Post by Admin on Sept 23, 2015 23:28:17 GMT
Greetings:
MERS vs. 200+ years of US property law is probably our single biggest current test of the “rule of law”. Since it is difficult to move land across state boundaries (requires lots of dump trucks), it is not an obvious “interstate commerce” issue the way railroads are, so presumably the default is to leave it as a state issue to be addressed in state courts.
The big banks are trying to argue that local and state laws are largely irrelevant to them (Too Big to Care?) since the laws very clearly state that mortgages and deeds are governed by state law and are typically administered on the county level.
MERS would also be a classic example of a potential RICO litigation since it would be hard to argue against it not being racketeering and collusion between multiple large parties.
FOR THE RECORD:
In my specific case, Plaintiff HSBC Bank alleges that it is the holder in due course on the subject mortgage and note yet it is the belief of the Defendant Anderson that the note was part of larger securitization process and sold to several un-named parties and beneficial owners and any claims by Plaintiff, in the absence of the original note endorsed to Plaintiff, are a clear misrepresentation of the actual facts.
If the court were to allow the Plaintiff in this case to prevail in light of serious misrepresentation and fraud upon the court, it would result in a major injustice to the Defendant Anderson.
The Court cannot be in a position of enabling Plaintiff and its attorneys to commit material misrepresentation or felony crimes.
In fact true, the courts would open the door to incredible harm to any homeowner whose home is secured by a mortgage.
But what do I know? I'm not an attorney.
States Fight Back Against MERS Mortgage Fraud | The Big Picture
MERS: The Center of the Mortgage Scam
A prominent economist said about the 2008 financial crisis:
The Mortgage Electronic Registration Systems – MERS – was one of the main ways the swindle was done, and the main way in which counterfeit mortgages were laundered by the banks.
MERS is a shell company with no employees, owned by the giant banks.
It is the company created and owned by all of the big banks to process title to property in the U.S. Approximately 60% of the nation’s residential mortgages are recorded in the name of MERS.
MERS is a shell corporation with no employees, but thousands of officers.
As the treasurer and secretary of MERS admitted in a deposition:
Q Does MERS have any salaried employees??
A No.
Q Does MERS have any employees?
A Did they ever have any? I couldn’t hear you.
Q Does MERS have any employees currently?
A No.
Q In the last five years has MERS had any employees?
A No.
Q To whom do the officers of MERS report?
A The Board of Directors.
MERS threw out centuries of well-established law about how real estate is transferred – and cheated governments out of many tens or hundreds of billions of dollars in recording fees.
Matt Taibbi pointed out:
"MERS … is essentially an effort at systematically evading taxes … and hiding information from homeowners in ways that enabled the Countrywides of the world to defraud investors and avoid legal consequences for same."
***
MERS was at least in part dreamed up by Angelo Mozilo of Countrywide.
***
For those of you wondering why so many localities are broke, here’s one small factor in the revenue drain. Counties typically charge a small fee for mortgage registration, roughly $30.
But with MERS, … you don’t need to pay the fee every time there’s an ownership transfer. Multiply that by 67 million mortgages and you’re talking about billions in lost fees for local governments (some estimates place the total at about $200 billion).
Outrageously, MERS actually marketed itself to its customers as a way to save money by avoiding the payment of legally mandated registration fees.
Check out this MERS brochure from 2007. It brags on the face page about its fee-avoiding qualities (“MINIMIZE RISK. SAVE MONEY. REDUCE PAPERWORK”) and inside the brochure, in addition to boasting about helping clients “Foreclose More Quickly,” it talks about how clients save money because MERS “eliminates the need to record assignments in the name of the Trustee.”
All of this adds up to a system that enabled the mortgage industry to avoid keeping any kind of proper paperwork on its frantic, coke-fueled selling and re-selling of mortgage-backed securities during the bubble, and to help the both the Countrywide-style subprime merchants and the big banks like Goldman and Chase pull off the mass sales of crappy loans as AAA-rated securities.
Harper’s reported:
“What’s happened,” said Christopher Peterson, a law professor at the University of Utah who has written extensively about MERS, “is that, almost overnight, we’ve switched from democracy in real-property recording to oligarchy in real-property recording.”
