MERS — Mortgage Electronic Registration Systems

19 Responses

Deontos, on November 20th, 2009 at 11:58 am Said:

George Babcock,

That’s great news about the Cardi Injunction;
in your post:
http://livinglies.wordpress.com/foreclosure-defense-forms/people-players-and-resources/mers-mortgage-electronic-registration-systems/#comment-29221

Do you have:
A link to the Case File?
or
A Case File Number?
or
Can you “post” the Case
here on livinglies?

I tried to look up the case at the court website:

http://www.courts.ri.gov/superior/publisheddecisions.htm

but it is organized by year with no other “search” facility that I can discern.

I did however find the “Bucci” Case File:
http://www.courts.ri.gov/superior/pdf/09-3888.pdf
george babcock, on November 20th, 2009 at 10:38 am Said:

Check out the case of Cardi v. MERS/Indy Mac/One West. Providence RI Superior Court. Permanent Injunction $800,000.00 mortgage. Party foreclosing did not own note and Aurora claim to be actual party foreclosing. Bucci V. Lehman, an alleged loss regarding MERS was relied upon by Plaintiffs to win this case. Beautiful justice. Never surrender.
Deborah Bergen, on November 19th, 2009 at 1:48 pm Said:

What is the right way to go to resend your mortage ,is this this violation with MERS true?
Lynn Chase, on November 13th, 2009 at 10:18 pm Said:

Having an extremely difficult go of things here in the non judicial state of Nevada. Other than a ruling by the Hon. Linda Riegle in Federal Bankcruptcy court District of Nevada that sided witht he homeowners in chapter 7, we hgave had NO luck with our District court judges that are throwing out all TROs and requests for injunctive relief due to RESPA, TILA and/or HOEPA violations. the judges here are ignoring constitutional law and denying even hearing the cases from homeowners filing TROs trying to get the lenders in court so that we can HAVE our day in court. We are being denied our due process. My personal story is I am 3 months behind and Indymac Bank a division of One West Bank is aggressively forclosing, will not negotiate under the Obama MakingHomes Affordable and only has to file their little notice and they can steal ones home. What is one to do? I sent in a RESPA request and asking for the pool agreements and assignments and who and how are they being paid from my payments etc etc. about 37 pages. Should I file it with the recorder where in it I assert the fraud and predatory lending and misrepresentation of a material fact and breach of covenants of good faith and rackateering and that I don’t believe I was given a loan but rather was made part of a credit product to which nothing was disclosed I also arrest they are not the party of interest and that i believe they have no damages by the alledged default etc. would that help coud the title so I can get them to pursue a judicial foreclosure? We are being so scammed here in NV. Our judges are elected and do not even have to be atttys! What are we to do if we can’t even get the judges to hear our complaints for RESPA TILA HOEPA predatory lending, fraud, misrepresentation of a material fact in a mortgage contract, tortous interference by the servicers, asking them to prove the bank has the real party of interest to foreclose, or proving damages?? Help?
Deontos, on October 27th, 2009 at 9:23 am Said:

MERS may soon suffer more maceration in the “loan pool”.

I really would prefer to see its demise so much more though
by a THOUSAND THOUSAND paper cuts……………

SNIP:

Mortgage transfers spur R.I. lawsuits

By Christine Dunn

A Providence lawyer, George E. Babcock, said his entire practice is now devoted to challenging the legal standing of a private mortgage registration service, the Mortgage Electronic Registration Systems, Inc., known as MERS, to foreclose under Rhode Island law…………

Babcock said he wonders why local governments and county deed registries have never challenged the MERS system before, because by allowing lenders to bypass the process of recording mortgage transfers with government entities, “millions and millions” in fees to local government have been lost.

But it took the foreclosure crisis to shine the light on MERS, which some have blamed for enabling the mortgage securitization craze and the questionable lending practices that preceded the housing bust.

Despite being on the losing end of an Aug. 25 decision by Providence Superior Court Judge Michael A. Silverstein, which he has appealed to the Rhode Island Supreme Court, Babcock said he is still filing “two or three” MERS lawsuits a week for clients hoping to stop foreclosure proceedings. Babcock estimates he is pursuing a total of about 100 MERS cases.

His clients who are the plaintiffs in the Aug. 25 Providence Superior Court decision, Anthony and Stephanie Bucci, are still in their Cranston home, according to Babcock. “I’m very confident in the appeal,” he said.

The defendants in the case are Lehman Brothers Bank, FSB, a federal savings bank, MERS, and Aurora Loan Services, LLC.

