Tag Archives: Fannie Mae

POINT – COUNTERPOINT: SECURITIZATION FAILURE EXPLAINED

“JANE … YOU IGNORANT SLUT!”

(As exclaimed by Dan Akroyd to Jane Curtin on Saturday Night Live …)

Sorry … I had to do that because you can’t say that to opposing counsel in foreclosure court … as much as you’d like to!  Still, I’m not an attorney, I can’t render legal advice, but I have been listed on at least one attorney’s “expert witness list” for upcoming trials! 

My blood boils when I’m consulting at a foreclosure trial and I hear the bank’s attorney claim that the borrower has nothing to do with the PSA because I know damned well that the borrower (nor his counsel) has a comeback that they can waylay on the bank’s attorney in point-counterpoint fashion, which is why I went with the opener that I did.

The bank’s attorney doesn’t want the borrower opening up the subject of securitization failure, because in so doing, the REMIC finds itself without standing to foreclose.  End of story … because the last attempt is always (when Fannie Mae and Freddie Mac aren’t involved) the use of MERS (through servicer fraud) “assigning” a note a mortgage years later into a REMIC trust. Securitization failure may look obvious on paper (what’s recorded in the land records) but it cannot account for the path the note didn’t travel.

The last trial I attended, I saw the bank’s attorney “step in it”.  You could hear her tiny little heels squish in the pile of dung she just sunk into asking the expert witness (who understands securitization) about the “closing date”, then suddenly realizing that she opened Pandora’s Box.  Sadly, the foreclosure defense attorneys need to climb on board with this thought process, as elaborate as it might be.  I’m going demonstrably put it into as easy a graphic as I can, using various scenarios (“submitted for your approval”, as the Twilight Zone‘s Rod Serling would say from the grave). You have to educate the judge!  You have to!  I don’t care if the other side jumps up and down with objections, you have to keep on keeping on.

FEW ATTORNEYS REALLY “GET IT”

First, let me share a pdf with you, written by (in my book) one of the most brilliant attorneys on record:

charlies-wallshein_securitization-fail-part-one-001

The foregoing even has “affirmative defenses” included in this paper, if you know what you’re looking for.  Thanks to Charlie, I used a chunk of his explanation and diatribe in a Texas Rule 736 motion I drafted for use by counsel, which, when coupled with a Rule 12 motion by the attorney (a motion demanding to know who the law firm was representing in its Application to foreclose), the law firm “non-suited” the foreclosure case (made it go away)!

I shall further elaborate, as I do in chain of title assessments where the last party to allegedly have the note and mortgage transferred to them is the REMIC … years after the fact.  The borrowers and their attorneys focus on the Pooling and Servicing Agreement and miss the whole enchilada completely.  It’s not just the PSA we’re talking about here folks!  It’s the entire “sales pitch” … I’m talking about the 424(b)(5) prospectus (and none other than).

The PSA does NOT contain your loan number!  The prospectus contains your loan number!

The prospectus contains well more of the governing regulations than the PSA, all neatly signed under penalty of perjury under the Sarbanes-Oxley Act!   When the bank’s attorney says the Borrower has nothing to do with the Assignment, why then are you stumped?  Why can’t your attorney object?  It can’t be because of ignorance, right?

However, just because your loan number is listed within the prospectus doesn’t mean that your loan is actually in the pool (or made the pool before the cut-off date).  Look at it in the simplest of terms:

  1. Why do lenders use the MERS® System?  

The lenders use the MERS® System as a means to register and securitize mortgage notes within the secondary markets.  However, before the note (and its accompanying electronic paperwork) can be traded (transferred, sold, resold, multiple times over), it has to be digitally uploaded into the MERS® System, which was created for the purposes of electronically transferring the note!  

This is why (when you look at your loan on the MERS® Servicer ID page, the loan reads “ACTIVE”.   That means, it’s “actively” being transferred (potentially multiple times over) from one entity to another while the Servicer’s name remains constant.  When you see the word “INACTIVE”, it means the loan is no longer being traded, most likely because it is NON-PERFORMING!  Who could get away with selling non-performing loans?  Only in the securities market can you get away with that!  This goes back to the late Judge Arthur Schack in the HSBC v. Taher case, which was reversed and assigned to another judge, because the powers that be (the Appellate Department) said Schack went too far (in vetting the truth about robosigning using parties claiming to be officers of MERS). So, as long as the note doesn’t end up in its “final resting place” (as claimed by REMICs in millions of foreclosures), we have an “ACTIVE” note trading within the MERS® System.

2. The servicers who subscribe to the MERS® System purposefully abuse it!

The MERS® System, as I have previously noted in other posts, as well as in the OSCEOLA COUNTY FORENSIC EXAMINATION, allows servicers and their minions and subordinates within their default divisions or their contracted third-party document mills, to “manufacture” standing by creating assignments out of thin air, utilizing the name Mortgage Electronic Registration Systems, Inc., accompanied by what is proclaimed an “official title”, with only flimsy, non-notarized proclamations by William Hultman or his “successors” within MERSCORP Holdings, Inc. potentially attached to the pleadings as a means of “verification” of the use of the title by the “nominee” (who also thinks it’s a beneficiary, which it’s not).

Regardless of their “signing authority” or other Limited Power of Attorney proof of anything (as Limited Powers of Attorney can be falsely created to reinforce a claim by the REMIC that certain servicers are covered to do exercise certain powers under the power of attorney), there is nothing in the MERS Rules of Membership that forces the users of the MERS® System to “play by the rules”.  In fact, all of the users of the MERS® System have to “indemnify” MERS and its parent of any liability in connection with the creation of these documents, which means it’s “open season” in the fraud department in the creation of these documents.

   3. Parties outside of the MERS® System are allowed to participate with the servicers in creating the documents employing the use of the MERS® System! 

