Tag Archives: MERS

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

NINTH CIRCUIT RULES AGAINST THE ROBINSONS!

BREAKING NEWS — OP-ED! 

In what the poster of this blog deems as a completely off-point issue of contention, the U.S. Ninth Circuit Court of Appeals has ruled that if you don’t name MERS in your quiet title action in California, the courts will simply ignore that you did not quiet title as to MERS, it will rule that you violated MERS rights by not noticing it in the first place!   See the attached ruling: 59-1-courts-memorandum-12-16-16

This also means that when you name MERS, the contract, which says MERS has the contractual right to foreclose on you, even though there wasn’t an assignment of deed of trust recorded when the quiet title action was taken, it means that if MERS is in the deed of trust, you have to name them because the contract says that they are a beneficiary and a nominee too!  Apparently the 9th Circuit thinks that the same party can be both the beneficiary (which was not certified to the California Supreme Court by the 9th Circuit to determine the same thing that Oregon and Washington did in their respective MERS-related cases), and that MERS suffered harm because they weren’t allowed to come in and outsource and outspend the homeowners by removing their quiet title actions to federal court, claiming diversity because of the value of the note, which they have no interest in.  Sadly, in this case, there was no pending foreclosure, so what right did the 9th Circuit have to bring that up.  Where in the contract does it say MERS has the right to assign anything?  Wait!  MERS doesn’t assign anything!  The members of MERSCORP, it’s parent, who’s not even stated in the contract, provides the platform for the alleged document fraud!   MERS’ Board of Directors needs to be in prison!

Now, using this ruling, I challenge all of the attorneys studying the aspects of this ruling exactly how much liability MERS assumes as the agent of a defunct lender when it comes into court and attempts to enforce its agreement with a lender that is no longer in business, without having to provide any proof whatsoever, because what MERS will do is flake out on your discovery (and I want MERS to know I wrote the discovery for this case) and refuse to answer simple “yes” or “no” answers, calling them vague and overbroad.

This battle is not over yet.  A 4-page Memorandum, which I deem as chickenshit by the 9th Circuit, needs to be challenged because there is something rotten about the way that Judge Philip Gutierrez wrote a 13-page Opinion and then turned around and did a complete 180-degree flip in a subsequent 10-page Opinion which the 9th Circuit affirmed.

I’m not an attorney, so I can castigate the judges, unlike attorneys, which have a strict guideline to uphold the integrity of the judiciary.

Integrity of the judiciary … hmm … now that’s another subject for another day.  We know there’s something rotten going on here when quiet title actions are no longer sacred and we have to summon agents of defunct lenders to court.  Time for a 70-millon-member class action lawsuit against MERS, brought by about 20 law firms?   Don’t laugh … it may be in the works!  I’d like to see what liabilities they can heap on MERS and make stick!  Civil RICO?   After all, MERS does provide the platform for all of this apparent servicer fraud, right?

Someone is going to have to have the patience and the bucks to bring this entity down.  They have not done one bit of good for the counties’ revenue streams, which is why the State of Connecticut virtually tripled the fees for all MERS-originated mortgages.  I say, all the states now have a blueprint to make more money … vote to raise your MERS-originated recording fees.  How about … $1500 a pop?

UPDATE: Also, I might also add that you should notice the decision in Robinson was UNPUBLISHED, which means MERS nor any other foreclosure mill can use it as a citation (however, MERS will attempt to do so, you can bet on it!).

