US Bank, America’s Wholesale Lender, MERS Go Down in Flames

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“This is a huge win for homeowner’s attorney Kelley A. Bosecker” in St. Petersburg, Florida

see us-bank-v-dimant_2013-ca-001130

See also

This case is similar to another case won by Patrick Giunta and myself in Broward County. The gravamen of the case is that AWL is a fictional entity with no standing. it is a nullity. MERS was not proven to have a nexus to the loan or anything else relevant to the case. Unlike some other cases around the country, the court did NOT order the return of all money paid by borrower to parties who had no right to collect or enforce the alleged debt. That might be the subject of a cross appeal if there is an appeal by the Banks.

The underlying issue remains obscured however. The emphasis remains on the paperwork rather than the absence of any real transactions in which the debt was originated or acquired by anyone in the chain relied upon by US Bank as Plaintiff in this action.

The other issue that I have already commented upon is the continued view by many that Quiet title, in and of itself, is a proper strategy to attack the banks. I don’t think it is unless and until the mortgage encumbrance is and has been declared void or has been rendered void by operation of law (rescission under TILA). Decisions in the 11th Circuit in Bankruptcy court along with a number of other decisions around the country make it clear that the lien survives even if it isn’t or can’t be enforced. See this Month’s Florida Bar Journal article on junior lien holders in foreclosure cases.

And my final comment on this is that it isn’t just AWL that is a fictional character. As I stated in sworn testimony when 16 banks took my deposition for 6 straight days, MERS is a fictional character that does not answer to the definition of a beneficiary in non-judicial states and does not answer to the definition of a creditor or holder in judicial states.Some fo you might remember when I said you might just as well have inserted the name of “Donald Duck” in place of MERS or any of the other players who were pretending to have engaged in transactions that either originated or acquired mortgage loans. My observation remains: none of it is true.

In addition the alleged trusts simply do not exist in real life. Since they were never funded and the Trustee is not managing the money in any account where the Trustee has power over it, the proceeds of the alleged sale of mortgage backed securities went elsewhere. The Trust is not even a shell because it has no business and never had any financial statements. The reason for that is that the Trust was simply a ruse by Investment Banks to take money from Pension Funds and other investors. Hence it is impossible for the assignment, regardless of whenever it was created or fabricated, dated or backdated, to be real, to wit: it implies the existence of a transaction in which the Trust bought the loan. If that were true, the banks would say so and would allege the ultimate status under the UCC — Holder in Due Course. And THAT would have eliminated any borrower defenses.

The assumption that somehow the loan IS in the Trust but that it got there in violation of the PSA is, in my view, simply wrong. But paradoxically it seems easier to get judgment for the homeowner by making that false assumption and attacking the paperwork. If any of the transactions were real, the banks would long ago have come to court with proof of payment and transactions that were clearly supportive of their paperwork — and nobody would have lost or destroyed cash equivalent promissory notes.

Significantly, the ruling found that:

  1. On May 13, 2005, there was a Mortgage recorded in the St. Lucie County, Florida land records in favor of “America’s Wholesale Lender” (“AWL”) which is stated to be a New York Corporation.
  2. The Note alleges that the Lender is “America’s Wholesale Lender”, which the Court determined did not file this action, did not appear at trial and it didn’t assign any of the interest in the mortgage (how could it, as it is a “fiction”?).
  3. There was enough evidence on the table to show that AWL was NOT a New York Corporation at the time the Mortgage was recorded and that this entity did NOT have authority to conduct business in the State of Florida.
  4. MERS again was used to facilitate (as a “cover” for the misdeeds of Countrywide Home Loans, Inc.).  This was deemed by the Court NOT to be in statutory compliance with the state’s Uniform Commercial Code!
  5. As in the Nash case (coming out of Seminole County, Florida), there was no evidence provided by the Plaintiff trust (who we know didn’t get the note and mortgage by the cut-off date) that there was any nexus between AWL, Countrywide d/b/a AWL, Countrywide Bank or Bank of America, N.A.
  6. The ruling also made mention of Paragraph 22 as to conditions precedent (which is really NOT the whole point of this ruling); however, the Court appears to have gotten it right when it came to the REMIC trust NOT having standing to foreclose.
  7. The more obvious concern here, is MERS being used to assign a note and mortgage from a “fiction” to a REMIC trust “outside of the parameters and dictates of the PSA”.


