(OP-ED) — This is an educational overview as to what has taken place in the American legal forums in the last two decades and my take on what it all means:
UPDATE: Please see my comments to Lori’s question in the comments section as to Bank of America’s claimed “successor by merger” BS to BAC Home Loans Servicing LP fka Countrywide Home Loans Servicing, LP, especially using MERS to hide the real truth!
On January 1, 1999, Mortgage Electronic Registration Systems, Inc. and its parent MERSCORP, Inc. (“MERSCORP”), surfaced as a new brainchild of the mortgage industry after two previously-failed efforts to put an effective electronic database into useable form.
MERSCORP is the “brain” part of the “brainchild” … Mortgage Electronic Registration Systems, Inc. is the “child” part of the “brainchild”.
The acronym known as “MERS” was attached to the “brainchild” to further confuse the system of things from being able to specifically identify whether the parent or the baby bastard child is coming into play at any given moment.
According to research done by Robert M. Janes, J.D. (retired attorney) in his work SHELLGAME MERS, Contrived Confusion (available at esprouts.com), the “MERS” known in mortgages and deeds of trust as Mortgage Electronic Registration Systems, Inc. HAS NO “MEMBERS”, despite what attorneys for “MERS” have told judges all across America. The entire system of things has bought into this crap. Our entire judicial system has been permeated with lies. As Hitler’s propaganda minister Joseph Goebbels stated (paraphrased), “tell a lie long enough and often enough and people will come to believe it as truth.”
MERSCORP however owned everything known as the MERS® System, up until the time that Intercontinental Exchange, Inc. (“ICE”, who also owns the New York Stock Exchange) bought MERSCORP and all of its assets and transferred all of the MERS servers to Mahwah, New Jersey, where ICE’s data servers are located. This happened in October of 2018. From February of 2012 until October of 2018, MERSCORP was merged into MERSCORP Holdings, Inc. and operated as such until ICE acquired it.
MERSCORP had all of the “Members” who technically are users and subscribers of its “MERS® System”. They have an executory contract with MERSCORP. As far as I can tell, when ICE acquired MERSCORP Holdings, Inc., ALL of the databases, memberships and every other facet of MERS went with the sale and transfer to ICE.
These latest developments also beg the question: Do I have to sue Intercontinental Exchange, Inc. if I want to go after MERSCORP Holdings, Inc., since ICE now owns MERSCORP? That’s a question for counsel to answer; however, I personally wouldn’t sue either one of them, knowing what I know about NOT giving MERS a “leg up” … and given the fact that MERSCORP is now backed by the power of Wall Street funding!
MERS WANTS TO BE “ALL THINGS TO ALL PEOPLE”
Unfortunately for MERS, one State (Tennessee)’s Supreme Court gutted MERS’s business model like a chicken in the Ditto decision. See attached:
MERS v DITTO_TN Supreme Court rules against MERS!
Unfortunately for the other 49 States, their respective Supreme Courts did not issue a ruling as succinctly as Tennessee’s ruling was. Only Washington (Bain), Oregon (Niday and Brandrup), Montana (Pilgeram), Maine (Greenleaf and Saunders), New York (Agard, Bresler, Collymore and Silverberg), Kansas (Kesler), Arkansas (SW Homes), Nebraska (Dept. of Banking and Finance) and Missouri (Bellistri) did some damage to the MERS® System, but nowhere near the damage inflicted in Ditto.
Sadly, for the rest of the country, especially in Minnesota (Jackson) and Michigan (Sauerman), where the foregoing cases have propelled the MERS business model into fruition, homeowners in those states (except Minnesota and Michigan, where homeowners are essentially f**cked) have a long, uphill battle against any securitized trust that made use of the MERS® System to do its bidding.
REPUDIATION AGREEMENTS: A POTENTIAL WAY OUT
If you were lucky enough to have a mortgage loan originated by New Century Mortgage Corporation or Fieldstone Mortgage Company, you may have a legal solution as a possibility to consider in maneuvering through the legal pitfalls created by the use of MERS in your mortgage security instrument.