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Filed under Breaking News, Op-Ed Piece, Quiet Title Education

ANOTHER CLASSIC EXAMPLE OF WHY I BELIEVE YOUR PROMISSORY NOTE WAS SHREDDED …

OP-ED — The author of this post is a consultant to attorneys in quiet title actions and foreclosure defense matters involving chain of title. However, in this particular instance, I accidentally stumbled upon this federal circuit ruling that merits consideration as to why I believe that your MERS-originated mortgage loan NOTE (and potentially your security instrument that went along with it). You can read it here:

first-am-bank-v-fed-res-bk-of-atlanta-et-al-7th-app-cir-no-16-1122-nov-22-2016

I customarily do not read the entire piece of litigation unless there are specific things regarding real property law I’m looking for; however, in this case, I found some interesting UCC citations specific to Illinois that were referenced by the 7th Circuit Court of Appeals (which I deem fairly conservative in their holdings on cases), in extrapolating what further happens when physical paper is converted into electronic paper, as noted here:

“…banks would drown in paper”

In this particular suit brought by First American Bank, it accused Citizens Bank of destroying a check; in other words, a spoliated (an albeit fraudulent) check, as it had been honored and then “truncated”.  This term (in quotes) is important to understand. To clarify, I’ll use the Court’s own wording in the suit:

“The Federal Reserve Board’s Regulation J, 12 C.F.R. § 210.6(b)(3)(i)(A), provides that when a Federal Reserve Bank presents an electronic check (such as the check drawn on First American) for pay- ment, “the electronic image … [must] accurately represent[] all of the information on the front and back of the original check as of the time that the original check was truncated.” By “truncated” is just meant that an electronic image is substituted for the original paper check.” Id. at 3.

Since your mortgage promissory note is also considered in the realm of debt as a negotiable instrument (even the banks will agree with me on this), the MERS® System relies on the conversion (or truncation) of the note into electronic form in order to be stored on its system. However, you and I both know that MERS does not do the conversions, right?  The users of the MERS® System do the conversions and then upload those conversions into individual files within the database known as Mortgage Electronic Registration Systems, Inc.  That is what this database was created for, for the storage of electronic files.

Now for the truth of the matter … here is the Court’s own wording:

“There is no duty to retain paper checks after an electronic substitute has been made—otherwise banks would drown in paper—provided there’s a record of the contents of the paper check, as there is of course in this case; we know what the electronic check omitted, and knowing that, we know the information that the original, the paper check, contained.” Id at 5.

I hope you caught the highlighted phrase as to my realization that spoliation of the original note and mortgage (or deed of trust) happened in all MERS-related cases.  When you compare how banks used to do business, when you borrowed money from a bank, they would issue a check payable to the seller on your behalf, store the hard documents in their vault … and at least you’d know WHO you were making your payments to every month.

Caveat to this story …

There was also another interesting notation I picked up on while reading through the opinion of the Court:

“Some information that was on the original check was missing from the electronic version, but unavoidably so be- cause it was information consisting of characteristics of the check, such as watermarks, microprinting, or other physical security features that cannot survive the imaging process,” and their absence from the electronic image, being inevita- ble, was not actionable. See Regulation CC, 12 C.F.R. Part 229, App. E, § 229.51(A)(3).” Id at 3

If you continue reading onto page 4 of the Opinion, First American Bank could have demanded a “substitute check”, which is a paper printout “is deemed the legal equivalent of the original paper check.”

The foregoing statement would clearly tell me that a challenge is necessary to all promissory notes contained within the MERS® System because there is no “paper printout” or “substitute check” other than a copy of the electronic note downloaded by the foreclosing entity (most likely a REMIC), which in most cases is clearly missing certain items not found within the original note. Let’s revisit one of the previous mentions of items that cannot survive the imaging process.  One of them could seriously be an indorsement on the note, if you consider the current round of “indorsement-in-blank” arguments as to their lack of dating.  This is another one of the key reasons I believe that servicers, working in conjunction with the foreclosure mills, deliberately and purposefully create documents out of thin air for the purposes of manufacturing standing.

Also revisit the statement the Court made about what the electronic image must accurately represent (all of the information from the front and back of a check). Why do you think that when you access your online banking checks, you see both sides of the check’s image?  You never see that with a promissory note, do you?

A promissory note operates just like a check!