Judge Silverstein ruled that Rhode Island law “does not prohibit MERS from invoking the Statutory Power of Sale [foreclosure] ” because “statutes should not be construed to reach an absurd result.”

To rule for the Buccis, Silverstein wrote, “would be an absurd result because named mortgagees and lenders would be precluded from employing servicers to service and collect obligations secured to real estate mortgages. Clearly, the General Assembly envisioned a role for mortgage servicers in the mortgage lending industry.”

MERS lawsuits have been filed in a number of states, with varying results, and case law appears to be evolving.

An Aug. 28 decision by the Kansas Supreme Court “completely undoes Judge Silverstein’s ruling,” Babcock said. “The tide has completely turned in favor of the homeowner.” ………………….

(MERS lawyer)
If the courts were ultimately to strip MERS of the right to foreclose, it could throw millions of titles into question and cause massive losses for lenders, Gladstone said.

He attributed the MERS cases to “a movement, and it’s a small movement” of “people looking for ways to attack the mortgage holder” and stave off foreclosures.

“They’re grasping at straws,” he said.

He said a number of the MERS lawsuits are brought by people who are trying to drag out the foreclosure process and stay in their houses “without even paying a dime” on their mortgage.

http://www.projo.com/business/content/HO_MERS_Lawsuit_10-25-09_LOG44C1_v15.1c5d26b.html
cdunn@projo.com
Deontos, on October 21st, 2009 at 8:46 pm Said:

Foreclosure Fraud?

The document you just posted at scribd?
The Case File where MERS is referred
to as a SHAM by the Florida judge. Is the
case that went to appeals and was reversed?
Or is this still a standing decision?
smallz, on October 11th, 2009 at 3:01 pm Said:

Filmaker Micheal Moore decided to actually put MERS in his new film Capitolism: A Love Story. At one point in the movie while Moore in reviewing someone’s foreclosure documents, MERS APPEARS IN PLAIN SIGHT ON THAT 40 ft SCREAN! Intrestingly, Mr. Moore didn’t offer one word about the “Mortgage Machine” that has an address in his home town of Flint Michigan. Suspicious.
pro-se, on August 15th, 2009 at 8:44 am Said:

Minnesota Statutes section 580.09 is for foreclosure of mortgages that do not have acceleration clauses. The statute allows the mortgage to survive a power of sale foreclosure for one installment. Since nearly every mortgage has an acceleration clause, so I’ve never seen 580.09 used.

As co-chair of the Legislative Committee of the Real Property Section of the Minnesota State Bar Association, I helped review and edit the “MERS statute” referred to by the Minnesota Supreme Court in the opinion. The court got it right. I think the legislature did approve the MERS concept by passing the MERS Statute. The following is quoted from the opinion. The full text is at: http://www.mncourts.gov/opinions/sc/current/OPA080397-0813.pdf

As a result of questions raised about the MERS system, the Minnesota Legislature passed an amendment to the Recording Act that expressly permits nominees to record “[a]n assignment, satisfaction, release, or power of attorney to foreclose.” Act of Apr. 6, 2004, ch. 153, § 2, 2004 Minn. Laws 76, 76-77 (codified at Minn. Stat. § 507.413 (2008)). The amendment, frequently called “the MERS statute,” went into effect on August 1, 2004. Id., § 2, 2004 Minn. Laws at 76-77. The MERS statute provides that:

An assignment, satisfaction, release, or power of attorney to foreclose is entitled to be recorded in the office of the county recorder or filed with the registrar of titles and is sufficient to assign, satisfy, release, or authorize the foreclosure of a mortgage if:

(1) a mortgage is granted to a mortgagee as nominee or agent for a third party identified in the mortgage, and the third party’s successors and assigns;

(2) a subsequent assignment, satisfaction, release of the mortgage, or power of attorney to foreclose the mortgage, is executed by the mortgagee or the third party, its successors or assigns; and

(3) the assignment, satisfaction, release, or power of attorney to foreclose is in recordable form.

Minn. Stat. § 507.413(a).

… So while the MERS statute suggests legislative approval of MERS’ practices, the statute does not resolve the question of whether MERS has complied with the foreclosure by advertisement requirements set out in chapter 580. Therefore, to answer the certified question we must analyze the foreclosure by advertisement statutes.