MERSCORP Shell Game Attacked by Kentucky Attorney General Jack Conway


What’s the Next Step? Consult with Neil Garfield

For assistance with presenting a case for wrongful foreclosure, please call 520-405-1688, customer service, who will put you in touch with an attorney in the states of Florida, Tennessee, Georgia, California, Ohio, and Nevada. (NOTE: Chapter 11 may be easier than you think).

EDITOR’S NOTES AND COMMENTS: My congratulations to Kentucky Attorney General Jack Conway and his staff. They nailed one of the key issues that cut revenues on transfers of interests in real property AND they nailed one of the key issues in perfecting the mortgage lien.

As we all know now MERSCORP has been playing a shell game with multiple corporate identities, the purpose of which, as explained in Conway’s complaint, was to add mud to the waters already polluted by predatory loan practices and outright fraud in the appraisal and identification of the lender. This of course is in addition to the very gnarly issue of using a nominee that explicitly disclaims any interest in the property or loan.

The use of MERS, just like the use of fabricated, forged, robo-signed documents doesn’t necessarily wipe out the debt. The debt is created when the borrower accepts the money, regardless of what the paperwork says — unless the state’s usury laws penalize the lender by eliminating the debt entirely and adding treble damages.

But the use of a nominee that has no interest in the loan or the property creates a problem in the perfection of the mortgage lien. The use of TWO nominees doubles the problem. It eliminates the most basic disclosure required by Federal and state lending laws — who is the creditor?

By intentionally naming the originator as the lender when it was merely a nominee and by using MERS, as nominee to have the rights under the security interest, the Banks created layers of bankruptcy remote protection as they intended, as well as the moral hazard of stealing or “borrowing” the loan to create fictitious transactions in which the bank kept part of the money intended for mortgage funding. Since the mortgage or deed of trust contains no stakeholders other than the homeowner and the note fails to name any actual creditor with a loan receivable account, the mortgage lien is fatally defective rendering the loan unsecured.

When you take into consideration that the funding of the loan came from a source unrelated (stranger tot he transaction) then the debt doesn’t exist either — as it relates to any of the parties named at the “closing” of the mortgage loan. So you end up with no debt, no note, and no mortgage. You also end up with a debt that is undocumented wherein the homeowner is the debtor and the source of funds is the creditor — in a transaction that neither of them knew took place and neither of them had agreed.

The lender/investors were expecting to participate in a REMIC trust which was routinely ignored as the money was diverted by the banks to their own pockets before they made increasingly toxic over-priced loans on over-valued property. The borrower ended up in limbo with no place to go to settle, modify or even litigate their loan, mortgage or foreclosure. This is not the statutory scheme in any state and Conway in Kentucky spotted it. Besides the usual “dark side” rhetoric, the plan as executed by the banks creates fatal uncertainty that cannot be cured as to who owns the loan or the lien or the debt, note or mortgage. The answer clearly does not lie in the documents presented to the borrower.

Now Conway has added the hidden issue of the MERS shell game. Confirming what we have been saying for years, the Banks, using the MERS model, have made it nearly impossible for ANY borrower to know the identity of the actual lender/creditor before during and even one day after the “closing” of the loan (which I have postulated may never have been completed because the money didn’t come from MERS nor the other nominee identified as the “lender”).

The Banks are trying to run the clock on the statute of limitations with these settlements, like the the last one in which Bank of America would have owed tens of millions of dollars had the review process continued, and instead they cancelled the program with a minor settlement in which homeowners will get some pocket change while BofA walks off with the a mouthful of ill-gotten gains.