It has to be endorsed among the parties to show the custody of the chain of the note; otherwise, someone could come in at a point in time uncertain to a future borrower and attempt foreclosure upon their home because the chain of custody of the note was not preserved, especially in a “failed beta system” like MERS, which relies on its user-subscribers to “do the right thing” in managing their online transfers; however, there is no requirement by MERS that its user=subscribers even use the MERS® System, so long as they sign an executory contract naming MERSCORP Holdings Inc. (its parent), as the “electronic agent” in the transaction.

And you never see MERSCORP Holdings, Inc. anywhere on your paperwork, do you?  Further, once you realize that MERS and MERSCORP require its user-subscribers to indemnify MERS and MERSCORP from all liability for the errors and atrocities in its “system”, you’d also have to believe that MERS and MERSCORP have little (if any) idea what transactions are submitted by its user-subscribers unless they are actually made aware of it.  How then can MERS come into Court and say they have an interest in a promissory note they don’t even know is in their own database (or not) or was traded out of its database, when MERS itself did NOT input said data into the database?  How’s that possible?   Plainly, it doesn’t appear to be the case.

Mortgage States versus Deed of Trust States

Sadly, the difference between the two is that in a Mortgage State, you at least get your day in court.  In Deed of Trust States, all foreclosures are deemed to be legal unless otherwise legally challenged.

So the next time you’re looking at your promissory note that you managed to retrieve from the Servicer in a Qualified Written Request, remember what “version” of the promissory note you’re likely to get back.  If you lost or destroyed your copy of the files you got at closing, we need to go no further because you have no physical proof of any of the items that could or could have not reproduced on the electronic version.  This entire sham process is as bad as the sham check that was tendered to the attorney in this story.

This case does represent a mild test of the Uniform Commercial Code, at least as far as Illinois was concerned.  It merits further analysis by your attorney of record, especially when it comes to evaluating what is and isn’t contained within your promissory note.

How then can allonges (as well as indorsements) be attached AFTER the note has been scanned and uploaded into the MERS® System?  I don’t see too many attorneys revisiting that angle. Even though I predominantly deal in chain of title issues, this case tells a story of proportions equal to the sum of many promissory notes and merits further research for your understanding into the flow of promissory notes and what you’re actually presented with in Court, especially when MERS is involved.

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Filed under Financial Education, Op-Ed Piece

NINTH CIRCUIT APPEALS COURT CANCELS MERSCORP V. ROBINSON ORAL ARGUMENTS! UPDATE!

BREAKING NEWS — The U.S. Ninth Circuit Court of Appeals has just sent notice to all of the attorneys of its decision to cancel the hearings on December 8, 2016 in the matter of MERSCORP Holdings, Inc. et al v. Dan and Darla Robinson.  Here is the notice that attorney Al West just received from the Court:

***NOTE TO PUBLIC ACCESS USERS***

Judicial Conference of the United States policy permits attorneys of record and parties in a case (including pro se litigants) to receive one free electronic copy of all documents filed electronically, if receipt is required by law or directed by the filer. PACER access fees apply to all other users. To avoid later charges, download a copy of each document during this first viewing.

United States Court of Appeals for the Ninth CircuitNotice of Docket Activity

The following transaction was entered on 11/21/2016 at 1:05:28 PM PST and filed on 11/21/2016

Case Name: MERS, et al v. Daniel Robinson, et al
Case Number:   15-55347
Document(s): Document(s)

 

Docket Text:
Filed clerk order (Deputy Clerk: WL): The Court is of the opinion that the facts and legal arguments are adequately presented in the briefs and record and the decisional process would not be significantly aided by oral argument. Therefore, this matter is ordered submitted without oral argument on December 8, 2016, at Pasadena, California. Fed. R. App. P. 34(a)(2)(C). [10204835] (WL)

Notice will be electronically mailed to:

Mr. John Owen Campbell, Attorney
Honorable Philip S. Gutierrez, District Judge
Mr. John Owen Murrin, III
JoAnn T. Sandifer
Ms. Mary Kate Sullivan
USDC, Los Angeles
Al West

 

