Fake Money Fraudulent Mortgages

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Do borrowers really owe money for Fraudulent Mortgages?

So do I owe the money or not?

by Neil Garfield

I think that the best answer you can give is no, there is not any money owed. You can only “go there” (money owed) if you describe the transaction as a loan. But every loan has some basic common sense characteristics or attributes:
1. There is no other reason or intent to give the consumer any money.
2. The transaction is legal — i.e., it complies with all federal and state laws, rules, and regulations governing lending and servicing.
3. The transaction creates a loan account reflected on the general ledger of the lender as an asset receivable.
4. The lender has an actual risk of loss if scheduled payments are not received.
5. The lender has funded the transaction by using its own assets or its own credit, wherein the lender is liable for repayment of the funds loaned to the lender.
6. The lender owns the loan account receivable when the transaction cycle is complete.
7. The lender’s business plan is to earn a profit through repayment of the loan together with interest and other fees or, as is frequently asserted, the profit is earned through the sale of the loan.
8. If the loan originated with the intent to sell it in the secondary market, the intent is to receive payment in exchange for a conveyance of the underlying obligation.

After some 50 years of experience in dealing with securities and investment banking issues, as a trained security analyst and having close ties with those who play on Wall Street, I can state unequivocally that no investment bank has ever wanted to loan money to any consumer — and no investment bank has ever done so. In fact, no investment bank goes into any deal without passing the risk on to someone else.

In the current iteration of securitization, Wall Street found and launched the holy grail of investment banking: what if you could underwrite the sale of securities and keep all of the proceeds? This notion throws out the role of every securities firm that ever existed and inserts a new role.

No longer acting as a broker, it is creating, issuing, and selling “certificates” that were redefined in 1998-1999 as “Not Securities” and therefore not subject to regulation, but which could nonetheless be offered for sale and trading in wide distribution.

By simply indexing on the prima data of a transaction with a homeowner, the investment firm can attribute a value of the certificate as a “secured” instrument despite no collateral guarantee for payments as set forth under the certificate indenture.

By simply indexing the present value of various investment grade products, the investment firms were able to price the certificates far higher than the value of any transaction with a homeowner or a group of homeowners.

By commingling funds and data with other securitization infrastructures, re-underwriting the same payment to homeowners into new certificates, the investment firm was able to sell the same transaction in dollars as though it was a new transaction without limit — or any accountability.

So the bottom line is that the securitization plan was created to multiply the dollars originally paid to start the first level of what was in actuality a pyramid scheme. The money paid to the homeowner was in exchange for the issuance of the primary or base certificate or securities — the note and mortgage. The revenue generated for the investment firms skyrocketed from and been underwriting fees of at most 15% to underwriting profits of 1200%.

Underwriting standards were ignored in terms of lending but followed with respect to creating the foundation for sale of securities. This created the added benefit of knowing that many “loans” would “fail” and that the investment firm could then take even more money from the sale of the property while at the same time giving apparent substance to the illusion that the transaction was a loan.

In addition, knowing that the homeowners would eventually en masse stop making scheduled payments, the investment firms tricked and deceived insurance carriers and hedge funds into “swap” contracts and other hedge products and insurance policies that were strictly paid to the investment firm and not to the investor who bought certificates.

And finally, the people at the top of the pyramid knew that the market would collapse from the weight of foreclosure cases, creating another opportunity to underwrite more certificates that were sold to investors who thought that the “buyers” were third party investors, thus starting a whole new round of continuing securitization.

The Achilles heel of this plan was of course that the homeowner had to agree to pay back the only consideration he or she was receiving to execute the primary or base securities. And the only way homeowners would do that is if they knew nothing about the true nature of the transaction and they were successfully deceived into thinking the transaction was a loan.

So given all that, let’s look at the above attributes of a loan again. The inescapable conclusion is that the homeowner believes it to be a loan but that is not enough to make it a loan.
1. There is no other reason or intent to give the consumer any money. Now we know that there was no reason to make a loan but there were plenty of reasons to sell securities.
2. The transaction is legal — i.e., it complies with all federal and state laws, rules and regulations. Now we know that the disclosure requirements and underwriting requirements contained in lending and servicing laws were regularly violated to cover up what the securities firms were doing.
3. The transaction creates a loan account reflected on the general ledger of the lender as an asset receivable. Now we know that there is no loan account and there is no accounting ledger that reflects a loan account receivable. Nobody wanted that risk of loss.
4. The lender has an actual risk of loss if scheduled payments are not received. Now we know that there was no risk of loss to the originator because the transaction was structured as a warehouse loan but in substance, the transaction was a fee for service. I argue that was the nature of the transaction with the homeowner — fee for service — and so far, not one person from the industry has corrected me.
1. There also was no risk of loss to the investment firm (bank( because they were borrowing money to fund payments to sellers of the property but repaying those loans with the much greater amount of money proceeds from the sale of certificates.
2. And there was no risk of loss to the investors, at least initially, because they were not the owners of the homeowners’ promises to make scheduled payments. They were the owners of a conditional, discretionary promise to make scheduled payments made by the underwriting investment firm. Unknown to the investors (or perhaps they didn’t care) the investment firm would continue making payments from a reserve fund created by withholding from the gross profit of the sale of certificates for that particular securitization structure plus the proceeds of sales of other certificates.
1. In fact, this was yet another opportunity to sell yet another round of certificates. The payments made to investors were designated as “Servicer advances” even though the funds came from the investors. Under the indenture, the “servicer” could recoup the “advance” upon liquidation of the property — which is why most foreclosure threats become reality rather than a “workout” that preserves the property and the transaction.
2. Servicer advances became receivable. This resulted in the securitization of servicer advances which was realized through the forced sale of the property.
5. The lender has funded the transaction by using its own assets or its own credit, wherein the lender is liable for repayment of the funds loaned to the lender. Now we know this was never true.
6. The lender owns the loan account receivable when the transaction cycle is complete. Now we know that this never happens even if a brand name bank did the “loan” underwriting.”
7. The lender’s business plan is to earn a profit through repayment of the loan together with interest and other fees or, as is frequently asserted, the profit is earned through sale of the loan. Now we know that rather than earning profit from payments of interest, the goal was to create revenue and profits on an unprecedented level from the sale of certificates dubbed “MBS” (even though they were neither securities nor backed by any obligation, note or mortgage from any homeowner) — giving rise to the “factor of 10” payment scale that was used to compensate anyone who participated in this scheme — all except the homeowner who received literally less than nothing once you deduct the principal and “interest” that is “owed” on a nonexistent loan account.
8. If the loan originated with the intent to sell it in the secondary market, the intent is to receive payment in exchange for a conveyance of the underlying obligation. Now we know that with very few exceptions no originator ever received payment from a buyer of any alleged obligation due from the homeowner. And we also know that means that anyone claiming rights to administer, collect or enforce based upon such purchase and sale is committing an act of deception. This explains why there was fraud bloom — the sudden appearance of hundreds of thousands of fabricated documents containing false information and forged signatures to make it appear that such a sale occurred.

