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What Is MERS and What Role Does It Have in the Foreclosure Mess?
You've heard the name Mortgage Electronic Registration Systems or "MERS" mentioned in relation to the foreclosure problems in the residential real estate market.
But what is MERS?
It is the company created and owned by all of the big banks to process title to property in the U.S. Approximately 60% of the nation’s residential mortgages are recorded in the name of MERS.
MERS is a shell corporation with no employees, but thousands of officers.
As the treasurer and secretary of MERS admitted in a deposition:
Q 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.***
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.***
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?
[Objection]
A There are no employees of MERS.
(page 70, line 1 through page 72, line 8)
In
another deposition, a legal assistant at a law firm initiating 4000 to
7000 foreclosures per month in Florida held herself out as "vice
president" and "assistant secretary" of MERS. She testified:
Q: The question was you have no job duties as an assistant secretary of MERS, correct?
A: I do not have any job duties other than signing the assignments and mortgage. Does that help?
Q: Yes. Here, I’ll try to rephrase this. Do you attend any board meetings at MERS?
A: No, sir.
Q: Do you attend any meetings at all at MERS?
A: No, sir.
Q: Do you report to the secretary of MERS?
A: No, sir.
Q: Who is the secretary of MERS?
A: I have no idea.***
Q: Where are the MERS offices located?
A: I can’t remember.
Q: How many offices do they have?
A: I have no idea.
Q: Do you know where their headquarters are?
A: Nope.
Q: Have you ever been there?
A: No.
Q: How many employees do they have?
A: I have no idea.
(pages 11 & 12)
She
further testified that her signatures on “these assignments,” which
from all indications were and are at least several thousand in number,
were in no way attestations that the statements contained therein were
accurate or truthful. She further testified that she was the person with
the most knowledge about the subject assignment.
For example, she testified:
Q: It says, ‘but effective as of the 19th day of February, 2008.” Do you see that?
A: Yes.
Q: Where did you get that date from?
A: I did not pick that date. That date was put in by the processor that prepared the
assignment.
Q: And who was that?
A: Off the top-of-my-head, I do not know who actually typed this assignment.
Q:
Okay. But you are signing on behalf of MERS, and you are stating here
that it is effective as of the 19th day of February, 2008, correct?
A: Correct.
Q: At the time you signed this, what reason did you have, as agent for MERS, to make it
effective as of the 19th day of February, 2008?
A: I did not pick that date. And I do not recall this document.
Q:
Sitting here today, you have no idea why it is that it says, “effective
as of the 19th day of February, 2008.” Is that correct?
A: Looking at this one particular piece of paper, I do not recall or know the answer to that question, no.
Q:
Is there some general practice, of which you are aware, that would give
us information as to why this particular date was inserted?
A: That information was determined by the people that review the file prior to me.
Q: And what would they base that on, as a general practice?
A: I do not know.
Q: You don’t know? Were, to your knowledge, any physical documents transferred on February 19, 2008?
A: I do not know.
Q: To your knowledge, does the 19th day of February, 2008 have any significance?
A: I do not know.
Q: Ma’am, if you signed this document on behalf of MERS, picking this date, this effective
date - -
A: I did not pick the effective date.
Q: But you ratified it by signing this; didn’t you?
[objection]
Q: Didn’t you attest to the accuracy of that date by signing this document?
[objection]
A: I would say, no.
Q: Did you attest to this document, as a whole, by signing it?
[objection]
A: I do not think that in my capacity of signing these assignments, it was my position to attest. My
role was to be given a document that had been reviewed by an attorney,
had been reviewed by a title examiner, had instructions from the client,
and I was to sign the assignment as secretary on behalf of MERS.
Q: Right. And
when you signed it as secretary on behalf of MERS, were you approving
and agreeing with the terms contained therein for MERS?
A: I believe I was approving and agreeing to the fact that the mortgage needed to be assigned from MERS to another entity.
(pages 13 and 14)
In
other words, assignments of title were never actually created,
notarized and recorded, as required by state law. The "vice president"
and "assistant secretary" MERS signing sworn statements under penalty
perjury was simply making it up and doing what she was told.
In that light, Yves Smith's report that "no one in the industry transferred the paper" makes perfect sense.
Why MERS?
But why was MERS created in the first place?