OP-ED — Now for the speculation as to why the 9th Circuit cancelled the hearings.  Here is some of the scuttlebutt floating around:

  1. “Someone got to the Chief Judge.”
  2. The Court was worried that the room would be packed full of cheering homeowners in favor of the Robinson’s and that this powder keg would bring crowd control issues the Court didn’t want to have to deal with.
  3. The political tide is shifting in favor of the banks with the election of the Donald.
  4. Ipsa Res Loquiteur.
  5. Certainly NOT because I was going to be there.
  6. MERS and MERSCORP own the Courts too!  (example: See Minnesota, “MERS Statute”)
  7. No matter what the 9th Circuit rules, they already know this case is going up to the United States Supreme Court.
  8. Rioting in the streets; protests in front of the 9th Circuit.
  9. Appellate Judges don’t want to hear the truth either.
  10. MERS attorneys were afraid that Al West was going to blow them out of the water … someone made a phone call.

Whatever the case, you can bet that both sides are going to wait the 4-6 months for the ruling.  Prep will start now in anticipation for taking whatever ruling the 9th Circuit issues up to the U.S. Supreme Court.

Calling all Superlawyers! 

Now’s your chance to shine!   Please email me at cloudedtitles@gmail.com if you’re interested in putting forth an amicus brief that further eviscerates the MERS business model!   If you have any dirt on the former AG (Holder), now’s the time to spill the beans on his allegiance to MERSCORP (his client at Covington & Burling) and the banks!  There are a lot of pissed off homeowners that aren’t going away any time soon … this case is being watched by the judiciary all across America!

FIRST UPDATE:

Here are comments from Fred Isaacs, an attorney with Jurisconsult, LLC in Lake Oswego, Oregon on the 9th Circuit’s decision NOT to hold oral arguments in the Robinson case: 

Speaking historically, it’s usually been a bad sign for an appellant to have a case submitted on the briefs — but as we both know, appellants always have an uphill battle in the appellate courts.  For the enumerated reasons set out below, this old historical rule may no longer mean much, if anything.  Moreover, it may be worth reminding the Robinsons what has been said about their appeal from the get-go.  You and I have consistently made clear to them that they have a viable appeal, but that simply means it has a fair chance of success; i.e., it’s not meritless, much less frivolous, but it does not mean it’s a slam-dunk win.  As you and I both know, only in 10-weights do the appellants have an edge over appellees; in all other appeals the appellees have the edge, and at best the Robinsons’ appeal is a 5-weight.  We have also been honest about telling them their chances of winning — at best one-in-three.  It might be worth reminding them that the odds were always against them, and nothing has changed on that front, oral argument or not.

Nevertheless, there are a few signs that might point to a little cautious optimism.

First, the appellate courts are hearing oral arguments less often than they did even five years ago.  This is largely a reflection of the fact that the number of appeals filed annually has more than tripled since the number of judges sitting on the Ninth Circuit was last increased — during the Carter administration.  In other words, the same number of judges are processing three times as many appeals: so, fewer cases get oral argument, and those that are argued get less time.  I myself am repeatedly seeing most 3-weights, and many 5-weights, being submitted on the briefs, something that just wasn’t done when I was with the Court.

Second, because more and more MERS cases are wending their ways through the federal courts, it is possible — indeed, likely — that the judges are aware of the factual and legal problems posed by these cases and may be looking to stem the tide by making a few definitive (?) rulings.  Oral argument isn’t necessary to do that.

Third, these MERS cases — despite their sometimes very ugly facts — really do present the courts with nearly pure questions of law.  Such appeals don’t need oral argument unless the Court is being asked to take a major step, e.g., overturn a long-standing law or declare something unconstitutional.  That isn’t our situation.

Fourth, most judges will admit — in private, anyway — that oral argument rarely changes their minds.

So, while I’m definitely not happy that this case is being submitted on the briefs, and I don’t view it as a good sign for us as the appellants, I’m not as pessimistic about our chances as I’d have been a few years ago.

