Tag Archives: MERS System

FDCPA CHALLENGED IN NON-JUDICIAL FORECLOSURES: U.S. SUPREME COURT TESTIMONY

(BREAKING NEWS) —

Here’s a rare treat … oral transcripts from Dennis Obduskey v. McCarthy & Holthus, LLP:

obduskey v mccarthy & holthus llp, scotus no 17-1307_oral transcripts of supreme court proceedings

(OP-ED) —

We’ve been waiting on the arguments here, because how the FDCPA is interpreted when it comes to foreclosures in non-judicial (Deed of Trust) states is at issue and has been in conflict among the federal circuits as to whether the enforcement of a security instrument (the actual deed of trust) constitutes the “collection of a debt”.  The 10th U.S. Circuit Court of Appeals (where the case originated) says enforcement of a security instrument is not a violation of the Fair Debt Collection Practices Act because it does not constitute debt collection.

Part of the problem here, is that it is and it isn’t (enforcement of a collection of debt) but an enforcement by the Trustee to sell property which is collateral for a debt (the note).  McCarthy & Holthus LLP is a known law firm that is part of a nationwide network that foreclosures on property wherein the borrower is claimed to be in default because of non-payment on the actual obligation (the Note).

Other courts have narrowly interpreted the matter in both ways.  This is where the conflict has occurred and this is why SCOTUS is hearing the matter.  If the Trustee is only attempting to satisfy the Lender’s need to recover the collateral that was pledged and does nothing more than use the contractual obligation of publication and sale to satisfy the terms of the security instrument (deed of trust) … that’s one thing.  The second the Trustee steps over the line and retains a law firm to enforce the terms of the security instrument and demand “payment” of a “sum certain”, THEN the attempt to collect a debt IS IN FACT, where misrepresentations occur, which would constitute a violation of the FDCPA!  My non-lawyer wisdom tells me to let YOU be the judge here!

If the law firm has all of its ducks in a row, that’s one thing.  But in this case, the argument tends to indicate it didn’t, which is why Dennis Obduskey filed suit.   This case represents one of the biggest challenges to non-judicial foreclosures in the United States; thus, this is worth the read if you are contemplating such an action.  Enjoy!

P.S.: The same amount of federal and state conflict has occurred with the MERS® System and the way the courts have treated it.  Why SCOTUS won’t hear those relative arguments may change.  For now, that issue is at a standstill.

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ENTER 2019 AND THE NEW MERS!

(BREAKING NEWS – OP-ED) —

FYI, NOT for use as legal advice … but for the added benefits of research!

ICE OWNS MERSCORP … and things have changed! 

If you haven’t been paying attention to the “new and improved MERS”, you should be.  As of October of last year, Intercontinental Exchange, Inc. (“ICE”; the same bunch that owns the New York Stock Exchange) took over MERSCORP Holdings, Inc. and Mortgage Electronic Registration Systems, Inc.

Two new corporate shills appear to be heading up the parent (MERSCORP Holdings, Inc.).  I got this from the “new and improved MERSinc” website:

How ironic?  The “Goone” squad!  (I know you’re trying to hold back the laughter, but this is serious folks!)

Noticeably missing from the MERSINC.org website is the “Member Search” tool.   Now ICE has made it impossible and further obfuscates WHO is participating as a “user/subscriber of the MERS® System!  Thus, anyone wanting to do research on a MERS-originated mortgage or deed of trust is going to have to ask for their closing documents PRIOR TO signing them.  Otherwise, those who are ignorant of history are doomed to repeat it because THE GOONE SQUAD now controls all of the information in the MERS System!

It also appears that since Goone is connected to the DTCC, he now might have access to every credit transaction conducted throughout the United States!

You can still search for the alleged “Servicer” on the MERS® System website; however, the users of the system are expected to continue to put the same malarkey on the “Investor” portion of the site when you go to access that information, vis a vis entering your personal identifying information, namely, your last name and your social security number.

Let’s be clear one more time … your social security number is actually NOT your number.  It was assigned to you by the Social Security Administration when you volunteered to be in the social in-security program.

My wisdom for 2019 … AVOID MERS MORTGAGES LIKE THE PLAGUE!

Any mortgages or deeds of trust you intend to execute from now on probably should be through the following entities:

(1) credit unions that are NOT user/subscribers to the MERS® System; and

(2) owner financing, or in the alternative, hard money lending, designed to purchase within the short term.

You have every right to walk away from the closing table and not have your property encumbered by “MERS” paper.  You should also do a chain of title search on anything you intend on purchasing because you never know what unknown (mesne) assignees might be lurking in the shadows, just waiting for that inopportune moment to foreclose on you!

My further wisdom for 2019 … TAX DEEDS!

Every state has a system for purchasing tax deeds. Investigate these in the alternative!  You’re helping the county pay its bills, in addition to getting yourself a great deal!

In Florida, for example, you can buy tax deeds at auction for less than assessed value.  In Florida, for example, when you buy a tax deed and your tax deed is recorded, possession is immediate!  You get to own the land (or a single lot; sometimes you can get acreage) outright; however, first investigate to make sure you can put a manufactured home or site built home of smaller proportions (if you’re in the scale-down mode) on such a lot.  Many areas have deed restrictions.  Don’t forget, you still need to quiet the title to the property, but on tax deeds, provided you don’t have to serve a foreign investor or person outside of the U.S., most QT actions take 60-90 days to complete and shouldn’t cost you an arm and a leg.

Whatever “state” of the union you’re in, the county maintains the #1 position for liens, based on payment of property taxes.  The ways of the allodial title have disappeared, despite what you’ve heard from some well-meaning Patriots that claim you can restore a land patent to its original state.  There is an interesting comment from Washington State I found to back that up:

(NOTE: Click on the image to enlarge it to make it easier to read!)