The plain truth is that in most cases BofA never paid a dime for the funding or purchase of the loan. That is called lack of consideration and in order for the rules of negotiable paper to apply, there must be transfer for value. There was no value, there was no cancelled check and there was no wire transfer receipt in which BofA was the lender or acquirer of the loan. Now add this ingredient: more than 50% of the REMIC trusts BofA says it “represents no longer exist, having been long since dissolved and settled.

The same holds true  for US Bank, Mellon, Chase, Deutsch and others. Applying basic black letter law, the only possible conclusion here is that the mortgages cannot be foreclosed, the notes cannot be enforced, the debt can be collected ONLY upon proof of payment and proof of loss. This is how it always was, for obvious reasons, and this is what we should re turn to, providing a degree of certainty to the marketplace that does not and will never exist without the massive correction in title corruption and the wrongful foreclosures conducted by what the reviewers in the San Francisco audit called “strangers to the transaction.”

See Louisville Morning Call here

See Bloomberg Article here



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“So Dallas is suing MERSCORP et al, including big old Bank of America who is already on our death watch. And Dallas is going to win, meaning that county recorders across the country are going to make their claim for fees that are due, even if the transactions were fraudulent because they tried to use those transactions as a means to foreclose. And ultimately, the banks are going to cornered — not being able to foreclose because they did not pay their fees.

The banks were and are the deadbeats, but they had a lot of money and power which is now fast flowing away from them. Politicians have figured it out — run against the banks and you can’t go wrong. They’ll get more money and more votes from people and other interest groups running against the banks than doing their bidding. We might let organized crime thrive for a while, but we always take it down.”

SEE Dallas-vs-Mers-Et-Al




EDITOR’S NOTE: Real change, real reform, real improvement are going to come from good people doing the right thing instead of standing by and watching their neighbors get clobbered, hoping and wishing that it won’t happen to them. So now protests and rallies are being held and they are growing. Over 2,000 people on Wall Street camped out and their voices are getting louder. Spanish citizens are banding together and forming a wall of bodies that the local,”Sheriff” refuses to penetrate to evict the homeowner. Leaders are rising to the top — people like Dan earl, Martin Andelman, Darrel Blomberg and others are not just actively helping their neighbors and their friends and those who find them pleading for help, they are making a difference.

Politicians are noticing that it is a pretty good bet to run against the banks since nobody likes them anyway and there is a special enmity that the citizens feel toward the banks, who have been draining the lifeblood out of our economy for over 3 decades. This time the banks went far enough for the people, the government and investors to strike back — giving restitution to the victims of the banks feeding frenzy.

Those victims are taxpayers, government agencies whose fees were not paid, regulators whose fees were not paid and who did not receive reports that were essential to orderly commerce, failure to record transactions in real property allowing almost anyone to wake up in the morning deciding to steal a house by asserting they are the beneficiary, filing a substitution of trustee naming someone that is in league with them, and then proceeding with the notice of sale, the auction and submitting a “Credit bid” that is as fake as a three dollar bill.

One by one, local government is getting the message — the banks owe them and they have nothing to fear from the banks. It is an illusion and a myth that the government can call the shots as we let them — because we  have long since withdrawn our consent to that. The budgets will be restored by government agencies tracking down the money that is due — not from new taxes — but normal fees and taxes required to perform the services that all of us need government to perform, like recording an interest in real property.

So Dallas has sued MERSCORP and some well-known shareholders seeking to recover its fees and restore its budget. Dallas has now made a statement that they will no longer underwrite the costs of the securitization scam and they want the money that the banks did not pay when they transferred interests in real estate repeatedly without ever recording the interest in the public records of the county in which the property was located.

They have a good case too. Because the trick the banks tried was to use some end user, the final nominee of the securitization process who would claim that they were the holder and owner of the loan so that a foreclosure could occur and another house could be stolen by a party who neither the loaned the money nor purchased the obligation. But now the banks have stepped on a rake because in order to give the “final nominee” the right to foreclose they must claim multiple transfers of the loan, none of which were reported on record. They want to use the county’s facilities to foreclose, but they don’t want to pay for the intervening transactions that they say gives rights to the the party foreclosing on behalf of the his hashed scheme.