Now that I read this back to myself, it may sound slightly dark, but I’d prefer to think it “realistic.”  I’d still put the odds at somewhere between 2:1 and 3:1 in favor of the appellees, but the fact that the case isn’t being argued doesn’t tip the scales any farther in their favor.

SECOND UPDATE! 

I made the previous comment that the judiciary across America was watching this case?  It appears (from one judge, who I am NOT going to name here because MERS reads these posts) who has researched PACER, the federal document custody and retrieval system), that something is “highly suspicious” with the cancellation of these hearings because upon this judge’s review of PACER, no actual “panel” was disclosed or appointed to hear the oral arguments that was cancelled in the first place!   My sources are checking further into this matter because for something like this to occur, because the Clerk of the 9th Circuit Court of Appeals released the Order canceling the hearings.  The chief judge is supposed to “sign off” on these documents, yet there is no signature of anyone in virtual authority doing this.  There is no indication as to who is actually reviewing these documents and there certainly isn’t any “person” of authority that has come forward to (other than the stated reason given) reveal why the cancellation came three weeks out and not just days prior to the oral arguments.

My sources also tell me that this case is a real “hot potato” for the 9th Circuit.  Most of the states (as I’ve previously cited) are split on what MERS can and cannot do.  This I know for sure (and it would surely follow that IF I were to author an amicus brief to the U. S. Supreme Court, based on my research) … there is NOTHING (as to specific language) in any deed of trust or mortgage that allows MERS to:

Assign a mortgage or deed of trust from Party A to Party B

The language contained ONLY in the first few pages of standard Uniform Fannie Mae/Freddie Mac Security Instruments relative to MERS says that MERS can only (a.) foreclose and sell the property (which it is NOT now doing because of all of the litigation it has had to defend for doing so); and (b.) release and cancel the Security Instrument.  There is NOTHING in the language of the contract that specifically says MERS can assign anything.

Get noticed of anything

If you look in Paragraph 15 of most standard Uniform Fannie Mae/Freddie Mac Security Instruments relative to MERS, the only parties entitled to “Notice” is the Lender and the Borrower.  This was succinctly pointed out in the Ditto decision in Tennessee, which you can refresh your memory on by reading here: MERS v DITTO_TN Supreme Court rules against MERS!

The other issue you have to also take into account is that MERS could have gone into state court to open up the Quiet Title Judgment that Al West secured for the Robinson’s, yet it did NOT exercise that right, probably because it didn’t have any idea that the case was ongoing.  The Shin case out of New York clearly noted that MERS is never aware of the transfer of any notes, so how then can it react and file lawsuits when it is not a party to the note?

Also to consider is the fact that if MERS wasn’t noticed doesn’t really mean anything.  If MERS WAS actually a named Defendant in the Quiet Title action, which in the Robinson case it was not, that would surely indicate that all claims MERS might have against the property are still on the table because MERS WASN’T NAMED!   MERS does not care about this fact however.  Nope.  Instead of leaving things status quo and biting the bullet on a case or two, MERS decided to jump into the fray and challenge a quiet title action by “forum shopping” (taking the case to federal court based on diversity jurisdiction and the value of the home, which exceeded $75,000, which must occur for diversity jurisdiction to be upheld) based on unproven harm to its business model.  At no time have I seen any proof of HOW MERS business model is harmed, with an exact dollar figure.

If MERS doesn’t suffer injury per Restatement of Mortgages, Third § 5.4, then what damage can be proven?

Enter: The MERS Rider

This 4-page Rider (attached here: mers_rider) is what is going to trap the homeowner in virtual hell.  I can tell you with a certainty that the title company will glaze over this document at the closing table (because the title companies ARE IN ON THE MERS SCHEME … and that’s exactly what it is, a scheme).  I have made numerous comments about this Rider in the past, which you can look up on this blog, so there is no need to waste your time restating everything again. Signing one of these will: (a.) bring title issues to your chain of title; and (b.) put you in proverbial legal hell if you ever stop making your mortgage payments!