During the Osceola County Forensic Examination, my team discovered (in hundreds of assignments) the use a law firm in the creation of the assignments.  Many times, the assignment itself contained the words, “Prepared by:”, with either the name of the law firm, a law firm attorney or a non-lawyer working for the law firm.  My take here is that this is where you have RICO issues because the servicer, a law firm, a notary and multiple employees of both, are tasked with the creation of the document.  We are not just talking civil RICO issues here, but also criminal RICO, because the document is generally created under the direction of the law firm handling the foreclosure (in mortgage states), or in the alternative, a document processing company (e.g. LPS, CoreLogic, etc.) being involved in engineering the “proper parties” onto a piece of paper that is going to be relied upon in court to foreclose on the property.  The law firm handling the foreclosure will then rely on an assignment that it was involved in creating to steal the home, knowing full well that the assignment contains multiple misrepresentations which are not provable because the assignments clearly show the note and mortgage were transferred into the REMIC years after the Cut-off Date!

This is why I intend to write a follow-up paperback aptly titled, “How To Screw MERS!” (or something like that), to explain how to circumvent the MERS®System in your dealings in real estate (part of your due diligence before you buy a piece of property using a “MERS Member”, which is false, because the alleged “MERS Members” aren’t really “members”; they’re user-subscribers of the MERS® System, through the use of an executory contract with MERSCORP Holdings, Inc. (which is nowhere to be found on your note, your security instrument or the assignment).

4. The “Electronic Tracking Agreement – Warehouse Lender” clearly shows who the “players” are … and MERSCORP Holdings, Inc. is one of them!

If you look at the attached: eta_warehouse_template_v6-mers-and-borrower4, you will see what I am describing here, as to who the “electronic agent” really is. Is this disclosed to you at closing?  Hi there boys and girls, can you say “Truth-in-Lending Act violations right out of the gate?” … sure you can!  (playing on Mr. Rogers’ voice).

Do you see where your “name” is inserted as to “Borrower”?   Didn’t think so.  That’s because you’re not the Borrower, the originating lender or mortgage broker (like that pesky “Rocket Mortgage” and other digital online services that make it so easy to “get approved in minutes” for a mortgage loan).

Notice in the third paragraph where it says, “the Borrower is obligated to pledge the Mortgage Loans to the Lender”?  Notice the term used “Loans” is in the plural?  That’s because the “Borrower” in this agreement is the originating mortgage broker/lender and the “Lender” in this agreement is the “Interim Funding Lender” (like Countrywide, WaMu, IndyMac, etc.).  Look who the “Electronic Agent” is:  MERSCORP Holdings, Inc.!   What is an agent?  (hint: a nominee)

Then why isn’t MERSCORP Holdings, Inc. (the parent of MERS, the entity with all the money) plainly stated on your loan paperwork, including your Note? Where is the Truth-in-Lending Act when you need it regarding non-disclosure of the real “truth”.  It was hidden from you at closing?  That might even bring about suspicion for a RESPA violation as well.

Notice within Paragraph 4 of this agreement where it says that the “Lender and the Borrower desire to have certain Mortgage Loans registered on the MERS® System (defined below) such that the mortgagee of record under each Mortgage (defined below) shall be identified as MERS;”   Did you ever sign a paper like this at closing?   I’ll save you the time looking for it.  You didn’t.  That’s because the “Borrower” in this agreement, involving the placement of your loan into the MERS® System IS NOT YOU!  Did you agree to that?   Didn’t think so.  But it sure the hell explains how your loan got “registered” on the MERS® System, doesn’t it?

This was all created to be part of the securitization process.  This is why the entire process is flawed … and why it needs to be eliminated … and why the parties who created it need to be in prison!  The MERS®System is the platform through which the RICO acts were committed.  Indemnification or not, the platform is there … and it’s knowingly being abused.

YOUR NAME AND ORIGINAL LOAN NUMBER IS ON THE ASSIGNMENT!

This begs the question: How can you NOT be involved?  The assignment is talking about your very loan and mortgage (or deed of trust) being conveyed by the employees of the mortgage loan servicer (who can’t get the originating lender to do it because it’s more than likely defunct), whose employees create the document out of thin air, under the instruction from: (a.) one of the major title companies; (b.) the foreclosure mill attorneys involved in the litigation; and (c.) a third-party document mill tasked by the servicer to keep the transaction at arms length to avoid suspicion.  In any case, the document is a fraud.  They know it. And you know it.  But the judges don’t know it because no one knows how to tell the judge a thing or two about the real aspects of securitization because they know that 99% of these assignments are fraudulent and by ruling against the bank on securitization failure, they would open up a “three-ring circus” in their courtroom while jeopardizing their political futures.

The servicer uses its own “loan number” which generally does not match yours.  But when the bogus assignment is drafted (and many times backdated for a purpose) by the servicer’s employees or that of the law firm or third-party document mill, your original loan number and name is on the assignment.  Why not simply ask the judge to take your name off that document (since you’re not involved in it) and we’ll call it a day?   You know how that will end up, right?

You first have to object to the attorney’s comment that you’re not involved in the PSA, because technically, the PSA talks in general about operations within the REMIC itself.  If you’re going to enter the PSA as evidence, you’re shortchanging yourself and your case.  What you should be entering is the entire 424(b)(5) prospectus.  It still costs $4.00 a copy from sec.gov on their forms page.  They have a contract with United Parcel Service to ship it to you at no charge.  You pay $4.00.  Get the whole prospectus.  The front end of the prospectus is what contains the cut-off and closing date, not the PSA.  Have you ever noticed that, or did you just take someone’s word for it?

exhibit-9_occ-asset-securitization-comptrollers-handbook

Notice the foregoing “Page 8” and where it came from … the 1997 Comptroller’s Handbook issued by the Office of the Comptroller of the Currency.  This handbook was issued before MERS Version 3 came into being.  Notice how the first paragraph below the diagram talks about the Borrower being a party to the securitzation chain?   Do you understand why?  Because in simple fashion, in order to make the chain work (the whole system), the Borrower’s payments facilitate the income stream to the investors, who received non-recourse bonds on the Closing Date (or Start-up Date, according to IRS terminology) of the REMIC.

That is, unless securitization failure occurred at the Start-up Date.  This begs the use of an expert witness at trial to can testify as to the facts, followed by the use of depositions of the parties creating the document (the assignment) to reinforce the fraud being plied on the court.

Actually, securitization failure occurred BEFORE that!  It occurred at the Cut-off Date!