So Dallas is suing MERSCORP et al, including big old Bank of America who is already on our death watch. And Dallas is going to win ,meaning that county recorders across the country are going to make their claim for fees that are due, even if the transactions were fraudulent because they tried to use those transactions as a means to foreclose. And ultimately, the banks are going to be cornered — not being able to foreclose because they did not pay their fees. The banks were and are the deadbeats, but they had a lot of money and power which is now fast flowing away from them.

Politicians have figured it out — run against the banks and you can’t go wrong. They’ll get more money and more votes from people and other interest groups running against the banks than doing their bidding. We might let organized crime thrive for a while, but we always take it down.


HERE IS THE BOMBSHELL — the model paragraph that will ultimately be the undoing of of the “Substitute trustees” the auctions, sales, deeds and evictions. When the full import of this paragraph sinks in, the banks will be left naked in the wind, revealed as common thieves who never loaned any money and who never purchased an obligation but managed to create an elaborate scheme to steal the homes in derogation of the rights of both investors and homeowners. In all the foreclosures, assuming the dubious proposition that the liens were perfected, the modification of the loan with a principal correction would have resulted in a better deal for the investor and the crush of evictions would have been reduced to a trickle because the deals would have been workable — something the original loans never aspired to as a goal, since the originators were after fees for closing not payback on the loans.

“PLAINTIFF  moves the court pierce the MERSCORP and MERS corporate veils and impose liability upon the Defendants Stewart and BOA as shareholders in MERSCORP for the activities of MERSCORP and MERS alleged herein. Recognizing the corporate existence of MERSCORP and MERS separate from their shareholders, including Stewart and BOA, would cause an inequitable result or injustice, or would be a cloak for fraud or illegality. MERSCORP and MERS were under-capitalized in light of the nature and risk of their business. The corporate fiction is being used to justify wrongs, perpetrating fraud, as a mere tool or business conduit for others, as a means of evading legal obligations, to perpetrate monopoly and unlawfully gain monopolistic control over the real property recording system in the State of Texas, and to circumvent statutory obligations.”




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  1. “In the event of a default on the loan, the lender may initiate foreclosure in its own name, or may appoint a trustee to initiate foreclosure on the lender’s behalf. However, to have the legal power to foreclose, the trustee must have authority to act as the holder, or agent of the holder, of both the deed and the note together. See Landmark Nat’l Bank v. Kesler, 216 P.3d 158, 167 (Kan. 2009).” 16985
  2. The deed and note must be held together because the holder of the note is only entitled to repayment, and does not have the right under the deed to use the property as a means of satisfying repayment.” 16986
  3. the holder of the deed alone does not have a right to repayment and, thus, does not have an interest in foreclosing on the property to satisfy repayment” 16986

SEE Olga_Cervantes_v _Countrywide_Home_Loans_Inc

The 9th Circuit Court of Appeals (Federal) has issued a decision in Cervantes that will no doubt be cited by pretender lenders all across the country. BUT, if you read the decision carefully, you can see that there were errors in pleading perceived by the Court. Correcting those errors might change the result completely.

Beth Findsen, Esq., one of the foremost scholars and legal writers of the country believes that the decision points the way to a successful action against the use of MERS. “There is some helpful language among the detritus here,” she said. “The legality of MERS’ role as a beneficiary may be at issue where MERS initiates foreclosure in its own name, or where the plaintiffs allege a violation of state recording and foreclosure statutes based on the designation.  Para. 7”. The obvious point here is that if MERS is the forecloser or if the homeowner alleges that the designation of MERS violates state recording statutes or alleges a violation of state foreclosure statutes, the analysis would clearly be different.