Think I am wrong? Find one qualified person with securities and law license who disagrees with this assessment. I have been baiting the opposition for 16 years now and they still have not come up with anyone.

Think it doesn’t matter? I have been lead or lead consulting attorney in thousands of foreclosure cases over the past 16 years. For those cases where we followed the script — “show me the loan account on the books of the designated creditor” — 80% were paid off in confidential settlements. I have had cases with home values as high as $5 million and as low as $15,000. Those who and the resources to create and aggressively litigate a coherent defense narrative based on what is contained in this email have an 80% chance of winning flat out which means no debt, no lien, and payment of money.

Emerging from the rubble of litigation for the 20 years are some strategies I am now exploring strategies and tactics in which an early termination of the foreclosure claim might be obtained. I will report later on my success. Or you might see it yourself when the “market” for “MBS” collapses again.

BOTTOM LINE: THIS PLAN OF SECURITIZATION WOULD HAVE WORKED JUST AS WELL IF INVESTORS AND HOMEOWNERS RECEIVED TRUE DISCLOSURES AND WERE COMPENSATED FOR THE TRUE RISKS.

THE ONLY REASON THAT DIDN’T HAPPEN IS THAT THE INVESTMENT BANK CORRECTLY ASCERTAINED THAT THEY HAD ENOUGH POLITICAL AND LEGAL POWER TO GET AWAY WITH IT IN MOST INSTANCES.

THEY LOSE ONLY ABOUT 1/4%-1/2% OF CASES WHICH IS NOT EVEN A ROUNDING ERROR.

YOUR JOB IS TO GET INTO THAT FRAME OF 1/4% to 1/2%.

One final note: Why did NOT those fund managers who purchased those worthless certificates demand a share of at least the insurance proceeds?

 

 

What is MERS?

What is MERS? MERS is the Mortgage Electronic Registration System and it is an electronic database that holds digitized mortgage loan documents. You can search the MERS Database here: The MERS Servicer ID to identify the servicer associated with a mortgage loan registered on the MERS System.

If you have a MERS mortgage you might have a Fraudulent Mortgages

Bankers Association testified to THE FLORIDA SUPREME COURT (in CASE NO.: 09-1460) that the physical loan documents were deliberately destroyed to avoid any confusion upon their conversion to electronic files. CASE 09-1460 COMMENTS OF THE FLORIDA BANKERS ASSOCIATION

 

In other words, the Banksters deliberately destroyed the wet ink signature loan documents for millions of mortgages in MERS the Mortgage Electronic Registration System.

