Tag Archives: MERS

BOTH QUIET TITLE ACTIONS AND C&E ACTIONS ARE DECLARATORY RULINGS! UPDATE!

(OP-ED) — The author of this post is not an attorney and thus cannot give legal advice.  However, based on the research contained herein, one can share without retribution; thus, let this be for your educational value only! 

UPDATE … NEW IDEA!  (Please move to the bottom of the article to read my thoughts on this!)

One judgment appears to be a “cheap date”, while the other judgment isn’t.

Which one is cheaper to prove?  Why … the C&E of course!

The “C&E” should become part of everyone’s vocabulary these days.  I can give you over 500-million reasons WHY a C&E is important to every American property owner.  The main one is adverse condition of title to over one-third of every parcel of land in America!  That’s the biggest reason.

How can you consciously sell a piece of property to another human being when there is clear evidence of chain of title issues present, especially when “MERS” is involved?

The C&E has been in the forefront the entire time, albeit not exclusively.  Everyone knows that quiet title actions have been around for centuries. But … and I use this caveat succinctly: Quiet title actions are more than just a simple step in clearing title to a piece of land.  Like the C&E, both matters involve an evidentiary proceeding.  Both are rooted in declaratory relief.  Both require a certain amount of discovery.  However, the C&E requires less discovery because you’re only targeting one suspect document in the real property records, while the Quiet Title Action focuses on the entire chain of title, leading back to the document (usually the mortgage or deed of trust) that plagued the chain of title in the first place!

Back in the days preceding the first financial collapse in 2008, mortgage brokers and their title companies were so quick to file stuff in the land records that: (a.) they submitted the documents incorrectly for recording; (b.) they submitted MERS-originated documents to the county recorder knowing full well that the borrowers encumbering their property had no knowledge their loans were being securitized; and (c.) they did this knowing that a majority of the documents being recorded contained information on loans that were designed to default years later, causing a huge rash of foreclosure actions that plagued the United States from coast to coast.

I can tell you with a certainty (after having lectured to hundred of various county clerks) that a lot of clerks (recorders, registers of deeds, etc.) these days still don’t understand what MERS is and what kind of issues became predominant after MERS-related assignments are recorded.  I have been asked from time to time whether we should sue county clerks and recorders and my answer is “NO” (not just NO but HELL NO)!  These folks are generally elected officials that have a bond.  These folks unknowingly became victimized by the “MERS process” as much as the collective body politic affected by borrowing that was intended to be obtained from the secondary mortgage markets.

In The C&E on Steroids! Attorney Al West and I bring forward the reality of challenging documents through declaratory relief, especially the documents created from 2004 through today.

Yes!  These entities are still “manufacturing” bogus documents and causing them to be recorded in the land records all over the country!

And what’s even more astounding … MERS and its parent have absolutely NO IDEA that the MERS name was being used in these assignments!

The culprits … 

Mortgage loan servicers, third-party document mills and title processing services are the guilty parties!

Secondary to these groups of land record predators are the foreclosure mill law firms prosecuting the foreclosures themselves!

The potential targets … 

All of the above … depending where they’re located.

Again, The C&E on Steroids! describes WHO these targets are … WHAT prompted them to become targets  … WHEN they became targets … WHERE they got involved as targets and WHY they are targets  … and more importantly, HOW the “system” played us in letting them become targets!

Wouldn’t it be nice to know WHO your enemy is BEFORE engaging them in a legal battle? 

This is why is becomes important to understand the principal of declaratory relief.  It allows us to obtain discovery to get at the “root” of the problem.

Most homeowners don’t get that.  They think, “Okay, I’m going to get pissed off and sue everybody!”  They let their emotions get out of whack, failing to recognize the tools available to isolate and attack individual targets to further corrupt a chain of title to the point where a county court HAS TO quiet title title in order to comply with marketability statutes!