Anyone trying this crap may find themselves on the receiving end of criminal charges because filing false documents into the land records is a felony in almost all 50 states and is punishable under both civil and criminal aspects.  You cannot evade property taxes anywhere.  This is why I like buying tax deeds for less than assessed value … the annual taxes on them is cheap and buying agricultural land (if you can find it) is even better!  It’s a great way to “start over” with less money, especially if you’re reeling from the effects of a foreclosure and are opting NOT TO DEFEND, but rather to move on.  Just make sure that if you’re buying a lot to build on, have a plan to follow through on that quickly.  Don’t buy raw land just for the sake of having a nest egg because you will continue to pay annual property taxes on that land in the future whether you live on that land or not.  Now that industrial hemp is being legalized, build your home out of hemp (https://www.youtube.com/watch?v=mfQbXuTzQQU) like these folks did in Asheville, North Carolina!

I’ve gotten past the point of asking people to simply deed their properties (that they’re about to be foreclosed on) over to me so I can litigate them in court.  If people were that “entitled” in the first place to make bad decisions to buy property using MERS-related securitization, thus screwing up their title, why would I want that headache?  Analyze every deal before engaging it!

MERS generally is never found on the titles to vacant lots!  That’s another plus for buying tax deeds on vacant land you intend on quickly building on.  Being mortgage free is a blessing in this day and age and I can only wish the best for my readers, that they can enjoy the freedom of not owing a bank or a monthly payment to a landlord, if not in 2019, then at some point in the near future.  That might be a great New Year’s resolution to make!  Why become part of the Nation of Renters if you don’t have to?

 

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RISK MANAGEMENT TAKES SO MANY FORMS

(OP-ED) — The author of this post is a consultant to attorneys on matters involving chain of title, foreclosure matters and matters involving in “the system of things”.  None of  what you’re reading here is anything but common sense, not legal or financial advice … and a matter of fact explanation about how one manages risk!

PROFESSIONAL LIABILITY IN A LITIGIOUS SOCIETY

If “the system of things” teaches us anything, it would be what the legal costs would be for having to defend a professional negligence suit … anywhere from $66,000 to $250,000.  If you have to retain an expert witness to testify on your behalf, fees could run has high as $10,000 … all this over about a two-year period.  That’s two years of hell for anyone.

A lot of these attorneys representing the banks think just because their firm has E&O insurance, they have nothing to worry about.”   That’s what they think.

Again, we think of professional liability carriers and wonder what exactly is covered under such an event as described above.  Professional liability insurance places the law firm under a microscope.  Insurance companies are by nature risk averse and so they’d be reluctant to insure anyone with a propensity to commit statutory or ethical behavior on an ongoing basis for which the insurance carrier would have to pay a damage claim for harm caused by the attorney.

Remember in previous posts, I mentioned how insurance companies became so filthy, stinking rich?   They avoid paying claims on cases at all costs.  They invest in things that will bring them a maximum rate of return and shelter their profits inside of real estate and other wealth-building mechanisms.  But they will look to shave off dollars paid out in damage claims by settling for a lesser amount to keep more of what they make.  I don’t mean to irritate you with more “facts”, but that’s the nature of the beast.  This is why I wrote the ten-part series on “Gutting the Underbelly of the Beast”.   Professional liability insurance, of which errors and omissions falls under, is there to help manage risk.

IT’S TOO BAD HOMEOWNERS IN THE NEW MILLENNIA WEREN’T RISK AVERSE 

If homeowners (as borrowers) would have taken that to heart long ago, we wouldn’t be in such a mess nationally.  The rate of foreclosures wouldn’t have been so damned high.

It’s sad that we’ve been so conditioned to want everything “sooner than later” and “more of it than less of it”.  We’ve been programmed to have feelings of “entitlement” … to reward ourselves handsomely for a job well done.  Hell, even Presidents of the United States have gone on TV and told us that we deserve the American Dream at a time when credit was plentiful and anyone could virtually buy the home of their dreams.  With the Glass-Steagall Act being repealed, the banks became sponsor-sellers, the MERS® System took root and the end result was bad banking behavior which fueled the 2008 crash.   It fascinates me that Wall Street would assume so much risk without first figuring out how to manage it.  I’m talking about mortgage loans, student loans, car loans, payday loans, installment loans to buy appliances … and we’re not even touching credit card debt yet. Much of this debt has been securitized.

Student loan debt has now replaced mortgage debt as the number one crisis in America!   Student loan debt collectors have become more unscrupulous in dealing with consumers.  Baby boomers over 60 years of age are financially liable for $66.7-billion worth of student loan debt (whether co-signed or originally taken out to finance their own education).

I used to clean up people’s credit for a living.  My success rate was 85% in removing negative trade line items from people’s credit reports.  I decided to write a book about it: The Credit Restoration Primer.  It was the first of many books that explained how the credit system works and how credit bureaus are governed by law to make sure your credit reports are accurate.

WHAT WE LEARNED IN PRINCIPAL ISN’T PRACTICAL

Mom and Dad always told me that if you want something bad enough, you save up and pay cash for it.  Right?  Radio talk show host Dave Ramsey promotes debt-free living.

But wait!  The world won’t wait for me to save up for a house!  Right?

By the time I save up enough money to pay cash for a house, prices would be so inflated I couldn’t afford to pay cash.  Plus, I’ll be a retiring. (the afterthought)

Once health issues set in, it will be too late to take care of a home. It wouldn’t be advantageous to pay cash for a house in the future while I’m throwing away money on rent (paying someone else’s mortgage) while trying to save on my own terms just because mom and dad told me to avoid debt whenever possible. (just looking at semi-rational scenarios)

But wait!  Mom and Dad worked like slaves to put food on the table and seemed to be doing okay.  Or did they?   Look at their outcomes.  Work for the Company Man.  Get a gold watch. Get a kick in the ass (out the door, to old to work when we can find younger people to replace you at less cost) and then retire, get sick and die.   The “get sick” part is where the family again struggles to make ends meet while coping with huge medical bills because of lack of health insurance or high deductibles.

