See entire decision here > kansas-supreme-court-sets-precedent-key-decision-confirming-livinglies-strategies
See also Arkansas Supreme Court stating the same principles and citing to Kansas: arkansas-supreme-court-denies-mers-legal-standing
Annotations: See this list of cases cited by pretender lenders: Lender’s Cases
What does this decision mean? It means that there are several direct strategic moves that are suggested both by the tactics of the pretender lenders and the Justices in Kansas who are not known for their activist liberal philosophy. Most persuasive about this decision is that it was NOT a case of “Bank” or “Lender” versus Borrower. It is a case of one pretender lender against another. So we don’t have an ideological argument about whether the court was leaning toward the poor borrower/victims of this mess versus the financial institutions.
This decision was based upon simple application of basic black letter law that has been in effect for centuries.
MERS and the other nominee tactics employed in securitization of home loans is properly described as an illegal, improper scheme that causes title problems because it introduces parties into the property records of a county who have no interest in the loan, obligation, note or mortgage, no rights to enforce them, and leaves out the parties who will ultimately claim to possess enforcement rights.
MERS and the whole nominee model serve as the conduit for information about behind the scenes transactions purporting to transfer interests in real property without compliance with local law requiring recordation of those interests. It means that the security interest is not perfected.
BANKRUPTCY LAWYERS BEWARE: Those schedules showing the property encumbered by a secured mortgage and note might be wrong. One day some lawyer is going to put on a commercial asking if people have filed bankruptcy in recent years and lost their house because the house was admitted to be a secured asset when in fact it was not. It is a legal malpractice field day.
TITLE INSURERS BEWARE: Those title policies you issued where the mortgagee or beneficiary was shown as MERS or some other similar nominee might well call upon you to compensate the homeowner for loss of the property to a pretender lender who did not have any interest in the mortgage. The moment the closing was done, with full knowledge by the title company, there was a cloud on title. Either the title carrier is going to fund the correction or they are going to fund the compensation.
TRIAL JUDGES BEWARE: YOUR ASSUMPTIONS REGARDING THESE FORECLOSURES IS WRONG. As appellate courts review the basics of property law and apply those principles to securitized loans on residential real property, there will be no room for affirming your decisions unless the appellant makes procedural errors. You have already validated hundreds if not thousands of illegal, fraudulent and improperly cast foreclosures, both judicial and non-judicial. It is only Judges like Boyco in Ohio, Shack in New York, Burford in California and others who will be heralded as the ones who understood the basics of property law. The rest of the Judges will be castigated for having applied personal bias against the basic requirements of black letter law.
Landmark vs Kesler stands for the following propositions, some of which are missed because people are looking for silver bullets rather than the entire rationale of the decision:
- MERS is and was a straw man that has no rights, is not a real party, and cannot assert any claims, constitutional or otherwise.
- Setting Aside a Default: It CAN be done and the court must consider evidence outside the pleadings. “It is appropriate–and probably necessary–for a trial court to consider evidence beyond the bare pleadings to determine whether it should set aside a default judgment.”
- Failure to record prevents a party from asserting enforcement rights under any document purporting to establish an interest in real estate.
- A Motion to Distribute Surplus is an effective tool (granted in the Kansas case) by which borrowers can attack a foreclosure even after the judgment has been entered and the sale has occurred. [What most people fail to realize because it is normally absurd to assume it, is that substantial profits were made on every mortgage — particularly those that were declared in default. If you carefully build your case around the single transaction theory, then all the undisclosed profits, fees, rebates and kickbacks stemming from payments to people who performed no service in originating the loan are recoverable and probable susceptible to the recovery of treble damages. Thus payments under credit default swaps that bought out polls 30 times over are recoverable pro rata to each borrower]
Filed under: bubble, CDO, currency, Eviction, foreclosure, GTC | Honor, Investor, Mortgage Tagged: | bailout, bankruptcy, borrower, disclosure, foreclosure, foreclosure defense, foreclosure offense, fraud, Lender Liability, lost note, Mortgage, securitization, trustee