She points out that the Court thought it important to state that “The plaintiffs’ allegations do not call into question whether the trustees were agents of the lenders. Para. 8″. This is an important signal from the Court of Appeals. They see the point. If the Trustees were agents of the putative lenders, then the analysis would also be different. How? Because if the trustees were agents of the pretender lenders who initiated the foreclosure, it would obviously  mean two things: (a) the trustees did not qualify as trustees because they were not serving in the capacity designed by the legislature to protect borrowers and (b) the more direct point would be that the implication would clearly point to the fact that the pretender lenders are forming entities for the purpose of designating themselves as trustees (through nominees — there is that word again).

Findsen also points out that the Court seemed to think it was important that”The plaintiffs have not alleged violations of Arizona recording and foreclosure statutes related to the purported splitting of the notes and deeds. Para. 8.” Here again. The Court is signalling us as to where to go with this. See the briefs and filings of Ron Ryan and Beth Findsen in connection with this issue. It relates to the UCC Article 3 and Article 9 which requires the OWNER of the obligation to be the one claiming the right to foreclose, not some holder or other agent. Lawyers have shied away from the Splitting the note and mortgage” under the simplistic notion that the general rule is that the note follows the mortgage and vica versa. It doesn’t actually work that way and the appellate court here is telling us just that. What is clearly happening is that the pretenders are foreclosing on the mortgage without (a) perfecting the lien in the first place and (b) without even asserting that any money is due them from the borrower. There are virtually no decisions anywhere that support such a notion.

To have the legal power to foreclose, Findsen says, the trustee must have authority to act as the holder, or agent of the holder, of both the deed and the note together.    She’s right and the 9th Circuit says she is right. The deed and note must be held together because the holder of the note is only entitled repayment, and does not have the right under the deed to use the property as a means of satisfying repayment.  Conversely, the holder of the deed alone does not have a right to repayment and, thus, does not have an interest in foreclosing on the property to satisfy repayment.

EDITOR’S NOTE: The only other thing I would point out is that we may be missing the forest for the trees. Why do we assume the original mortgage represents a perfected lien? We know that the money came from an undisclosed creditor, we know that the creditor was not named or even described, and we know that the creditor was  given a bond with many more terms than the note itself.

If you want a satisfaction of mortgage, you need to get it from the party who is the one to whom the money is owed — not some self-appointed agent. And if the self-appointed agent is claiming agency rights, then they must show the documents supporting that contention AND the facts to show that the documents were followed with respect to the conditions and restrictions for transfer of the loans. We already know that wasn’t done, and so we know that the claim of agency cannot be true. Thus the placeholder at the closing of the loan was merely that and no more. It can’t claim agency and it wasn’t the lender. Somebody explain to me how that could result in a perfected lien!



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EDITOR’S COMMENT: If he doesn’t get stepped on political heavyweights who accepted bank money for their campaigns, Watkins may well be leading the real charge against the banks that will end up real results. Fixing the budgets of state and local governments with money they were entitled to receive in the great securitization scheme is a high priority. It will save jobs, improve the economy and maintain social services — like police, fire, rescue, education, parks etc.

District Attorney Craig Watkins to Explore Possible Claims against Mortgage Electronic Registration Systems, Inc.

Posted by shawnpwilliams on Aug 9th, 2011

Dallas South News Wire (Dallas County District Attorney’s Office)

Today Dallas County District Attorney (DA) Craig Watkins announced that the DA’s office is considering asserting claims against Mortgage Electronic Registration Systems, Inc. (MERS) for the possible loss of millions in revenues to Dallas County.

MERS, a subsidiary of MERSCORP, Inc., was established and is owned by banks and members of the mortgage finance industry.  MERS was established to act as a shadow recording system for the millions of mortgages in the United States and facilitate the buying and selling of mortgage rights as commodities.

There are currently approximately 31 million active residential mortgage loans registered on the MERS System.  Since its inception, MERS has attempted to track more than 60 million mortgages nationwide and more than 250,000 in Dallas County alone.  However, due to the fact that reporting is not always required, the MERS electronic records of mortgages may or may not accurately reflect the millions of transfers of mortgage rights that have occurred over the past several years.

“While the DA’s office is traditionally only thought of as the prosecuting authority for crimes against individuals, in addition to handling those types of cases, we are also responsible for providing legal representation in civil matters such as this issue with MERS where Dallas County is the victim,” said District Attorney Craig Watkins.

