MERS Smackdown in Nevada!!

Judge Dawson “Gets It” - Stand and applaud please

I expect this post to set a new record for hits. Thanks again to Michael, Ken and all our readers across the country who aid in getting these important rulings to us for posting long before they will ever show up in Westlaw or Lexis Nexis. If you have not already clicked the button above to get the feed or email notifications of new posts here at Livinglies, now is the time.

It seems like a year ago, pro-homeowner rulings like this were coming down once a month or so…then it seemed to happen weekly…now, appellate rulings. While the importance of the legal consequences of securitization, the recording of bogus notices and assignments, appraisal fraud and other topics discussed here cannot be downplayed, particularly with regard to a full or adequate forensic analysis or claims assessment. Neil (who is currently getting a little well deserved and needed R&R on the high seas),  has repeatedly exhorted in seminars, radio broadcasts and here that successful litigation is about “winning at the beginning.” Get your ducks in a row and don’t wait until you get an eviction notice to try to do it. Personally, I espouse the KISS method, “keep it simple stupid” approach. That is to say…if you come out guns blazing with securitization talk, conspiracy theory and the creation of money business watch the Judge’s eyes glaze over…he’s a human being too. Keep it simple.

Who is the real lender not the “pretender” lender, who put up the money and who would actually be damaged by the alleged non-payment of the note? Or put another way who is the real beneficiary of the promise to pay or obligation. Reasonable questions… judge… that deserve answers. Or..Judge, if I wanted to payoff this note today, who is it that has actual authority to issue a satisfaction of mortgage? How’s that for simple and reasonable.

We know and have known and now the courts are starting to catch up to facts that “MERS admits it does not actually receive or forfeit money when borrowers fail to make their payment.” In fact, “MERS only has standing in the context of the motion to lift stay under the Rules if it is a real party in interest.” (See Fed.R.Bankr. 7017)

Consequently, as Judge Dawson puts it, “the parties cannot come to a resolution if those with a beneficial interest in the note have not been identified and engaged in communication.”  Those of you who have been to our lawyers CLE workshops should remember that part of the securitization segment involves asserting that there are “necessary and indispensible parties” as a result of the securitization process that are missing from the proceedings.  Hence the need for expedited discovery in part to identify the real source of funds(read: real lender), potential co-obligors and/or any other parties that may have a colorable claim or rights of subrogation because they in fact paid off the note and satisfied the obligation(perhaps even your Uncle Sam) . Of course, in the non-judicial states you have to initiate the action and force things into a judicial forum where the other side has to deal with the pesky little things like rules of evidence. 

I have said in our seminars and been challenged, I have said to numerous lawyers in individual conversations that “just because it SAYS in the Deed of Trust that MERS is the beneficiary DOESN’T MAKE IT SO and they look at me like I am nuts. If you put up the money in return for the promise to pay(read:obligation) then you are the beneficiary, you are also the party that would be potentially damaged in the event obligation is not fulfilled. If you didn’t put up any money/consideration then you can’t be damaged and can’t be the beneficiary.

Which is why I almost stood up all alone in my office and started to applaud about midnite last night when I read Judge Dawson’s words, “MERS is NOT a beneficiary in spite of language that designated MERS as such in the Deed of Trust.” (pause to applaud here).Likewise, just because it SAYS “XYZ Financial” is the “lender” on the Deed or Mortgage doesn’t make it so either, who or where did the funds come from, think “source of funds” as opposed to “lender.”

 Perhaps someone can really throw the state of Nevada a lifeline and file an action to invalidate all the previous foreclosures done in Nevada in the name of MERS…at a minimum maybe the state AG can stop them going forward. It would seem at a minimum that all those Notices of Default and Notices of Trustee sales that only named MERS as the beneficiary are/were arguably defective notice.

See the full text in the pdf below.

MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., Appellant, v. LISA MARIE CHONG, LENARD E. SCHWARTZER, BANKRUPTCY TRUSTEE

MERS_Hawkins-Dist Ct Affirms BK Ct ruling

Dist. Ct. Case No. 2:09-CV-00661-KJD-LRL
Bankr. Ct. Case No. BK-S-07-16645-LBR

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11 Responses

  1. Does all of the info today affect only those homes already foreclosed? What happens for MERS loans in early stages of pre-foreclosure?