If it was me, and I was handed this “Rider” at the closing table, I would get up and walk out of closing.  Knowing me, I’d get in trouble for giving the escrow agent a black eye for even pulling this document out of a file and insisting I sign it.  As pointed out in the Ditto decision, there is nothing stated past the first couple of pages of a mortgage or deed of trust that says (vaguely) what MERS is and what it’s entitled to do, because the framers of that document DON’T WANT YOU TO KNOW about MERS, so they bury it in the document.  That in of itself should sour your taste from borrowing money from mortgage companies … especially mortgage companies, who say they can get you low interest rates (I’ll bet you MERS is involved in it up to their necks).

My amicus brief

If I was able to get my amicus brief before the U. S. Supreme Court, you can bet I’d point out the research in both land record reports I issued.  While MERS put out a full-page ad in the Austin American-Statesman in the first instance, when the OSCEOLA COUNTY FORENSIC EXAMINATION came out, things got quiet in Reston, Virginia (probably because MERS’s attorneys told the MERSCORP hierarchy to “put a sock in it”, so as not to drag MERS into a perpetual criminal foray). There are a lot of things for the nation’s highest court to consider … and I can tell you, MERS and its parent will fight like hell to keep their “fatally flawed business model” alive at all costs.  How do I know this?

A federal court clerk (in charge of handling docketing for pro se litigants) in the 8th Circuit was fired for hiding and delaying the filing of one pro se litigant’s paperwork after two other employees witnessed a bribery of said clerk on the street corner by what the witnessing clerks described as a “Bank of America junior lawyer”.   This is corruption at its finest folks.  The federal judiciary should be concerned and should be more open about this type of behavior because America has already gotten a bad taste in its mouth of the “status quo” and voted for change. Our court system is the last resort of sanctity for fairness and equity and if that portion becomes corrupted, nothing else matters except Patrick Henry’s famous saying about “the blood of Patriots and Tyrants”.  As to this, I believe the judiciary is fully aware.

More to come as details unfold in this high-profile case!

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NO FREE HOUSES? THAT GOES FOR THE BANKS TOO!

Op-Ed (… meaning the opinions expressed herein are that of the poster and should not constitute the rendering of legal advice!)

One of the key opportunities that homeowners in Florida should be aware of is the chance to observe “how the other side thinks”, especially in the most recent Florida Supreme Court decision in Bartram.  See the opinion here if your mind needs refreshing: bartram-v-us-bank-na-et-al-fl-sup-ct-no-sc-14-1265-nov-3-2016  If not, keep reading, because there’s the “other side of the coin” that isn’t being discussed.

For the purposes of this discussion, I included two recent posts, probably designed by law firms representing the banks, to gloat over the recent decision and surmise what was and wasn’t answered in the Supreme Court’s ruling.  You can read those posts here and surmise what the bank’s attorneys are now thinking:

no-free-houses-florida-supreme-court-approves-fifth-dcas-bartram-decision-and-extension-of-singleto

no-free-house-in-florida-balch-bingham-llp-jdsupra

If anything was meant to get you “off track” on rightful thinking, it would be this case!  Why?

It doesn’t matter whether Florida even has a statute of limitations available, because only those who can actually prove they own the loan have the right to enforce the terms of the mortgage!  Why this case had to even develop into what it was is beyond comprehension.  Even the attorney litigating this case told me that the Nash decision would be reversed, because, that’s just the way the courts are around here.

So the real issue rises to the level of scrutiny … standing.   Rightful thinking should be based on any Florida homeowner’s understanding of jurisdiction.  A court cannot rule on a case when an alleged party to the case (the complaining bank, servicer, etc.) cannot prove that it has a right to even file the complaint in the first place!

When the alleged aggrieved party cannot prove it has possession of the note … 

Nine times out of ten, Florida Circuit Judges don’t give a shit … they give your house to the bank because you owe someone and why would this bank file a foreclosure complaint if they didn’t own it?