… Our case law establishes that a party can hold legal title to the security instrument without holding an interest in the promissory note. The cases demonstrate that an assignment of only the promissory note, which carries with it an equitable assignment of the security instrument, is not an assignment of legal title that must be recorded for purposes of a foreclosure by advertisement. In essence, any disputes that arise between the mortgagee holding legal title and the assignee of the promissory note holding equitable title do not affect the status of the mortgagor for purposes of foreclosure by advertisement.
pro-se, on August 15th, 2009 at 8:43 am Said:

High court upholds mortgage lenders’ registry

by Elizabeth Stawicki, Minnesota Public Radio

August 13, 2009

St. Paul, Minn. — The Minnesota Supreme Court has ruled 6-1 that the Mortgage Electronic Registration System, or MERS, did not violate Minnesota law by failing to disclose which lenders actually owned a homeowner’s mortgage.

MERS was created by the nation’s largest mortgage lenders to streamline the foreclosure process.

Five Hennepin County homeowners filed a lawsuit in January 2008, alleging that MERS violates Minnesota law by foreclosing without following two requirements — to identify all assignees of the mortgage in county land records, and list those assignees in the published foreclosure notice.

Minnesota Legal Aid attorneys, acting on behalf of the plaintiffs, argued that homeowners facing eviction in foreclosures administered by MERS often didn’t know which lending institution held their mortgage, which prevented them from negotiating a deal.

MERS argued that it should be able to foreclose in its own name without identifying the successive owners of the loan which are tracked on its private system. The Supreme Court agreed.

Writing for the court majority, Justice Paul Anderson said as the mortgage banking industry has changed, certain problems have become evident, especially in the secondary mortgage market. But resolving those problems was beyond the court’s authority.

Writing in dissent, Justice Alan Page said by allowing the identities of promissory noteholders to remain hidden, the court essentially eliminates a homeowner’s ability to assert a wide range of defenses to foreclosure.

Amber Hawkins, one of the plaintiffs’ attorneys, said she’s disappointed in the court ruling.

“As a result of the court’s decision, an agent with no responsibility or authority related to the loan can foreclose upon a homeowner through an expedited, non-judicial process without identifying who it is working for,” said Hawkins.
George E. Babcock, Esquire, on August 4th, 2009 at 6:11 pm Said:

Full briefs and arguments were submitted in RI Superior Court regarding MERS standing to foreclose. Decision due soon. Result will effect dozens of cases I have filed in RI. Russo v. MERS.
George E. Babcock, Esquire, on June 19th, 2009 at 6:44 pm Said:

I have caused a “mini-moratorium” on MERS foreclosures in RI. Most of the cases have deeper issues that just MERS’ involvement, but I am on MERS’ radar and I like it. The note and mortgage must be together or no foreclosure can take place. Follow the title and the UCC. I have had judges accept the argument but they still can’t see themselves clear to give a borrower a “windfall.” I guess we have to take one step at at time. I am on streaming radio tomorrow between 8 and 9 eastern. 790 am in RI.
George E. Babcock, Esquire, on June 17th, 2009 at 5:13 pm Said:

I have developed a new theory on how to attack MERS. Its has to do with the “nominee” label it attaches to itself in mortgages. In RI, there is no such thing in real estate law as a nominee. THere is not, therefore, any such estate as a nominee mortgagee. I have dozens of cases filed against MERS and several are postured for fulling hearing in the Superior Court. MERS counsel has promised that if I win it will appeal to RI Supreme Court. Clearly, the MERS monster is going to be exposed very soon. The UCC, the law of real property and traditional contract law will be its undoing absent legislative assitance. This is a very exciting time. MERS can be defeated.
Glen L. Moss, on June 11th, 2009 at 11:39 am Said:

I was retained to assist California Continuing Education of Bar [CEB] in updating its 2 vol. text on Real Property Security and Foreclosure. Roger Bernhardt is principal author. Looking for case law allowing attacks on trustee sales; defending the resulting eviction actions– both in commercial and consumer context. Please send cases, briefs, etc to above address or email [M-M@pacbell.com]. Our deadline is July 10. I will be on vacation last week in June, 2009. Sttreet address: 1297 B Street, Hayward CA 94541. /s/ GLEN L Moss.
Alex, on June 5th, 2009 at 2:00 am Said:

Trevino is a good case but till now I only were able to find its complaint (First Amended is the last verstion I saw)

Now – I found a Judge’s opinion on it ! Where MERS’s motion is denied, and there are a few good pages of analysis

http://noonanandlieberman.com/media/pdfs/Trevino__v_Merscorp.pdf

all found within a good news-mailing list, following several cases on our subject from January 2008 till now

http://www.noonanandlieberman.com/newsletter/october_2008
livinglies, on June 1st, 2009 at 12:51 pm Said:

Senate Testimony is definitely a good read although the assumptions about ownership of the loan are mistaken. Anyone who has a case where MERS is Plaintiff is in good position to eliminate the foreclosure even if it is in the past.
Alex, on May 31st, 2009 at 9:15 pm Said:

correction on my part – I had re-read the Knighton, Norman v. MERS #08-40616 case (previous comment here, on link #2) and although it sounds all favorable to Plaintiff, his case is Dismissed, Affirmed is denial not the appeal, sorry for my mis-stating earlier.