We’ve taken from what we’ve learned and decided that based on current data, we’d be better off in debt.  How crazy is that?  The banks and credit card companies would just love it if you got yourself in head over heels in debt.  They’re rich and you’re broke.  Yes, you may have “stuff”, but you’re broke!

BECOMING RISK AVERSE IN A SOCIETY THAT PROMOTES DEBT

Whether you like it or not, the Age of Entitlement is upon us.  We have nice things because we want them, no matter the risk in obtaining them.  We cannot become financially successful without a plan.  Then again, there are some that are just happy being able to make ends meet.  But it’s never enough, is it?  You always want what your parents had and then some.

The media is guilty of putting ideas in your head.  Ideas that promote debt. We allow it to permeate our thought processes because it expands our comfort zones and makes us feel better.  We have become programmed to make bad decisions because we “want it now, not later”.  Lacking legal and financial education seems to have been a deliberate thing, despite the fact the government keeps telling us it’s budgeted money to educate us in certain financial matters (like the money appropriated for “education” under the new Fair Credit Amendments Act in 2003). Where was that “education”?  I sure didn’t see any of it.

Why didn’t they teach “Checkbook 101”, “Mortgage 101” or “Student Loan 101” in high school?   I personally didn’t learn too much in civics class.   Maybe my teacher really didn’t give a shit whether I learned anything or not.  In high school, it’s all about the annual test scores and nothing else.

In the land of plenty, why are so many people starving?  Why are there still homeless people?  Have our principles simply been ignored?

Being homeless or without food presents a personal safety risk.  Thus, the government steps in and has the answer: Welfare, Section 8  housing, homeless shelters and food stamps!

But wait!  You have to fill out a form, giving Uncle Sam all of whatever personal information you can give, so the government can build a database with you in it.

The ideas that run through your head when it comes to food, water and shelter involve risk management (believe it or not).  If you can’t plan for a rainy day, why take the risk?  There’s always welfare.  Someone has to pay for it.  Let’s all have a pity party while we figure out who.

We have a government that writes checks its body can’t cash.  Our national debt is into the trillions.  Every time a new budget gets passed, a huge chunk of it is “pork”, so politicians will keep getting re-elected to keep the special interest groups that got the “pork” benefits happy.  This is the Congress that is bought and paid for by lobbyists, like those who work for Fannie Mae and Freddie Mac.

Our government has set such a wonderful example for us, hasn’t it?  Congress can’t balance its own budget, so why should we?

Spending makes us feel better. People get all emotional over colors, floor plans and styles, they forget practicality and price. To top that off, many buy over budget because they think they can afford it.  Prior to the 2008 crash, people took out risky loans, most of whom could never repay them. Many folks allowed the lenders to inflate their earnings so they could buy more home, which was a great disservice.  I’m not saying it’s all the homeowner’s fault.  The lenders played right into the game, offering predatory loans which were risky in an already unstable, credit-saturated market.  The teaser rate was merely a game played by unscrupulous lenders on uninformed borrowers who wanted their piece of the American Dream, only to find themselves on the street years later.  Our government promoted all of this and America bought into it.  Congress repealed Glass-Steagall through the Gramm-Leach-Bliley Act. It was a bipartisan effort.  No one but the banks knew how they were going to use securitization to “rig” the economy.  Notice how the government hasn’t put any of them in jail?  Our executive branch is supposed to enforce the laws that Congress makes.  Why did we forget that?  Why wasn’t that drummed into our heads in high school?

Do we chalk up our current system of behaviors due to lack of knowledge?  It’s no wonder insurance companies are rich.  They avoid risk.   Why aren’t we doing that?

CERTAIN WAYS TO AVOID RISK (MY PARTIAL LIST … TAKE IT FOR WHAT IT’S WORTH): 

(1) Research your planned purchases BEFORE you spend money!  See if you can get products that are either more durable or have a longer shelf life.  America has been so conditioned to mass produced products we’ve become a “throw away nation”.  We’re already seeing difficulty in America in disposing of trash.  Spending a little extra for something that has a longer warranty or shelf life is more prudent in the long run. If you have to use credit to buy that item, make sure it fits within your budget and have a time frame set in your mind (and on paper) on when you intend on paying it off.

(2) Investigate all insurance policies BEFORE you invest … and don’t over insure!  Compare policies.  The last policy I got didn’t cover that much in computer replacement in case of a lightning strike, so I upgraded my policy for $204 more to cover replacement of ALL my computers in my home.  Sometimes, not having ENOUGH insurance puts you at risk … and, in the alternative … sit down and total up all of your policies’ annual premiums.  If you’re paying more than 10% of your income on insurance, you’ve bought too much in policy benefits (or you bought a policy that doesn’t fit your current needs).  It’s like buying whole life insurance policy when pure term is cheaper and you can gage your financial position based on your age and what your current needs are and not get killed financially by changing face value amounts.  Having insurance is part of managing risk.  When homeowners default on their loans, hazard insurance is the first thing that gets cancelled for non-payment of premium.  This is why I pay annually.  It’s cheaper and you have a definitive date to plan for, so your risk is calculated.  General liability insurance on the average runs $350 a year!  If you’re going to protect yourself against high-risk situations, it’s a good thing to have.  I’m not a big fan of homeowners’ indemnity policies.  They essentially insure nothing and with MERS around, shit happens.  There’s nothing like buying a piece of real estate with a tainted MERS mortgage somewhere in the chain of title.  You never know what the future holds if your home’s fate is in the hands of some unknown REMIC.