MERS, the banks and the mainstream financial press all say that it was simply to save fees by digitizing mortgage electronic.
But as Ellen Brown notes, there is in reality a very different reason that the big banks created MERS:
The rating agencies required that the conduit be "bankruptcy remote," which meant it could hold title to nothing ....
Indeed, the secretary and treasurer of MERS admitted this in a deposition, stating:
As
a requirement for mortgages that were securing loans or promissory
notes that were sold to securitize trust, the rating agencies would only
allow mortgages MERS -- well let me step back. They
required that a bankruptcy remote single purpose entity be created in
order for transactions holding loans secured by MERS, by mortgages MERS
served as mortgagee to be in those pools and receive a rating, an investment grade rating without any changes to the credit enhancement. They required that to be a bankruptcy remote single purpose subsidiary of MERS, of Merscorp.
(page 32, lines 9-20)
Indeed, many commercial mortgages may be held by MERS as well, and for the same reason.
And as a a forthcoming article in the Real Property, Trust and Estate Law Journal notes, saving fees was another
motivation for the giant banks in running mortgages through MERS, but
in a way which is shadier than routine cost-cutting efforts.
Karl Denninger summarizes the article (indicated with indented quotes), with commentary:
A few good cites will set the table for those willing to dig into what's really not that hard to understand...
In
the mid-1990s mortgage bankers decided they did not want to pay
recording fees for assigning mortgages anymore. This decision was
driven by securitization—a process of pooling many mortgages into a
trust and selling income from the trust to investors on Wall Street.
Securitization, also sometimes called structured finance, usually
required several successive mortgage assignments to different companies.
To avoid paying county recording fees, mortgage
bankers formed a plan to create one shell company that would pretend to
own all the mortgages in the country—that way, the mortgage bankers
would never have to record assignments since the same company would
always “own” all the mortgages.What do you call an artifice designed to evade the payment of taxes - which these fees are?
They incorporated the shell company in Delaware and called it Mortgage Electronic Registration Systems, Inc.
Even though not a single state legislature or appellate court had authorized this change in the real property recording,
investors interested in subprime and exotic mortgage backed securities
were still willing to buy mortgages recorded through this new proxy
system.14What do you call selling
something to someone that claims an ownership right as an inherent part
of the bargain - indeed, it's the only consideration that is offered in
exchange for money, yet the state legislatures have not ratified this as proper, and in fact the county and state legislatures say it is not?Because
the new system cut out payment of county recording fees it was
significantly cheaper for intermediary mortgage companies and the
investment banks that packaged mortgage securities. Acting on the
impulse to maximize profits by avoiding payment of fees to county
governments much of the national residential mortgage market shifted to
the new proxy recording system in only a few years. Now about 60% of the nation’s residential mortgages are recorded in the name of MERS, Inc. rather than the bank, trust, or company that actually has a meaningful economic interest in the repayment of the debt.
***
Astonishingly,
MERS “vice presidents” are simply paralegals, customer service
representatives, and foreclosure attorneys employed by other
companies. MERS even sells its corporate seal to non-employees on its internet web page for $25.00 each.
Ironically, MERS, Inc.—a company that pretends to own 60% of the
nation’s residential mortgages—does not have any of its own employees
but still purports to have “thousands” of assistant secretaries and
vice presidents.
AP notes
that banks hired hair stylists, Walmart floor workers and people who
had worked on assembly lines as foreclosure "experts". Some of
these folks testified in deposition that they hardly knew what a
mortgage or an "affidavit" is, and admitted that they knew they were
lying when they signed the foreclosure affidavits and that they agreed
with the defense lawyers' accusations about document fraud. While I
have not yet seen any evidence that the folks signing on behalf of MERS
were of this caliber, nothing would surprise me at this point.
But It Can All Be Fixed, Right?