The county clerks who established the ownership of land, who oversaw and kept the records, were democratically elected stewards of those records, said Peterson. Now a corporation headquartered outside Washington, D.C., oversaw the records. “There was no court case behind this, no statute from Congress or the state legislatures,” Peterson told me. “It was accomplished in a private corporate decision. The banks just did it.”
Peterson said it was “not a coincidence” that more Americans than at any time since the Great Depression were being forced out of their homes just as records of home ownership and mortgages were transferred wholesale to a privatized database.
MERS was also the engine which allowed securitization of mortgages.
Bloomberg reported:
MERS played a key role in the bundling of mortgages into securities that reached a frenzy before the economic decline of 2008, critics including Grayson of Florida said. It allowed banks to sell and resell home loans faster, easier and cheaper, he said.
“MERS is the central device by which the banks have tried to opt out of the legal system and the real-property record system,” U.S. Representative Alan Grayson of Florida said in an interview.
“They have taken it upon themselves, with the supposed consent of the borrowers, to violate a system of property record-keeping that we’ve had going back centuries.”
Attorneys General of all 50 states opened a joint investigation into home foreclosures Oct. 13, saying they will seek an immediate halt to any improper practices at banks and mortgage companies. The announcement came after several banks, including Bank of America Corp., halted foreclosures in either all states or the 23 with judicial supervision of foreclosures.
“It appears that on a widespread and probably pervasive basis, they did not take the steps necessary to own the note,” Grayson said in a Sept. 30 video he recorded about MERS, “which means that in 45 out of the 50 states they lack the legal right to foreclose.”
Uploaded on Sep 30, 2010
This is Rep. Alan Grayson explaining the crisis of foreclosure fraud and how it links to the entire securitization chain of Wall Street.
“MERS was a facilitator of securitization,” said Grayson, a Democratic member of the House Financial Services Committee.
How?
Steve Liesman explained in 2007:
How do you create a subprime derivative? …You take a bunch of mortgages… and put them into one big thing. We call it a Mortgage Backed Security. Say it’s $50 million worth… Now you take a bunch of these Mortgage Backed Securities and you put them into one very big thing… The one thing about all these guys here (in the one very big thing) is that they’re all subprime borrowers, their credit is bad or there’s something about them that doesn’t make it prime…
Watch, we’re going to make some triple A paper out of this… Now we have a $1 billion vehicle here. We’re going to slice it up into five different pieces. Call them tranches… The key is, they’re not divided by “Jane’s is here” and “Joe’s is here.” Jane is actually in all five pieces here. Because what we’re doing is, the BBB tranche, they’re going to take the first losses for whoever is in the pool, all the way up to about 8% of the losses.
What we’re saying is, you’ve got losses in the thing, I’m going to take them and in return you’re going to pay me a relatively high interest rate… All the way up to triple A, where 24% of the losses are below that. Twenty-four percent have to go bad before they see any losses. Here’s the magic as far as Wall Street’s concerned. We have taken subprime paper and created GE quality paper out of it.
We have a triple A tranche here.
Ellen Brown explained the significance of MERS in this process:
The top tranche is triple A because it includes the mortgages that did NOT default; but no one could know which those were until the defaults occurred, when the defaulting mortgages got assigned to the lower tranches and foreclosure went forward. That could explain why the mortgages could not be assigned to the proper group of investors immediately: the homes only fell into their designated tranches when they went into default.
The clever designers of these vehicles tried to have it both ways by conveying the properties to an electronic dummy conduit called MERS (an acronym for Mortgage Electronic Registration Systems), which would hold them in the meantime. MERS would then assign them to the proper tranche as the defaults occurred. But the rating agencies required that the conduit be “bankruptcy remote,” which meant it could hold title to nothing; and courts have started to take notice of this defect.
[…]
Now, this we love!
Relief Must Come at the State Level
Property recording laws are state laws, and the states have always been the bedrock for property rights.
Given that the head of the U.S. Department of Justice used to represent MERS – and that the D.C. politicians are (with a few exceptions) lackeys for the big banks which own MERS – the only hope is at the state level.
Some state courts have, in fact, declared MERS illegal … or at least without power to foreclose on property.
