authority to modify the loan, a modification or a short sale, even if beneficial to both the borrower and the beneficiary, cannot occur.

When no borrowers default, the problems inherent in the MERS system may go unnoticed. Unfortunately for banks, borrowers, investors, and courts throughout the country, many borrowers are now defaulting. Countless grantors of trust deeds now face the harsh prospect of losing a home outside of any judicial proceeding. At the same time, the MERS system greatly increased the number of investors stuck holding worthless notes. A lender that knows it will immediately sell a loan on the secondary market has no incentive to ensure the appraisal of the security is accurate. Similarly, the lender need not concern itself with the veracity of any representations made to the borrower. In short, the MERS system allows the lender to shirk its traditional due diligence duties. The requirement under Oregon law that all assignments be recorded prior to a non-judicial foreclosure is sound public policy.

continue below…

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WASHINGTON, D.C. (September 24, 2010) – Jay Brinkmann, Chief Economist and Senior Vice President of Research and Economics for the Mortgage Bankers Association (MBA), testified today before the Federal Reserve Board of Governors at a hearing entitled, “Potential Revisions to Regulation C – Implementing the Home Mortgage Disclosure Act (HMDA).”

Below is Mr. Brinkmann’s oral statement before the committee, as prepared for delivery.

“My name is Jay Brinkmann and I am the Chief Economist and head of research at the Mortgage Bankers Association (MBA). I very much appreciate the opportunity to participate in today’s hearing of the Federal Reserve Board on potential revisions to its Home Mortgage Disclosure Act (HMDA) requirements.

I would like to address essentially five questions or areas that need to be addressed. First, what data should be required? Second, how should the data be reported? Third, what should be used as the universal mortgage identifier? Fourth, what data should be made public? Finally, I will address some issues regarding multifamily data.

What data should be required?

Dodd-Frank already requires a significant expansion of the required data elements, although some are left to the discretion of the Bureau of Consumer Financial Protection (CFPB). In addition, we understand the Federal Reserve is looking at some potential additions beyond what is in Dodd-Frank. We have no objection to an expansion of the HMDA data elements as long as that expansion is consistent with the stated purposes of HMDA, the elements are consistent with what is already collected, and the changes would not pose unnecessary burdens on lenders. It should be understood, however, that no matter how many additional data elements are required they will not serve as a reliable proxy for the range of credit models or credit decisions given the sequential nature of the credit decision, variations in decision-making processes among lenders, as well as variations in shopping behavior and self-selection of credit terms by borrowers.

One issue the Fed must keep in mind in determining what data elements to collect is that HMDA requirements should not turn into a safe harbor of allowable credit variables to be considered when making a loan. Freezing credit models into an official sanctioned set of variables would have a deleterious impact on credit availability going forward, limiting the growth of lenders who believe they have a better idea of how to do things. For example, over the years some lenders have come to believe that credit scores are not as important as the number of times a potential borrower has been late with housing-related payments. Some lenders now will simply refuse to make a loan to a borrower who has walked away from a previous mortgage, or appears to be positioning himself or herself for such behavior. None of these considerations are captured in any of the proposed HMDA data elements, nor should they be.

How to report?

In determining definitions and file formats for potential data items, the Fed should use the standard and uniform definitions developed over the last ten years by the Mortgage Industry Standards and Maintenance Organization, Inc. (MISMO®). Reliance on MISMO definitions would greatly reduce the regulatory compliance burden by allowing lenders and vendors furnishing HMDA compliance services to pull from existing MISMO-compliant databases to report under HMDA. This would reduce the errors associated with entering data a second time for HMDA purposes and reduce the phase-in period for trying to interpret and then implementing new HMDA definitions. In addition, MISMO standards have already been adopted by Fannie Mae and Freddie Mac.

Reliance on the MISMO dictionary and standards would also help deal with the ambiguity surrounding some of the data elements specified in Dodd-Frank. For example, Dodd-Frank requires that credit scores be reported. MISMO recognizes that there is no such thing as a single credit score, so while it has a field for the score, it also has a field for the credit score vendor (such as Vantage Score or FICO), and the reporting agency. Rather than asking lenders to map multiple fields into a single number to be reported to the Fed, a number that likely would not appear in any credit file nor be used in the credit or loan pricing decision, the Fed could simply ask for the multiple fields dealing with credit scores and do its own mapping depending on whether it is doing a company-level or industry-level analysis.

I cannot stress enough the extent of the regulatory burden that HMDA and other reporting and compliance requirements place on the industry. The largest shares of investments in technology today are going to reporting and compliance needs, with no direct benefit to the companies or their customers. I would hope that the Fed would keep this burden and its costs in mind and minimize future changes in HMDA once these changes are made. Relying on MISMO would not only minimize costs but it would allow minor tweaking of data requirements in the future with less burden.

What to use as the universal mortgage identifier?

