Unveiling the Path to Victory: How FRAUD STOPPERS Empowers Homeowners in Foreclosure Cases and Quiet Title Lawsuits

 

In the tumultuous era of the mortgage meltdown, some individuals were well aware of their actions. They sought to achieve their own financial gains before the unlawfulness of their deeds was fully comprehended. Speculating on their success before the truth was revealed seemed to be their plan.

 

While certain state court judges’ express concerns about granting a “Free House,” it is important to recognize the legal framework that allows homeowners to secure a tangible monetary obligation and provide an alternate means of repayment through the property’s security interest. This alternative source of collection comes into play when all applicable laws are followed. When these laws are not upheld, the tangible creditor, whether a lender or another party, is left with no recourse to collect the value owed to them. In reality, there is no such thing as a “Free House”; it is merely the loss of an alternate means to satisfy a homeowner’s tangible monetary obligation. If a party possesses a valid tangible monetary instrument, such as the Note, they can seek monetary relief based on that instrument.

 

Throughout history, biases favoring creditors have been present in courts, as even Abraham Lincoln experienced during his legal career. While biases may exist, a court’s ruling contrary to statutory law undermines the very foundation of justice. Many courts mistakenly assume that the creditor named in a tangible obligation suit is the creditor for the tangible obligation. In today’s electronic and digitized world, the named creditor in court proceedings often represents the “Account Debtor” rather than the creditor for the tangible obligation. When a court rules in opposition to statutory law, it fails to deliver justice. In reality, no one likes to lose, and when attorneys skillfully employ deceptive tactics in court, they may secure victory through deception.

 

The current world reflects a self-centered desire for instant gratification. This mindset is evident in the securitization of tangible secured instruments, such as homeowners’ mortgages (the Note secured by an interest in real property, the security instrument). To better understand securitization, refer to the attached chart titled: “Subsequent ‘Purchase’ Electronic Authoritative Copy.”

 

At the left side of the chart, we find the seller of real estate executing a Warranty Deed with a Vendor’s Lien to protect their interests. One source of funding for the seller’s payment is a third-party contract between the originating lender (L1) and the buyer. However, it is worth questioning why sellers of real estate would assign their legal protection to a lender financing the purchase for the buyer, as stated in some Warranty Deeds. Nevertheless, sellers are typically paid, and a lien remains in public records even if the vendor’s lien is not dissolved. If the seller is paid, the lien expires by operation of law.

 

Moving left from the three-directional silver arrow, the originating lender (L1) attaches a security instrument (lien) to ensure repayment for funding the buyer’s monetary obligation. To permanently perfect the security instrument and make the lien enforceable, the originating lender (L1) must comply with local jurisdiction laws by filing the instrument into the public record. However, for subsequent purchasers of the Note to maintain the enforceability of the security instrument, they must file it in their name as a Secured Party of Record (Tangible Secured Party). Failure by the originating lender to timely file the necessary documents results in the expiration of enforceability by operation of law, leaving no alternate means to collect the value equivalent to the Note.

 

The Mortgage Electronic Registration Systems (MERS) is a source of confusion, as it has been recognized as a member-agent of various parties rather than a single entity or employer. While MERS may be recognized as the nominal mortgagee in the public record, it is crucial to understand that MERS does not hold any tangible interest in the underlying Note or the property itself. MERS acts as a nominee, facilitating the transfer of the Note among various parties involved in securitization.

 

This intricate web of securitization often leads to a clouded chain of title, where the true ownership of the Note and the corresponding security instrument becomes uncertain. This lack of clarity opens up opportunities for homeowners facing foreclosure or those seeking to quiet title to challenge the validity of the foreclosure proceedings.

 

In such cases, FRAUD STOPPERS Bloomberg Securitization Audit and Chain of Title Analysis can play a pivotal role in helping homeowners assert their rights and potentially win their foreclosure cases or quiet title lawsuits. These services provide a comprehensive examination of the securitization process and the chain of title, aiming to identify any irregularities or violations that may render the foreclosure or title invalid.

 

The Bloomberg Securitization Audit delves deep into the securitization process, analyzing the transfer and assignment of the mortgage loan throughout its lifecycle. It examines the loan documents, pooling and servicing agreements, securitization trust documents, and other relevant records to uncover any discrepancies, violations of law, or improper procedures that may have occurred during the securitization process. This audit can reveal critical evidence that can be used to challenge the standing of the foreclosing party and the enforceability of the security instrument.

 

Simultaneously, the Chain of Title Analysis scrutinizes the history of ownership and transfers of the mortgage loan, aiming to identify any gaps, breaks, or questionable assignments in the chain of title. This analysis can reveal instances where the Note and the security instrument were not properly assigned or transferred, raising doubts about the foreclosing party’s authority to initiate foreclosure proceedings. By challenging the validity of the chain of title, homeowners can assert their rights and potentially secure a favorable outcome in their foreclosure or quiet title case.