It couldn’t have happened because after the note and mortgage was uploaded into the MERS® System database (owned by now-MERSCORP Holdings, Inc.), I believe the original paperwork was no longer needed and was shredded.  My forensic examiners and I have heard this on more than one occasion, right out of the mouths of the bankers!  Thus, when the Borrower went into default: (a.) the servicer handling the loan dummied up an assignment, knowing already that it didn’t have the original loan; (b.) the servicer went into the MERS® System and downloaded the “uploaded electronic copy” and printed it out and took it into court (after adding a bunch of other “allonges”, “indorsements” to the note to try to tie the chain of title together with the chain of custody of the note.

Let me be clear here!  I do not believe that the allonges and the indorsements were completely added until AFTER the original note was retrieved from MERS. The latest article by Neil Garfield, which contains a statement: “I have obtained confirmation from a large bank vendor (Visionet Systems, Inc.) that it rectifies “lost notes” by reapplying the “signature images” upon stored copies. –Bill Paatalo, December 10, 2016.” goes to the core of the following scenario:

My wife and I attended a trial in Fort Myers, Florida where Bill Paatalo was admitted as an “expert witness”.  I went for two reasons.  First, I wanted to see what kind of questions the bank’s attorney and the judge were going to ask Bill about his expertise and the facts of the case; and second, we had dinner with Bill after that to further discuss the case, which ended up without a Final Judgment being issued that day (in court) because the judge wanted more education, in the form of trial briefs by the attorneys, which were due yesterday (I have not seen the brief).

This clearly also shows that the Notes were, at one time (as I suspected) electronic copies.  And riddle me this (as the Riddler said to Batman) … where do you think Visionet Systems, Inc. got the copy of the note?  Visionet is NOT a user of the MERS® System (check for yourself like I did) and therefore, they had to get the note from somewhere (more than likely the servicer, who IS a user of the MERS® System).  This now begs the deposition of someone at Visionet Systems, Inc. to verify this chicanery.

There are at least two cases supporting this conclusion! 

If you’ll simply Google a pdf of “In re Saldivar” (Texas) and “Glaski v. Bank of America” (California), you can see from these two cases that the court finally recognized that if the note and mortgage (or deed of trust) weren’t assigned until years after the Cut-off Date”, there is no verifiable evidence of WHEN or IF the note and security instrument actually “made it into the pool of loans” within the REMIC trust! This is what Bill Paatalo testified to at trial in Fort Myers.  When attacked by the bank’s attorney on the possibility that the note and mortgage made the cut-off date and that the assignment was strictly a memorialization of that fact, Paatalo responded to the “fact” that the assignment itself shows the date of the assignment being two years after the REMIC closed; thus, there is no possibility that the governing rules of the REMIC were complied with.  I am referring to the entire 424(b)(5) prospectus here, NOT just the PSA!

The OCC clearly contemplated that the Borrowers were the parties signing the notes and security instruments, which contained the provision (in paragraph 19 or 20, depending on which long form security instrument was employed at that time) that “the note, or a partial interest in the note” may be sold or transferred. It says nothing about the parties involved in that transaction, the “boss of the note” at foreclosure proceedings, or securitization of the loan.

Not only is the chain of title screwed up (because the right hand doesn’t know what the left hand is doing), certain parties came in contact with each other to “dummy up” paperwork to steal the house.  It’s that plain and simple.

That my friends, is a short-form explanation of the formula for securitization failure in roughly 3200 words, despite the fact I’m not an attorney nor do I render legal advice.  Share this with everyone because the life you save may be that of someone you don’t know that desperately needs to view this educational post!

BTW: For those of you wanting a progress report on the new FDCPA book I’m working on … I’ve about 40 pages to go!  I’m trying to get it done by the end of the year!  It contains some real damning information every “consumer” should know about, from foreclosures, to credit cards and car loans to student loans … all of which have been securitized … including relevant case law to back up the education I provide in this book! 

Dave Krieger, Clouded Titles

 

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Filed under Chain of Title Education, Op-Ed Piece

ROBINSON CASE GOES BEFORE THE U.S. 9TH CIRCUIT COURT OF APPEALS!

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:

  1. 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;
  2. where MERS and MERSCORP came in and accused the judge of being an “actor” in depriving MERS and MERSCORP of their civil rights; and
  3. 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.

OP-ED —

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.

 

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FORENSIC COUNTERMEASURES

(Op-Ed, Financial Education) — The poster of this blog is not an attorney and the information portrayed here is for educational purposes only and should not be construed as legal advice. Kudos to Washington State attorney Scott Stafne for posting this where I could obtain a copy of it in my travails in research!

The title of this post reflects what I’m about to share with you, which you should read at least twice over before making any assessments in your case.

Most folks do not realize that when the proverbial “ca-ca hits the fan” that these types of countermeasures may be necessary to defeat the “other side’s” claim to note ownership.  In an attempt to show that the title documents (the assignments in the land records) do not match the chain of custody of the note, one may have to go a step further in evaluating the legitimacy of the note. It is implied here that once the loans were electronically uploaded into the MERS® System, they were shredded because they were trading on the secondary markets electronically and their original versions weren’t needed anymore.

Anyone reading this post should understand the following:

(1) It is safe to assume that prior to closing your loan, your loan could have been sold as many as NINE TIMES (or more in some cases)!  This means that your originating lender, who many times is just a corresponding lender (5% of their own money into the “game”) was paid off BEFORE the closing actually occurred, which would appear to indicate that the document (the mortgage or deed of trust) on its face is false because it does not state that the lender was paid in full prior to closing.  It only shows where your loan originated.

(2) It is also safe to assume that some investor funded your loan and you don’t have any idea who that investor might be because everything is hidden from you!  Regardless of that fact, the issue remains that the banks will falsely assert that you have no right to determine WHO was involved on the “other end” of the financing spectrum, even though there is convincing research that shows the borrower is actually a party to the securitization process because without their monthly payments, the securitization chain would break (massive defaults in any given tranche within the REMIC after 90 days), the REMIC’s sponsor (who already made side bets that your loan would fail) would cash in on the credit default swaps it placed, plus the default and title insurance policies it took out, which would appear to indicate it was paid in full, and then some, for your loan, yet did not apply any of the proceeds to it, but rather went to the strip club and indulged in some blow, booze and hookers, including all those “friends of Angelo”!