A Few Facts about MERS

1. Mortgage Electronic Registration Systems (MERS) is incorporated within the State of Delaware.
2. Mortgage Electronic Registration Systems (MERS) was first incorporated in Delaware in 1999.
3. The total number of shares of common stock authorized by MERS’ articles of incorporation is 1,000.
4. The total number of shares of Mortgage Electronic Registration Systems (MERS) common stock actually issued is 1,000.
5. Mortgage Electronic Registration Systems (MERS) is a wholly owned subsidiary of MERSCorp, Inc.
6. MERS’ principal place of business at 1595 Spring Hill Road, Suite 310, Vienna, Virginia 22182
7. MERS’ national data center is located in Plano, Texas.
8. MERS’ serves as a “nominee” of mortgages and deeds of trust recorded in all fifty states.
9. Over 50 million loans have been registered on the Mortgage Electronic Registration Systems (MERS) system. (UPDATE 9/11/2011: 70 MILLION American Mortgages)
10. MERS’ federal tax identification number is “541927784”.
11. Mortgage Electronic Registration Systems (MERS) does not take applications for, underwrite or negotiate mortgage loans.
12. Mortgage Electronic Registration Systems (MERS) does not make or originate mortgage loans to consumers.
13. Mortgage Electronic Registration Systems (MERS) does not extend any credit to consumers.
14. Mortgage Electronic Registration Systems (MERS) has no role in the origination or original funding of the mortgages or deeds of trust for which it serves as “nominee”.
15. Mortgage Electronic Registration Systems (MERS) does not service mortgage loans.
16. Mortgage Electronic Registration Systems (MERS) does not sell mortgage loans.
17. Mortgage Electronic Registration Systems (MERS) is not an investor who acquires mortgage loans on the secondary market.
18. Mortgage Electronic Registration Systems (MERS) does not ever receive or process mortgage applications.
19. Mortgage Electronic Registration Systems (MERS) simply holds mortgage liens in a nominee capacity and through its electronic registry, tracks changes in the ownership of mortgage loans and servicing rights related thereto.
20. MERS© System is not a vehicle for creating or transferring beneficial interests in mortgage loans.
21. Mortgage Electronic Registration Systems (MERS) is not named as a beneficiary of the alleged promissory note.
22. Mortgage Electronic Registration Systems (MERS) is never the owner of the promissory note for which it seeks foreclosure.
23. Mortgage Electronic Registration Systems (MERS) has no legal or beneficial interest in the promissory note underlying the security instrument for which it serves as “nominee”.
24. Mortgage Electronic Registration Systems (MERS) has no legal or beneficial interest in the loan instrument underlying the security instrument for which it serves as “nominee”
25. Mortgage Electronic Registration Systems (MERS) has no legal or beneficial interest in the mortgage indebtedness underlying the security instrument for which it serves as “nominee”.
26. Mortgage Electronic Registration Systems (MERS) has no interest at all in the promissory note evidencing the mortgage indebtedness.
27. Mortgage Electronic Registration Systems (MERS)is not a party to the alleged mortgage indebtedness underlying the security instrument for which it serves as “nominee”.
28. Mortgage Electronic Registration Systems (MERS) has no financial or other interest in whether or not a mortgage loan is repaid.
29. Mortgage Electronic Registration Systems (MERS) is not the owner of the promissory note secured by the mortgage and has no rights to the payments made by the debtor on such promissory note.
30. Mortgage Electronic Registration Systems (MERS) does not make or acquire promissory notes or debt instruments of any nature and therefore cannot be said to be acquiring mortgage loans.
31. Mortgage Electronic Registration Systems (MERS) has no interest in the notes secured by mortgages or the mortgage servicing rights related thereto.
32. Mortgage Electronic Registration Systems (MERS) does not acquire any interest (legal or beneficial) in the loan instrument (i.e., the promissory note or other debt instrument).
33. Mortgage Electronic Registration Systems (MERS) has no rights whatsoever to any payments made on account of such mortgage loans, to any servicing rights related to such mortgage loans, or to any mortgaged properties securing such mortgage loans.
34. The note owner appoints MERS to be its agent to only hold the mortgage lien interest, not to hold any interest in the note.
35. Mortgage Electronic Registration Systems (MERS) does not hold any interest (legal or beneficial) in the promissory notes that are secured by such mortgages or in any servicing rights associated with the mortgage loan.
36. The debtor on the note owes no obligation to MERS and does not pay Mortgage Electronic Registration Systems (MERS)on the note.
37. Mortgage Electronic Registration Systems (MERS) is not entitled to receive any of the payments associated with the alleged mortgage indebtedness.
38. Mortgage Electronic Registration Systems (MERS) is not entitled to receive any of the interest revenue associated with mortgage indebtedness for which it serves as “nominee”.
39. Interest revenue related to the mortgage indebtedness for which Mortgage Electronic Registration Systems (MERS) serves as “nominee” is never reflected within MERS’ bookkeeping or accounting records nor does such interest influence MERS’ earnings.
40. Mortgage indebtedness for which Mortgage Electronic Registration Systems (MERS) serves as the serves as “nominee” is not reflected as an asset on MERS’ financial statements.
41. Failure to collect the outstanding balance of a mortgage loan will not result in an accounting loss by Mortgage Electronic Registration Systems (MERS).
42. When a foreclosure is completed, MERS never actually retains or enjoys the use of any of the proceeds from a sale of the foreclosed property, but rather would remit such proceeds to the true party at interest.
43. Mortgage Electronic Registration Systems (MERS) is not actually at risk as to the payment or nonpayment of the mortgages or deeds of trust for which it serves as “nominee”.
44. Mortgage Electronic Registration Systems (MERS) has no pecuniary interest in the promissory notes or the mortgage indebtedness for which it serves as “nominee”.
45. Mortgage Electronic Registration Systems (MERS) is not personally aggrieved by any alleged default of a promissory note for which it serves as “nominee”.
46. There exists no real controversy between MERS and any mortgagor alleged to be in default.
47. Mortgage Electronic Registration Systems (MERS) has never suffered any injury by arising out of any alleged default of a promissory note for which it serves as “nominee”.
48. Mortgage Electronic Registration Systems (MERS) holds the mortgage lien as nominee for the owner of the promissory note.
49. Mortgage Electronic Registration Systems (MERS), in a nominee capacity for lenders, merely acquires legal title to the security instrument (i.e., the deed of trust or mortgage that secures the loan).
50. Mortgage Electronic Registration Systems (MERS) simply holds legal title to mortgages and deeds of trust as a nominee for the owner of the promissory note.
51. Mortgage Electronic Registration Systems (MERS) immobilizes the mortgage lien while transfers of the promissory notes and servicing rights continue to occur.
52. The investor continues to own and hold the promissory note, but under the MERS® System, the servicing entity only holds contractual servicing rights and MERS holds legal title to the mortgage as nominee for the benefit of the investor (or owner and holder of the note) and not for itself.
53. In effect, the mortgage lien becomes immobilized by Mortgage Electronic Registration Systems (MERS) continuing to hold the mortgage lien when the note is sold from one investor to another via an endorsement and delivery of the note or the transfer of servicing rights from one Mortgage Electronic Registration Systems (MERS) member to another Mortgage Electronic Registration Systems (MERS) member via a purchase and sale agreement which is a non-recordable contract right.
54. Legal title to the mortgage or deed of trust remains in MERS after such transfers and is tracked by Mortgage Electronic Registration Systems (MERS) in its electronic registry.
55. Mortgage Electronic Registration Systems (MERS) holds legal title to the mortgage for the benefit of the owner of the note.
56. The beneficial interest in the mortgage (or person or entity whose interest is secured by the mortgage) runs to the owner and holder of the promissory note and/or servicing rights thereunder.
57. Mortgage Electronic Registration Systems (MERS) has no interest at all in the promissory note evidencing the mortgage loan.
58. Mortgage Electronic Registration Systems (MERS) does not acquire an interest in promissory notes or debt instruments of any nature.
59. The beneficial interest in the mortgage (or the person or entity whose interest is secured by the mortgage) runs to the owner and holder of the promissory note (NOT MERS).

MERS as Holder

60. Mortgage Electronic Registration Systems (MERS) is never the holder of a promissory note in the ordinary course of business.
61. Mortgage Electronic Registration Systems (MERS) is not a custodian of promissory notes underlying the security instrument for which it serves as “nominee”.
62. Mortgage Electronic Registration Systems (MERS) does not even maintain copies of promissory notes underlying the security instrument for which it serves as “nominee”.
63. Sometimes when an investor or servicer desires to foreclose, the servicer obtains the promissory note from the custodian holding the note on behalf of the mortgage investor and places that note in the hands of a servicer employee who has been appointed as an officer (vice president and assistant secretary) of MERS by corporate resolution.
64. When a promissory note is placed in the hands of a servicer employee who is also an Mortgage Electronic Registration Systems (MERS) officer, Mortgage Electronic Registration Systems (MERS) asserts that this transfer of custody into the hands of this nominal officer (without any transfer of ownership or beneficial interest) renders Mortgage Electronic Registration Systems (MERS) the holder.
65. No consideration or compensation is exchanged between the owner of the promissory note and Mortgage Electronic Registration Systems (MERS) in consideration of this transfer in custody.
66. Even when the promissory note is physically placed in the hands of the servicer’s employee who is a nominal Mortgage Electronic Registration Systems (MERS) officer, Mortgage Electronic Registration Systems (MERS) has no actual authority to control the foreclosure or the legal actions undertaken in its name.
67. Mortgage Electronic Registration Systems (MERS) will never willingly reveal the identity of the owner of the promissory note unless ordered to do so by the court.
68. Mortgage Electronic Registration Systems (MERS) will never willingly reveal the identity of the prior holders of the promissory note unless ordered to do so by the court.
69. Since the transfer in custody of the promissory note is not for consideration, this transfer of custody is not reflected in any contemporaneous accounting records.
70. Mortgage Electronic Registration Systems (MERS)is never a holder in due course when the transfer of custody occurs after default.
71. Mortgage Electronic Registration Systems (MERS) is never the holder when the promissory note is shown to be lost or stolen.