 

In conclusion, the complexities of securitization and the potential clouded chain of title present opportunities for homeowners to challenge foreclosure proceedings and assert their rights. Utilizing services like FRAUD STOPPERS Bloomberg Securitization Audit and Chain of Title Analysis can provide valuable insights and evidence to support homeowners in their quest to win foreclosure cases or quiet title lawsuits. By uncovering irregularities and violations in the securitization process and the chain of title, homeowners can challenge the standing of the foreclosing party and potentially secure a favorable resolution to their legal dispute.

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.

 

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!

MERS and the problem of false agency

Posted on April 19, 2022 by Neil Garfield

Since the beginning of this century, The initial transaction with homeowners was the product of multiple layers of paperwork, most of which were neither identified nor accessed by consumers or their professional advisers.

Here is the deal:

As was typical during the “securitization” era, the application for a loan is received as the commencement of the transaction. It is not the “closing.”

From your perspective, you asked for a loan, and you were given false paperwork for you to read and sign. From the perspective of the disclosed counterparty to your transaction, the originator was merely paid a fee for the service of selling the transaction to you as a “loan.”

The funding for your transaction is an elaborate scheme unto itself. Once the paperwork is completed by the investment bank, the investment bank borrows the amount of money needed to pay homeowners at or near the time of closing. There is frequently a waiting period after what the homeowners perceive as a loan closing. This is the final check to make sure that there are not multiple entities named as Plaintiffs or beneficiaries on mortgages and deeds of trust respectively.

The loan from, for example, Credit Suisse, is collateralized by the impending sale of certificates to investors. The certificates do NOT represent any status as beneficiaries of a trust nor any status as a creditor to whom the homeowners ‘payments set forth on the homeowners’ note are payable.

Payments of money to the investors are discretionary but they usually are made by the investment bank regardless of whether or not any homeowner makes a scheduled payment on the schedule described in the promissory note issued by the homeowner. Investors were sold and contractually accepted the idea that they and no right, title or interest to any homeowner payment, legal debt, underlying obligation, note, or mortgage (or deed of trust).

So investors are paid not by homeowners but by various undisclosed intermediaries who have access to the funds paid by homeowners and access the funds generated by sales of certificates that are frequently mislabeled as Mortgage-Backed Securities. The fact the payments are frequently made as “Servicer advances” (as though the money came from companies who were named as “servicers” is the foundation for framing this deal — taken as a whole — as at least part of the PONZI scheme.

The sale of the certificates pays back the loan to Credit Suisse, plus a fairly large (e.g. 30%) profit partly directly arising from a yield spread premium (the difference between the amount of money paid by investors for unsecured IOUs from the investment bank and the amount paid to homeowners. Additional money is generated as the proceeds or revenue of either sale of the additional derivatives securities created and issued by the investment bank.

The problem for laypeople or even lawyers is that there is a choice between whether to analyze your transaction from the perspective of what you were seeking or whether to analyze the group of transactions from the perspective of the securitization scheme, without which there would have been no homeowner transaction. The consensus in the media and courtrooms is to simply analyze the transaction from the perspective of what the consumer wanted when he or she applied for a loan, regardless of where that is an accurate description of the transaction.

Contemporaneously with the origination of the transaction, several things are happening. In broad strokes, they are divided into the money trail and the paper trail. In the paper trail, none of the documents correctly identify or describe a transaction much less “memorialize” any transaction. Because everyone has received all the money they intended from participation in the “securitization” scheme the essential ingredient of a loan account receivable is eliminated thereby making nobody the “lender.”

Simply stated, since there isn’t anyone who maintains any record on the accounting ledger of an account receivable owed by you, there is no creditor. Nonetheless, in order for the securitization scheme to work (justifying more sales of certificates and other derivatives to investors), it must appear as though (a) an underlying obligation is created, owed to a specifically named lender and (b) that it has been transferred to a named business entity with caveats on the sale — namely that there is no warranty of title to the claims against homeowners.

When the origination cycle is complete, the status of the transaction is that there is no counterparty who has a stake in the viability or success of that transaction because nobody loses money if the homeowner does not make a scheduled payment — one that I maintain is simply not due to anyone. The absence of a lender — and all that entails under law — means there is no loan. The finance side of the transaction knows this but sets out to create a false paper trail to make it seem like “this is a standard mortgage loan” or ” this is standard foreclosure action.”

The financial community in coordination with lawyers willing to play the “game” used strategies and tactics to not only make it appear that the transaction was a loan but to actually have the court presume that the transaction was a loan and that the complaining party has hired counsel to seek a remedy. The status of such claims is always this: there is no obligation, loan account, or other claims for money allegedly due from the homeowner.