(3)  The reason lenders use the “MERS® System” is because they intended on securitizing your loan and the actual process started when you submitted your Form 1003 loan application! The title documents in your “chain of title” will reflect something totally different than what actually happened on Wall Street (the secondary markets).  Many attorneys and researchers I work with surmise that it was at this point (when the MERS® System was utilized), that parties whom you did not authorize to have your personal identifying information were involved in an apparent massive conspiracy to commit identity theft against you by farming your information out to “the system”, where every subscriber has access to your information, whether you gave permission or not for them to have it!

(4) The banking cartels play by numbers and they know that very few of those getting subprime loans have the resources to wage a legal battle in the court system! This is one of the reasons why they “got out ahead of it” when it came to setting case law involving shutting down the “back end defenses” to securitization, which are now the subject of much litigation in the “sand states”, especially Florida and California.  Anyone reading the Glaski or Saldivar cases can certainly understand where this poster is going with this. These are standing cases!  California homeowners have been getting repeatedly screwed over with non-judicial foreclosures committed by servicers and alleged substitute trustees who (if legally bound to do so) could NOT prove they have any real interest (financial or otherwise) in your property.

(5) Forensic countermeasures may be more relevant if Fannie Mae or Freddie Mac claim to own your loan! Many forensic analysts have told me that once Fannie or Freddie (who I believe were involved in the setting up of the MERS® System to hide their own misdeeds) have your loan, utilizing these types of strategies may be the only means of “shutting down” their claim of note ownership!  In of itself, undated indorsements have also become a major part of the appellants arguments in homeowner-won foreclosure cases, as the other side can’t prove “effective date of transfer” of the note.

It is for this reason that I found that the following document may be necessary to consider when planning your litigation strategy: FORENSIC EXAMINATION OF NOTE

Keep in mind that 85% of all property owners who found themselves facing foreclosure packed up and moved, leaving their home vacant.  This violates their mortgage or deed of trust, based on the fact that they warranted they would live in the property.  It also warrants the issuance of an IRS Form 1099-A, which represents abandonment, as much as this poster still regards the illegality of that in of itself!

The remaining 15% of those property owners who did stand up to the banks dwindled the more they were challenged.  Ten (10%) per cent more of them gave up due to running out of funds and/0r the fundamental fortitude to defend their property once the proceedings either started or were challenged in the courts (including non-judicial proceedings that went judicial when the property owners filed suit to stop the foreclosure).  The remaining five (5%) per cent of all homeowners either have been beat down or are still fighting a war that has placed them in a condition of financial suppression, all by design.

These forensic countermeasures cost money.  This poster has other avenues of approach regarding research into the loan itself, even though he specializes in chain of title and quiet title research.

This is one of the reasons that this poster is working on a new book, which he believes to be fundamentally necessary in educating homeowners on how litigation strategies have shifted towards FDCPA-type filings as a means to build a “war chest” to fight the banks.  This book is taking more time than thought because of the voluminous content of case law but is anticipated to be out before year’s end.  There is more to the entire securitization scheme once “fraud on the court” issues become present!

In the meantime, it becomes necessary to plan your litigation strategy if you intend on staying in your home with the intent to “fight the monster” because the judges across America are convinced that their retirement accounts will be jeopardized if they rule in your favor, which I believe is far from the truth.  The foregoing “forensic countermeasure” is just one avenue you may wish to consider.

If I didn’t care about you and your situation, I wouldn’t be posting these types of articles! 

And the truth shall set you free … God’s speed!

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Filed under Chain of Title Education, Financial Education, Op-Ed Piece

10 TIPS FOR BUYING A HOME … BASED ON THE CURRENT SCENARIOS!

The author of this blog post is a consulting expert to attorneys and paralegal in the drafting of quiet title and FDCPA complaints.  The subject matter here has been used personally by the author and in know way do his suggestions constitute the rendering of legal advice.  If you need assistance in matters involving your real estate closings, it is suggested that you check with an attorney who is well versed in quasi in rem matters of this nature, title attorneys excluded (they’re going to hate me for this; so what?) … 

(Another Rod Serling euphemism …) “Submitted for your approval” … 

It never ceases to amaze me that with all of the negative press surrounding mortgage foreclosures and the scams they have produced, that people are still willing to go out and buy someone else’s real estate “problems” just because they think they’re getting a “deal”.   I caution the reader here that it isn’t the “deal” itself (at the outset) that may cause problems, it happens at the time you sell the property to someone else and you warrant the title.  Caveat emptor has never been more emphasized than in present times!

For starters, unless you check out the chain of title thoroughly on any property you buy or invest in (and this includes tax deeds and lien certificate sales too), you are at a disadvantage here because the chain of title was here long before you came along and you are a proverbial stranger to it!

I avoid REO’s like the plague. The chain of title is generally royally screwed up.  Anytime a servicer is selling a property, you should be especially cautious because if the servicer handled the foreclosure (especially in a judicial state) and got away with it, they weren’t “the boss of the note” and weren’t entitled to foreclose in the first place!  This makes the entire sale of the REO a sham; and at risk of unmarketability.

Short sales don’t fare much better and it’s highly likely that these may collapse mid-deal. Unless you are getting a build job straight out of a swing loan (construction type loan), which started out as a vacant piece of land with little history that you can deraign, you put yourself, your investment and your future at legal risk.  There are title company executives that have referred to me as a “f**king purist” (which is their prerogative), but isn’t it better to be safe than sorry later on?  I bought a short sale, but it evolved out of a construction loan, which started from a vacant piece of land.  The bank and I had an understanding going into the matter, so I knew I would end up with good title at closing.

So what I’ve attempted to do here, as a precursor effort to others to help keep them from falling into the same trap, is to cite my own TOP 10 LIST for buying a piece of property, whether it be vacant land or your eventual homestead:

1. It’s okay to fall in love with the deal!  This is why I look for bargains. There’s nothing wrong with looking for bargains because looking doesn’t cost you anything but time.  When you get to the point where the bargain seems doable, then it’s time to put on your thinking cap and do your research into the chain of title.  You need to go back to at least 1990 in the records.  Look for that pesky 18-digit MIN number on all mortgages and deed of trust prior to your acquisition.  These will generally pop up from 1999 on, but moreso after 2001.  If you see one of these numbers pop up, check to see if the MIN is “inactive”.  That means that the chain of custody of the note had a finite ending somewhere.  You will have to get all sorts of assurances (stipulations to judgment to quiet title) that MERS and everyone involved previously releases all claims on the property prior to your closing.  More than likely, you’ll have to quiet the title to the property before you can sell it.  I generally do not even purchase properties with MERS anywhere in the chain of title, unless I can get stipulations at closing keeping MERS out of my quiet title action!