Diana Olick notes:
A
source of mine pointed me to a recent conference call Citigroup had
with investors/clients. It featured Adam Levitin, a Georgetown
University Law professor who specializes in, among many other financial
regulatory issues, mortgage finance. Levitin says the documentation
problems involved in the mortgage mess have the potential "to cloud
title on not just foreclosed mortgages but on performing mortgages."***
With
the chain of documentation now in question, and trustee ownership in
question, here is one legal scenario, according to Prof. Levitin:The
mortgage is still owed, but there's going to be a problem figuring
out who actually holds the mortgage, and they would be the ones
bringing the foreclosure. You have a trust that has been getting
payments from borrowers for years that it has no right to receive. So
you might see borrowers suing the trusts saying give me my money back,
you're stealing my money. You're going to then have trusts that don't
have any assets that have been issuing securities that say they're
backed by a whole bunch of assets, and you're going to have investors
suing the trustees for failing to inspect the collateral files, which
the trustees say they're going to do, and you're going to have
trustees suing the securitization sponsors for violating their
representations and warrantees about what they were transferring.***
Josh
Rosner, of Graham-Fisher, put the following out in a note today,
claiming violations of pooling and servicing agreements on mortgages
could dwarf the Lehman weekend:
Nearly all Pooling and Servicing Agreements require that “On the Closing Date, the Purchaser will assign to
the Trustee pursuant to the Pooling and Servicing Agreement all of
its right, title and interest in and to the Mortgage Loans and its
rights under this Agreement (to the extent set forth in Section 15), and the Trustee shall succeed to such right, title and interest in and to the Mortgage Loans
and the Purchaser's rights under this Agreement (to the extent set
forth in Section 15)”. Also, an Assignment of Mortgage must accompany
each note and this almost never happens.We believe nearly every single
loan transferred was transferred to the Trust in “blank” name. That
is to say the actual loans were apparently not, as of either the
cut-off or closing dates, assigned to the Trust as required by the PSA.Rather
than continue to fight for the “put-back” of individual loans the
investors may be able to sue for and argue that the “true sale” was
never achieved.Quite the can of worms. Anyone who says that the banks will fix all this in a few months is seriously delusional.
Citi's conference call is even more dramatic when you remember that CitiMortgage is one of the main owners of MERS. Here's more from Citi:
MERS
(Mortgage Electronic Registration Systems) functions as a centralized
electronic registry of mortgages and tracks ownership of mortgages.
MERS allows mortgage ownership to change hands efficiently and
relatively quickly since it is electronic and allows all parties to
forgo making a filing in local land records. Indeed, MERS was designed to function as a substitute for local land records.Although MERS was designed to enhance efficiency in the mortgage assignment process, Levitin
argued it may not conform with the law. “Slowly but surely” courts
are issuing decisions which “cast validity on the MERS process.”
Although ~60% of mortgages list MERS as the “nominee” which owns the
mortgage, a handful of recent court cases have ruled that MERS has no
standing in foreclosure actions either because (1) physical paperwork
must be transferred when a mortgage is assigned by one party to
another or (2) MERS has no true economic interest in the mortgage in
question since it collects no payments from the borrowers.
Finally,
the above-described Real Property, Trust and Estate Law Journal article
also comments on the illegality of MERS (the indented quotes are from
the article; the rest is Denninger's commentary):
Worse, MERS may have literally "split the baby" and rendered millions of mortgages unsecured:
Typically, the same person holds both the note and the deed of trust. In the event that the note and the deed of trust are split, the note, as a practical matter becomes unsecured. Restatement (Third) of Property (Mortgages) § 5.4. Comment. The
practical effect of splitting the deed of trust from the promissory
note is to make it impossible for the holder of the note to foreclose,
unless the holder of the deed of trust is the agent of the holder of the
note. Id. Without the agency relationship, the person holding
only the note lacks the power to foreclose in the event of default.
The person holding only the deed of trust will never experience default
because only the holder of the note is entitled to payment of the
underlying obligation. Id. The mortgage loan became ineffectual when the
note holder did not also hold the deed of trust.That's an actual holding of the Missouri Court of Appeals.
It gets worse.
If
the growing line of cases asserting that MERS is neither a mortgagee
nor a deed of trust beneficiary is correct, then courts must soon
confront profound questions about the very enforceability of MERS’
security agreements. ... There is a compelling legal argument that loans originated through the MERS system fail to create enforceable liens......
The
mortgage industry has premised its proxy recording strategy on this
separation despite the U.S. Supreme Court’s holding that “the note and
the mortgage are inseparable.” If today’s courts take the Carpenter
decision at its word, then what do we make of a document purporting to
create a mortgage entirely independent of an obligation to pay? If the
Supreme court is right that a “mortgage can have no separate existence”
from a promissory note, then a security agreement that
purports to grant a mortgage independent of the promissory note
attempts to convey something that cannot exist.