To date, to my knowledge and research, these two entities were the only two entities that had executory contracts with MERSCORP (or any form thereafter) repudiated their contracts with the MERS® System and its owner/parent MERSCORP Holdings, Inc. See the attached below:
NCMC Notice of Repudiation
The foregoing repudiation was validated in the case of DiLibero v. MERS in Rhode Island. I like to use this case because the Rhode Island Supreme Court likes to rub homeowners’ noses in MERS’s bullshit every chance it gets because Little Rhody’s lower courts have bought into the lies propounded by MERSCORP-retained attorneys.
See the case here: DiLibero v MERS_2015-13-190
In a previous post, I talked about the positive outcome of using the repudiation agreement as a means to assert the lack of standing of the Plaintiff Bank, unlike what happened in the Cruz v MERS case, where Cruz lost because he didn’t use the repudiation agreement. Duh? (Was Cruz or his attorney even aware of this?)
See the case here: Cruz v. MERS_2015-12-136
The second known notice of repudiation was filed in the bankruptcy case of Fieldstone Mortgage Company, in a rather voluminous omnibus filing:
Fieldstone Mortgage Bankruptcy
As I teach in my COTA Workshops, repudiation of a contract in a Chapter 11 proceeding is like taking a dump. Getting rid of excess baggage that could potentially weigh you down as to legal issues coming back to bite you in the ass.
In what I’ve just presented, both entities unilaterally decided they didn’t want to play in the MERS® System any further because they deemed it a potential liability and thus NOTICED MERS that they were ending their relationship with MERSCORP. This has provided at least one homeowner with an “out”.
In what I deem is a “new twist” to the equation, the New York-based law firm of Jenner & Block (where Neil Barofsky works), issued a memo, dated January (2019), entitled “Recent Developments in Bankruptcy Law”, wherein Section 9 talks about “executory contracts” and where the debtor in possession (of whatever is part of the debtor’s estate or business) does not need court approval to repudiate (or cancel) an executory contract (see below):
NOTE: Click on the picture to see it in full size!
For a full copy of the report (in PDF format): Recent Developments in Bankruptcy Law, Jan 2019 (Jenner & Block)
What does THIS SAY for Chapter 11 petitioners who repudiate MERSCORP executory contracts NOT needing court approval? How do you know a MERSCORP executory contract with a so-called “MERS Member” was cancelled by the Chapter 11 debtor unless you ask about it (in discovery)? Would you care to go rummaging through bankruptcy court filings (at ten cents a page)? The repudiation agreement by the defunct lender or notice of such may not even be in there!
MERS AS A PLAINTIFF
In the states that allow Mortgage Electronic Registration Systems, Inc. to file a foreclosure action against a borrower, MERS is simply claiming that it’s exercising its right to foreclose per the language in the security instrument. In some cases I’ve seen, MERS’s attorneys even come in and attempt to claim a surplus after the sale, even though MERS itself receives no payments, incurs no financial harm, etc. (see Restatement of Mortgages, Third § 5.4), which I think the law firm is clearly attempting to pilfer whatever surplus it can get for its own gains and not those of MERS or its parent.
The problem I have with MERS being anywhere near a foreclosure is not so much the contractual angle, but the damage angle, based on the Spokeo v. Robins decision by the U.S. Supreme Court. How was MERS damaged? In the Robinson case in California, MERS plead to the 9th Circuit (as part of getting the appellate court to affirm the lower court’s ruling) that its business model would be harmed if the appellate court didn’t rule in its favor. You see how the lie permeates into the appellate court system?
Sadly, I liken MERSCORP CEO Bill Beckmann and his Board of Directors as a little Hitler and his band of little crony “yes-men”. They all need to be in jail! And speaking of Hitler …
MERS AS A DEFENDANT
The main reason that MERS (as Mortgage Electronic Registration Systems, Inc.) is listed as a Defendant in foreclosure cases is because the Plaintiff REMIC or servicer (posing as the party claiming to have the right to enforce the security instrument) wants to notice MERS in order for MERSCORP employees to check the database to make sure that there aren’t any other “mesne assignees” hiding somewhere within the chain of custody of the electronic trading going on involving that alleged loan, in order to provide a “clearing” of potential unknown Defendants that may come in later and file a claim in the case.