The primary tactic utilized by the financial community is the volume of paperwork. the thicker the pile of paperwork the more likely it is that a layperson sitting on the bench, will conclude that the transaction was real as a “loan.” And that is why we witnessed the birth of a major industry — creating false, fabricated, backdated documentation making it appear that several brand name institutions were trading, purchasing, and selling the “loans”. In reality, no such transactions existed, but the paperwork said the t transactions had occurred.

Considerable effort and coordination were devised by the financial sector to mislead the court system and they did so successfully in most cases. But even a casual look at your chain of title for the mortgage or deed of trust reveals inconsistencies in the paperwork especially when one realizes that the signature block one each document is on behalf of entities that (a) don’t exist at all, (b) exist but are irrelevant to the transaction and (c) are unclear from the face of the document.

Your case is almost certainly closely aligned with the typical playbook of strategies and tactics. Examining the document assignment of mortgage you find what is typical:

No consideration. the law requires that value be paid by the claimant before it can file suit to enforce the claim. But that law does not impact the ability of the foreclosure players to make false claims of authority to administer, collect or enforce in correspondence, notices, and statements.
“Corrective instruments” that correct nothing in order to establish more paper volume.
Execution of assignment by a business entity that has no right, title or interest in the alleged obligation. For example, MERS is used to launder titles.

People from FINTECH companies regularly access the main servers that are maintained by MERS for the sole purpose of getting themselves automatically appointed, without board resolution, as an officer of MERS.
MERS always is described as the nominee for the specifically named “lender” who is just an originator selling a financial product as described above. MERS is used as a cover-up. It effectively hides the title gap in plain sight.

The execution of an assignment or corrective assignment presumes that it is acting as an agent for whoever is currently named as the current claimant, beneficiary, or Plaintiff. But no such agency exists in fact or at law.
The execution of a security instrument (mortgage or loan) by a self-proclaimed “servicer” (which performs no servicing duties with respect to receipts data processing and disbursement of money from homeowners) on behalf of a new entity appointed to be the claimant, beneficiary or Plaintiff. But the execution of the assignment by MERS on behalf of Countrywide after the collapse of countrywide. it does not exist.
And Bank of America did not acquire any ownership interest in any homeowner transactions because countrywide didn’t own any such interest.

So while Bank of America was a successor to Countrywide, the foreclosure team is relying on appearances — in order to get the court to presume that the merger created a transfer of the ownership of the unpaid nonexistent loan account receivable of the mortgage rights from Countrywide as originator to Bank of America.

In such mergers, there is no Mortgage Loan Schedule, nor any written assignment of mortgage. Since the law requires the assignment, the presumption that the transfer could occur without an assignment of mortgage is erroneous. But that fact will not stop foreclosure unless it is aggressively contested.
The document is supposedly executed by someone calling themselves an “assistant secretary.” But note that it does not say that the signor was the assistant sectary of MERS.

Every time there is mention of MERS it includes the phrase “its successors and assigns” such that it is unclear from the grammar utilized whether there is a successor to MERS or a successor for the principal in the agency agreement between MERS and the originator (Countrywide in this scenario).
But there is no succession to either one unless (a) someone bought or merged with MERS or (b) someone bought loan accounts receivable from Countrywide. Such a sale would’ve been impossible because, by the time of the merger, Countrywide had only reserved “servicing rights” which really only meant the claim to receive “servicer advances” upon liquidation of a foreclosed property. So there is no MERS successor and there is no Countrywide successor as it relates to either the actual pr presumed transfer of the alleged underlying obligation.

Any endorsements are undated. Under current law, this means that parole evidence must be offered to prove that the promissory note was transferred and delivered to the party named as claimant, beneficiary, or Plaintiff.
Documents requiring the signature of the homeowner are in most cases completely fabricated even if the homeowner did sign similar documents. This has been sued to change the fact relevant to execution and delivery of the promissory note that in approximately 95% of all cases is destroyed within days of the time of closing that transaction with the homeowner.

This becomes clearer when the homeowner is able to lay hands on the original note at least as an original, and when the original note contains coloration of signature or other marks that do not appear on the refabricated note made by electronic manipulation of images.

The foreclosure mill will often utilize such fabricated documents even when they contain glaring facially invalid errors. For example, where a parent was the owner of the property and signed the “mortgage” paperwork, the instructions received by the law firm are turned into correspondence, notes, statements, and pleadings that reflect the grantors under a deed of trust or the mortgagors under a mortgage instrument become the heirs or successors to liability under the note.

MERS Is Dead

MERS Is Dead: Can Be Sued For Fraud: WA Supreme Court

Countdown to banks forcing Congress to protect MERS in 3,2,1…

State Court Ruling Deals Body Blow to MERS

(Reuters) - 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.”

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.

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.

“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.