(3) Avoid impulse spending!  I go shopping just to see how informed the clerks are.  I will rarely buy anything unless I absolutely need it.  This type of buying is especially true in grocery stores.  Why do you think they have food samples for you to try?  To get you to buy extra!  If you have a frustrating time buying groceries and stretching your family’s budget at the grocery store, you have no business going out to eat (because you’re frustrated with high grocery prices) and you’ve probably succumbed to the grocery chain’s slick marketing campaigns.  The stuff they WANT YOU to spend extra on is always in the middle of the aisle or on the end caps.  If you have to take your kids shopping with you, make them go into the check-out lane BEFORE YOU and make them watch the clerk load the cart to make sure nothing you bought was missed.  That way, you give them something responsible to do and they’re not basking at the candy racks at the checkout counter and bugging you with “I want! I want! I want!” overtures.  Hey!  They learned this conditioning on television.  It’s called cartoons (advertising targeted at children in between the cartoon segments).

(4) Plan your educational expenditures by properly planning your career move! Many folks went to college and majored in stuff that had no career future.  They went to school and took classes they liked and spent a fortune (in student loan money) over-educating themselves in foolish majors (like forestry or liberal arts, for example).  It’s one thing to double major in horticulture and business if you’re going to manage a food production facility (like a farm, poultry or egg production or similar skill set) or work for a Fortune 500 company with a guaranteed paycheck.  But wait!  There are risks there too!

First, there is no guarantee that you’re not replaceable!  The first time you make a sexist remark in the workplace, you’ll be labeled a target of some political movement that is responsible for polarizing America.  You’ll be shamed.  This is what you have to look forward to in the national workplace now.  Everyone’s got a political opinion. Everyone’s got Twitter.  Everyone’s got Facebook.  Everyone’s got Instagram. Ask Anthony Weiner (who’s getting out of jail soon) what the consequences are of putting sexually explicit pictures on your phone and sending them to someone.

Second, if you’re nearing retirement age, but have great experience factored into your work history, you can bet the company will be looking for someone younger with much less experience that they can pay less of a salary to.  This posits a risk in this day and age.

Third, there are unplanned illnesses.  You know your body better than your doctor does.  If you have health issues, get them fixed FIRST before embarking down the path to a new career.

(5) If you have to retrain to get out of being unemployed or underemployed just to stay afloat … research self-employment FIRST … then the skilled trades! 

Anything involving food, water, shelter and personal welfare (medicine, nursing assistant, dental assistant) are the BEST career moves NOW.  I know for a fact that my kids are not like me.  They do not have the discipline to be self-employed like I am. I always told my kids to work off the “trade side” and go to a short-term facility that offers grants more than student loans.  In the alternative, attempt to get a job in a trade that is willing to train you while you work (OJT).  True, it doesn’t pay much but the gains from improving your learning curve far outweigh the temporary disadvantages. If you’re going to have to take out a student loan, put a limit on what you’re willing to borrow.  The average student loan debt in America at present is $30,000!  That means, if you can stay at the lower end of that curve, say, $10-15,000, you’ll pay it off in less time.  But you’d better have a job lined up (or at least research enough to know there will be a job in that career path for you) when you graduate.   Paralegal certificates are easier to get these days and there are certain parts of the legal field where jobs are plentiful for lower-echelon workers.

Again, I like self-employment better.  I can work from home and be a consultant when I want.  I can do seminars when I want … or not.  I can work as much as I want or as little as I want.  Every day however, I’m up by 6 a.m. doing research for an hour or so!  Old habits die hard.

I had fun as a mobile DJ.  I made good money too and didn’t have to spend a fortune on equipment.  I rented someone else’s gear first.  When I got enough to buy my own gear, I continued to rent the gear for another DJ to use and over time, I was able to put 28 DJ’s to work and make damned near a six-figure income! That was in 1983.  Imagine what self-employment could do for you and research all of the possibilities.  In some trades or skills, you can rent what you need before you have to make a commitment to purchase stuff.

Avoid franchises!  I know … they look attractive, but there’s a hefty price tag and a huge commitment to follow their schools of thought, whether they work or not.  This is why they put ads in entrepreneurial magazines, to snag the ignorant who are attracted by their teasers.  If you don’t have a couple of million bucks lying around, you’re not going to be able to get into a McDonald’s franchise or a Hooters franchise or any other franchise you think is sexy or at best attractive.  A lot of people like to compete with Starbucks and open coffee shops or coffee carts.  Not a bad living.  Any kind of food cart is a cheap date, but you’ll face local licensing issues and potential consumer issues (conflicts on the street, hold-ups, shoplifters, etc.).

My mom had her own news stand inside the Rochester Gas & Electric building for a number of years before she passed.  It was a safe environment (there was a security guard in the lobby near where her stand was set up, inside a rented nook in the lobby) and she made a modest living and did well despite renting a studio apartment (unfortunately, she never had the opportunity to own a home).  She never got a college degree.  Back then, you just applied yourself.  But the work ethic has changed and so has the marketplace we live and work in. People seemingly care less about the end result (doing a good business) so long as they get a benefit from it (a paycheck with no commitments).

Self-employment is the “new shit”!  Set up an LLC or a full C-Corp. I don’t know if you knew this or not, but the IRS audits full corporations and LLCs less than self-employed sole proprietors.  LLC’s (I’m told by several credible CPAs) get up to 75 deductions a year, while sole proprietorships only get 35 deductions annually.  Full C-Corps get up to 350 deductions per year!  Put your personal property and your homestead into separate trusts as part of asset protection to guard your investments.  Being a consultant or an investor is NOT a bad thing, especially with the right training.  I spend a ton of time researching other people’s careers to determine their longevity.  I can look at a credit report and tell a lot about the consumer (how leveraged they are).  They may have a great cash flow and credit that sucks.  That tells a lot about how they manage risk (0r don’t).  When you can get to the point of investing in other people’s projects (with them doing all the work), then you’re really on top of your game!