 

MERS’ Role in Mortgage Servicing

72. Mortgage Electronic Registration Systems (MERS) does not service mortgage loans.
73. Mortgage Electronic Registration Systems (MERS) is not the owner of the servicing rights relating to the mortgage loan and Mortgage Electronic Registration Systems (MERS) does not service loans.
74. Mortgage Electronic Registration Systems (MERS) does not collect mortgage payments.
75. Mortgage Electronic Registration Systems (MERS) does not hold escrows for taxes and insurance.
76. Mortgage Electronic Registration Systems (MERS) does not provide any servicing functions on mortgage loans, whatsoever.
77. Those rights are typically held by the servicer of the loan, who may or may not also be the holder of the note.

 

MERS’ Rights To Control the Foreclosure

78. Mortgage Electronic Registration Systems (MERS) must all times comply with the instructions of the holder of the mortgage loan promissory notes.
79. Mortgage Electronic Registration Systems (MERS) only acts when directed to by its members and for the sole benefit of the owners and holders of the promissory notes secured by the mortgage instruments naming Mortgage Electronic Registration Systems (MERS) as nominee owner.
80. MERS’ members employ and pay the attorneys bringing foreclosure actions in MERS’ name.

 

MERS’ Access To or Control over Records or Documents

81. Mortgage Electronic Registration Systems (MERS) has never maintained archival copies of any mortgage application for which it serves as “nominee”.
82. In its regular course of business, Mortgage Electronic Registration Systems (MERS) as a corporation does not maintain physical possession or custody of promissory notes, deeds of trust or other mortgage security instruments on behalf of its principals.
83. MERS as a corporation has no archive or repository of the promissory notes secured by deeds of trust or other mortgage security instruments for which it serves as nominee.
84. Mortgage Electronic Registration Systems (MERS) as a corporation is not a custodian of the promissory notes secured by deeds of trust or other mortgage security instruments for which it serves as nominee.
85. Mortgage Electronic Registration Systems (MERS) as a corporation has no archive or repository of the deeds of trust or other mortgage security instruments for which it serves as nominee.
86. In its regular course of business, Mortgage Electronic Registration Systems (MERS) as a corporation does not routinely receive or archive copies of the promissory notes secured by the mortgage security instruments for which it serves as nominee.
87. In its regular course of business, Mortgage Electronic Registration Systems (MERS) as a corporation does not routinely receive or archive copies of the mortgage security instruments for which it serves as nominee.
88. Copies of the instruments attached to MERS’ petitions or complaints so not come from MERS’ corporate files or archives.
89. In its regular course of business, Mortgage Electronic Registration Systems (MERS) as a corporation does not input the promissory note or mortgage security instrument ownership registration data for new mortgages for which it serves as nominee, but rather the registration information for such mortgages are entered by the “member” mortgage lenders, investors and/or servicers originating, purchasing, and/or selling such mortgages or mortgage servicing rights.
90. Mortgage Electronic Registration Systems (MERS) does not maintain a central corporate archive of demands, notices, claims, appointments, releases, assignments, or other files, documents and/or communications relating to collections efforts undertaken by Mortgage Electronic Registration Systems (MERS) officers appointed by corporate resolution and acting under its authority.

 

Management and Supervision

91. In preparing affidavits and certifications, officers of Mortgage Electronic Registration Systems (MERS), including Vice Presidents and Assistant Secretaries, making representations under MERS’ authority and on MERS’ behalf, are not primarily relying upon books of account, documents, records or files within MERS’ corporate supervision, custody or control.
92. Officers of Mortgage Electronic Registration Systems (MERS) preparing affidavits and certifications, including Vice Presidents and Assistant Secretaries, and otherwise making representations under MERS’ authority and on MERS’ behalf, do not routinely furnish copies of these affidavits or certifications to MERS for corporate retention or archival.
93. Officers of Mortgage Electronic Registration Systems (MERS) preparing affidavits and certifications, including Vice Presidents and Assistant Secretaries, and otherwise making representations under MERS’ authority and on MERS’ behalf are not working under the supervision or direction of senior Mortgage Electronic Registration Systems (MERS) officers or employees, but rather are supervised by personnel employed by mortgage investors or mortgage servicers.

This should be a pretty good start for those of you faced with a foreclosure in which Mortgage Electronic Registration Systems (MERS) is falsely asserting that it is the owner of the promissory note.  Whether Mortgage Electronic Registration Systems (MERS) is or was ever the holder is a FACT QUESTION which can be determined only by ascertaining the chain of custody of the promissory note.  When the promissory note is lost, missing or stolen, Mortgage Electronic Registration Systems (MERS) is NOT the holder.

By William A. Roper, Jr. Excerpted from the MSFraud Forum thread “Facts about MERS / MERS Unmasked”

Is Your MERS Mortgage Status Designated Inactive?

Many homeowners find out their existing mortgage is listed as “inactive.” An inactive status can refer to the transfer of their mortgage to another loan servicer, or to a few other factors as noted below.

The difference between having an inactive or an active MERS (Mortgage Electronic Registration System) loan may determine if the property owner has any improved or worsened home equity, or a truly saleable asset.

 

What is MERS?

MERS functions as a centralized electronic registry of mortgages, and it was supposed to track the ownership of these mortgages, which are typically sold multiple times during the loan’s life. MERS potentially affects upwards of 70 million residential mortgage loans nationwide, and almost completely crashed the U.S. housing market by itself because of so many problems with the packages.