2. Obtain a title report!  I’m not talking about a commitment letter, because these are a joke.  The title company is looking for excuses to “write around” the defects in title.  The kind of report I’m talking about is an Ownership & Encumbrance Report (or “O & E” Report).  These will become useful because these reports were generally pulled out of a title plant database and probably contain the most case-specific data you’ll need to evaluate your position before you buy.  Don’t even dare contact the prospective seller until you’ve at least done your homework here.  These O & E Reports can go back “to the Queen of Spain” if the title company is thorough enough.  Most title companies generally research at least 46 years out from the date of the request.  There may be a fee for this service.

3. You may wish to conduct an independent chain of title assessment (COTA) of your property!   There are COTA Preparers out there that have trained in this line of work.  You may also wish to take a course on this yourself, so you don’t miss any of the tricks that could trip you up later.  There is a COTA Workshop coming up in Chicago in June (4th – 6th, 2015) at the Radisson O’Hare Airport Hotel.  Go to the Clouded Titles Website for more details if you wish to attend.  This class is invaluable for investors and homeowners alike!  You’ll want to know for sure who has been playing around in your chain of title and certainly whether the former homeowner or the bank could face some sort of liability in the future.  The greatest way to vent your suspicions is to investigate them thoroughly until you get the answers you’re looking for an can piece together the puzzle which is your chain of title.

4. Make a list of all of the prospective challenges to your property’s marketability if you start confronting issues as the result of your research!   Add to this list on an ongoing basis, no matter what the issue.  Here are some of the subcategories you’ll want to be aware of due to their effects that affect the long term investment:  (a.) Look for defective or missing assignments because these will be the biggest obstacle you’ll have to face in a quiet title action (those unknown intervening assignees that crawl out of the woodwork at the last minute); (b.)  Examine your prospective property’s “up close” issues involving easements, mineral rights (many subdivision developers deeded away mineral rights to themselves), potential encroachments and private nuisances by neighbors; (c.) Ask questions about prospective scenarios that may develop, such as planned upcoming “special assessments” that may plague an area that your prospective property is located in, which may drive up your personal costs of living in the future; (d.) Look for issues involving external obsolescence, which are economic issues affecting your property caused by an onslaught of “for sale” signs in your prospective neighborhood (especially given the age of certain neighborhoods); (e.) Avoid homes with “white signs” in the windows. These generally mean that a foreclosure has been commenced or has concluded and the economic viability of the property has been affected.  The smart investors do more than simply peek in the windows.  Look at the overall financial picture for the residence. It makes no sense to buy a fixer upper and spend a lot of money in a neighborhood full of fixer-uppers (unless you plan on redeveloping the whole subdivision), just so you have the nicest looking house in an economically-challenged area; and (f.) You take a much bigger risk buying Fannie Mae, Freddie Mac and HUD properties these days (which is why HUD properties may be completely phased out of existence), because of the condition of the chain of title created by the toxicity of the loans sold to the GSE’s that they’ve had to legally recover from.  Despite the fact the GSE’s settled and were remunerated tens of billions of dollars, the chains of titles to the properties the lenders bought back from them are more than likely severely tainted with expensive title issues that will make quieting title a nightmare.  Unless you have deep legal pockets, you may wish to avoid GSE properties as well because despite what they say in their contracts, there’s always the clause regarding “condition of title” you’ll have to worry about later.

5. Make sure at some point that you visit the and personally inspect the property!  I never buy anything sight unseen.  The worst thing that can happen is you take someone else’s word for what a great deal something is, only to find out that someone misrepresented (or flat out lied) about details regarding your prospective property!  A personal inspection of the property as it lies within a given neighborhood may lead to questions regarding mistakes former homeowner’s made in their wisdom to buy or build in a given area in the first place.

6. Make sure you visit the local public entities and do further homework regarding your property!  This also begs its own subcategory of visits: (a.) Visit your county appraiser. Check the plat maps (if the property is in a subdivision) and ask for help from the appraisal district if you have any questions about surveys and especially deed restrictions, including HOA and COA Covenants.  Identify and obtain copies of all restrictions and rules PRIOR TO submitting an offer on the property! Remember, the HOA and COA (in many jurisdictions) have lien power over existing mortgages; and (b.) Make sure to visit the County Recorder or Clerk’s Office at the County Courthouse. You can go online and search many areas of the public records; however, smaller counties may not afford you that luxury, which warrants a personal visit and a lot of search time in the grantor-grantee index.  It never hurts to get acquainted with the local clerk and it’s also imperative to locate all the documents in the chain of title.  Beware of trustee sale deeds or other conveyances which represent foreclosures.  You’ll probably NOT want to mess with these parcels or homes, especially if there’s a REMIC listed anywhere in the chain of title; and (c.) pay special attention to recorded tax liens, especially from the IRS.  Avoid these homes like the plague!

7. Avoid distressed and blighted neighborhoods!  Many counties have foreclosure maps (many of them online).  Refer back to Tip #4 and apply subparagraph “(b.)”, especially when it comes to entire subdivisions being vacated due to “farming” by developers.  There are certain areas of the country that are more prone to this, especially in the “sand states”.  Entire subdivisions have been affected because certain commercial developers bought into “teaser” financing mechanisms from now-defunct mortgage lenders, which resulted in entire portfolios of loans (later allegedly sold into securitization) that were financed using adjustable rate mortgages tied to LIBOR.  Examples of these subdivisions can be found in places like Stockton, California and Peoria, Arizona, wherein the same mortgage company handled all of the financing for all of the homes in the subdivision (wherein the developer may have gotten a kickback). I find it better to single out a custom home and deal directly with the lender rather than buy some developer’s “pipe dream” that involves risky financing.

