BREAKING NEWS —
The case of MERSCORP Holdings, Inc. v. Daniel and Darla Robinson is headed for the U.S. 9th Circuit Court of Appeals.
Oral arguments are set to be heard on Thursday, December 8, 2016 in the Pasadena, California branch and California Attorney Al West, contributor to THE QUIET TITLE WAR MANUAL is now admitted to practice before the U.S. 9th Circuit and is slated to present the oral argument, at the insistence of the Robinsons.
If you are within traveling distance of the Pasadena, California branch, Al West has requested that you “pack the courtroom” for this event!
There are several key issues here that are of national importance, which is what some judges are saying makes this case a national landmark case:
- where a federal judge has reversed a state judge’s ruling on a quiet title action, when the parties who claim an interest had a state court remedy to open up the judgment and challenge it and failed to exercise that right;
- where MERS and MERSCORP came in and accused the judge of being an “actor” in depriving MERS and MERSCORP of their civil rights; and
- where MERS and MERSCORP claimed they were entitled to notice, yet there is nothing in the Robinson’s Deed of Trust that entitles MERS to: (a.) notice rights; and (b.) assign any interest to anyone.
It is unprecedented that a federal judge would reverse himself and undo a quiet title action. Needless to say, word has it that when the state judge found out that he was accused of being an “actor” because he “colluded” and “conspired” with Al West and the Robinsons to obtain a quiet title judgment, he was pissed! Frankly, I don’t blame him. Every other state judge should be worried as well … if the 9th Circuit deems that the state judge conspired with Al West and the Robinsons and allows this to stand, then every state judge in America can be overturned for any ruling by a federal court, just because some “shell” entity (or anyone for that matter) can come in and tell the court that their civil rights were violated!
That would also mean that anyone doing a quiet title action might as well forget it, because MERS and MERSCORP do not care about your property rights or your contractual obligation to defend title. They do not care if your chain of title has been trashed or compromised, impairing its vendibility. We’ve heard state judges even say, “The only parties that get to quiet title are the banks!” So you know that the entire system is slanted in their favor because: (a.) judges are drawing pensions which are vested in these RMBS REMICs; and (b.) judges in this country are “bought and paid for” and there are very few judges that are standing up for the homeowner.
The Robinson case could end up in front of the United States Supreme Court because the circuits are split on what MERS is and isn’t allowed to do within the parameters of a contract. The states themselves are split on what MERS is and isn’t allowed to do within the parameters of a contract. Here’s some examples:
On February 10, 2011, in the case In re Ferrell Agard, New York Bankruptcy Court Judge Robert Grossman eviscerated MERS’s agency relationship in a scathing 37-page opinion, in response to affidavits filed by then MERSCORP Secretary William Hultman, who intervened in the case, trying to make an argument bolstering MERS’s authority to be an nominee and thus, an assignor/assignee of mortgages. Negating that argument, Grossman wrote:
“The Court recognizes that an adverse ruling regarding MERS’s authority to assign mortgages or act on behalf of its member/lenders could have a significant impact on MERS and upon the lenders which do business with MERS throughout the United States. However, the Court must resolve the instant matter by applying the laws as they exist today. It is up to the legislative branch, if it chooses, to amend the current statutes to confer upon MERS the requisite authority to assign mortgages under its current business practices. MERS and its partners made the decision to create and operate under a business model that was designed in large part to avoid the requirements of the traditional mortgage recording process. This Court does not accept the argument that because MERS may be involved with 50% of all residential mortgages in the country, that is reason enough for this Court to turn a blind eye to the fact that this process does not comply with the law.”
One month later (March 10, 2011), the Supreme Court of the State of New York, Appellate Division, Second Judicial Department (in the case of Bank of New York v. Silverberg, Case No. 2010-00131, Index No. 17464-08) issued an opinion and order that went solidly against MERS, to wit:
“This matter involves the enforcement of the rules that govern real property and whether such rules should be bent to accommodate a system that has taken on a life of its own. The issue presented on this appeal is whether a party has standing to commence a foreclosure action when that party’s assignor—in this case, Mortgage Electronic Registration Systems, Inc. (hereinafter MERS)—was listed in the underlying mortgage instruments as a nominee and mortgagee for the purpose of recording, but was never the actual holder or assignee of the underlying notes. We answer this question in the negative.”