MERS was created by lenders and title insurance companies, so it would be easier to transfer the beneficial interests to other secondary market lenders. Yet, some mortgages ended up significantly discounted due to packaging problems, which made them inactive.

Where’s the “IOU” for the mortgage debt?

 

The MERS Scandal

Missing documents, notary fraud, and “robo-signing” led the way.

There was a lot of chaos involved with MERS mortgage packets, which contained no original promissory notes (the “IOU” for the mortgage debt) in these same MERS files.

Knowledgeable homeowners were able to completely stop their home foreclosures by pointing out that the foreclosing entity, such as the mortgage servicing company, didn’t have a legal right to foreclose on their homes, since they didn’t have all of their valid mortgage paperwork in their files.

These questionable ownership interests in the mortgages led to foreclosure moratoriums, court settlements, and inactive statuses.

There were a large number of allegations of notary fraud in which real or fake notaries such as “Linda Green” were allegedly part of the massive “Robo-Signing Scandal” nationwide.

It has been suggested that promissory notes, deeds of trust or mortgages, and other loan or title documents were forged, left blank, or illegally assigned to numerous mortgage investors. Since MERS was set up to become as paperless, speedy, and efficient as possible, there was not enough third party oversight to check whether these documents were valid.

 

Questionable Beneficial Interests

“No Note = No Debt” became the mantra for homeowners who were in the midst of their own foreclosures due to the weaker U.S. economy. Some savvy property owners were able to legally void their existing mortgage debt altogether by proving that the foreclosing mortgage company had no valid beneficial interests in the existing mortgage, and thus had to legal right to collect any payments.

Other homeowners were able to show that their MERS files had fraudulent notary signatures signed on behalf of both owners and lenders, which moved their file designations over to “inactive” as well.

Mortgage lenders that have collapsed or imploded since the official start of the Credit Crisis back in 2007, such as Countrywide, Indy Mac, Lehman Brothers, World Savings, Downey Savings, and Washington Mutual still figuratively exist by way of their asset or beneficial interest transfers to the “strawman” named MERS.

MERS may pay no taxes or employ anyone. Without the proper assignment of these MERS mortgages, these same imploded mortgage companies’ loans could have ceased to exist.

 

The Shadow Inventory & MERS

Instead of upwards of 60 million residential MERS mortgages becoming inactive or possibly even completely voided and worthless, many of the largest banks and mortgage service companies worked closely with the U.S. government to create the National Mortgage Settlement in early 2012. This insanely small $25 billion settlement is but a mere fraction of the potentially trillions of dollars of MERS mortgages nationwide.

The National Mortgage Settlement of 2012 and MERS Scandal were two of the primary reasons why home listings nationally dropped dramatically.

There were potentially millions of Shadow Inventory homes (mortgage payments are more than 90 days late), which may not have valid promissory notes, or other mortgage or title instruments or documents, in the files. The lack of listed home inventory led to a rapid increase of home prices between 2011 and 2013 (also partly due to the record low mortgage rates).

 

The “Inactive” MERS Designation

An inactive MERS designation may relate to the loan having been refinanced or paid off, discounted, or completely voided due to the invalid mortgage documents in the file. Or, the mortgage loan was assigned out of the MERS system to a completely new mortgage servicing company.

A property owner with a MERS mortgage can find the status of their loan by searching for their 18-digit Mortgage Identification Number (MERS MIN). Then, the same person may search online for the MERS Servicer ID system in order to check the status of their mortgage.

Before attempting to pay off a MERS loan, it’s very important to find out if all of the mortgage payments have been properly applied to the account. The vast majority of MERS mortgages have been assigned to multiple mortgage investors over the years, so it is very important to check your own payment history over the years in order to determine if all of your payments have been credited to every mortgage servicing lender’s accounts.

It’s imperative that the owner pays off the correct amounts, which may mean more money back to the owner and much less money for the current mortgage loan servicer. As such, a little research and loan analysis by a property owner on their personal payment histories can save them a lot of money and headaches.

Here is some additional information on MERS:

• MERS Is Dead
• MERS Admits NO Interest in Mortgage and No Loss on Default

• New York’s U.S. Bankruptcy Court Rules MERS’s Business Model Is Illegal

• Consent Order for MERSCORP and Mortgage Electronic Registration Systems, Inc. (MERS)

 

Take action right now and get the FACTS and HELP that you need to gain the legal remedy that the law entitles you to, and that you deserve!

Who Has The Burden of Proof in a Foreclosure Case?

Who Has Legal Standing to Foreclose?

Who has legal standing to foreclose? Only the mortgagee has standing to foreclose. Look, if you are planning to sue someone and you accuse them of some wrong doing, you better have proof.  The person doing the accusing (the Plaintiff) has the burden of proof. Before you can go to court, you must have some sort of grievance that you are seeking relief on; in other words you must have legal standing.  For example, if you had a contract and the other person broke that contract causing you to suffer as a result of that breach.  This is called a Cause of Action.  In other words, “why are you suing this guy?  What wrong did he do to you?” You must have a valid reason to bring your suit.

There are a number of different causes of action you can accuse the other party of.  For example, breach of contract, fraud, tortious interference, etc. Another very special type of cause of action is called a Quiet Title Action.  These types of “Actions” (an “Action” is just legal jargon for a civil action…or a civil suit) are done when there is a cloud of title issue that needs to be resolved.  As a title owner, you have an obligation to defend your title against encroachments.  For example, if I started to build a fence three feet into your land and you say nothing… then five years later, I sell my land, and change the legal description to include that extra three feet…and you say nothing, then that extra three feet is mine.

Let’s discuss the Deed of Trust and Mortgage to see how this all fits in.

The Deed of Trust or Mortgage:

The Deed of Trust is a special Trust that is created specifically so that you (the landlord) temporarily grant your title in trust to the new Trust to secure against the promissory note.  When you create a Trust, you appoint a Trustee.  You also give that Trustee the power to sell your property in the event of a default of the promissory note.  This is the vehicle and mechanism your “lender” uses to foreclose and sell your house.  The same goes with a Mortgage in a Judicial State, except there is no need for a Trustee.

In the event that there is a problem with the promissory note or deed of trust, then there is an issue called “cloud of title”.  When a title is clouded, you will have a problem selling your house.  Let me give you an example.