8. If you’re bidding on tax liens, buying tax deeds or investing HOA or COA foreclosure sales, make sure you understand that in today’s economic times, the condition of the chain of title affects how much you’ll spend on the parcel you’re buying!  This is the tricky part … the part where you need to ask a lot of questions and do a lot of extra homework. While these “deals” are great for medium-term investments, you may be faced with having to deal with subsequent litigation from a mortgage lien holder; the IRS; public nuisance liens; additional property taxes or special assessments; and local economic blight.  I will admit, I buy tax deeds and liens, but only to hold them for short term (2 years or less) and I avoid homesteaded properties because it’s just a bunch of extra hassle and expense playing the “waiting game”, especially in states that have lengthy redemption periods.

9. Structure your offer in such a way that you can “weasel out” of a deal using contingencies.    This may cause you to lose the deal because you’re making issues out of stuff the lender considers passe.  Too many contingencies in a contract can also cause the seller to reject the contract.  Advance research can help you make some common sense approaches to constructively analyze where your best options lie in preparing the contract and what contingencies to offer.

10. Always read everything SINGLE item in every single document at the closing table!  If you think your escrow officer will rush you through closing, you’d best schedule a time to close when you know they will give you every opportunity to ask questions and contact outside counsel if necessary.  Do not overlook any addendum because these are the items that circumvent your legal strategies later on.  Don’t be afraid to walk out of a closing because the escrow officer refuses to disclose or explain something to the point where you fully understand it.  True, they’re not allowed to give legal advice, but they’re not allowed to badger you into signing something you’re not comfortable signing in the first place!  If something is really bugging you about what you’re about to sign, there’s probably good reason to get up and walk out (take the papers with you for your attorney to examine BEFORE you sign any more of them) and re-schedule your closing for later.

One other focal point I stress here is the title company’s escrow officer making a comment about MERS.  If the agent deflects your questions about MERS and says there’s nothing wrong with it, you can bet the title company is part of a larger network of MERS® System users who subscribes to covering up the misdeeds created by the issues within the chain of title and they could care less whether you take title to something that you’ll regret later because MERS was involved.  The title company: (a.) may not be around long enough to pay a claim; and (b.) when’s the last time you’ve ever heard of a title company paying a claim on an unrecorded intervening assignment?  I rest my case.

Finally, if you’re buying a property, don’t settle for anything less than a general warranty deed. Otherwise, you’ll never be able to hold the seller accountable for defects in title, which he warranted (inside of a General Warranty Deed) to defend title if issues arise in the future. This is the part where you’re allowed to start thinking of the unintended consequences of that “great deal” you thought you were getting.  I hope you have a large “war chest” to pay legal fees to defend the warranty you issued.  I would never buy anything based on a Quit Claim or Special Warranty Deed. To me, these are “red flags” that should negate any deal.  I can fight a simple tax deed in court, based on a limited chain of title and get quiet title (I’ve already done that as I’m sure many of you have) to a property. But when MERS or toxic financial scenarios affect the chain of title, you may end up in the shoes of Bellistri or Bevilacqua (see my other posts, or Clouded Titles for more information).

If you want an investor and/or financial education, the upcoming workshops in Chicago would be a great place to start!

 

 

 

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Filed under Chain of Title Education, Financial Education, Quiet Title Education

WHY QUIET TITLE ACTIONS WILL BECOME COMMONPLACE IN THE FUTURE

The author of this post (Dave Krieger) is not an attorney.  Try to find an attorney near you that does quiet title actions as successfully as Al West (I want proof of the winning cases) … and I’ll let him TEACH the bloody workshop and pay his/her airfare and expenses to boot!  I’m not handing out legal advice today (nor will I ever, because the state bars, who are technically NOT affiliated with any Supreme Court jurisdiction, would love for me to stop talking about this subject, permanently), so if you need an attorney to assist you in a quiet title action, be prepared to do some serious digging to find one that knows their stuff.  I’ll tell you why in a minute … 

Since the beginning of this country, county land records were designed because America needed some sort of “fundamental order” in its keeping of land ownership records.   And in this case, I’m talking about the proper ones, not the ones influenced by the behaviors of today’s legislatures (at the whims of the banking cartels).  One of the many concerns within the realm of real property law, which I have had the pleasure of studying to the umteenth degree, much to the chagrin of others, began with my own experiences, which I write about in Clouded Titles, now in its final Mayday Edition version.

I expressly designed this work as an educational product because I found America lacking in the basic principals of real estate ownership that they may have either NOT learned in high school or college, or in the alternative, conveniently forgot about as part of the Age of Entitlement generations.  There are two issues here that I will discuss further, the key reasons for WHY quiet title actions should become part of your legal research and education to benefit your future and the future of America, if there ever is to be one.

There are a lot of Patriot-type folks out there that will disagree with my theories and my educational principles regarding quiet title, but I can tell you, I’ve done them … and they work.  Without quiet title, burps and hiccups in any given chain of title will render it impaired and thus, unmarketable.  You can disregard your belief that the “county” you live in has any authority, but let me tell you, you are in the minority of all of the registered voters who have faith in their county government, until their government proves them otherwise.  If you want change, then run for public office and change things!  First, have some respect for our current system, because it’s the only thing we have in place that stands in the pendulum path of civility versus anarchy.  Those of you out there who think you can still get title in allodium … keep dreaming.  We’re way past that point.

The first issue I will discuss here is WHY most attorneys DON’T WANT TO do quiet title actions!

Attorneys who specialize in real property law should completely understand the principals of quieting title, including pleadings and procedure, which Al West and I share in the workshops I host around the country.  Many attorneys ignore quiet title, because it represents (for the most part in a majority of the cases) a finite end to issues involving superior title to property.  This may also result in what is known as a “lien stripping” of a promissory note (which of course is what the judges suspect), which is then rendered unsecured because the quiet title action may end up causing the complete removal of the mortgage or deed of trust, if the parties who show up can’t prove they have superior title.  I said nothing about the Note here because the having a lien vis a vis a promissory note does not, in of itself, constitute superior title, unless the the Note has terms within it wherein the borrower gives up title to the property until the lien is retired in full.  Title theory states operate that way.  Lien theory states however, grant an “interest” in the property by what I call a “unilateral adhesion contract”, which is a one-way ticket to hell!  It’s called a mortgage or deed of trust.  Of late (within the last 15 years), these two documents have been tainted by a process called MERS (an acronym for Mortgage Electronic Registration Systems, Inc.), whose parent, MERSCORP (in whatever incorporated form it happens to be in at any given point in time) runs the obfuscation game for Fannie Mae and Freddie Mac and the rest of its members.