Harper’s notes:
After the housing market collapsed, however, MERS found itself under attack in courts across the country. MERS had singlehandedly unraveled centuries of precedent in property titling and mortgage recordation, and judges in state appellate and federal bankruptcy courts in more than a dozen jurisdictions—the primary venues where real estate cases are decided— determined that the company did not have the right to foreclose on the mortgages it held.
In 2009, Kansas became one of the first states to have its supreme court rule against MERS. In Landmark National Bank v. Boyd A. Kesler, the court concluded that MERS failed to follow Kansas statute: the company had not publicly recorded the chain of title with the relevant registers of deeds in counties across the state.
A mortgage contract, the justices wrote, consists of two documents: the deed of trust, which secures the house as collateral on a loan, and the promissory note, which indebts the borrower to the lender. The two documents were sometimes literally inseparable: under the rules of the paper recording system at county court-houses, they were tied together with a ribbon or seal to be undone only once the note had been paid off. “In the event that a mortgage loan somehow separates interests of the note and the deed of trust, with the deed of trust lying with some independent entity,” said the Kansas court, “the mortgage may become unenforceable.”
MERS purported to be the independent entity holding the deed of trust. The note of indebtedness, however, was sold within the MERS system, or “assigned” among various lenders. This was in keeping with MERS’s policy: it was not a bank, made no loans, had no money to lend, and did not collect loan payments. It had no interest in the loan, only in the deed of trust.
The company—along with the lenders that had used it to assign ownership of notes—had thus entered into a vexing legal bind. “There is no evidence of record that establishes that MERS either held the promissory note or was given the authority [to] assign the note,” the Kansas court found, quoting a decision from a district court in California. Not only did MERS fail to legally assign the notes, the company presented “no evidence as to who owns the note.”
Similar cases were brought before courts in Idaho, Massachusetts, Missouri, Nevada, New York, Oregon, Utah, and other states.
The language in the judgments against MERS became increasingly denunciatory.
MERS’s arguments for standing in foreclosure were described as “absurd,” forcing courts to move through “a syntactical fog into an impassable swamp.”
more
MERS vs. 200+ years of US property law is probably our single biggest current test of the “rule of law”. Since it is difficult to move land across state boundaries (requires lots of dump trucks), it is not an obvious “interstate commerce” issue the way railroads are, so presumably the default is to leave it as a state issue to be addressed in state courts.
The big banks are trying to argue that local and state laws are largely irrelevant to them (Too Big to Care?) since the laws very clearly state that mortgages and deeds are governed by state law and are typically administered on the county level.
MERS would also be a classic example of a potential RICO litigation since it would be hard to argue against it not being racketeering and collusion between multiple large parties.
FOR THE RECORD:
In my specific case, Plaintiff HSBC Bank alleges that it is the holder in due course on the subject mortgage and note yet it is the belief of the Defendant Anderson that the note was part of larger securitization process and sold to several un-named parties and beneficial owners and any claims by Plaintiff, in the absence of the original note endorsed to Plaintiff, are a clear misrepresentation of the actual facts.
If the court were to allow the Plaintiff in this case to prevail in light of serious misrepresentation and fraud upon the court, it would result in a major injustice to the Defendant Anderson.
The Court cannot be in a position of enabling Plaintiff and its attorneys to commit material misrepresentation or felony crimes.
In fact true, the courts would open the door to incredible harm to any homeowner whose home is secured by a mortgage.
But what do I know? I'm not an attorney.
States Fight Back Against MERS Mortgage Fraud | The Big Picture
MERS: The Center of the Mortgage Scam
A prominent economist said about the 2008 financial crisis:
“At the root of the crisis we find the largest financial swindle in world history”,
where “counterfeit” mortgages were “laundered” by the banks.
where “counterfeit” mortgages were “laundered” by the banks.
The Mortgage Electronic Registration Systems – MERS – was one of the main ways the swindle was done, and the main way in which counterfeit mortgages were laundered by the banks.
MERS is a shell company with no employees, owned by the giant banks.
It is the company created and owned by all of the big banks to process title to property in the U.S. Approximately 60% of the nation’s residential mortgages are recorded in the name of MERS.
MERS is a shell corporation with no employees, but thousands of officers.
As the treasurer and secretary of MERS admitted in a deposition:
Q Does MERS have any salaried employees??
A No.
Q Does MERS have any employees?