California attorney Tim McCandless was recently quoted as saying:

” … the more recent strategy of attacking the assignment of mortgage and seeking nullification of that instrument has met with some success and it should succeed, because you are attacking the facial and substantive validity of that specific instrument and not the entire mortgage or deed of trust. That strategy merely attacks the technical requirements for creation and recording of an an instrument affecting title to real property and attacking the substantive validity of the assignment by revealing that the debt was not transferred to the assignee by a party who owned the debt.”

The success in doing a C&E would seemingly “cut the legs out from under” the perpetrator of any future alleged foreclosure, right?  It would stand to reason that without an assignment being present in the chain of title, the mortgage loan servicer and its counterparts that were probably the culprits behind the very assignment they’re relying on as a tool in their foreclosure arsenal would be affected directly by the “lack of gunpowder” in their magic bullet.  The only thing they’re attorney will say is, “These people just want a free house, your Honor!” because they don’t have anything else they can say that will evoke the emotion of the Court to screw the homeowner one more time!

The beauty of this process is that it can be used at any time prior to foreclosure without bringing the mortgage loan servicer itself into the fray.  And it can be used in both deed of trust and mortgage states!  All 50 states have statutory mechanisms for declaratory relief.  All 50 states have rights to attack phony documents!

Further, there is case law out there that has taught us much in the way of educational value!  That case law is described in The C&E on Steroids! 

In fact, the case law Al West and I discuss in this book and the related course materials SHOW YOU validity past what attorney McCandless previously described!

And it all revolves around a simple and concise declaratory relief action. Yet, homeowners will continue to go out and make a “mountain out of a molehill” (go overboard in citing every cause of action under the sun, thinking they’re entitled to damages), when a simple action designed to knock these bogus assignments out of the land record create a precedent of bad behavior on the part of those who would undertake the illegalities of trying to steal your homes!  This is not a pipe dream process.  This process has been used countless times and has been successful because of the patience and effort put into drafting the proper complaint against the proper parties, isolating them in such a way as to keep the matter in county court!

Federal courts will generally NOT hear these types of cases.  Suing the wrong party in a C&E will get your case removed to federal court, where the judge is likely to dismiss it, because federal law has already declared declaratory rulings to be discretionary.  In state court, judges do not have that option.  They HAVE TO hear that complaint.  This is why Al West and I decided to get to the bottom of the root causes for doing a cancellation and expungement action and extrapolate the material into something useful for the average American consumer and put it into an 8-DVD/book weekend training kit. America has to know there is a remedy out there that can be used to attack phony documents!

If you don’t know your rights, you don’t have any!

UPDATE!:  While I was having a conversation with an aggrieved party, the thought crossed my mind as to the type of attorney that would be GREAT to utilize for the C&E when the opposing law firm is your target … 

Who can you think of that isn’t intimidated by prosecuting attorney misconduct and malpractice? 

Legal Malpractice Attorneys (they prosecute malpractice for a living!) … add that to your arsenal (just Google them … they’re out there)! 

I found at least a dozen in the Dallas-Fort Worth area alone! 

If your own attorney screws you in the process, it may be that your defense attorney is “working for the bank/servicer” under a silent agreement to feed you to the wolves.  Why not prosecute BOTH ends of malpractice if you’re going to attack one for failing to defend your case adequately.  

Just a thought.

 

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FDCPA CAN STILL APPLY TO NON-JUDICIAL FORECLOSURES!

(OP-ED) — The author of this post is the author of The FDCPA, Debt Collection and Foreclosures … and posits the following for educational purposes and for your consideration in the paradigm shift that has now become the focus of thousands of consumers.

I’ve noticed an uptick in the number of pro-bank/pro-debt collector law firm postings regarding the U.S. Supreme Court’s latest narrow ruling in the Obduskey case (out of the 10th Circuit Court of Appeals).  I love how these folks like to “pat themselves on the back” for their observations that non-judicial foreclosure proceedings can still be business as usual, despite the caveats their posts now contain.  Why on earth would they post “caveats” to the debt collection industry (which includes law firms like the one Dennis Obduskey filed an FDCPA action against) if they were so sure of themselves in being able to just walk all over borrowers they claim are in default?