While
this argument will surely strike a discordant note with the mortgage
bankers that invested billions of dollars in loans originated with this
simple flaw, the position is consistent with a long and hitherto
uncontroversial line of cases. Many courts have held that a
document attempting to convey an interest in realty fails to convey that
interest when an eligible grantee is not named. Courts all
around the country have long held: “there must be, in every grant, a
grantor, a grantee and a thing granted, and a deed wanting in either
essential is absolutely void.”Now consider this - assignments of the Grantee in blank are thus invalid too. Oh, yeah, they went there.
Nonetheless, in Chauncey,
the trial court, intermediate appellate court and New York’s highest
court all agreed that the attempt to convey an “in blank” mortgage
failed. The Court of Appeals explained, “No mortgagee or
obligee was named in [the security agreement], and no right to maintain
an action thereon, or to enforce the same, was given therein to the
plaintiff or any other person. It was, per se, of no more legal force than a simple piece of blank paper.”Double Oops.
And then, in a very nice throwback to something I wrote we get this:
In a stunning betrayal of the policies that ground the ancient statute of frauds principal commanding that we commit transfers of land interests to writing,
mortgage bankers wrote millions of mortgage loans that did not specify
who the actual mortgagee was. For over a hundred years, our courts
have held that “legal title to real property may not be established by
parole”....Then there's the little problem with REMICs that don't actually have title because MERS claims to (well, sometimes)
And,
all rights to a mortgage loan must be deposited into the trust for it
to achieve tax exempt status under federal REMIC law—which does not
contemplate the use of a proxy mortgagee. Yet, despite claiming sole
ownership of mortgages sold to investors, in documents regularly
recorded with county officials these same institutions maintain that
MERS is the sole owner of the mortgage. The chain of financial
institutions linking originators to securitization depositors
collectively want to have their lien and sell it too.That should go over well with the IRS.
Communities around the country have elected and hired county recorders to act as their custodian of property rights.
Those recorders who agree the MERS system poses a threat to real
property records have an obligation arising from their office to reclaim
and restore faith in land title records. While some individual county
recorders may reasonably feel reluctant to take on a powerful national
system backed by some of the nation’s largest financial institutions,
this is precisely what they were hired to do. If county recorders do not
protect county real property records, who will? A pathway to
reclaiming authority over real property records could involve joining
with other recorders to raise a unified voice. State and national county
recorder trade associations could have a significant impact on pending
cases by submitting amicus curiae briefs. Courts are likely to
respect county recorders’ expertise in maintaining and preserving
transparent records, both because of recorders’ experience but also
because of their democratic mandate. Even more to the point, county
recorders should consider appealing to the courts directly to stop
financial institutions from recording false documents. In lawsuits to
recover unpaid recording fees counties could hire private counsel on
contingent fee agreements that would place no financial burden county
taxpayers.Yep.
It is time to take this edifice and throw it in the trashcan, after
forcing its members to fix all the titles they have damaged - at their
expense - and record true and correct assignment information.
Oh
wait - that's a problem isn't it..... what if the assignments never
actually happened, and the REMICs hold an empty box? Why that could get
messy..... Hmmmm....
Indeed, as a prominent economist said
recently: "At the root of the crisis we find the largest financial
swindle in world history", where "counterfeit" mortgages were
"laundered" by the banks.
MERS was a large part of that laundering process.
- advertisements -
What in the sam hell is going on round here, the veracity of loan documentation is now less reliable than a yard sale permit. Foreclosure moratorium and.. what?
Markets up 120.
It's "Sam Hill"
The Traning text below is posted on the MERS site under Forclosure. (there's also an interesting legal precedent document for why MERS has standing to forclose. It appears the RE lawyers have been fighting them for some time). From what this says to me MERS is aware they need to be the holder of note & mortgagee before filing .
My question is if MERS is the mortgagee, who's the holder of the note that can endorse the note to them after the sale of the mortgage occurs? Hasn't the note been sold by the originator? So who can endorse it? I assume it's like a check, I endorse to you... If the trusts don't even know they don't have the notes? Are they being asked to endorse? Probably not. So who has the note and the right to endorse it before forclosure starts and they robo signing begins?