Let’s say the County places an imminent domain claim on a strip of land on your property to lay down some pipes.  They then record this on your county records.  But because of budget cuts, they decided not to lay the pipes, but forgot to give you your land back.  2 years later, you are trying to sell your house.  It will be stopped because you are selling part of a land you don’t own (i.e. the strip for the un-laid pipes).  In order to un-cloud the title, you will need to seek a Quiet Title Action.

As we discussed, your promissory note has been permanently converted into a stock.  It has also been fully discharged.  The language on your Deed of Trust says “This Deed of Trust secures a promissory note”, and if the promissory note is destroyed through permanent conversion, then the Deed of Trust secures nothing.  This is just like the situation with the strip of land with the un-laid pipes.  It’s lost property.  It’s unclaimed land.  As the Title owner, you have an obligation to defend your land and title.

This is why we need to do a Quiet Title Action to reclaim our land to resolve the controversy.  In a Quiet Title Action, you basically issue a challenge to all parties wishing to lay a claim on our property to come forth and provide the proof of their claim(s).

However, remember the rule of court is the Plaintiff has the burden of proof.  In the following parts, we will go into uncovering proof. If you haven’t done so, we recommend that you purchase a chain of title & securitization analysis because once you have real evidence that your mortgage contains fraud, legal violations, and or has been securitized you will have a much better chance at beating your foreclosure and saving your house.

 

Federal Rules of Evidence:

You can sue your lender in federal court and/or state court (this is called circuit court).  Typically, the State Rules of Civil Procedure and State Rules of Evidence will govern state courts.  However, since we don’t know which State you are in, and for the most part, these rules are pretty similar, we’re going to talk about the Federal Rules of Evidence governing the admissibility of photocopies. Specifically, we want to talk about Rule 1002 and Rule 1003.  Please click on these and read up on them. These should be similar with your State Rules of Evidence.  You should consult your own State’s Rules of Evidence to confirm.

Basically, what will happen is your “lender” will bring to court photocopies of the Deed of Trust and Promissory Note to claim their rights as proof of claim in your Quiet Title Action.

These are admissible, unless you learn to object!

The rules of evidence are simple.  A photocopy is admissible unless it is unfair to admit the photocopy in lieu of the original.  What you need to know is, under Uniform Commercial Code, your promissory note is a one of a kind negotiable instrument, just like a check. You cannot go down to a bank and cash a photocopy of a check.  It has to be the real thing.  Your promissory note contains the only legally binding chain of title.  A photocopy made years ago does not contain the chain of title.

Basically, the argument is “sure, I signed a loan with you then, but we know you sold it.  Can you prove that you still own it?”

Opposing Counsel will say, “But Your Honor, the plaintiff has the burden of proof.  They are alleging that we sold the note.  Where’s the proof?”

And that’s where most Pro Se Litigants get stuck!

If you do not have the proof (evidence) when you file your civil action, your case will be tossed out, and classified as “failure to state a claim”.

What typically happens when you file an action is opposing counsel (the dirty rotten lawyer working for the bank) will file a Motion to Dismiss. They ALWAYS DO IT; so expect it. In order to survive the Motion to Dismiss, you must have sufficient proof.

If you haven’t already purchased your copy of Jurisdictionary, do it now because you have no chance of winning your case if you don’t know the rules of the game. This is a mandatory resource if you’re serious about defeating your foreclosure and saving your house.  I cannot stress how much you need this product!

Evidence of Movement:

The first and simplest evidence we can bring to court is called Evidence of Movement. In an Evidence of Movement situation, you closed with Bank A (let’s say Stearns Lending), who sells it to Countrywide (Bank B), who then got acquired by Bank of America (Bank C) ….who then securitizes the note into New York Mellons Bank Trust Series 12345.

So, the Deed of Trust names Bank A as the Beneficiary.  But Bank C wants to foreclose.  Bank C comes to the court with a Deed of Trust pointing at Bank A (Stearns Lending).  Where is the Chain of Title on the Promissory Note that gives Bank C (BofA) the Right to enforce the note?

If you have a situation like this, you might not need to get a securitization audit, although getting one may make your case stronger and more likely to succeed.

Often times, Bank C would come to the Court claiming “Your Honor, we have reacquired the note and now have the right to foreclose.”  If you encounter this situation, you must learn to object.

1)   Show me the perfected chain of title.  If you have sold it, then you lost your right to enforce.U.S. Code Title 12: Banks and Banking PART 226—TRUTH IN LENDING (REGULATION Z), a servicer does not have the rights of a lender if it has acquired the note for the purposes of administration.

2)   Please stipulate for the record whether the note is part of a pooling and servicing agreement.  Please stipulate whether the note has been securitized. Please stipulate who “New Your Big Bad Bankers Trust Series 12323 (of course yours will be different)” is, are they a REMIC?

3)   If the loan has been securitized, did you reacquire the note as an unsecured debt in the secondary securities market?  Are you acting in the capacity of a debt collector as governed under 15 U.S.C. §1692?

Remember, this is fraud at its greatest.  Only the top echelon bankers know this scam.  Even their Counsel does not know the scam that is being perpetrated here.  He is just taking his client’s word at face value.  He is hearing “we bought the note back” and accepts that the bank now has the right to foreclose.  They don’t.  Most homeowners who are confronted with this situation don’t know the scam either and run out of juice.

Do you see how we structure our arguments here?  It was never “Show me the note”.  We are attacking them on the “show me standing” and “show me that you are the real and beneficial party of interest who has the right to enforce the note”.

 

What is MERS?

MERS is Mortgage Electronic Registration Systems it was created by banks in order to “streamline” the warehousing of loans and mortgage documents. Basically MERS is a front organization that was created to defraud homeowners and government agencies. It pretends to hold your note, but in fact holds nothing. Banks set up MERS in the 1990s to help speed the process of packaging loans into mortgage-backed bonds by easing the process of transferring mortgages from one party to another. But ever since the housing crash, MERS has been besieged by litigation from state attorneys general, local government officials and homeowners who have challenged the company’s authority to pursue foreclosure actions. Recently there have been many court decisions delivering death blows to MERS and their 70,000,000+ mortgages they claim to hold. Fraudulent Mortgages are almost always in the MERS system.