The industry already has a uniform mortgage identification number that is issued through the Mortgage Electronic Registration Systems, Inc. (MERS). This MERS number is used by a very high percentage of lenders and is integral to numerous origination and secondary market functions. It would cause considerable confusion and unnecessary implementation expense to impose a new mortgage identification protocol on the industry. Reliance on the MERS Mortgage Identification Number (MIN) allows loans to be tracked from origination through sale in the secondary market and subsequent servicing, and is valuable in identifying and preventing mortgage fraud.

For the Fed’s purposes, a further advantage of using the MERS MIN is that it would help prevent double counting or the failure to count loans altogether. For example, the current practice of eliminating loans purchased as closed loans from correspondent banks lowers the apparent coverage level of HMDA. In an effort to see what was missing from HMDA, the MBA several years ago did a matched-pair analysis of correspondent loans and found that a large percentage did not have a matching loan in the retail/broker data. Use of the MERS MIN would largely solve the problem of estimating coverage levels because it would permit an explicit matching between retail/broker originations and correspondent originations, it would provide a matching of loans originated in one calendar year and sold in another, and it allow loan data to be double checked against other data sources like Fannie Mae, Freddie Mac and Ginnie Mae.

What to make public?

Federal Reserve staff have developed considerable expertise in the analysis and interpretation of HMDA data. Their annual article in the Federal Reserve Bulletin is the source of information on HMDA for most analysts. In recent years, Fed staff have gone the extra mile to conduct analyses beyond the HMDA data to answer topical policy questions.

However, while it is proper and customary for a firm’s regulator to have access to confidential data, care needs to taken before those data are made public. While we see tremendous risk of widespread identity theft if all of the HMDA data elements were to be released in their collected form, particularly when those data are combined with other publicly available data, under Dodd-Frank, decisions on such release now lie with the Board and later the CFPB. The lending industry has poured tremendous resources into safeguarding the private information of our customers, and we have paid large fines for lapses. No doubt we would face the potential of additional fines and public recrimination were we to make the proposed HMDA data elements available to the public at large. That is why any liability associated with the collection and release of these data pursuant to Board rules should lie with the Fed. Moreover, the Board should provide guidance on how lenders should deal with requests that come directly to them for these data.

To a certain degree, we would support a greater release of credit data in some form. While it still would not solve all of the statistical problems associated with trying to mimic credit models with these data, it would go a long way to putting to rest once and for all charges of racism that have been hurled at the industry by various groups over the years that have no basis in fact. The econometric problems of omitted variables, multicolinearity and spurious correlation would still remain, but sufficient data would be available in the public domain to refute most of these charges.

What multifamily data should be reported?

MBA estimates that the 2008 HMDA data contained information on 95 percent of the multifamily loans made that year based on the number of loans, but covered only about 61 percent of their dollar amount. The average multifamily loan in HMDA was about $1.7 million while the average missing loan was about $18.9 million. We question the benefit of expanding the reporting requirements to include a relative small number of high-dollar multifamily projects.

Clearly, the data elements associated with single-family lending are not applicable to any but the smallest multifamily projects. Variables like race and credit score do not apply to limited partnerships, corporations or real estate investment trusts. We suggest that the Fed should examine the usefulness of the multifamily data it collects now with an eye to scaling back the requirement rather than going to large lengths to expand the reporting requirements to cover a small number of large dollar projects.

In conclusion, in making changes to the required data elements of HMDA, the Fed should look carefully at what is needed considering the new data requirements under Dodd-Frank and their costs, integrating the data requirements with what is already being collected, and using data definitions and identifiers that are already in common use. In addition, the Fed should be very concerned with the privacy related issues that would attend a wholesale public release of the new required data elements.”

###

The Mortgage Bankers Association (MBA) is the national association representing the real estate finance industry, an industry that employs more than 280,000 people in virtually every community in the country. Headquartered in Washington, D.C., the association works to ensure the continued strength of the nation’s residential and commercial real estate markets; to expand homeownership and extend access to affordable housing to all Americans. MBA promotes fair and ethical lending practices and fosters professional excellence among real estate finance employees through a wide range of educational programs and a variety of publications. Its membership of over 2,200 companies includes all elements of real estate finance: mortgage companies, mortgage brokers, commercial banks, thrifts, Wall Street conduits, life insurance companies and others in the mortgage lending field. For additional information, visit MBA’s Web site: www.mortgagebankers.org.

Could this deposition hold the key to take all of MERS V3 &  MERSCORP down!

There is not 1, 2 but 3 MERS, Inc. in the past.

Just like MERS et al signing documents dated years later from existence the Corporate employees do the same to their own corporate resolutions! Exists in 1998 and certifies it in 2002.

If this is not proof of a Ponzi Scheme then I don’t know what is… They hide the truth in many layers but as we keep pulling and peeling each layer back eventually we will come to the truth!

“A Subtle Stranger” Orchestrates a Paradigm Shift

MERS et al has absolutely no supervision of what is being done by it’s non-members certifying authority PERIOD!