  2. This is the kind of news that needs to be shared

  3. On September 25, 2009, R.K. Arnold, the President and CEO of MERSCORP, Inc. — the parent corporation of Mortgage Electronic Registration Systems, Inc. was deposed in Alabama. Arnold is also an Officer of MERS. Arnold admitted MERS does not have a beneficial interest in any mortgage; does not loan money; does not suffer a default if monies are not paid; etc. etc. On November 11, 2009, William C. Hultman was deposed in Alabama and made the same admissions. And, of course, the internal agreement used by MERS expressly disavows any beneficial interest. One tactic, if confronted with a foreclosure in Nevada, is to elect mediation. At the mediation, demand the assignments, i.e., the assignments which would cure the problem (according to Judge Riegle’s March 31, 2009, opinion, as affirmed by Judge Dawson on December 4, 2009). MERS and/or the lender has been unable to produce any such assignments — because they almost certainly do not exist. Request the Mediator to check the appropriate box, i.e., the box which memorializes a failure by the lender to produce all required documents (all assignments must be produced per AB 149 — incorporated into Chapter 107 of the Nevada Revised Statutes). The requisite Certificate will not issue as a result. The Notice of Default is effectively negated. The “lender” must thereupon issue a new Notice and the borrower is again at liberty to elect mediation within 30 days of receipt thereof. The borrower should pay his or her taxes, and insurance, but not the mortgage — especially if upside down. It is an effective stopgap measure.
    If the courts continue to follow the reasoning of Judge Riegle and Dawson a borrowr may, if otherwise eligible, declare bankruptcy; bring an adversary proceeding within the bankruptcy; and discharge the “mortgage” debt (which re a MERS mortgage is not really a mortgage but rather an unsecured debt — per Judge Riegle). Or the borrower may initiate litigation based on causes of action for breach of contract, fraud by omission and racketeering (Chapter 207 of the Nevada Revised Statutes). By conducting systemic predatory lending, and coupling predatory lending with credit default swaps, i.e., bets homes would be foreclosed upon, the lenders breached the implied duty of good faith and fair dealing — the duty to refrain from frustrating the purpose of the contract. Borrowers generally harbored two main purposes — to secure a place to live and to safeguard/create an investment. By engaging in systemic predatory lending the banks frustrated the second purpose. They devalued the collaterized asset and breached the lending contract. Because this information was not disclosed, fraud by omission occurred. A series of fraudulent act constitutes racketeering, which gives rise to a claim for treble damages, plus fees and costs. Those are the theories.

  4. please add me to your email list and keep me updated about MERS related issues. Thanks

  5. I love it……its like the judge pulled open the curtain and told the “Wizard” of OZ to stop goofing around….the gig is up. LOL.

    Steve Vondran
    Arizona Foreclosure Defense Lawyer

  6. Hey I figured some thing out you know how MERS can no longer do business in California anymore? Well now they are just using another name, Quality Loan Service Corp. same hollow shell company different name. They use the same exact pattern of practice. Libra 99 do you remember when I asked you if you’ve ever heard of them because they were located in San Diego? You said no that’s because they sprung up outta nowhere just like MERS did too. So put the word out QUALITY LOAN SERVICE CORP. = CALIFORNIA MERS

  7. Link –> Ruling may help homeowners trying to avoid foreclosure

    By JOHN G. EDWARDS
    LAS VEGAS REVIEW-JOURNAL

    Article on the ruling. Took some quotes out of this post and put them in the comment section to help educate their readers.

    My favorite part of the story is…

    Bill Uffelman, chief executive officer of the Nevada Bankers Association, predicted that most foreclosures will be able to proceed, because the “real mortgage owners and notes” will be able to be identified in most cases.

    “In the end in 99.9 percent of the cases, ownership of the note will be proved,”

    HA!

    4closureFraud

  8. This is exactly what I plan to do for the next phase of my personal war on the pretender lenders: sue MERS for damages due to their fraud (wire, mail, on the court, etc.) for their fraudulent assignment that made my attempted foreclosure even possible. Great to have a judge acknowledge, in no uncertain terms, that MERS is not a beneficiary in any legal sense (or any other sense) of the word.

  9. The whole MERS thing is a total sham, created for the sole purpose of helping to facilitate the fraud by the banks.

    Steve
    99Libra@gmail.com

  10. You forgot to include the link to the actual file that I posted in homeowners section…

    Here it is for anyone who is interested…

    http://livinglies.wordpress.com/in-trouble-right-now-press-here/#comment-31908

    4closureFraud

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