Most attorneys refuse to study the convoluted ways of the MERS® System, which I believe was started up to hide the behaviors of Fannie Mae and Freddie Mac (the two Examined Members talked about in the April 13, 2011 Consent Order involving MERS and its parent) as they involve the chain of title (but also to the financial benefit of other users of the database).  Thus, attorneys do NOT know what my network of attorneys know.  Thus, they render inconsistent and improper pleadings (IMHO).  Thus, anyone who attends my workshops will probably come away with more information than attorneys learn about quieting title than they learned about in the whole of their law school.  Since they don’t teach MERS in law school (to the degree we do in our workshops and educational materials), you can bet most attorneys don’t want to be bothered with it when they can be making a monthly income off the backs of desperate homeowners who want to stay in their homes (sadly, most of them have no game plan for the future).

Attorneys who specialize in foreclosure defense have quickly learned (as I have surmised here) HOW TO stall a foreclosure.  During that time, they bill their clients with a monthly fee that similarly equates to their monthly mortgage payments.  This is the first wave of foreclosure fraud.  Many attorneys want their clients to file bankruptcy to stop a foreclosure sale, yet seemingly, they ignore the 10-year “stain” on their clients’ credit reports as a result of what?  Delaying the inevitable?  According to the Office of the Comptroller of the Currency (O.C.C.; who coddles MERS, because they’re all “in on it” together, in whatever sort of conspiracy you want to call it) has plainly stated on its website that bankruptcy is simply just a “stall tactic” (for the inevitable).  I would have to ask these folks at the OCC, “Whose side are you on here?”  All of what has taken place in the shaping of legislation has obviously been instigated by the banks.  It may be time to vote out those in the electorate who aren’t on “your side” when it comes to property ownership and maintaining proper real property records in the county courthouse.  The continuation of this current way of doing things illustrates my point on the need for quieting title even more.

Attorneys would rather have their monthly annuities coming in than seeing a finite end to their client’s case involving a quiet title action.  There is no guarantee that getting your title quieted will stop some bank (or MERS, as it unsuccessfully did in the Groves case in Texas) from pursuing you down the road, but the “law of the case” seems to make things a bit easier.  In short however, why have a “finite end” to things in favor of a monthly paycheck?   For example, if a law firm has 10 attorneys doing foreclosure defense and each one brings in a retainer (for a single client) of $5,000 and then bills them for two years at $1,000 a month; if each attorney had 50 clients to “stall” for, the gross income to that firm would be $2,500,000 in retainers and $12,000,000 in monthly fees.  That’s $14,500,000 for those of you doing the math.  Such a business model it is.  This is why it’s so hard to find an attorney to do quiet title work.  Another major reason attorneys don’t favor doing quiet title actions is that these attorneys simply don’t want to be chastised and ridiculed by a judiciary that appears heavily vested in the very securities that are screwing America!

Equally important however, which attorneys overlook, is HOW and WHY quiet title actions are necessary if our current “system” of property ownership is to be salvaged.  Attorneys have to educate themselves FIRST, then they can educate the judges, who will then understand WHY quiet title actions are necessary.  For the time being, most judges I’ve read up on think of quiet title as just another assertion for why a homeowner wants a “free house” when this is so far from the truth. It’s unfair and totally biased to ignore the fundamental basics of quieting title; thus, we will discuss it here in further detail.

Now let’s look at the other side of the coin … the second issue in this think piece … 

From all the research my collective “network” has done, quiet title actions will become fundamentally commonplace because of what the MERS business model has done to contribute to the corruption of any chain of title it’s involved with.  I will NOT buy a property that has MERS anywhere in the chain of title! I suggest you take my comment to heart here, especially if you’re an investor.  This can only be overcome by (again, my suggestion and not legal advice, in the “if it were me” scenario) stipulation to judgment in the quieting of title prior to the deal being closed.  That means that MERS would have to be notified, so it too can “sign off” on what rights it thinks it (or its member users) may have (which I humbly disagree that any exist other than what’s in the contract, which are feebly explained by language a third grader can’t understand, let alone a future homeowner who doesn’t ask questions before signing papers at closing).  I would love to debate Bill Beckmann about how successful his “business model” really is, because the only thing I see here is how it benefits the users of his “system” and NOT homeowners. I’ll explain in more detail in a minute …

Most title attorneys will NOT admit that Schedule B circumvents the payment of 99% of any claims against a title policy.  They wouldn’t want you to know that because the title insurance industry is a racket unto itself that I’m not going to go into detail about in this particular article.  I will however, discuss it in finite detail when the book THE QUIET TITLE WAR MANUAL is finally published.  One needs to have all of his “A” game on before venturing into the shark-infested waters of what I term the quasi in rem quiet title realm.   Title attorneys further do NOT care about MERS, because users of the MERS® System do NOT record proper assignments anyway, and most title companies (“the racket”) have subscribed to the fact that they can now “write around the defects in title” simply because MERS exists somewhere in the chain.  Schedule B is the key here.  Read it and weep, preferably BEFORE you buy a worthless homeowners’ indemnity policy.

I don’t give a damn about the insurability of a property, but the “system” of the way things are done around here seems to cater to that modus operandi.  I care more about the marketability of property and what a prudent and reasonable person would do when confronted with a piece of property that is loaded with chain of title issues. Hopefully RUN … in the opposite direction, far away from the deal!  I realize that this may leave millions of blighted homes out there unoccupied, but it’s about damned time we sent Congress and our state legislatures a message: Either come up with a game plan to keep owners in “the game”, or watch your system turn into total chaos!  You let the banks “dangle the carrot” and you looked the other way when you repealed the Glass-Steagall Act and then end result was a system of modified securitization that has now turned this entire country’s court system into a game of reckless indulgences by foreclosure mill law firms who are making beaucoup bucks off the banks to keep the “game” in play in courts across the country, as long as it can, in the end, take the property, by whatever means (including the manufacture of phony documents for the purposes of litigation).