“When I learned about this issue, my first reaction was we needed to explore possible remedies for getting MERS to reimburse the estimated tens of millions in uncollected filing fees that are potentially owed to Dallas County.  These possible remedies are in the process of being explored.  This is yet another issue that has gone unaddressed for years that we have discovered, are taking action to correct and put measures in place to prevent it from happening in the future.”

Lenders ordinarily file a record of their rights in the deed records of the county where the property is located.  The county clerk maintains those records as notice to the public of the identity of persons who loaned money for the purchase of the property and who have rights to foreclose upon the property if the loan is not repaid.

For a fee, MERS allows lenders to show MERS as the “beneficiary” of the lender’s rights to the property if the loan is not repaid, even though MERS is not actually the beneficiary.  MERS acts as a placeholder for the lender as to the lender’s mortgage rights, but not the lender’s rights to receive the loan payments.

In that way, the lender is able to sell its rights to receive the loan payments and MERS agrees to protect the purchaser of the loan by remaining on the deed records as the “beneficiary” of the mortgage.  So long as MERS remains on the deed records as the beneficiary, subsequent purchasers can avoid having to file their acquisition of the rights to the loan payments and pay the associated filing fees.

After extensive research on the issue of whether MERS and others acting with it improperly recorded hundreds of thousands of real estate records in Dallas County, and were thereby able to avoid paying filing fees on subsequent transfers of the properties that were involved, it was concluded that MERS and those acting with it have engaged in conduct which wrongfully deprived the citizens of millions of dollars in filing fees on property located in Dallas County.

MERS operates a national electronic registry that tracks beneficial ownership interests and servicing rights associated with residential mortgage loans and any transfer of or changes in those interests or rights.  There are approximately 5,000 participating members of MERS, of which 3,000 are residential mortgage servicers.

Members register loans and may report transfers, foreclosures, and other changes to the status of residential mortgage loans on the MERS System.  However, there is no requirement that all changes or transfers be reported to MERS.

Fed penalizes 10 banks on mortgage practices

Fed penalizes 10 banks on mortgage practices

By Steve Goldstein
WASHINGTON (MarketWatch) — The Federal Reserve said it’s taken enforcement action against 10 banks over “a pattern of misconduct and negligence related to deficient practices in residential mortgage loan servicing and foreclosure processing. These deficiencies represent significant and pervasive compliance failures and unsafe and unsound practices at these institutions.” The banks are Bank of America /quotes/comstock/13*!bac/quotes/nls/bac (BAC 12.86, -0.27, -2.06%) , Citigroup /quotes/comstock/13*!c/quotes/nls/c (C 4.41, -0.03, -0.56%) , Ally Financial, the HSBC North America unit of HSBC Holdings /quotes/comstock/13*!hbc/quotes/nls/hbc (HBC 53.34, -0.22, -0.41%) , J.P. Morgan Chase /quotes/comstock/13*!jpm/quotes/nls/jpm (JPM 44.89, -0.08, -0.18%) , MetLife /quotes/comstock/13*!met/quotes/nls/met (MET 43.88, -0.25, -0.57%) , PNC Financial Services /quotes/comstock/13*!pnc/quotes/nls/pnc (PNC 61.87, -0.01, -0.02%) , SunTrust Banks /quotes/comstock/13*!sti/quotes/nls/sti (STI 28.15, -0.04, -0.14%) , U.S. Bancorp /quotes/comstock/13*!usb/quotes/nls/usb (USB 25.95, +0.11, +0.43%) and Wells Fargo /quotes/comstock/13*!wfc/quotes/nls/wfc (WFC 29.89, -0.26, -0.86%) . In addition to the actions against the banking organizations, the Federal Reserve on Wednesday announced formal enforcement actions against Lender Processing Services, Inc. (LPS), a domestic provider of default-management services and other services related to foreclosures, and against MERSCORP, Inc., which provides services related to tracking and registering residential mortgage ownership and servicing, acts as mortgagee of record on behalf of lenders and servicers, and initiates foreclosure actions



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Just released. Thanks to Dan Edstrom our senior securitization analyst for alerting me.