Motions for Relief for Stay and Proofs of Claim can be filed by Mortgage Electronic Registration Systems, Inc. (MERS). Each MERS member, through its duly appointed MERS officer(s), is responsible to ensure that outside counsel that files pleadings on behalf of MERS properly describes MERS and attaches all necessary proof to show MERS has standing at the time the pleading is filed. This means that if MERS is the movant on a motion for relief from stay, in addition to being the mortgagee, MERS will need to be the note-holder for a particular loan transaction prior to filing a motion from relief from stay. Endorsing a promissory note in blank and delivering it to a duly appointed MERS officer is sufficient to make MERS the note-holder entitled to enforce the note. A copy of the note with the blank endorsement needs to be attached to the motion as an exhibit. Also, any transfers of the note must be disclosed in the motion for relief from stay. If the MERS member decides not to make MERS the note-holder, then MERS will not file the motion for relief from stay in MERS’ name. As assignment of the mortgage lien from MERS to the applicable note-holder must then be executed and recorded in the applicable land records. When MERS files proofs of claim, MERS does so as the mortgagee of record pursuant to either a recorded MOM (MERS as Original Mortgagee) mortgage or an assignment. MERS holds an
"in rem" mortgage interest in the property on behalf of the note-owner. Under the United States Bankruptcy Code, such an interest constitutes a claim in bankruptcy, and as such, MERS qualifies as a creditor for purposes of filing a Proof of Claim. A proof of claim filed in MERS’ name is based upon the mortgage lien. Therefore, the claim is considered a secured claim. If the proof of claim is seeking more than the right to enforce the mortgage, and is also seeking to collect against the borrower personally, in what is known as an "in personam"
claim, then the lender will need to be added to the claim for full disclosure. Each member’s duly appointed MERS officer(s) that is designated by the member to be responsible to oversee and supervise the compliance of MERS filings shall conduct an audit on all active bankruptcy cases by reviewing all Proofs of Claims and Motions for Relief from Stay to be sure that the above guidelines are being met. If a duly appointed MERS officer fails to make sure that the above guidelines are followed by the MERS member and retained outside counsel, MERS will revoke that officer’s authority and MERS will no longer file motions for relief from stay or proofs of claim for mortgage loans serviced or owned by the applicable MERS member. If you have any questions regarding this Bulletin, please contact the MERS’ law department at (703) 761-1270.
A "satisfaction of lien" fairy tale is a chain of events that ultimately should cause someone to tear up the original paper. The original paper will/should trump the subordinate satfac paper. But then there are judges.
You can't help get the feeling that the statutory and case law isn't going to amount to squat in this situation. There are to many powerful institutions with money at stake here, including the entire federal government who has made support of the housing market (and therefore banks) top priority. SCOTUS overturned 100 years of their own precedents upholding campaign finance restrictions with the recent Citizens United case, so what's another overturned precedent?
Anyway, the elites are in yet another predicament now, and this one they cannot extend and pretend away. Door A leads to a housing market FUBAR that no accounting tricks can whitewash, and door B leads to an outright admission that not only will massive amounts of fraud be condoned, but it will be rewarded. And all this a time when the masses are already compressed tight on a spring and looking for any reason to release.
Like JFK said, "those who make peaceful revolution impossible will make violent revolution inevitable".
Trying to get my arms around this. Tell me if I am right or wrong. Bob buys a home and gets a mortgage from BAC agreeing to pay x amount for x number of months. At the end of that time, BAC provides him with a clear title to the property.
Someone comes up with this idea. What if we could sell the income stream generated by Bob? You could, but the transaction, tax, recording fees and costs would eat up the spread. But what if we separated the title from the income stream? We can hold the title and sell the income stream, we just have to come up with a mechanism that will work. And thus MERS is born.
Now since MERS not only never did the proper transaction, tax and recording aspects of the transaction that they were supposed to do, we find that they never intended to do them at all. For the very reason that MERS was created in the first place, to reduce costs involved in selling the income stream.
So, back to Bob. Bob had a mortgage, but BAC in essence, had someone buy the idea of an income stream that was not actually backed by anything. As long as Bob believes the mortgage exists, and that it has not been paid off, he continues to pay it. But someone paid the mortgage, just not Bob, and they thought that they were being secured by an underlying mortgage, but they weren't. It seems to me, that everything we are seeing right now is an attempt to keep Bob from realizing that he no longer has a mortgage, the bank was paid, and it was the bank that promised the income stream with nothing to back it up.
