Complete Memorandum Decision By Judge Grossman Finding MERS Transfers Illegal

Tyler Durden's picture

Here is the punchline:

The Court recognizes that an adverse ruling regarding MERS’s authority to assign mortgages or act on behalf of its member/lenders could have a significant impact on MERS and upon the lenders which do business with MERS throughout the United States. However, the Court must resolve the instant matter by applying the laws as they exist today. It is up to the legislative branch, if it chooses, to amend the current statutes to confer upon MERS the requisite authority to assign mortgages under its current business practices. MERS and its partners made the decision to create and operate under a business model that was designed in large part to avoid the requirements of the traditional mortgage recording process. This Court does not accept the argument that because MERS may be involved with 50% of all residential mortgages in the country, that is reason enough for this Court to turn a blind eye to the fact that this process does not comply with the law.

Full ruling:


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Thomas's picture

Squatters unite (bitchez if I must)!

Fish Gone Bad's picture

It is only fun until someone loses an eye over it.  Then it gets REALLY fun.  I am such a big fan of bad behaviour, I can watch it all day.

blindfaith's picture

Here, here!  Ah, great American point of view...and truthfull too.


However, as someone who lost an eye while watching bad behavior, I can tell you it ain't REALLY fun.

Teaser's picture

This is last weeks news.


Not that it's not interesting...


still means nothing.  When do I get to tell my servicer to pound sand and sue them for all the payments I made?

HamyWanger's picture

As I've said on the previous thread, it will have absolutely no consequence.

Otherwise the Dow wouldn't be green at this present time.

williambanzai7's picture

This is an opinion by a Federal judge. It will embolden all the judges looking at similarly fucked up facts. All morons can ignore the ramifications of this at their own peril...

LeBalance's picture

Let's all remember (ala akak) that Harry is a dipshit provocateur who is studying the reactions of folks to his line of deviant thought.  By his own admission!

Cursive's picture


You've been Hammied!  Seriuosly, when was the last time the real HW/Prof. K was here?

blunderdog's picture

Harry's business is booming--he doesn't have time to play on ZH.  He's out trying to hire for expansion right now, but the labor market is really tight in his world.

blindfaith's picture

Are Harry W, Ironman, and Redneck Repugnican all the same guy???


Seriously, are they?

jobs1234's picture

But hey, Fedex just warned citing fuel costs and snow.



Arthor Bearing's picture

Breaking news, court applies law as it's written

wretch's picture

... recommends that congress removes law.

cougar_w's picture

Yeah he scared himself there for a second. "Just kidding guys, you fix it and we're all good."

irishlink's picture

Where were the regulators? Capitalism run amok

Al Gorerhythm's picture

Capitalism run amok? What's capitalism?

I Am The Unknown Comic's picture

what are these things irishlink calls "regulators?"

gwar5's picture

The banks can now shop for a higher judge or go to congress to get more special carve outs

But I don't think this House or Senate is going to rubber stamp their bullshit.

blindfaith's picture

It might be a good idea to investigate the holdings of said congressmen (not to mention the other two divisions of government) before you hold your breath too long and look for justice.

Bottom line is STILL clouded title with broken chains of ownership rights.  But, that is OK because Timmy is about to end the dream of homeownership once and for all.... unless you are in the fraternity.

irishlink's picture

Where were the regulators? Capitalism run amok

4closureFraud's picture

Other key language from the memorandum...

The documentation provided to the Court in this case (and the Court has no reason to believe that any further documentation exists), is stunningly inconsistent with what the parties define as the facts of this case.

However, even if MERS had assigned the Mortgage acting on behalf of the entity which held the Note at the time of the assignment, this Court finds that MERS did not have authority, as “nominee” or agent, to assign the Mortgage absent a showing that it was given specific written directions by its principal.

This Court finds that MERS’s theory that it can act as a “common agent” for undisclosed principals is not support by the law. The relationship between MERS and its lenders and its distortion of its alleged “nominee” status was appropriately described by the Supreme Court of Kansas as follows: “The parties appear to have defined the word [nominee] in much the same way that the blind men of Indian legend described an elephant – their description depended on which part they were touching at any given time.” Landmark Nat’l Bank v. Kesler.

irishlink's picture

Where were the regulators? Capitalism run amok

midtowng's picture

For some reason I am always happily surprised whenever judges uphold the law.

JW n FL's picture

seriously we should get that Judge some security... he has balls and God Bless Him!!!! But that doesnt help when they want to shut him and the truth up.

JW n FL's picture

can we have a downloadable version please? Thanks Tyler!!

JW n FL's picture

I am sorry I missed that story! there are so many stories being posted that some of the really good ones get blown away in the information wave(s)...


We need (Tyler) a sticky for some of the different issues... as well as a rolling page of new info.. can I as well have a large pizza and super size it as well... sorry to sound so demanding, God Knows! you have enough going on without the peanut gallery asking for a more sophisticated law out...


But to be Clear! I am Grateful to all who work to bring about an quicker end to the lie (matrix) that we live in.. That is Truly God's Work! Sharing the Truth!


Thanks 4closureFraud for all of your great work! and the info for the doc as well... You are FANTSTIC!!!

Possible Impact's picture

"Thanks 4closureFraud for all of your great work! and the info for the doc as well... You are FANTSTIC!!!"


Pladizow's picture

He will mysteriously retire just after retracting his ruling!

Josh Randall's picture

Sorry Mr. Attorney your "Change of venue" motion to China: is denied...