SEE MERS_Cease_and_Desist_2011_04_13



The Agencies find, and MERS and MERSCORP neither admit nor deny, the following:
(1)    MERS is a wholly-owned subsidiary of MERSCORP. MERSCORP’s shareholders include federally regulated financial institutions that own and/or service residential mortgages, including Examined Members, and other primary and secondary mortgage industry participants.
(2)    MERSCORP operates a national electronic registry that tracks beneficial ownership interests and servicing rights associated with residential mortgage loans and any changes in those interests or rights. There are approximately 5,000 participating Members, of which 3,000 are residential mortgage servicers. Members register loans and report transfers, foreclosures, and other changes to the status of residential mortgage loans on the MERS System. There are currently approximately 31 million active residential mortgage loans registered on the MERS System. Examined Members receive a substantial portion of the services provided by MERSCORP and MERS.
(3)    MERS serves as mortgagee of record and nominee for the participating Members in local land records. MERS takes action as mortgagee through documents executed by “certifying officers” of MERS. MERS has designated these individuals, who are officers or employees of Members or certain third-parties who have contractual relationships with Members, as officers of MERS. By virtue of these designations, the certifying officers execute legal documents in the name of MERS, such as mortgage assignments and lien releases.
MERS Consent Order
(4)    In connection with services provided to Examined Members related to tracking, and registering residential mortgage loans and initiating foreclosures (“residential mortgage and foreclosure-related services”), MERS and MERSCORP:
(a)    have failed to exercise appropriate oversight, management supervision and corporate governance, and have failed to devote adequate financial, staffing, training, and legal resources to ensure proper administration and delivery of services to Examined Members; and
(b)    have failed to establish and maintain adequate internal controls, policies, and procedures, compliance risk management, and internal audit and reporting requirements with respect to the administration and delivery of services to Examined Members.
(5)    By reason of the conduct set forth above, MERS and MERSCORP engaged in unsafe or unsound practices that expose them and Examined Members to unacceptable operational, compliance, legal, and reputational risks.
Pursuant to the authority vested in them by the Federal Deposit Insurance Act, as amended, 12 U.S.C. §§ 1818(b), the Bank Service Company Act, 12 U.S.C. § 1867(c)-(d), and the Federal Housing Enterprises Financial Safety and Soundness Act, 12 U.S.C. § 4631, the Agencies hereby ORDER that:
(1)    Within twenty (20) days of this Order, the Boards of Directors of MERSCORP and MERS (the “Boards”) shall each establish and thereafter maintain a Compliance Committee of at least three (3) directors, of which at least two (2) may not be employees or officers of MERS or MERSCORP or any of their subsidiaries or affiliates. In the event of a change of the
MERS Consent Order
membership, the name of any new committee member shall be submitted to the OCC Deputy Comptroller for Large Bank Supervision (“Deputy Comptroller”). The Compliance Committee shall be responsible for monitoring and coordinating MERS’ and MERSCORP’s compliance with the terms and provisions of this Order. The Compliance Committee shall meet at least monthly and maintain minutes of its meetings.
(2)    Within ninety (90) days of this Order, and within thirty (30) days of the end of each calendar quarter thereafter, the Compliance Committee shall submit a written progress report to the Boards setting forth in detail its actions taken to comply with each Article of this Consent Order, and the results and status of those actions.
(3)    The Boards shall forward a copy of the Compliance Committee’s report, with any additional comments by the Boards, to the Deputy Comptroller and the OCC Examiner-in- Charge within ten (10) days of receiving such report.
(1)    Within ninety (90) days of this Order, MERS and MERSCORP shall jointly develop and submit to the Deputy Comptroller an acceptable plan containing a complete description of the actions that are necessary and appropriate to achieve compliance with the terms and provisions of this Order (“Action Plan”), as well as the resources to be devoted to the planned actions, with respect to services provided to Examined Members. In the event the Deputy Comptroller requests MERS or MERSCORP to revise the Action Plan, they shall immediately make the requested revisions and resubmit the Action Plan to the Deputy Comptroller. Following acceptance of the Action Plan by the Deputy Comptroller, MERS and