Conspiracy theory time. Banks had in essence created a fiat mortgage system similar to our fiat money system. As long as Bob believed he had a mortgage, everything is fine. How many people actually pay off a mortgage? They don't, they sell to someone else, who also needs a mortgage and the game continues. Can't happen, because there are foreclosures and some people who do pay off mortgages. The foreclosure rate was built into the investment vehicle via the different tranches, and who is going to question the bank? Even the homeowner thinks he has a mortgage! Thus we get the news that these foreclosure mills would create clean titles for $35.00 per. Because everyone assumes they exist and these are just a couple of technicalities, nothing to see here, move on.
The scariest name on the MERS shareholder list? American Land Title Associaton. They have they known all along?
We are about to find out if we actually are a nation of laws or not.
Let's assume you're right...don't overlook the fact that Bob still has a loan which he needs to pay, albeit unsecured. If Bob elects to stop payment on the loan, the bank (or other owner of the purchased loan / income stream) can go after Bob and all of his unencumbered assets...my question is does this include the house? According to your theory, it appears an independent third party, not Bob, has title to that. If that's the case, what's stopping that third party from throwing us all out on the street, screwing the homeowner and the MBS investors?...now I'm confused.
So, if I am understanding this correctly, every mortgage in the last 10-15 years, that used MERS as the transfer agent, is void? Is that correct?
Great post!
"In the event that the note and the deed of trust are split, the note, as a practical matter becomes unsecured. Restatement (Third) of Property (Mortgages) § 5.4. Comment. The practical effect of splitting the deed of trust from the promissory note is to make it impossible for the holder of the note to foreclose, unless the holder of the deed of trust is the agent of the holder of the note. Id. Without the agency relationship, the person holding only the note lacks the power to foreclose in the event of default."
The reason it's "impossible for the holder of the note to foreclose" is that both the promissory note and the mortgage have to be in the hands of a single party. Short of that, no party party on earth has the standing to sue--and the court lacks the power to decide the case because there is no case or controversy to decide.
What does this mean? Well, for starters, it means that all prior foreclosure judgments rendered where the promissory note was split from the mortgage are void as a matter of law--and subject to collateral attack:
"The general principle that final judgments have res judicata effect and are binding on the parties is, of course, subject to the qualification that void judgments may be collaterally impeached." Ellis v. Dyson, 421 U.S. 426, 440, n.6 (1975).
Nice work, GW.
Well that read like an Onion article.
I agree ... I wish it was an Onion article instead of our economy and property rights in real life!
One of the issues many people are missing is that you still owe the money. They may not have perfected the debt instrument to allow them to collect on the collateral (home). They will need to clean up the paperwork bring a lawsuit against you for non-payment, get a judgement attach it to the home then foreclose all over again. You still owe the money. If they don't do the above they will sell it to someone like me that will for the right price buy it and eventually collect money or the home. There is no free lunch just lots of money lost by the Banks to collect on the money people owe.
Some of these problems can be solved by going back to dealing in original paper. Create a modern indenture on acid free paper (11x17), provide for a tear-line, ink test blots on each side, and demand to be able to destroy a matched 'original' at payoff time. Instead the current paradigm is a 'satisfaction of lien', which you then have to keep around to guard against the possible surfacing of an older original.
It's been almost 30 years since I took the bar exam, but in the scheme of property law, tis an eyeblink. Even president Nincompoop (our Constitutional law expert) should understand what is at stake here. Property transactions are RECORDED. They are recorded so that the TITLE REMAINS CLEAR. This area of the law is literally centuries old. We lawyers often (deservedly) take a lot of crap. But voiding multi hundred year legal doctrines will infuriate the thousands of us who try to do our jobs properly.
Wm.Banzai is correct on the piercing the corp. veil issue too. The discovery process will allow the layers to be peeled back. One dep. will inevitably lead to the next. The threat to the common law combined with dreams of gigantic fees will be a great motivator. Now that the state AGs are involved, it is only a matter of time and money. Can you say, tobacco settlement style money? Considering the state of most State finances, do you now see why they are involved?