THE SUPREME COURT HAS (TO DATE) NOT ALLOWED ANTI-MERS CASES TO COME BEFORE IT
Writs of Certiorari have tried and failed. However, I still believe that we will continue to see more MERS-related decisions appealed to the nation’s highest court until the matter of MERS’s flawed business model and the damage it has inflicted on over 80-million homes finally gets resolved.
THE BOTTOM LINE IS STILL THE ASSIGNMENTS: THE DEVIL IS IN THE DETAILS!
Again, if you go into the back of The Quiet Title War Manual, you will see state-by-state listings of statutes that cover certain elements of law involving quiet title, declaratory relief, deficiency judgment law, etc. … and below that section, three individual paragraphs on actionable statutes and case law involving violation of statute in the recording of documents into the land records which contain false information (many of which are felony-rooted in nature) or violate provisions of state consumer protection act laws. We are now (based on my past posts) seeing the use of these mechanisms in attacking the banks’ attorney(s) (because sometimes there is more than one attorney or law firm involved in any given foreclosure) in turning a statutory violation into an ethical violation!
When a foreclosure mill attorney is put “at risk” of being suspended or being disbarred for suborning perjury, committing perjury or some other ethical misconduct, do you really think he (or she) is going to want to stay in the fight? Further, what future substituted law firm would want to step “into the pile of poop” created by the first law firm, knowing it would put itself “at risk” of having its Errors & Omissions insurance policy attacked?
Things To Watch Out For …
- Any entity that has filed for Chapter 11 Bankruptcy before 2010 … as to whether they got court approval to repudiate the MERSCORP executory contract.
This provides you with a potential argument (or at least an affirmative defense to a foreclosure) that MERS and its alleged “agents” (“officers’) for the “nominee” has any authority that was repudiated by the originating lender (debtor-in-possession);
2. Assignments dated AFTER the originating lender filed for bankruptcy (easily discovered on Google or Google Scholar).
You especially want to check for language within the assignments (of mortgage or deed of trust) that says, “together with the Note”, because MERS cannot transfer what it does not have an interest in. Secondly, not many people argue that there is no specific right delegated to MERS to “assign” anything. Thirdly, NOTES ARE NEGOTIATED … not transferred or assigned; and
3. Any mortgage foreclosure complaints, notices of trustee’s sale or similar notices that reflect that MERS has any authority to do anything, specific to the state of the union you are in.
Certain states, as I’ve mentioned before, do NOT allow MERS to do much of anything, while in other states, MERS can pretty much steamroller over homeowners.
My question is, why are you still living there? Or better yet, why haven’t you attacked the assignments in Consumer Protection or statutory claims?
The Devil Is In The Details
Always check the assignment of mortgage or deed of trust for:
- Self-dealing (by the servicer and its employees);
- Claims that the note was “assigned” in addition to the mortgage or deed of trust by MERS;
- Names and addresses of law firms involved in the assignment;
- Names and addresses of title companies involved in the assignment;
- Names and addresses of servicers involved in the assignment that claim the Plaintiff’s address is in c/o the servicer’s address;
- Names of known robosigners involved in the assignment;
- Names of notaries participating in the assignment that are acknowledging under PENALTY OF PERJURY;
- Phony MERS addresses (like their alleged Ocala, Florida address, which actually belonged to Electronic Data Systems);
- Dates of assignments that well post-date the REMIC’s 424(b)(5) Prospectus Cut-Off and Closing Dates;
- Post-dating or back-dating of the assignment; and
- Documents created in one state that are executed in another state.
Any of these “details” can be used as evidence to go after the law firm attempting the foreclosure! And THAT my friends … is how the system of things should work!
Coming soon …
P.S.: Hat tip to David A. Rogers, Esq. of Austin, Texas for the Fieldstone materials!