Despite the fact the nation’s highest court resolved the federal circuit split on whether non-judicial foreclosures can continue as “business as usual”, the ruling was “narrow in scope” regarding the enforcement of security interests as defined under 15 USC § 1692f(6), which is what the Court focused on in its decision: Obduskey v McCarthy & Holthus LLP, 586 U.S. ___ (2019)

What Congress intended … 

Creditors used to love the idea that they could open up a can of “whoop ass” on debtors any time they felt like it, even late-night, repetitive or threatening phone calls (“I know where you live” and “your mommy’s going to jail” and “we’re going to sue you if you don’t pay” or “we’re going to bomb your office building if you don’t come down here and pay this bill” or “you !@)#(%^!”.)  The caveats I’m seeing in these law blog posts still make reference to the fact that the latest FDCPA-related ruling DOESN’T mean “business as usual”.  It simply means that debt collectors trying to enforce deeds of trusts have to be extra careful NOT to step over that well-defined line of intended “abuses” that do in fact, fall under the FDCPA!

Enforcing a recorded security interest (deed of trust, security deed, HELOC, etc.) in a non-judicial state means just that.  If a third party (the trustee, NOT MERS) intends on using the terms of the security instrument to act as the third party in taking back collateral, the collection activity has to specifically and purely involve that process.  The narrow ruling still prohibits abusive debt collection practices, whether or not a non-judicial foreclosure is still the intended outcome.  The abusive debt collection practices fall under 15 USC 1692d and 15 USC 1692e, as well as portions of 15 USC 1692f (1) through (5) and (6)(B)(C) and (7) and (8).  See here for clarification: FAIR DEBT COLLECTION PRACTICES ACT 09-1996

If you have a case … you have a case … 

Every time the debt collection industry scores a narrow victory, they pontificate their accomplishments as soon as humanly possible, almost to the point of bragging rights (see, I told you so … lemme rub your nose in it) kind of stuff.  This is typical of the legal profession, especially the kind that can operate unchecked when it comes to carrying out enforcement actions.

One of the more remarkable things I find is that all non-judicial foreclosures are assumed to be legal unless otherwise challenged.  One of the things I put forward in the book (mentioned above) is that careful analysis of the debt collection laws needs to be strictly adhered to (the letter of the law), which you are attempting to assert was violated.

How the “chain of title” points to potential suspect violations of 15 USC 1692e(5) … 

Here’s where the latest ammo we’ve been sharing on the C&E comes into play.  Cancellation and expungement (C&E) actions are used to disable and destroy the authority these debt collectors rely on to even enforce a security instrument.  Under “False or misleading representations” (§ 807 of the FDCPA), section 5 prohibits false, deceptive or misleading representation in threatening “to take any action that cannot legally be taken” … which would mean to me that if you could strip away the lies contained within the assignments that generally precede the initiation of a non-judicial foreclosure action through a C&E, the authority of the debt collector would be void and the debt collector’s representations would then be false and misleading, which IS a violation of the FDCPA!

Champagne budget … Beer Belly Pocketbook! 

A C&E action is definitely a cheaper way to wage war on an unsuspecting servicer (who is really behind the scenes of the debt collection/non-judicial enforcement proceeding), stripping away whatever rights it thinks it has to steal your house on behalf of party or parties unknown (which could be Fannie Mae or Freddie Mac, lest we hold the GSEs unaccountable in the end) than waging an all-out FDCPA battle in federal court, which costs substantially more money.  Try to keep the emotions in check for the moment while I finish.

The document the servicers are creating is the assignment of deed of trust (much like the assignment of mortgage), which they claim gives them the authority (on behalf of the alleged “lender”) to appoint a substitute trustee to initiate a non-judicial foreclosure.  Do you have a contract with the mortgage loan servicer?   (Didn’t think so.)  However, servicers have Limited Powers of Attorney, which they claim give them the authority to do whatever they want, including wading into the shark-infested waters of violations created under the FDCPA.  Strip away their authority under the assignment as void … they’re like “chum in the water”.