(6) Learn to construct a financial statement!  There are FREE classes both online and offered by community colleges and libraries that will teach you how!  Once you know HOW to build a financial statement, you can then figure out what kind of a budget makes you more attractive to expand your horizons. It takes less than a day out of your schedule to learn how.

(7) Do NOT buy vacant land unless you intend on a pre-planned build job! There’s nothing worse than buying a vacant lot (and overpaying for it) only to find that you’re about to get hit with high sewer assessments or increased property taxes due to an unforeseen annexation.  Don’t buy land in flood plains!  I don’t care how glamorous the lot is.  If you’re going to buy, buy in secure areas with a home-building plan.   I actually acquired a 3/4-acre tract and put a used mobile home on it from a lot I bought through the Texas Veterans Land Board for $75 down and made payments on both until the timing was right to sell the 12-acre parcel.  I ended up with a $222 a month land payment and a paid off mobile home, which I fixed up and later made a $27,000 profit selling it.  In the process of selling the 12-acre lot, which was soon to be adjacent to a major toll road, I paid off $35,000 worth of debt!  Being mortgage free is wonderful.  I wish everyone in America could experience it.

Land purchases are great if you have a definite plan to build.  Getting suckered into development purchases is penny-wise and pound-foolish!  Avoid HOAs!  Research chain of title to make sure there’s no restrictions on the lot you’re going to buy and that the title is clean.  If you can buy 5+ acres, owner financed, even better.  You can put a used mobile home on it and build as you go.  A lot of people are doing that these days.  I would do it again if I had to (in a heartbeat)!  You can put in a garden, a well and eventually solar panels … and live off the grid.

AVOID buying second or vacation homes! I know this goes against the grain of you overachievers out there that think you deserve everything. Part of the problem is, second homes or vacation homes is nothing but an equity builder and equity is “fake” until realized.  Many people rent out their second homes but with this creativity comes more legal restrictions. I just don’t like tying up money you could use to really build wealth owning a business.  If you’re going to plan your career, look at self-employment and design your home purchase in an area as your principal residence that doesn’t have to support your business in order for it to survive.  Truck farming is another creative way to stay “under the radar”, eat well and have plenty of fresh, healthy fruits and vegetables left over for bartering.  Farm organic (but don’t advertise it … it raises an FDA red flag and subjects you to scrutiny). I’ll write another book about “being invisible” at some point.

From the investor’s perspective, forget the idea of a second home or a vacation home.  Build a rental income portfolio by investing in distressed properties that you can rent out and make a decent return, while making the bank payments.  There are people with money that have crappy credit, so option payment financing puts instant cash in your pocket you can use to buy another property or fix up your own place or pay down debt!

I know a couple that started out with a mobile home on 8 acres. They originally purchased a mobile home.  They put up a garage and pens and she got her veterinary assistant’s certificate (short term skill training) and got a business license to open up a kennel.  They eventually managed to build their mortgage-free home from scratch.  Yes, it took time, but the rewards were realized in the profits they made from their home-based business!  Ah, the peace and quiet of country living along with the security of knowing you’ll have lots of barking dogs to warn you of unwanted intruders!  I know that a lot of you aren’t cut out for that kind of work, so I posit this as a creative example of “putting your mind to something” to have a working investment.  Credit card companies are throwing credit card applications at these folks because they have cash flow.  They are credit resistant though, because they’ve budgeted and saved for a rainy day, mixing old school principals in today’s modern times.

(8) Say “NO!” to MERS mortgages!  Getting a loan that you know is going to be securitized is crazy because with the digital age, you’re putting your whole future at risk.  Your chain of title is going to ride on someone else’s say-so! You don’t want an electronic database involved in your life any more than you’d want your mother-in-law calling every other minute to query where you’re spending your next dime!

(9) Bank with public banks and credit unions!  Only go with banks that portfolio their loans (meaning they hold the loan in their own vault) and don’t sell them to any entity outside of their own bank!  If the bank is a member/subscriber of MERS, go somewhere else.  You don’t need to support these mega corporations any longer!  Generally, the credit unions give you savings accounts and additional protections that the mega-banks take for granted (when they’re taking YOU for granted).  AND … DO keep cash on hand.  I recommend at least $500 for every person in your household.

(10) Consolidate and pay down on credit cards!   Close the ones you hardly use, have high interest rates or hit you with annual fees.  Unless there’s a real purpose for having a department store credit card … those cards should be the FIRST cards you get rid of!  All your other plastic will work in those stores.  I take issue with these low-dollar credit campaigns like Macy’s and JCPenney’s do as a means to get customers. It’s not worth the hassle of applying for a $300 credit limit just to get a deal on buying one item or saving money on your initial purchase.  You’ll have an inquiry on your credit report, which could bring down your overall credit score.  It’s too easy to forget paying on cards with really low balances, which could jack up your credit score when you least expect it. I find keeping a credit card available for travel or emergencies is the most prudent, don’t you?

TEN WAYS TO “CLOCK” YOUR OPPONENTS UP SIDE THE HEAD! 

Read the 10-part series on this blog: “Gutting the Underbelly of the Beast”!

That way, you’ll learn how “the other side” manages risk.

Listen to this author (Dave Krieger) on City Spotlight-Special Edition, every Friday night at 6:00 p.m. Eastern Time on WKDW-FM!  Get the latest financial news and education!

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MERS HAS A NEW OWNER … THE SAME BUNCH THAT OWNS THE NYSE!