That decision put New York State on the map against MERS in the appellate court level as well as in at least one bankruptcy court. It should come as no surprise that Wells Fargo would later find itself in trouble with another bankruptcy court justice (Hon. Robert D. Drain) for using MERS in robosigning documents in favor of Wells Fargo, in an attempt to create fraudulent standing, based on a 150-page “foreclosure attorney manual”, instructing attorneys to simply contact Wells’s document manufacturing plant in Minnesota … and the folks there would just “make up an assignment out of thin air”, just for the purpose of proving up a proof of claim in bankruptcy court. That case, In re Carrsow-Franklin, did not fair well for Wells Fargo when the debtor’s attorney, Linda Tirelli, exposed the attorney manual to the court.
In Washington State, the decision in Kristin Bain v. Metropolitan Mortgage Group of August 16, 2012 rendered a ruling from that state’s Supreme Court (Case No. 86206-1, consolidated with 86207-9) that MERS was NOT a valid beneficiary under the Washington Deed of Trust Act.
Shortly after the Bain decision, the Oregon Supreme Court decided the same thing in Niday v. GMAC Mortgage LLC and Brandrup v. ReconTrust Company et al … and ruled MERS was not a valid beneficiary under the Oregon Deed of Trust Act. Shortly after the two Oregon decisions, the Montana Supreme Court decided that MERS did not have the authority (as a nominee) to appoint a Substitute Trustee in the Pilgeram v. Greenpoint Mortgage Funding, Inc. case. These decisions were pointed out in the next paragraph.
On June 12, 2014, in a class-action lawsuit styled In re: Mortgage Electronic Registration Systems, Inc. (No. 11-17615), the U.S. 9th Circuit Court of Appeals ruled that a multi-district litigation panel set up in Arizona to look into the use of MERS in suspect fraudulent document manufacturing in a case in Arizona, reversing Count 1 of a federal appellate court ruling, wherein the Court opined (in 31 pages), the conflicts throughout the entire U.S. court system:
“There has been a wave of litigation in state and federal courts challenging various aspects of the MERS System. Almost all of the relevant law is state rather than federal. The results under state law have been inconsistent. See Weber, supra, at 246–56 (cataloguing the “schizophrenic position of state courts” on issues relating to the MERS System). Some state supreme courts have upheld the MERS System on issues ranging from foreclosure authority to recording requirements. See, e.g., Renshaw v. Mortg. Elec. Registration Sys., Inc., 315 P.3d 844, 846–47 (Idaho 2013) (holding that MERS may be a beneficiary as nominee for the lender, that assignments of the deed of trust between MERS members need not be recorded, that MERS was not liable to the borrower in negligence, and that the Idaho Consumer Protection Act did not provide a cause of action to the borrower); Jackson v. Mortg. Elec. Registration Sys., Inc., 770 N.W.2d 487, 501 (Minn. 2009) (holding that Minnesota law does not require recording of assignments of promissory notes among MERS members); Edelstein v. Bank of N.Y. Mellon, 286 P.3d 249, 252 (Nev. 2012) (stating that, although a split note and deed are not enforceable, under Nevada law “any split is cured when the promissory note and the deed of trust are reunified”); Bucci v. Lehman Bros. Bank, FSB, 68 A.3d 1069, 1081, 1083–89 (R.I. 2013) (holding that MERS had the contractual authority to invoke the power of sale and the right to foreclose and that Rhode Island law did not preclude foreclosure where the noteholder and the mortgagee were not the same entity).
Other state supreme courts have reached essentially opposite conclusions. See, e.g., Mortg. Elec. Registration Sys., Inc. v. Sw. Homes of Ark., 301 S.W.3d 1, 4 (Ark. 2009) (holding that, because MERS receives no payments on the debt, it is not the beneficiary, even though it is so designated in the deed of trust); Landmark Nat’l Bank v. Kesler, 216 P.3d 158, 166–67 (Kan. 2009) (“[I]n 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, the mortgage may become unenforceable.”); Mortg. Elec. Registration Sys., Inc. v. Saunders, 2 A.3d 289, 297 (Me. 2010) (holding that MERS lacked standing to foreclose as the lender’s nominee); CPT Asset Backed Certificates, Series 2004-EC1 v. Cin Kham, 278 P.3d 586, 592–93 (Okla. 2012) (holding that the putative noteholder lacked standing to foreclose because MERS lacked authority to assign the note, though it arguably had authority to assign the mortgage); Brandrup v. ReconTrust Co., N.A., 303 P.3d 301, 304–05 (Or. 2013) (en banc) (holding that MERS was not the “beneficiary” of a deed of trust under the Oregon Trust Deed Act absent conveyance to MERS of the beneficial right to repayment, and that MERS could not hold or transfer legal title to the deed as the lender’s nominee); Bain v. Metro. Mortg. Grp., Inc., 285 P.3d 34 (Wash. 2012) (en banc) (holding that “MERS is an ineligible ‘“beneficiary” within the terms of the Washington Deed of Trust Act’ if it never held the promissory note or other debt instrument secured by the deed of trust,” and that “characterizing MERS as the beneficiary has the capacity to deceive” and may give rise to an action under the Consumer Protection Act); see also MERSCORP, Inc. v. Romaine, 861 N.E.2d 81, 88–89 (N.Y. 2006) (Kaye, C.J., dissenting in part) (identifying concerns with the MERS system and “at least a disparity between the relevant statute . . . and the burgeoning modern-day electronic mortgage industry”).