This is another reason why the banks are trying to actively change the Uniform Commercial Code (the “UCC”).  This is the last resort of any viable defense in both foreclosure and quiet title actions.  The banks know this full well.  If they can totally tip the scales in their favor, borrowing money will leave a bad taste in people’s mouths once they see others getting screwed.  Wait a minute!  That’s already happening here!

Instead of being honest about how they make money, the major banks have corrupted the securitization scheme in favor of side bets, called credit default swaps.  The borrowers seem to never have any of this payout money applied to their bottom line, but the banks who started it are reaping big benefits.  Securitization DOES INDEED affect the chain of title, because the Pooling and Servicing Agreements (“PSAs”), are never adhered to.  These are the governing regulations established by Congress under 17 CFR 210, 228, 229 et seq.   Conduct a full audit of one of these securitized trusts and you’ll see why investors are screaming that the failure rate of these REMICs is 100%! 

This is another reason that MERS was created: to facilitate securitization.  This beta model has done more harm than good despite what MERS tells its members.  If you look at their policies and procedures, you can plainly see that MERS® System users violate MERS’ policies with wanton impunity.  This is another reason WHY quiet title actions are fundamentally necessary.  This is another reason why the laws need to be changed to allow property owners to finitely challenge any piece of paper that is publicly recorded having to do with their chains of title.  This is all part of quieting title and THIS is what MERS and the banks DON’T WANT.  But … it gets better! 

If MERS and its parent had their way, all quiet title actions and their respective state statutes that mandate quiet title would be declared unconstitutional and your case discarded! 

MERS does NOT care about your rights to property.  MERS and its parent, MERSCORP (the for-profit corporation that is going to find itself embroiled in more lawsuits in the future, I predict, when the real truth comes out) caused to be filed an amended pleading (in the California federal case in Robinson) that asserted that the California Quiet Title Statutes were unconstitutional!  Can you believe the arrogance?  Is MERS now better and more powerful than the state legislatures?   Have we elected a pack of wimps that can’t stand up to them?  You be the judge here, because you have the power to change things!   State statutes regarding the quieting of title were created for a purpose … not to be ignored by MERS!  MERS has some sort of liability somewhere in this equation (facilitating breach of contract possibly) and someday it will be called upon to ante up.

MERS seems to forget that there is language contained within the contracts in which it’s named as a nominee and beneficiary or mortgagee (yet these terms are NOT specifically defined within the mortgage or deed of trust, so they become conveniently arguable as to their meaning in court) that specifically gives homeowners a duty-bound, contractual right to defend title to their property.  This is why every State in the Union is now faced with conflicting rulings when MERS is a party to any action.  That is fact, not my opinion.  Further, MERS doesn’t get to cause a breach in contracts it’s named in, in the name of squelching a quiet title action!  You should take out your mortgage or deed of trust and read the first few pages, especially the “seisin mechanism”.  That part of the contract is your contractual duty to defend title.  If you don’t, YOU’RE IN BREACH OF CONTRACT!  YOU DIDN’T ABIDE BY THAT SECTION OF THE CONTRACT YOU SIGNED! THE LENDER SHOULD BE SUING YOU FOR BREACH, BUT THEY DON’T.  WHY? BECAUSE THEY’VE ALREADY BEEN PAID OFF BY CREDIT DEFAULT SWAP MONEY! (The money, by the way, that wasn’t applied to your “bottom line” balance as typically referenced in Section 23 of your long-form mortgages and deeds of trust.)

What?  You didn’t know all of this when you signed the damned note and mortgage/deed of trust at closing?   Well … welcome to the real world!

As long as there is a mortgage or deed of trust out there with this language in it, you have a contractual duty to quiet title!  Maybe the lenders and Fannie and Freddie will remove the seisin mechanism completely from their security instruments at the insistence of MERSCORP, and will change the language to read:

“BORROWER COVENANTS that Borrower may not actually own the property they just bought, or in the alternative, have just purchased a property full of holes that title companies will not insure. Borrower agrees that they are stuck with what they bought and further agree that any rights to litigate to correct title are hereby waived completely.”

When it comes to the foregoing language, the courts seemingly treat Borrowers as if they have no rights at all … because … they owe somebody!   Title doesn’t matter … because the judge said so!  Read some of the appellate case law on quiet title and you will see where appeals have been reversed and remanded to allow attorneys for property owners to amend their complaints to quiet title, because they didn’t get them right in the first place!   Then you will see WHY attorneys need to be educated on the subject! It’s a shame you have to appeal quiet title actions because foreclosure mills denounce this practice, ignoring the contractual right (which to me wreaks of tortious interference with contractual relations).  Again, judges seemingly ignore this too!

Further, there is established case law regarding the quieting of title.  We have compiled quite a bit of it for your research, which is on the 16GB USB flash drive every attendee gets as part of their research materials for attending these classes.  Sorry, you have to attend the classes.  We do NOT sell the flash drives a la carte with no explanation behind it as to how we came up with this research!

Still confused, this is what we have the upcoming quiet title workshop in Chicago for.  Visit the Clouded Titles website for details.  The Chicago event offers three different workshops on chain of title assessments (COTA), quiet title actions and a session on the Uniform Commercial Code, state-specific, taught by attorney Robert M. Janes, who I deem the UCC “guru” in America.   You and/or your attorney needs to especially attend THAT workshop if you’re going to attend any of the events we’re offering here!  This is the educational series you want to drop the dime on!  This is the only event remaining this year with this kind of discount offering. We will not be doing another event like this in 2015, maybe ever!  That’s right, I’m making a pitch here for your benefit!

When we start addressing the real issues involving quiet title, then American homeowners will become more responsible and productive citizens!

I should hold a contest to see how many folks out there have incorporated themselves as one of the defunct lenders of the past, or MERS, for that matter.  There seems to be a lot of brouhaha about those scenarios as well.  I will discuss two relevant cases in the future regarding this point (involving MERS and America’s Wholesale Lender; “AWL”; anyone with an AWL mortgage or deed of trust will want to pay attention to this upcoming article!)

As a sidenote … if the courts don’t want continuous and voluminous foreclosure cases wreaking havoc on their dockets, perhaps they should consider the positive nature of quieting title when a case dismissal occurs.  Why should the bank get a “second bite at the apple”?

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Filed under Chain of Title Education, Financial Education, Quiet Title Education