(BREAKING NEWS — OP-ED) — 

It’s official and still under investigation (by me) … but the reasons that the author of this blog post wrote the book Clouded Titles goes to the very core of an argument I made ages ago, siding with various law professors and legal minds in the world of foreclosure defense:  MERS cannot be trusted to be a reliable source for the truth!

Now it has been announced by multiple news pieces within the financial sector that Intercontinental Exchange, Inc. (“ICE”) has announced that it has acquired ALL of MERSCORP Holdings, Inc.’s assets, namely, the MERS® System and everything that goes with it.

ICE also announced that it has moved all of the MERS® System’s operations to its data center in Mahwah, New Jersey.  ICE acquired the New York Stock Exchange in November of 2013.

You’re probably all wondering why this happened.  In one short statement, ICE claims that the addition of MERS will help ICE “serve its customers better as the U.S. mortgage industry is gradually shifting to more digital mortgages and electronic notes from a paper-based process.”

WARNING — There’s a signpost ahead.  It says you’re about to enter “The Twilight Zone”! 

There are some serious repercussions with this acquisition.  I spoke with California attorney Al West yesterday about this acquisition.  Here are some of the components to consider:

(1) There is a movement afoot to privatize the entire land record system and take it away from the state-sponsored, state-sanctioned, state-mandated public databases and archives! 

Since this country was founded, our Framers gave the States certain rights to govern their own affairs, one of which was to establish land recording systems.  The purpose of this was to establish who owned what parcels of land.  Each state legislature voted on setting up these archival databases, which in of themselves, have evolved into (at least many of them) digital centers of database retrieval.  While it is certainly convenient to go online and search out your chain of title, taking all of this and putting it into ledger technology that is decentralized (“blockchain”) is dangerous because ANY system (over time) can be hacked and tampered with.

(2) The fact that there was even a mention of moving towards “digital mortgage” means that the possibilities do exist that you can easily get a mortgage loan from your smartphone or your home computer, all with the push of a button that applies your “digital signature” through your IP address. How convenient for the mortgage banking industry and MERS! Isn’t that wonderful?  NOT! NOT! NOT!

Part of the problem that precipitated the 2008 financial collapse was easing up on credit restrictions.  Credit was available everywhere (as long as you “could fog up a mirror”). History repeats itself and those who are ignorant of it are doomed to repeat it.  For starters, even though taking out one of these “digital mortgage loans” may supply you with a copy of what you signed … (a.) digital signatures are NOT your actual signatures; (b.) the digital signature you picked will be present on the “copy” of the mortgage paperwork you received; (c.) in all likelihood, your IP address from your computer or digital technology relative to your smartphone will be stored for retrieval in case you default on your loan and then that technology will be used against you for sure; (d.) all of this technology will be registered within the MERS® System now that ICE owns it lock, stock and server.  You can bet the obfuscation towards consumers will be just as prevalent, if not greater, as it has been in the past; and (e.) because the increased use of MERS will be tolerated, you can bet more foolish investors will keep buying into the thought that securitization is a great way to make money.  As history has shown us, even with its lingering effects, a lot of investors lost money while the sponsor-sellers made off (Madoff) like bandits!

(3) With “digital” technology, there are no “originals”!  

That means no original “note”, no original “mortgage”, no original SQUAT!  And ICE will keep the disclaimers on the “MERS” website it now owns, making sure things are just as “fuzzy” for everyone but “investors” and actual subscribers of the MERS® System.  It is unknown at this time WHO will actually entertain the previously-referenced “executory contract” now that MERSCORP Holdings, Inc. appears to have sold off all interest in its patented process (or so we might think).   Verifiability will shrink making it harder to defend mortgage foreclosure actions.

(4) The U.S. Securities and Exchange Commission’s role in determining MERS® System violations is undetermined!

Given what we know about lax prosecutions in the revolving door business known as the “SEC”, it is hard to ascertain at this time what we’re dealing with as to potential non-disclosure violations or other liabilities first assessed against the MERS business model.

(5) Even more serious … using any digital technology puts you at risk of identity theft!

Look … if hackers can get into the Equifax database … put your thinking cap on before you fill out an online mortgage loan application!

WARNING TO THE JUDICIARY! — You … as a judge … may play into “the system of things” in an adverse way! 

Because the same parent company to the NYSE owns MERSCORP’s “MERS® System”, all state and federal judges holding any NYSE-traded shares may have a conflict of interest!

It is seriously important to recognize, as Al West pointed out to me yesterday in our phone conversation, that any judge having any stock in the NYSE, now that MERS is a directly-linked, wholly-owned subsidiary, may represent a conflict of interest if that judge’s portfolio contains any NYSE-traded stock, which could be stock in any financial institution or any loan with MERS in it that is connected in any way to an NYSE stock, which could be cause to have the judge recused from your foreclosure case!

Further, my radio co-host (on WKDW-FM’s City Spotlight-Special Edition), R. J. Malloy, also intimated that in Florida, all of the senior judges presiding over foreclosure dockets could also be at risk of being recused based on similar conflicts of interest because their pension funds are vested in these types of stocks, bonds, securities, etc.  Not good!

If the judge is called upon to recuse himself from a case because he holds stock in the NYSE, which is connected to MERS, or has a pension vested with anything related to either, and fails to recuse himself, it could trigger an attack on the judges bond for a multitude of behaviors, including non-disclosure, which if played out to its distinct finality, could represent an ethical violation for which he could be permanently removed from the bench.  This would include federal judges (who, for the most part, have their finances laid bare at Judicial Watch!) who end up getting cases that have been removed by foreclosure mill attorneys who think they can get a 12(b)(6) out of the federal districts.

Besides clogging up the judicial system throughout the United States, all of the U. S. counties that employ judges that are even remotely “attached” to “the system of things” are at risk of having their treasuries plundered because most U.S. counties are self-insured.