SUPERIOR COURT OF NEW JERSEY
CHANCERY DIVISION – ATLANTIC COUNTY
DOCKET NO. F-10209-08
BANK OF NEW YORK AS TRUSTEE FOR
THE CERTIFICATE HOLDERS CWABS,
INC. ASSET-BACKED CERTIFICATES,
SERIES 2005-AB3
Plaintiff(s),
vs.
VICTOR and ENOABASI UKPE
Defendant(s).
___________________________________________
VICTOR and ENOABASI UKPE
Counter claimants and
Third Party Plaintiffs,
vs.
BANK OF NEW YORK AS TRUSTEE FOR
THE CERTIFICATE HOLDERS CWABS,
INC. ASSET-BACKED CERTIFICATES,
SERIES 2005-AB3
Defendants on the Counterclaim,
and
AMERICA’S WHOLESALE LENDER;
COUNTRYWIDE HOME LOANS, INC.;
MORGAN FUNDING CORPORATION,
ROBERT CHILDERS; COUNTRYWIDE
HOME LOANS SERVICING LP,
PHELAN, HALLINAN & SCHMIEG,
P.C.,
Third Party Defendants
——————–

Deposition of William C. Hultman, Secretary and Treasurer of MERSCORP

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Does MERS have any salaried employees?
A No.
Q Does MERS have any employees?
A Did they ever have any? I couldn’t hear you.
Q Does MERS have any employees currently?
A No.
Q In the last five years has MERS had any
employees?
A No.
Q To whom do the officers of MERS report?
A The Board of Directors.
Q To your knowledge has Mr. Hallinan ever
reported to the Board?
A He would have reported through me if there was
something to report.
Q So if I understand your answer, at least the
MERS officers reflected on Hultman Exhibit 4, if they
had something to report would report to you even though
you’re not an employee of MERS, is that correct?
MR. BROCHIN: Object to the form of the
question.
A That’s correct.
Q And in what capacity would they report to you?
A As a corporate officer. I’m the secretary.
Q As a corporate officer of what?
Of MERS.
Q So you are the secretary of MERS, but are not
an employee of MERS?
A That’s correct.

etc…
How many assistant secretaries have you
appointed pursuant to the April 9, 1998 resolution; how
many assistant secretaries of MERS have you appointed?
A I don’t know that number.
Q Approximately?
A I wouldn’t even begin to be able to tell you
right now.
Q Is it in the thousands?
A Yes.
Q Have you been doing this all around the
country in every state in the country?
A Yes.
Q And all these officers I understand are unpaid
officers of MERS?
A Yes.
Q And there’s no live person who is an employee
of MERS that they report to, is that correct, who is an
employee?
MR. BROCHIN: Object to the form of the
question.
A There are no employees of MERS.

RELATED ARTICLE:

_____________________________

MERS 101

_____________________________

FULL DEPOSITION of Mortgage Electronic Registration Systems (MERS) PRESIDENT & CEO R.K. ARNOLD “MERSCORP”

_____________________________

DEPOSITION of A “REAL” VICE PRESIDENT of MERS WILLIAM “BILL” HULTMAN

_____________________________

HOMEOWNERS’ REBELLION: COULD 62 MILLION HOMES BE FORECLOSURE-PROOF?

Excerpts:

MERS was created in 1995 under the auspices of the Mortgage Bankers Association (MBA), as the mortgage industry’s utility, to streamline the mortgage process by using electronic commerce to eliminate paper. Our Board of Directors and shareholders are comprised of representatives from the MBA, Fannie Mae, Freddie Mac, large and small mortgage companies, the American Land Title Association (ALTA), the CRE Finance Council, title underwriters, and mortgage insurance companies.

Our initial focus was to eliminate the need to prepare and record assignments when trading mortgage loans. Our members make MERS the mortgagee and their nominee on the security instruments they record in the county land records. Then they register their loans on the MERS® System so they can electronically track changes in ownership over the life of the loans. This process eliminates the need to record assignments every time the loans are traded. Over 3000 MERS members have registered more than 65 million loans on the MERS® System, saving the mortgage industry hundreds of millions of dollars in the process. The Federal Housing Administration (FHA) and Veterans Administration (VA) approved MERS for government loans because they recognized the value to consumers. On table-funded loans, MERS eliminates the cost to the consumer of the mortgage assignment ($30 – $150). In addition, the MERS process ensures that lien releases are not delayed by eliminating potential breaks in the chain of title. Similar to the residential product, we also addressed the assignment problem in the commercial market with MERS® Commercial, on which is registered over $110 billion in Commercial Mortgage-Backed Securities (CMBS) loans.

More than 60 percent of existing mortgages have an assigned MIN, making a total of 65,000,000 loans registered since the inception of the system in 1997. The corresponding data for these mortgages is tracked on the MERS® System from origination through sale and until payoff. MERS therefore offers a substantial base of historical data about existing loans that can be harnessed to bring transparency to existing MBS products. Attached are letters from the MBA, FHA, Fannie Mae and Freddie Mac on this point.

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Related:

MERS May NOT Foreclose for Fannie Mae effective 5/1/2010

_________________________________________

Fannie Mae’s Announcing Miscellaneous Servicing Policy Changes