A Did they ever have any? I couldn’t hear you.
Q Does MERS have any employees currently?
A No.
Q In the last five years has MERS had any employees?
A No.
Q To whom do the officers of MERS report?
A The Board of Directors.
MERS threw out centuries of well-established law about how real estate is transferred – and cheated governments out of many tens or hundreds of billions of dollars in recording fees.
Matt Taibbi pointed out:
"MERS … is essentially an effort at systematically evading taxes … and hiding information from homeowners in ways that enabled the Countrywides of the world to defraud investors and avoid legal consequences for same."
***
MERS was at least in part dreamed up by Angelo Mozilo of Countrywide.
***
For those of you wondering why so many localities are broke, here’s one small factor in the revenue drain. Counties typically charge a small fee for mortgage registration, roughly $30.
But with MERS, … you don’t need to pay the fee every time there’s an ownership transfer. Multiply that by 67 million mortgages and you’re talking about billions in lost fees for local governments (some estimates place the total at about $200 billion).
Outrageously, MERS actually marketed itself to its customers as a way to save money by avoiding the payment of legally mandated registration fees.
Check out this MERS brochure from 2007. It brags on the face page about its fee-avoiding qualities (“MINIMIZE RISK. SAVE MONEY. REDUCE PAPERWORK”) and inside the brochure, in addition to boasting about helping clients “Foreclose More Quickly,” it talks about how clients save money because MERS “eliminates the need to record assignments in the name of the Trustee.”
All of this adds up to a system that enabled the mortgage industry to avoid keeping any kind of proper paperwork on its frantic, coke-fueled selling and re-selling of mortgage-backed securities during the bubble, and to help the both the Countrywide-style subprime merchants and the big banks like Goldman and Chase pull off the mass sales of crappy loans as AAA-rated securities.
Harper’s reported:
“What’s happened,” said Christopher Peterson, a law professor at the University of Utah who has written extensively about MERS, “is that, almost overnight, we’ve switched from democracy in real-property recording to oligarchy in real-property recording.”
The county clerks who established the ownership of land, who oversaw and kept the records, were democratically elected stewards of those records, said Peterson. Now a corporation headquartered outside Washington, D.C., oversaw the records. “There was no court case behind this, no statute from Congress or the state legislatures,” Peterson told me. “It was accomplished in a private corporate decision. The banks just did it.”
Peterson said it was “not a coincidence” that more Americans than at any time since the Great Depression were being forced out of their homes just as records of home ownership and mortgages were transferred wholesale to a privatized database.
The Securitized Sausage Maker
MERS was also the engine which allowed securitization of mortgages.
Bloomberg reported:
MERS played a key role in the bundling of mortgages into securities that reached a frenzy before the economic decline of 2008, critics including Grayson of Florida said. It allowed banks to sell and resell home loans faster, easier and cheaper, he said.
“MERS is the central device by which the banks have tried to opt out of the legal system and the real-property record system,” U.S. Representative Alan Grayson of Florida said in an interview.
“They have taken it upon themselves, with the supposed consent of the borrowers, to violate a system of property record-keeping that we’ve had going back centuries.”
Attorneys General of all 50 states opened a joint investigation into home foreclosures Oct. 13, saying they will seek an immediate halt to any improper practices at banks and mortgage companies. The announcement came after several banks, including Bank of America Corp., halted foreclosures in either all states or the 23 with judicial supervision of foreclosures.
“It appears that on a widespread and probably pervasive basis, they did not take the steps necessary to own the note,” Grayson said in a Sept. 30 video he recorded about MERS, “which means that in 45 out of the 50 states they lack the legal right to foreclose.”
Uploaded on Sep 30, 2010
This is Rep. Alan Grayson explaining the crisis of foreclosure fraud and how it links to the entire securitization chain of Wall Street.
“MERS was a facilitator of securitization,” said Grayson, a Democratic member of the House Financial Services Committee.
How?