For one minute, I do not believe that any of the people involved in the acquisition of the MERS® System even thought about the repercussions of having MERS connected to the NYSE!

If you thought that the idea of shredding documents was an option, with digital technology, there won’t be any originals to shred … and loan mods will probably be done online … reviewed online … and denied online.  Information gathering technologies will put all of your personal identifying information at risk, because ALL systems at some point, can be hacked. That furthers your risk for identity theft if you “play the digital game”!   Be forewarned!  Things are about to get dicey!

 

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THE JOURNEY BEGINS WHEN THE PITY PARTY ENDS … STEP TWO!

Op-Ed — (continued from the previous post) STEP TWO … 

The Internet can be a dangerous thing, especially when doing research, trying to find answers to questions surrounding a potential financial issue that could become a crisis, like a foreclosure.

One of the reasons why I post blogs is because people share them.  Others who are in despair happen to run across these posts and some of them walk away with reason.  The “reason” I speak of is the need to recognize when there is a problem and the HOW TO’s to do something about it. Being in denial solves nothing.  It simply prolongs the problem.  Sometimes, it makes the problem worse.

The bigger part of the problem is the second issue I spoke of in the previous article: Confusion.  Understanding what is happening in its most blatant aspects is that there is the potential of losing one’s home.  The WHY of it all stems from the alleged lender’s assertion that payments were missed and that the loan is in default.

In mortgage states, or states that are commonly referred to as judicial states, you not only get your “day in court”, but the bank has to actually PROVE that you are in default AND that they hold your promissory note AND have the right to enforce the terms of the mortgage (and note).   In all cases, the mortgage FOLLOWS the note.  The mortgage is a recorded security instrument, which is found in the public record in the county in which the mortgaged property is located.  It contains terms and conditions which must be adhered to in order to keep the note holder from foreclosing and taking their “security for the loan” back.

In deed of trust states, or states that are commonly referred to as non-judicial states, you don’t get your day in court unless you file a lawsuit and demand that the court issue a temporary restraining order (TRO), which prevents the lender (or its alleged servicing representative) from advertising and conducting a sale of your property on the courthouse steps at a prescribed point in time.  The deed of trust is also a recorded security instrument, which operates similarly to a mortgage, and if properly recorded, is also found in the public record in the county in which the mortgaged property is located.

You should know that if lenders had their way, EVERY STATE would be a deed of trust state.  That way, the lenders and their henchmen would have nothing to prove when it came to advertising and selling homes on the courthouse steps.  Until they actually bribe every state’s legislature to change over to non-judicial from judicial, homeowners still have their day in court. This is the only way the banks can win.  Knowing of this potential makes me wonder why people are taking out loans to buy property when, if they know there is a possibility of their financial future turning dismal, they don’t just buy a small plot of raw land and “build as they go”.  This would seemingly make more sense and involve the banks less.

Another reason the lenders prefer a deed of trust to a mortgage is that when examining the 2007-08 financial crisis, homeowners were affected to the point where most in financial straits could not afford an attorney let alone keeping food on the table.  Knowing the homeowner won’t fight back increases a successful outcome by the lender of taking the property back without much hassle.  Now that the Dodd-Frank Act has been molested and degraded to the point of history repeating itself, how many potential homeowners will be sucked into taking out mortgages from the mega-banks, which the gutting of Dodd-Frank was clearly designed to benefit.  You can bet the major lenders had a lot to do with those major changes to the most recent passage of the “Economic Growth, Regulatory Relief and Consumer Protection Act”.  Because these bills are so voluminous and partisan, they create more “confusion” for the average person on the street who didn’t go to law school.

Your “property” has a chain of title … 

Researching your property’s chain of title is like peeling away the layers of an onion.  The more research you do, the more layers you peel away, leaving the real truth on the table, which, after peeling an onion, leaves most people in tears.  This is why I used the “onion” analogy because peeling onions makes my nose run and my eyes water.  Finding out what really happened to you as the result of your being duped by an unscrupulous mortgage loan officer would make anyone cry, especially when they discover that they made a mistake getting that particular mortgage loan in the first place.  And now, you’ve opened “Pandora’s Box” and found the onion.

Accepting the “truth” for what it is … 

During the times prior to the 2007-08 financial crisis, banks and mortgage companies were loaning money to anyone who could “fog up a mirror”, altering mortgage loan applications, baiting loan applicants with teaser rates tied to adjustable rate, interest-only and negative amortization loans and mortgages that looked normal, only to end up finding one got stuck with a balloon note or interest rates that put their monthly payments out of reach of their paychecks.  This was deliberate and calculated.  The banks played both sides of the coin when they lured the investors into the schemes of securitization and lured the homeowners into loans they neither could afford nor deserved.  The first “truth” you need to recognize is whether you’ve bitten off more than you can chew.  Once you realize what the truth is, it makes it easier to come to grips with and deal with HOW the mistake was made that got you into the dilemma you’re in now.  I went through this “dilemma”.  I got stuck with an “80/20 loan”.  That’s two separate mortgages, wherein the second mortgage (the “20”) had a much higher interest rate and was generally tied to another Wall Street security altogether. I used the foregoing phraseology to describe “securitization”.

It does not take an Einstein to figure out that when there’s more month at the end of the money, you’re not making it.  When you’re even one day late on your mortgage payments, the servicer handling your mortgage “red flags” your account and starts a file on you. The servicer is generally looking for excuses to take your home away from you.  No servicer in today’s times is “nice”; in fact, they’re all common liars from time to time, especially those $9/hour cubicle employees who tell you that you have to be 90 days late before you can apply for a loan mod.  THAT IS THE BIG LIE!  The servicer knows that on Day 91, the REMIC’s credit default swaps, default insurance and any other PMI or LPMI that’s been tied to the loan will be negotiated and the alleged “Lender” will reap over 200% profit off of your mortgage loan … and that’s without even applying for the title insurance payout (the principal amount of the loan less 27% administrative costs) because the chain of title is jacked up (due to the Lender’s own ineptness).