For example in MERS Is Dead: Can Be Sued For Fraud: WA Supreme Court we learn that the Washington State Supreme Court dealt a death blow to MERS: “The highest court in the state of Washington recently ruled that a company that has foreclosed on millions of mortgages nationwide can be sued for fraud, a decision that could cause a new round of trouble for the nation’s banks.

The ruling is one of the first to allow consumers to seek damages from Mortgage Electronic Registration Systems, a company set up by the nation’s major banks, if they can prove they were harmed.

Legal experts said last month’s decision from the Washington Supreme Court could become a precedent for courts in other states. The case also endorsed the view of other state courts that MERS does not have the legal authority to foreclose on a home.

“This is a body blow,” said consumer law attorney Ira Rheingold. “Ultimately the MERS business model cannot work and should not work and needs to be changed.”

A spokeswoman for MERS said the company is confident its role in the financial system will withstand legal challenges. The Washington Supreme Court held that MERS’ business practices had the “capacity to deceive” a substantial portion of the public because MERS claimed it was the beneficiary of the mortgage when it was not.

This finding means that in actions where a bank used MERS to foreclose, the consumer can sue it for fraud. If the foreclosure can be challenged, MERS’ involvement would make repossession more complicated.

On top of that, virtually any foreclosed homeowner in the state in the past 15 years who feels they have been harmed in some way could file a consumer fraud suit if they have a Fraudulent Mortgage.

“This may be the beginning of a trend,” says Elizabeth Renuart, a professor at Albany Law School focusing on consumer credit law. The company’s history dates back to the 1990s, when banks began aggressively bundling home loans into mortgage-backed securities. The banks formed MERS to speed up the handling of all the paperwork associated with recording the filing of a deed and the subsequent inclusion of a mortgage in an entity that issues a mortgage-backed security. MERS allowed the banks to save time and money because it permitted lenders to bypass the process of filing paperwork with the local recorder of deeds every time a mortgage was sold.

Instead, banks put MERS’ name on the deed. And when they bought and sold mortgages, they just recorded the transfer of ownership of the note in the MERS system.

The MERS’ database was supposed to keep track of where those loans went. The company’s motto: “Process loans, not paperwork.”

But the foreclosure crisis revealed major flaws with the MERS database.

The plaintiffs in the Washington case, homeowners Kristin Bain and Kevin Selkowitz, argued that the problems with the MERS database made it difficult, if not impossible; to determine who really owned their loan. It’s an argument that has been raised in numerous other lawsuits challenging the ability of MERS to foreclose on a home.

“It’s going to be very easy for consumers to say they were harmed because it’s inherently misleading,” says Geoff Walsh, an attorney with the National Consumer Law Center. If consumers can’t identify who owns their loan, then they don’t know whom to negotiate with, and can’t even be certain of the legitimacy of the foreclosure.

In a statement, MERS spokeswoman Janis Smith noted that banks stopped using MERS’ name to foreclose last year. She added that the opinion will “create confusion” for homeowners in the state of Washington while the trial courts consider its effect on pending cases.

Meanwhile, MERS is attempting to remake itself. The company has a new chief executive and a new branding campaign. In Washington D.C. federal lawmakers have recognized the need to create a national mortgage-recording database that would track all U.S. mortgages. MERS is lobbying to build it.

The case is Bain (Kristin), et al. v. Mortg. Elec. Registration Sys. et al., Washington Supreme Court, No. 86206-1.” (Reuters).

This information about MERS is very important for you to understand, if you are going to successfully defend your points in court. For a list of some FACTS about MERS check out https://fraudstoppers.org/a-few-facts-about-mers and also pay attention to: MERS-and-Citibank-are-not-real-parties-CA.pdf

IF you would like to see if your loan is serviced by MERS, click here: https://www.mers-servicerid.org/sis/.

Or you can also purchase a professional Securitization Audit, a Robo-Signing Check, or a Forensic Audit from Fraud Stoppers.

 

Who is the Investor?

Fraudulent Mortgages are many times GSE or government sponsored entities. For example, there is a good chance Fannie Mae or Freddie Mac owns your loan.  If you can find your properties here, then you can present this as evidence that your servicer (so called “lender”) is not a real party of interest.  This is critical evidence to bring forth in your civil action.  You must include this as a claim in your suit.

To find out whether Fannie Mae owns your note, please come here.

Freddie Mac’s database is here.

IMPORTANT: DO THIS NOW.  Research whether these guys own your note.  If so, then you have a vital piece of evidence to present to the court.

Carpenter v.  Longan 83 US 271

Why is this so important?  This is a US Supreme Court ruling that says the Deed of Trust is the peripheral, and the Promissory Note is the “Thing”.  Imagine if you will, that the Deed of Trust is the tail, and the Promissory note is the dog.  He who owns the dog controls the tail.  He who controls the tail does not wag the dog.

Your lender will want to come in to lay claim on your title only showing ownership to the Deed of Trust without disclosing who the real and beneficial owner of the promissory note.  This is admissible unless you know to object.  If you quote this law when there is evidence of movement, then this will stop them in their tracks. Basically, it’s the same thing.  ”Show me you have subject matter jurisdiction over this controversy”, “show your proof of claim and title”.  He, who controls and owns the promissory note, controls the Deed of Trust.

 

Getting County Records:

Look, State Civil Code requires that every party of interest in your property must record their interest at County Records.  So, any loan assignments must be recorded.  Any notices must be recorded. To gather your evidence, you should head down to your local county recorder’s office and request for a complete printout of all recorded documents for your property from the date of subject loan.  Go down and talk to your county recorder.  They will usually be able to help you get the “title search dump”.  You don’t need certified copies.  Just the copies are fine, but it is a good idea to get all these documents handy so you can see what’s been recorded against your property.

What you are trying to find is instances where there is evidence of movement…i.e. the loan has been sold or securitized, but there was no corresponding evidence recorded at the County. So the next step is to go to the County Recorder’s Office for the DEED RECORDS and get a copy of every page of each document that is in the deed records of your home, since you got your last loan.

Print the Search Results, with your name as GRANTOR and GRANTEE, and your wife’s name as GRANTOR and GRANTEE, then search the property address, and print the search results.