Because it’s easy to steal someone’s property in Florida!  … and that’s no joke, folks!  

Here’s how they do it:

  1. Servicers analyze properties that have been sitting idle in the securitization pools without payments being applied (no matter whose fault it is).  They don’t care whether or not other sources of income (like credit default swaps, default insurance … PMI, LPMI, etc … shared loss agreements with the FDIC) are applied to the bottom line or not; so the loan number is flagged and further scrutinized.
  2. Servicers’ IT departments then dig up as much information as they can to see who and when the last time the property was attacked via a foreclosure complaint. The Bartram decision now gives lenders and their servicers the right to as many “bites at the apple” as they want.  They will flag and further scrutinize loans where cases have been dismissed (it doesn’t matter whether the homeowner won or not, voluntary, involuntary or through summary judgment) and place them in a “pending litigation” file.
  3. The servicers then enlist the help of the major title companies and foreclosure mill law firms to review and analyze what was wrong with the cases that were dismissed. They will check into the status of the note, who might possibly own it, whether the note was lost (or shredded), what assignments have been filed in the real property records where the property they want to steal is located and what actions might be needed to correct the issues to make it easier to convince a judge to allow them to steal the property. After all, why would a judge who is drawing a pension steeped in RMBS-type securities even think about siding with the homeowner, especially in Florida?
  4. The servicers then employ the major title companies and foreclosure mill law firms to “take corrective measures” to move the foreclosure cases forward (vis a vis David J. Stern “procedures”), like: (a.) manufacturing fraudulently-misrepresentative assignments of mortgage that assign the mortgage and note (often using MERS, whether MERS is involved or not) to the “servicer” or new “lender” whose intention is to come in and foreclose on the property; or in the alternative, (b.) to direct the manufacture of said document(s) by the servicers own teams of “robosigners” and “robonotaries”, like those situated in Palm Beach County, Florida.
  5. The servicers then cause the phony documents to be filed in the real property records where the property is situated and then direct the foreclosure mill law firm to start sending notices (following the notices being sent by the servicers to the borrowers).  It doesn’t matter what the alleged “default date” is … because they keep changing it … and thanks to Bartram, nothing else matters.
  6. The foreclosure mills then look at the promissory notes to make sure there is at least an “indorsement-in-blank”, so they can claim that entitles them to foreclose on the property. This, despite the fact the “indorsements” are undated, which prove no effective date of transfer. It doesn’t matter, because whatever the argument that might come from the homeowner or their attorney, the bank’s attorney can simply say, “They just want a free house, your Honor!”, just to piss off the judge!

The homeowner, who by this time has done some Internet research, has deemed himself “entitled” to a free house because a “fraud” was committed against him.  However, the fighting homeowner is living in the house (still) and the judge knows this, which makes the crime against the homeowner even worse in the judge’s mind.  Whether or not the claims made by the lender are factually based, all they have to do is show up with manufactured documents, claim some REMIC trust owns the property, and they rely on the judges to do their bidding.  After all, the judge doesn’t want the banks to “bankroll” his opponent in the next election, so, “what’s fair is fair”:

  1. The homeowner borrowed the money.  It doesn’t matter where the money came from (e.g., out of thin air-created-credit, interim funding lender, REMIC investors, etc.), the homeowner’s loan was funded.
  2. The homeowner got something of value.  Namely, the home they’re living in.
  3. The homeowner hasn’t made his payments.  Regardless of the fact that the burden of proof is on the lender to prove the homeowner is in default, the judge starts asking the questions of the homeowner/borrower to help the bank’s attorney prove their case.  The ill-informed homeowner and/or their attorney doesn’t know HOW to answer the judge’s questions, mostly out of fear.
  4. The lender is getting screwed and is therefore entitled to the house.  It doesn’t matter whether the note is credible or not.  The fact it is attached means something to the judge.  95% of the time, the judge is not going to ask any questions because the Florida Supreme Court has directed him to “get the case off his docket”! and
  5. No matter how many times an attempted foreclosure has taken place … and no matter how many times that case may have been dismissed (for whatever reason) … the lender(s) get multiple bites at the apple.  Some party is eventually going to end up with the property, while draining the homeowner of available funding so at some point, the homeowner can’t fight back. The servicers know that it’s a “numbers game”.  95% of homeowners in Florida “run away” when served with a foreclosure complaint.  The other 5%? A percentage of them will spend thousands of dollars (after reading stuff on the Internet) hiring a lawyer that is ill-prepared to defend the foreclosure and believes the same thing as the bank is alleging (“you owe somebody”) and (“no free house”).  A small fraction of that 5% are prepared financially to appeal the case, which could result in a reversal of their foreclosure.