The next major ploy of disbelief is the then-servicer (on or before DAY 90) has its employees dummy up an assignment of mortgage or deed of trust and cause it to be recorded into the land records in the county where your home is located so they can “structure” or “manufacture” standing to foreclose.  The term “standing” in of itself intimates that the lender (or its servicer) has the right to do what it’s doing to you. Most attorneys I know assert “lack of standing” in almost every foreclosure defense, because the simple statements of the servicer (who claims to represent the real party in interest) are not sufficient enough to prosecute a foreclosure.

If your loan is in the MERS® System, it is likely to have been securitized, which means that the chain of title is really messed up an there is likely a REMIC (Real Estate Mortgage Investment Conduit), a tax-exempt entity that soaked investors for loan money, who has no idea you’re in default (the servicer knows!) and the servicer comes in disguised as the Lender, retains an attorney, obtains a foreclosure, sells the house post-judgment and runs away with your earnings.  This is why mortgage loan servicers are in business.  You make gobs of money when 95% of the homeowners run away and leave their homes to the servicer and their law firms, who split the booty, post-sale. MERSCORP (in whatever form) and its wholly-owned subsidiary, Mortgage Electronic Registration Systems, Inc. were created to bolster lighting fast transfers of loans electronically, that have allegedly been securitized (paid for with investor money instead of the bank’s own money) and sold and re-sold multiple times on Wall Street.  This can only happen if the loan is securitized.  MERS IS NOT (AND SHOULD NOT BE) USED IN PORTFOLIO LOANS!

If you just understood what I just said … the REMIC does NOT know when you are in default because the servicer is required to make your payments to the investors, even when you don’t.  When people realize this, they get really pissed off because all along they thought it was all their fault.  The “noose” was tightened around your neck when you signed the mortgage loan in the first place!  Speaking of fault … did you come to realize the word “fault” and “default” are similar?  How do you know you’re actually in “default” if the servicer has been making your mortgage payments all along?   This is the “power over” debt collection game they play with you when you’re late on your mortgage payments.  All this time, the servicer has been making the payment for you and you never knew it.

These are only a fraction of the “truths” I teach at my workshops!

Homeowners who think they’ve been defrauded want to sue everyone tied to the mortgage loan.  THAT is the first big mistake that homeowners make.  That’s because their confusion has caused them to become angered (the third phase of foreclosure) for all the wrong reasons, to the point where they lose all rational consciousness in making proper decisions about litigation. Listening to people putting forth information and then acting on that information (without first vetting it just because it supports some sort of rational argument they have in order to make a living steering people down rabbit holes) accomplishes nothing either.  This is why many people become confused. Once they enter the cesspool of foreclosure cases looking for answers, they get so overwhelmed they don’t know where to turn or who to trust.

My research shows me that if the banks and mortgage companies were conniving and calculated enough to pull one over on you at closing, then the obvious objective is to give them their just desserts in return.  “Wise as serpents, harmless as doves.”  Going out and filing big lawsuits against lenders without a reason or any “litigation logic” using that same rationale is futile and fatal.  Why waste your money and your time?  The fact you are being foreclosed on brings an undue psychological burden on the mindset, which in turn induces stress, which in turn affects both your mental and physical health.  This is why 95% of homeowners “run away” and don’t fight.  This is why America can easily be “taken over” by the “party elite”, because most do not know HOW TO fight, let alone WHY.  If you knew HOW TO fight, wouldn’t the WHY develop into something more logical?   This is like taking karate or some other form of martial arts training.  There’s no “false hope” here because you are confident you stand a chance of winning.  You either choose to fight or you don’t.  You can still walk away from a fight and save your mental and physical anguish by formulating an alternate plan (otherwise known as PLAN B).

Everything from taking out the mortgage loan to fighting the alleged “lender” in court has a certain amount of risk.  Some of this risk is calculable.  Some of it is not.   You chose the path you are on for a variety of reasons and now you must choose the right reasons to either run and hide from your creditors or to get educated, stand up and fight them.   Filing bankruptcy only aggravates your struggle and to that end, I will explain that in the next step.

The journey begins with the chain of title … 

There is only one place that you’re going to be able to locate the foregoing and that is in the office of the clerk or recorder of your county records.  These folks get paid to help you search out the necessary documents.  If you live in a rural area with an underdeveloped county recording system, it’s highly likely that you will have to search all of this by hand through the index, which is organized by last name, then first name until you locate the recorded copy of your warranty deed.  This is your proof that title has been vested in you and no one else.

As a title consultant for many years, I can safely say that in most instances, this is your starting point.  You do not need certified copies of everything, just regular printed copies you can scan and mail to others who may have more research knowledge than you.  Getting together with other homeowners to discuss your findings after a visit to the land records may expose you to more research truths, which you need to begin your quest to justice.

You MUST collect the entire chain of title for your property in order to be able to fully analyze it (or have someone else that is more formally trained analyze it).  Skimping to only obtain the first couple of pages of a mortgage or deed of trust is just plain penny wise and pound foolish.  You need to see the whole document to see HOW you got screwed.  The devil is in the details!

Mortgage = Payments until Death  (Duh … “mort” … in several languages, means “Death”)

STAY TUNED FOR STEP THREE!  (I will discuss HOW the chain of title is used to formulate your case for trial!)

For more information on the Foreclosure Defense Workshop, click on the link!

I’m only doing this once this year!

For more information on Dave Krieger’s information library, CLICK HERE!

NOTE: Foreclosure defense attorneys are attending this Workshop!

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