Take your camera and take a picture of every page starting with the index or the cover page of your deed record file and save each picture by:

Yr-mo-day, YOUR LAST NAME, Name of Doc, Page of Doc:

[Example: 2013-07-04, Last Name, Original Deed of Trust received from ABC Brokers for Countrywide, 17 Pages]

You should end up with copies of your Original Warranty Deed, Deed of Trust (or Mortgage, as it is called in some states).

While looking at the Deed of Trust or Mortgage, click on the button or link for “RELATED DOCUMENTS” and print the search results, then get a copy of any “Assignments of Deed of Trust or Mortgage” and any “Releases of Liens”,” Appointments of Substitute Trustees”, “Trustee Deeds”, and Law Firm Letters, like Default or Acceleration Letters from Attorneys who are hired to collect the debts from you. Get a copy of everything in the file to the present date.

 

Calling a Title Company:

If you don’t want to do it yourself, then you can call a local Title company for a complete title research. A complete title research includes a report of all activities on your title from the date of sale.  They will also print copies of these documents for you.

 

Writing a Foreclosure Timeline:

A timeline is a chronological structure and is frequently the way cases are presented to juries and judges of fact. Visual representations are important and they make it easy to share the details of you case with others. It sometimes becomes the underlying foundation for the flow of all information related to a case. Therefore, it is important that care be given in the creation of visual timelines. Here is a Sample Timeline.

 

The Chain of Title & Securitization Analysis:

For those of you who do not have clear evidence of movement, for example, you closed with Countrywide and the loan got acquired by Bank of America.  Or your loan went through Chase and is now Chase is just a servicer, or GMAC (and GMAC is now servicing), then getting a Securitization Audit might be a way to go. Remember, as the Plaintiff, you have the burden of proof.

It will be like having a photo of a bank robber with a gun aimed at a teller.  It’s them caught with their hands in the cookie jar…and it puts opposing counsel in a position of having to explain to the judge why he should not be sanctioned for bringing fraud before the court. Fraud Stoppers Foreclosure Defense System includes one of the most powerful Chain of Title & Securitization Analysis available today. Banks hate it because it’s preformed by licensed professionals and includes the admissible evidence that you need to save your house from foreclosure. Banks HATE these because it exposes their fraud.

In today’s world of securitized residential mortgages, a Secured Mortgage Loan consists of two parts: (A) the financial obligation (created by the Tangible Promissory Note) which operates in accordance with Federal and State Law, and (B) an enforceable contractual lien instrument (i.e. Tangible Security Instrument, Mortgage, Deed of Trust) intended to provide an alternate method of collection of payment to the Holder of the financial instrument in accordance with State Law. In reviewing the transfer and ownership history of a Secured Mortgage Loan, one must evaluate the negotiation of the financial instrument and consider the laws applicable to the Security Instrument upon said negotiation of the financial instrument.

Our Competent Evidence Package looks at the true sequential ownership of a Securitized Mortgage Loan Security Instrument as evidenced by the documents related to the client’s property filed with the County Recorder’s Office, and compares it to the claims of ownership made by the party attempting to foreclose. The Competent Evidence Package shows what steps SHOULD have been taken in the securitization process in order to become a proper party to enforce the mortgage contract, according to both statutory and case l aw. More importantly, the Competent Evidence Package shows what steps were ACTUALLY taken in the securitization process, and what steps were NOT taken, and the results of these actions/inactions on the Chain of Title as shown by the County Records.

Many times clients and their attorneys lack competent evidence. The term “competent evidence” is used to refer to evidence that is directly relevant and of such nature that it can be admitted into evidence in a court of law. For a client considering going into litigation, a prior assessment of the potential violations surrounding the Chain of Tit le of a Securitized Mortgage Loan is a much-needed tool for determining whether there is a valid basis for proceeding with a legal action.

The goal is to arm one’s self with indisputable evidence so they may clearly and accurately demonstrate that the claims made by the foreclosing party may be inaccurate and/or fraudulent.  In addition to the written Chain of Title Analysis, our Investigators also create a customized infographic/flowchart/schematic to visually represent their findings regarding the path taken by the various parts of the client’s Mortgage Loan and the parties involved in the securitization process. This visual representation is invaluable in making the arguments indisputable and understandable to the clients, attorneys, and judges – A picture is truly worth a thousand words.

Now, let’s continue with a little role playing.

Opposing Counsel:”but Your Honor, the plaintiff has the burden of proof.  They are alleging that we sold the note.  Where’s the proof?”

You:”Your Honor, please see Exhibit C in our evidence as part of our initial complaint.  On Page X, you will find our loan listed as a permanent fixture in an SEC filing for the New York Mellons Bank Trust Series 1232342 REMIC in which this loan has been securitized.”

Judge: “Counsel, what do you have to say to that?”

Opposing Counsel:”I don’t know about this you’re Honor; I was informed by my client that they bought back the loan.”

You:  “Counsel, are you aware of FAS 140?  Under the Financial Accounting Standard 140, it says that once a loan has been sold into a pooling and servicing agreement, the lender forever loses control of the asset.”
“Are you aware that this loan is a permanent fixture of the New York Mellons Bank Trust Series 1232342 REMIC?”
“Where is the Chain of Title that gives your client the right to enforce the promissory note?”
“Are you aware that the promissory note has been discharged in the REMIC as a bad debt and that the individual share holders have received tax credit for this loss?”
“Are you aware that once a debt has been discharged, it loses its ability to collect?”
“Are you aware that your client bought the note as a discharged debt and an unsecured instrument?”

“I motion the court to have Counsel stipulate that you know with firsthand knowledge that the note has not been discharged as a non-performing asset. “If he cannot, then say… “I move the court to sanction opposing counsel for bringing fraud before the court.  Counsel misrepresents the facts in order to deceive the court.”

Keep in mind that the courts are absolutely corrupt and will try to rule against you at every opportunity. Therefore it is vital that you not only learn the rules of the game Jurisdictionary…but you must also learn how to land on them like a ton of bricks when they try to break the law and violate your legal rights!

FRAUD STOPPERS Private Members Association (PMA) has a PROVEN WAY to help you save time and money, and increase your odds of success, suing the banks for mortgage and foreclosure fraud.

Our primary focus is helping you get clear and marketable title to your property by arguing that the actions of the banks have made the security provisions of the mortgage/deed of trust unenforceable as a matter of law.

Take action right now and get the FACTS and EVIDENCE that you need to gain the legal remedy that  you deserve!