It is still an interesting account, dedicated to discussion, whether MERS’s fees charged to its members for MERS staying a permanent nominee on record is a violation of RESPA, it failed in that particular action and appeal due to not that well allegations built in Plaintiff’s complaint, it doesn’t meant that it can’t be redone and presented better in the future
Alex, on May 31st, 2009 at 8:34 pm Said:

two more resourses found today available online regarding MERS:

1 – legal analysis on MERS and loan securitization, written testimony before US Senate, by Christopher L Peterson, associate professor of Law, University of Florida.

Several interesting points made, including
- naming MERS no less but tax evasion tool,
- analyzing existing anti-predatory system of law (as of 2007 when it was written) as outdated by at least a decade before MERS was created and found its way through the holes in legislation of pre-digital era
- providing some good citations and basis for its resolutions

link:
http://banking.senate.gov/public/index.cfm?FuseAction=Files.View&FileStore_id=4f40e1b9-ec5b-4752-ba8f-0c14afc44884

2 – United States Court of Appeals for 5th Circuit AFFIRMS Plaintiff’s standing against MERS, fresh ruling, came out December 23rd, 2008, rooted from Texas case Knighton, Norman v. MERS #08-40616

http://www.buckleykolar.com/Knighton_v_Merscorp.pdf
smallz, on April 1st, 2009 at 10:36 am Said:

This article by one of the architects of MERS was definitely worth the $ 5.00 bucks.

Enjoy!

Mortgage assignments – headed for extinction?
Mortgage Banking – July 1, 1993
Phyllis K. Slesinger

Word count: 1265.
citation details

It won’t happen tomorrow, and it won’t happen next week or even next year. But in the not too distant future, paper mortgage assignments may become as common as dinosaurs–outside Jurassic Park.

The Mortgage Bankers Association of America (MBA) in conjunction with Fannie Mae and Freddie Mac is exploring “New Age Delivery.” The phrase represents a proposal for grounding the mortgage note for the life of the mortgage loan immediately after origination. Subsequent transfers of the loan, as well as transfers of servicing, will be registered in an electronic clearinghouse–essentially a computer. What we will have is a book-entry system for transfers of mortgages and servicing rights sponsored by participating mortgage investors. These will include not only Fannie Mae, Freddie Mac and GNMA, but also conduits, portfolio lenders and any other investors in mortgages.

The proposed system is analogous to the system used to establish ownership of book-entry securities–including Fannie Mae MBS, Freddie Mac PCs and Ginnie Maes. The concept is still in the early stages of development, and we expect that it will be refined as it is discussed and analyzed further. Currently, it provides for the following:

* Mortgage investors will establish a system for electronically registering ownership of and interests in mortgages. Submitting information to the resulting book-entry data repository (clearinghouse) will be recognized as the official means for establishing constructive notice of title to and interests in the registered mortgages. The repository could be an entity created from scratch, or it could be operated by an existing facility.

* Lenders will provide closing agents with electronic closing instructions. Upon funding of a mortgage loan and recordation of the security instrument (mortgage or deed of trust) in the public land records with the clearinghouse probably designated as the mortgage of record, the title company, closing agent (independent closing agent/escrow agent/attorney), or lender will transmit electronic data to the clearinghouse to register a loan and have it assigned a permanent identification number (the data could be limited to borrower/original payee/loan amount/date, or could be very extensive to include property description/census tract and so on.

* Immediately upon closing, the closing agent also will fax the clearinghouse an image of the note. The clearinghouse or the closing agent also will notify the warehouse lender that the loan had been originated and send the original note to the designated custodian. The warehouse lender then will electronically register its interest in the mortgage loan with the clearinghouse.

* All future loan transfers or assignments to secondary market entities, as well as transfers of servicing, will be registered electronically through the book-entry system.

* If mortgages designate the clearinghouse as the mortgagee of record in the manner that book-entry securities are listed in the name of a primary bank having a book-entry account with a Federal Reserve Bank on behalf of the true investor, the clearinghouse will receive important notifications affecting the mortgage lien; for example, notices of foreclosure of junior liens, notices of federal asset forfeiture actions, bankruptcy notices and notices of environmental actions affecting the underlying property.