I've read in a few places where MortgageGate will not affect new construction due to lack of title defects. While that may be true, who will be willing/able to lend now that the REMICs are all broken as well? After all, if they can't securitize and defect even more mortgages, they have to take the risk on their books. I just can't see that happening.
Meanwhile I've got to think about the ramifications of having a VA backed (now) unsecured loan, with WF as the servicer and Mers as the "trustee," and a "chooses not to be disclosed" note holder.
Qutie the bizzaro surreal world of finance, it is.
I wonder if my mortgage note, which now goes to BoA, was affected by all of this. Anyone have any idea how to go about determining if one's mortgage was potentially swept up into this swindle?
Prior to BoA, Countrywide was who I sent the montly note to. Even they weren't the originator, that was yet another entity (Aegis I believe).
By the way, even though HR3838 was 'kicked back' by Barry O, I have no doubt whatsoever that TPTB will push something through before this gets truly out of hand and starts costing the banksters some real money. As we've seen in other areas, the puppets on Capitol Hill will change the rules insta-quick when Daddy Warbucks makes a call.
Go to mersinc.org and search for your mortgage. Then check their info against your county records. If they didn't record the ownership transfer properly, then it never legally happened, and you now have an unsecured loan.
Good luck getting justice. The stories of systemic threats are now trickling out in the media are that the entire system could collapse if banks/MERS are held accountable.
CONgress will perform the reach around.
Too big to fail strikes again. Pass me my Ipad. Apple 2nd most valuable company? There is your problem right there folks.
Hmmm, it seems that a lot of county governments are owed some serious money for recording fees. Tax evasion by the Banksters. How many laws do you think they have broken now with this scandal?
I don't think "bankruptcy remote" means what you think it means. Bankruptcy remote entities can hold title to assets. Is there someplace that you've seen otherwise? Bankruptcy remote just means that the entity can't be thrown into bankruptcy by the insolvency of a parent company or an affiliated company.
http://en.wikipedia.org/wiki/Bankruptcy_remote
FUBAR AGAIN!!
Remember a few months back
Someone said, "If you can, get out of the US NOW!
Unpack your bags
You missed your chance -
That would be b9k9. I'm not so sure US citizens would not become targets outside our borders in the future after this fully falls apart.
Performing loans now in question. Folks are paying to people who have no right to collect the funds and outstanding loans are not being satisfied. Now, there's a whole new can o' worms.
You are right, the strategic default decision matrix has shifted significantly. Any settlement will have to deal with late payment fees etc
I submit that everyone could ask for proof that the service agent is acting on behalf of the true note holder. If they can't respond, then you have a bona fide reason to say I am withholding payment until you can establish that you are authorized to collect.
The settlement could require a waiver of late payment. Voila! You have interest free money in your hands.
This not intended as legal advice. You should consult your attorney before making any decisions relating to your rights as a borrower.
It should be remembered that these are not the sub-prime loans. These are Alt-A and such. The problem has been that loans which should have been rated as sub-prime were given Alt-A and better ratings. The ratings agencies are more at fault here than they are being given credit for (unintended pun). If jail time is in order, the first place to look will be within the ranks of the credit agencies.
these fucking banksters should be prosecuted under rico....every single one of them should be rotting in a vat a of sulphuric acid or a windowless jail cell...
I vote for the vat (not a value added tax, I won't vote for that)
I don't want to pay to feed and house these cretins. Besides, if they reproduce during a conjugal visit, there will be more to throw in the vat in another 25 or so years.
The Terminator must really wish he were a Terminator now, wouldn't he ?
Why not stop all mortgage payments til every last derivatives are put on a computer platform for all to see who in God's name's been screwed?!
Pass It ON! http://mandelman.ml-implode.com/2010/10/the-signing-or-pardon-me-mr-banker-but-your-remic-is-showing/
ANSWER
In corporate law, there is a concept known as "piercing the corporate veil." This is a doctrine that is used to pierce the veil of corporate limited liability and seek direct recourse against the shareholders.
I would say that MERS looks very much like a textbook shell that does not bother to maintain corporate formality.
If they do not have board meetings, have proper officers, maintain proper books and records etc. (corporate formality) then a plaintiff can go after the shareholders (i.e., the banks) for whatever gross negligence and related damages have occurred.
A plaintiff lawyers wet dream.
I'll be back...
WB7
good one. don't sell the rights cheap.