Steve Liesman explained in 2007:
How do you create a subprime derivative? …You take a bunch of mortgages… and put them into one big thing. We call it a Mortgage Backed Security. Say it’s $50 million worth… Now you take a bunch of these Mortgage Backed Securities and you put them into one very big thing… The one thing about all these guys here (in the one very big thing) is that they’re all subprime borrowers, their credit is bad or there’s something about them that doesn’t make it prime…
Watch, we’re going to make some triple A paper out of this… Now we have a $1 billion vehicle here. We’re going to slice it up into five different pieces. Call them tranches… The key is, they’re not divided by “Jane’s is here” and “Joe’s is here.” Jane is actually in all five pieces here. Because what we’re doing is, the BBB tranche, they’re going to take the first losses for whoever is in the pool, all the way up to about 8% of the losses.
What we’re saying is, you’ve got losses in the thing, I’m going to take them and in return you’re going to pay me a relatively high interest rate… All the way up to triple A, where 24% of the losses are below that. Twenty-four percent have to go bad before they see any losses. Here’s the magic as far as Wall Street’s concerned. We have taken subprime paper and created GE quality paper out of it.
We have a triple A tranche here.
Ellen Brown explained the significance of MERS in this process:
The top tranche is triple A because it includes the mortgages that did NOT default; but no one could know which those were until the defaults occurred, when the defaulting mortgages got assigned to the lower tranches and foreclosure went forward. That could explain why the mortgages could not be assigned to the proper group of investors immediately: the homes only fell into their designated tranches when they went into default.
The clever designers of these vehicles tried to have it both ways by conveying the properties to an electronic dummy conduit called MERS (an acronym for Mortgage Electronic Registration Systems), which would hold them in the meantime. MERS would then assign them to the proper tranche as the defaults occurred. But the rating agencies required that the conduit be “bankruptcy remote,” which meant it could hold title to nothing; and courts have started to take notice of this defect.
[…]
Now, this we love!
Relief Must Come at the State Level
Property recording laws are state laws, and the states have always been the bedrock for property rights.
Given that the head of the U.S. Department of Justice used to represent MERS – and that the D.C. politicians are (with a few exceptions) lackeys for the big banks which own MERS – the only hope is at the state level.
Some state courts have, in fact, declared MERS illegal … or at least without power to foreclose on property.
Harper’s notes:
After the housing market collapsed, however, MERS found itself under attack in courts across the country. MERS had singlehandedly unraveled centuries of precedent in property titling and mortgage recordation, and judges in state appellate and federal bankruptcy courts in more than a dozen jurisdictions—the primary venues where real estate cases are decided— determined that the company did not have the right to foreclose on the mortgages it held.
In 2009, Kansas became one of the first states to have its supreme court rule against MERS. In Landmark National Bank v. Boyd A. Kesler, the court concluded that MERS failed to follow Kansas statute: the company had not publicly recorded the chain of title with the relevant registers of deeds in counties across the state.
A mortgage contract, the justices wrote, consists of two documents: the deed of trust, which secures the house as collateral on a loan, and the promissory note, which indebts the borrower to the lender. The two documents were sometimes literally inseparable: under the rules of the paper recording system at county court-houses, they were tied together with a ribbon or seal to be undone only once the note had been paid off. “In the event that a mortgage loan somehow separates interests of the note and the deed of trust, with the deed of trust lying with some independent entity,” said the Kansas court, “the mortgage may become unenforceable.”
MERS purported to be the independent entity holding the deed of trust. The note of indebtedness, however, was sold within the MERS system, or “assigned” among various lenders. This was in keeping with MERS’s policy: it was not a bank, made no loans, had no money to lend, and did not collect loan payments. It had no interest in the loan, only in the deed of trust.
The company—along with the lenders that had used it to assign ownership of notes—had thus entered into a vexing legal bind. “There is no evidence of record that establishes that MERS either held the promissory note or was given the authority [to] assign the note,” the Kansas court found, quoting a decision from a district court in California. Not only did MERS fail to legally assign the notes, the company presented “no evidence as to who owns the note.”
Similar cases were brought before courts in Idaho, Massachusetts, Missouri, Nevada, New York, Oregon, Utah, and other states.
The language in the judgments against MERS became increasingly denunciatory.
MERS’s arguments for standing in foreclosure were described as “absurd,” forcing courts to move through “a syntactical fog into an impassable swamp.”
“It appears that every MERS mortgage,”
a New York State Supreme Court judge recently told me,
“is defective, a piece of crap.”
a New York State Supreme Court judge recently told me,
“is defective, a piece of crap.”
more