InconvenientCounterParty's picture

There's only one branch of the 3-4 branches of the U.S. gov that is the least bit  concerned with defining "right and wrong". I'm not saying they are good at it, but I am saying that the self perception of "moral high ground ownership" can lead to solo swans "leaving the flock".

The question is: will the other branches allow the judicial branch to get too far out of control? Things can happen fast.

goldsaver's picture

4 branches?

President, house, senate and the courts? Are you a US senator?

treasurefish's picture

What bearing does this have on the Robo-signers (like Lender Processing Services)?  Excuse my ignorance.  Considering MERS does not have a ticker, I'm just looking for a way to benefit from this knowledge, and I'm too timid to buy FAZ.


Shorts anyone?


sunnydays's picture

Ah, but MERS does have a ticker - just a few of them are JP Morgan, BOA, Goldman Sachs, Deutsche Bank, Wells Fargo, and all those other big Wall Street banks.  They are all MERS banks.  Everyone of them goes through MERS for their mortgages.  Guess they shouldn't have tried saving billions by committing fraud and not having to pay transfer fees to states.  So their greed has now caught up to them.

Cdad's picture

This story has yet to be touched by the MSM.  Expect a brief bank short covering rally in the AM...followed by the huge sucking sound of nothing.  Or go ahead and follow the second rate, failed NFL bit part player P. Najarian.  I'm sure tomorrow he will say "we look at the" followed by the "we talk about" five times each...with a big "giddee up" tossed in for confidence sake.  Sweet.

Hello Blow Horn [CNBC]? Is there anybody in there?

I guess it is time to start directing my mail to Comcast.

cougar_w's picture

This Court does not accept the argument that because MERS may be involved with 50% of all residential mortgages in the country, that is reason enough for this Court to turn a blind eye to the fact that this process does not comply with the law.

What's wrong with this guy? Doesn't he understand how the actual law actually works in this actual country? He needs to go back to the People's Re-Education Center for Spiritual Purity of Thought for another 50 lashes and 100 days in solitary confinement.

Miles Kendig's picture

Where he will relearn to sing from the prescribed hymnal with sufficient zeal

Thomas's picture

I hope Tepper eats his Citi shares for breakfast: they will be bite sized.

Johnk's picture

re: Mainstream Media

at least HousingWire has the story now

It'll probably be on Drudge in a week or two under the headline "Activist Judge Threatens American Way of Life" or something similar.


Amish Hacker's picture

It's a good thing there are still a few judges around with this kind of integrity. Recall the Matt Taibi article ( about Florida's railroading of distressed homeowners. With a different judge, this case could have been just another invisible foreclosure statistic.

It appears from the Conclusion (p.36) that the judge was actually ruling that the motion should be granted in this particular case, but that in subsequent cases a note and a mortgage would be required to prove standing. 

goldsaver's picture

So the Judge's conclusion was: I know you are legally wrong, I can provide prima facia evidence that you are wrong, but I'm going to let you do it this time, just dont do it again?

edit: answered my own question. The court is respecting the decision of the lower court that established the bank's right to foreclose claiming that the mortgage was secured by the property and the failure of the debtor to prove otherwise. But the judge is using this case to establish a Federal precedent for future and pending cases.

Trifecta Man's picture

Does this make that judge an accessory to a crime?

GreenSideUp's picture

Here's what I completely don't get.  Cities, counties and states in serious financial trouble all over the map and nobody's making a peep about all the recording fees they were screwed out of?  Further, I'm willing to bet that a look at all the HUD (closing) statements would show that recording fees were charged to the buyer or seller.  Somebody took those fees.  What am I missing?

blunderdog's picture

If you're $140 million in the hole, the fact that you were cheated out of $200,000 isn't enough to get passionate about.

I know, I know, every little bit helps.  But since you asked...

j0sh1130's picture

youre confusing the process.  when you close on a mortgage for property you own, the escrow/title company will record your documents with the county recorder and there are fees for this.  what the banks then did was scan the final docs into a pdf, slap a MERS # on top of it and upload it to a database of mortgages.


the banks then sold the mortgage off to an investor or another bank.  in these instances only the bank seller and buyer of the mortgage/note would complete a simple transfer/assignment doc (actually, MERS most likely did the docs and signed on behalf of the seller and buyer and that is one of the big issues) and then they added this transfer/assignment to the pdf stack for the MERS #.  This would occur once, twice a dozen times.  the local municipality is supposed to be paid recording fees to have these assignments recorded and the transfer of mortgage to be a matter of public record. 


this was MERS whole value proposition.  screw the bullshit paperwork and make the whole process electronic, quick, easy and cut out the municipal middle man and his fees.  cities/counties/states should sue for each transfer that took place without fees being paid.  but how do they find this out when there is currently no access for them to MERS?  well, based on the stated value prop, they should sue for access to all transfers in their state since the company blatantly states what it is doing.  


so, that alone will eat MERS alive and why everyone has quit in the last 30 days.  MERS wont be a company much longer and the member banks will be left to pick up the tab.  beyond this, the answer is fairly simple.  even if there were fraudulent transfers of the mortgage, you go back in time to the original mortgagee and have them assign the document to you directly, effectively wiping out all the fraud and you have the mortgage as you should.  there is also the chance that if the last transfer is done legitimately - ie. the holder/seller assigns to the buyer as they are supposed to then the whole stack of MERS transfers wont matter.


in any case, the public is not directly being gouged any money.  the municipalites are.  and the problem can be solved if the banks just do what they were supposed to be doing the whole time.