But no matter … with Bertram, banks get more and more bites at the apple … with more phony documents and fabricated arguments relying on those phony documents.  No one will prosecute those phony documents to stop this nonsense from happening over and over again, so the judge’s dockets keep getting jammed up with foreclosure complaints … a scenario created by the Florida Supreme Court itself, who then issues mandates to clear the dockets.  This creates new bad case law upon new bad case law, to where “standing” is the only viable counterattack available to homeowners.

As nice as the Sunshine State is to live in, why would anyone want to buy a house here, knowing that:

  1. The legal odds are that the chain of title is all F**KED UP on 90% of the properties!
  2. Because it’s the Sunshine State, there’s a desire for more investors to buy these properties; thus, burying the frauds committed by the banks and their servicers deep within the F**KED UP chains of title.
  3. Prosecutors (who like being in power) don’t want to prosecute document manufacturing frauds because “that would be bad for business” because we need more banks operating out there to take advantage of homeowners, giving them loans they’re not entitled to, just because they can.
  4. Homeowners don’t understand that when you borrow money from a bank, security instruments guarantee that “someone” can steal the house down the road, whether you’ve made your payments or not.  There are cases in Florida where banks have attempted foreclosure on homes where the homeowners borrowed nothing … they paid cash for the house!
  5. Living in Florida may be really nice, except when you have a bank riding your ass all the time! Still thinking about moving here just because medical marijuana has been legalized?  Think about where you’re going to live, because only a certain percentage of Florida homeowners will be able to leave an estate to their children, largely due to the fact that foreclosure mill law firms need something to do to stay in business, whether they’re entitled to a “free house” or not!  Most people move to Florida because of estate planning advantages, except when there’s a “subject to” riding on a mortgage loan or a reverse mortgage.  This is the financial raping of America folks!

If the government can’t (or won’t) deal with the foregoing issues, in any state for that matter, what makes you think your life is “secure”.  Security is only perception that your living conditions are unchecked by some bank, because when banks don’t know who owns what, your living conditions could be disrupted.  So, even if you paid cash for the house, decisions like Bartram are irrelevant and take a back seat to standing issues.   You should simply come to the understanding that banks can do whatever they want in Florida, including fund judge’s retirement pensions with accounts laced with residential mortgage-backed securities!  What a conflict of interest, eh?

99% of the time, whether you have the funds to fight the banks and their servicers in court, YOU are probably NOT the party who’s going to end up with the “free house”. Until judges put the screws to these banks in court, or the law firms and the servicers that manufacture the phony documents get sent to prison, it’s going to be “status quo” in Florida … and elsewhere across this damaged America.

I don’t care who you voted for.  When are you going to wake up and realize that BOTH SIDES OF THE AISLE (in Congress) are responsible for the mess you’re in?  It doesn’t really matter WHO the Chief Executive is, does it?  The power elite in DC have this country right where they want it, because now everyone’s arguing over who should be in the White House … again, distracted from the real truths!

Pretty soon, you’ll be so distracted you won’t be able to see the real enemy coming.

If you want change, stop borrowing money from banks!  Let’s see how long you can survive without altering your lifestyle.

 

 

 

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Filed under Financial Education, Op-Ed Piece