Federal courts, applying state law, have reached similarly disparate results. Compare, e.g., Montgomery Cnty., Pa. v. MERSCORP, Inc., 904 F. Supp. 2d 436, 441 (E.D. Pa. 2012) (applying Pennsylvania law and holding that the County’s allegations that MERS violated recording statutes by failing to record assignments stated a claim for relief), In re Thomas, 447 B.R. 402, 412 (Bankr. D. Mass. 2011) (applying Massachusetts law and holding that “[w]hile the assignment purports to assign both the mortgage and the note, MERS . . . was never the holder of the note, and therefore lacked the right to assign it. . . . MERS is never the owner of the obligation secured by the mortgage for which it is the mortgagee of record”), and In re Wilhelm, 407 B.R. 392, 404 (Bankr. D. Idaho 2009) (applying Idaho law and holding that MERS is not authorized “either expressly or by implication” to transfer notes as the “nominal beneficiary” of the lender), with Town of Johnston v. MERSCORP, Inc., 950 F. Supp. 2d 379, 384 (D.R.I. 2013) (holding Rhode Island law does not require recording of assignments among MERS members); DeFranceschi v. Wells Fargo Bank, N.A., 837 F. Supp. 2d 616, 623 (N.D. Tex. 2011) (granting summary judgment to defendants on plaintiffs’ claims that assignments by MERS were invalid and rendered foreclosure defective), and Moore v. McCalla Raymer, LLC, 916 F. Supp. 2d 1332, 1344–45 (N.D. Ga. 2013) (applying Georgia law and holding that, even assuming the plaintiff had standing to challenge the foreclosure on the theory that MERS assignments were invalid, that theory did not provide a basis for a wrongful foreclosure claim).”
The foregoing was used simply to illustrate the disparity in case law involving MERS, which is further reasoned as a necessity for the Robinson case to go to the nation’s highest court. The foregoing is also an understanding of what the 9th Circuit is thinking (and what MERS and its parent are up against) regarding said disparities.
A month after the 9th U.S. Circuit ruling, on July of 2014, in the Bank of America, N.A. v. Scott A. Greenleaf case, the Maine Supreme Court decided that MERS was a “mortgagee of record” and thus, was only allowed to assign that right, and no other, which brought foreclosures to a screeching halt (by roughly 65% according to attorney Tom Cox, who argued for Greenleaf).
In December of 2015, the Tennessee Supreme Court went further than any other Supreme Court in the U.S. in the case of Mortgage Electronic Registration Systems, Inc. v. Carlton J. Ditto, a pro se litigant who won rulings from the district, appellate and the Supremes … one of the only pro se litigants going up against MERS that I can find to accomplish such a feat. In that ruling, which I have discussed extensively on this blog, MERS has no authority to do anything according to the Court’s opinion.
Many other states have sported decisions in favor of MERS because attorneys representing homeowners had no idea what they were getting themselves into, further allowing MERS to get its arguments admitted into the record without objection because these same attorneys had no concept of MERS’s business model. Had these attorneys read Robert Janes’ “SHELL-GAME MERS, Contrived Confusion” BEFORE going into court, the outcomes may have been different!
My take on this … and I will be in court for the hearings on December 8th … is that no matter what this circuit decides, one or the other of these parties are going to take this up to “the big top”! Once the U.S. Supreme Court decides whether our nation’s court systems should support a private entity, which I conclude were created to hide the misdeeds and snafus of Fannie Mae and Freddie Mac, the sooner we can begin to identify and oust the legislators who put laws into place giving MERS credence anywhere in America.
The entire court system in America is at risk because of Robinson. This author has is on good authority that the entire court system in the U.S. is watching this case with more than just simple interest. The contract you sign at the closing table has everything to do with the arguments in this case, because a number of cases have been decided against MERS based on what the contract “didn’t say”. I would opine MERS’s arguments are indeed “schizophrenic”, as the Tennessee Supremes ruled in Ditto. We shall see.