* Mortgage notes will remain with the original document custodian until payoff or foreclosure. Custodians will hold the notes on behalf of the registered owner. Custodians will release satisfied notes to closing agents who will record satisfactions.

The book-entry concept is the logical outgrowth of several initiatives undertaken by the Inter-Agency Technology Task Force. This task force, in which MBA assists Fannie Mae, Freddie Mac and GNMA, is dedicated to streamlining mortgage banking functions. Activities focus on reducing paper in mortgage loan transactions, eliminating redundant data-entry activities by various industry sectors and establishing uniform formats for agency submissions to the extent feasible.

The current systems for establishing and tracking mortgage ownership is extremely cumbersome and expensive. The generally accepted rules are that ownership of a mortgage note is established by possession of a note endorsed in blank, either directly or through a custodian holding notes on behalf of a third party, and by execution and delivery of a mortgage assignment, which may or may not need to be recorded. However, even where assignments need not be recorded to establish legal rights, the need for their execution, delivery, verification and storage is very costly. Therefore, the elimination of mortgage assignments has been targeted by the Inter-Agency Technology Task Force as a significant objective.

Because mortgage assignments are creatures of state law, a logical question is whether registration of a mortgage interest in the book-entry clearinghouse will be sufficient under state law to establish enforceable legal rights. Although the proposed book-entry concept seems a drastic departure from existing practice, there is good reason to believe that the book-entry system will mesh with the existing legal framework. A tangible mortgage note and recorded mortgage will still be executed, and the note will be held by a third party consistent with current practice. What will differ is that an interested party must refer to the book-entry system, rather than an executed assignment, to determine on whose behalf the custodian is holding a note of any given time.

It appears that to make the concept work without changing state law, mortgage investors will have to impose a contractual requirement for mortgage sellers and servicers to participate in the book-entry system and comply with clearinghouse rules. Investors can easily change mortgage eligibility requirements to condition loan purchases on registration of loans in the clearinghouse and recordation of the mortgage in the public land records in the name of the clearinghouse. Clearinghouse rules would be modeled after Article 8 of the Uniform Commercial Code, which addresses book-entry securities.

Enforcing this contractual requirement will not harm borrowers. Although the public land records under New Age Delivery would not disclose the current mortgage servicer or owner of the mortgage, with the growth of the secondary market, the public land records under our existing system rarely disclose the borrower’s current servicer. In states where mortgage assignments don’t need to be recorded, the public land records may disclose only the original mortgagee notwithstanding successive transfers of equitable ownership and transfers of servicing rights. Instead, updated information regarding servicing transfers is delivered to borrowers in the manner provided for under federal law.

Although the impact of New Age Delivery on borrowers will be minimal, the book-entry concept will definitely change the way many sectors of the mortgage finance industry to business. During June, MBA hosted a series of focus groups to present the book-entry concept to the various sectors that will be affected: mortgage lenders, of course; warehouse lenders; closing agents; and document custodians. The purpose of these meetings was to identify the costs and benefits of the concept, needed concept enhancements, work flow changes, and the level of receptivity of each industry segment. Our findings will be incorporated in a white paper will present the issues involved for general comment. This white paper should be available sometime this coming autumn.

MBA and the Inter-Agency Technology Task Force welcome your comments on New Age Delivery and the whole loan book-entry concept. In order to have a meaningful white paper that will identify important concerns and constraints, as well as benefits, MBA needs to hear from you. In order to develop the best system, all the relevant issues must be identified and adequately aired so that a broad consensus can be reached. Preliminary indications are that the mortgage assignment is a very endangered species.

Citation Details

Title: Mortgage assignments – headed for extinction?
Author: Phyllis K. Slesinger
Publication: Mortgage Banking (Magazine/Journal)
Date: July 1, 1993
Publisher: Mortgage Bankers Association of America
Volume: v53 Issue: n10 Page: p81(2)
willie smith, on February 23rd, 2009 at 10:23 pm Said:

mers claim that they bought my former home at the sheriff sale. I found out later it weren’t true and they then start to say that they were the nominee and assigned. I were evicted on by mers at Oakland County Circuit ct. 9/24/2008 by judge Kumar. Mers on 9/4/2008 quit claim deed the house to wells fargo. A company that never had any invovlement with my home quit. On 11/24/2008 Wells Fargo conveant deed the property to an couple whom are now living in the home 28425 brooks lane southfield, mi 48034.