MERS Consent Order
MERSCORP shall not take any action that would constitute a significant deviation from, or material change to the requirements of the Action Plan, or this Order, unless and until MERS or MERSCORP have received a prior written determination of no supervisory objection from the Deputy Comptroller.
(2)    The Boards shall ensure that MERS and MERSCORP achieve and thereafter maintain compliance with this Order, including, without limitation, successful implementation of the Action Plan. The Boards shall further ensure that, upon implementation of the Action Plan, MERS and MERSCORP achieve and maintain effective residential mortgage and foreclosure- related services on behalf of Examined Members, as well as associated risk management, compliance, quality control, audit, training, staffing, and related functions. In order to comply with these requirements, the Boards shall:
(a)    require the timely reporting by MERS and MERSCORP management of such actions taken to comply with this Order and/or directed by either Board to be taken pursuant to this Order;
(b)    follow-up on any compliance issues with such actions in a timely and appropriate manner; and
(c)    require corrective action be taken in a timely manner for any non- compliance with such actions.
(3)    The Action Plan shall address, at a minimum: (a)    the capability of the Boards and senior management to ensure that MERS
and MERSCORP are operated in a safe and sound manner in accordance with applicable laws, regulations and requirements of this Order;
MERS Consent Order
(b)    development and implementation of a strategic plan to include a comprehensive review of business operations, including the risks associated with each business line, and recommendations to implement the strategic plan;
(c)    consistent with the strategic plan, development and implementation of a financial plan to ensure that MERSCORP and MERS have adequate financial strength to support business operations related to Examined Members. The financial plan, at a minimum, shall address:
and liquidity risk; and
any need for additional capital, including the amount and source of
the identification, measurement, monitoring and control of funding
(iii) discretionary expenses and improve and sustain earnings, as well as maintain adequate reserves for contingency risks and liabilities;
(d)    development and implementation of a comprehensive litigation strategy to effectively manage lawsuits and legal challenges involving MERS and MERSCORP, regardless of whether MERSCORP or MERS is a named party, including early identification and tracking of such lawsuits and challenges;
(e)    development and implementation of a communication plan to communicate effectively and in a timely manner with MERSCORP’s shareholders, Members including Examined Members, and relevant external parties;
(f)    development and implementation of a compliance and quality assurance program for ensuring that Examined Members implement and follow all of the Rules, including
MERS Consent Order
a profit and budget plan to include specific goals to reduce
adherence to the requirements set forth in MERS Announcement 2011-01, dated February 16, 2011;
(g)    development and implementation of a plan to ensure that MERS certifying officers are transitioned expeditiously onto the Corporate Resolution Management System (“CRMS”) in accordance with MERS’ current certifying officer policy and process;
(h)    development and implementation of appropriate standards to maintain separation of corporate functions between MERS and MERSCORP;
(i)    review of the effectiveness of the Rules, and related Procedures, Terms and Conditions to determine what, if any, additions, amendments, or deletions are appropriate;
(j)    development and implementation of enhanced information reporting practices to senior management from lower levels of each organization, and from senior management to the Boards to ensure that significant issues are properly identified and escalated, and that corporate actions are considered, taken in a timely fashion, and properly documented;
(k)    any Matter Requiring Attention in the OCC Supervisory Letter No. MERS 2011-01, dated January 19, 2011, that addresses an issue that is not otherwise covered by provisions of this Order; and
(l)    development of contingency plans to address issues that arise with respect to any of the foregoing elements of the Action Plan, including plans that address operational continuity issues in the normal course of business and in a stressed environment.
(4)    The Action Plan shall specify timelines for completion of each of the requirements of this Order. The timelines in the Action Plan shall be consistent with any deadlines set forth in this Order.

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