This is why I’m releasing a two-day training video DVD set with the latest book by attorney Al West and myself, The C&E on Steroids! in very short order.  What better a way to deal with America’s tainted real property records than to fight the good fight head-on in state court, rather than wage a flimsy, unsupported war in federal court without first demonstrating the ultra vires behavior of the trustee thanks to a phony assignment, which you’ve knocked out FIRST in a C&E action!

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DEFEATING DIVERSITY IN FORECLOSURE ACTIONS

(BREAKING NEWS — OP-ED) — The author of this post is the author of Clouded Titles, The Quiet Title War Manual, The C & E on Steroids!, The FDCPA, Debt Collection & Foreclosures, The Credit Restoration Primer, End Game Strategies, Beyond End Game Strategies and host of The Krieger Files.  The opinions expressed herein are that of the author and should not be construed as legal advice.  For legal advice, seek competent counsel that clearly understands what constitutes diversity jurisdiction.

Even in its most liberal stature, the U.S. 9th Circuit Court of Appeals has again, redefined and re-explained that REMIC trusts can end up costing you lots of money in litigation, fighting a losing battle in federal court by re-constituting an opinion of what constitutes diversity jurisdiction.  See the link below to the 17-page ruling:

Demarest v HSBC Bank USA NA, 9th App Cir No 17-56432 (Apr 8, 2019)

You’ll readily notice in the caption on Page 1 that HSBC and MERS were “incorrectly sued”, which would indicate to me they were sued in the wrong name, as indicated in the caption.

Part of the problem here is that the trustee was also sued (Western Progressive, LLC) and the trustee was also out-of-state as to its “headquarters”, which put all of the Defendants, coupled with the $75,000 required for complete diversity jurisdiction, squarely in federal court.

Again, Hawaii Attorney Gary Victor Dubin, who is again in the crosshairs of the Hawaii Bar (thanks to the banks and their attorneys who don’t like lawyers who beat them in court), likens being in federal court to suicide, which he has succinctly stated that it (suicide) is better than being in federal court.  Yet, a lot of people end up becoming victims within the federal system because of improper and incomplete pleadings.   Couple that with WHO you sue and the numbers of removed cases rise exponentially.

Why sue MERS?

This entity is the “bastard child” of MERSCORP Holdings, Inc., which is now owned by Intercontinental Exchange, Inc. (which also owns the New York Stock Exchange).  This newly-acquired entity has the backing of Wall Street.  The ownership of MERS may have changed, but the stupidity of the courts in relying on every tenet of MERS’s flawed business model incorporated within the “MERS® System”, has caused nothing but utter conflict among the state courts and federal circuit courts.

Like MERS says or intimates in its pleadings (among some of the third-person, schizophrenic quotations from its collective counsel and others), “We didn’t do anything wrong!”  “We want to be all things to all people!”  “We are the God of Securitization!”  (sic)  “We are everyone’s beneficiary that names us in their mortgages and deeds of trust!”  “We can be a nominee (agent) and beneficiary at the same time!”  “We can do anything we want, because we’re MERS!”  “We can remove you to federal court because we know your pleadings lack sufficiency and we can get them dismissed!”  “We can be in multiple states at any given moment and the federal judges will do what we say because we own them!” (that’s what they think, seriously).

Knowing you’re dealing with such a filthy, stinking rich entity that kowtows to Wall Street, why in bloody hell would you name them in anything?  Do you seriously have deep pockets?

You’re dealing with a multi-billion-dollar-a-year company here.   Here are some facts you should face:

  1. You signed the mortgage (or deed of trust).  No one held a gun to your head.  You could have walked away from the closing, but you didn’t.
  2. You could have read the entire agreement, asked questions; and when you didn’t get sufficient answers, you could have put off the closing until you got clarification, but you didn’t.
  3. You had no idea that the closing agent and the entity that agent represented knew (or should have known) WHERE the funds were coming from; how the funds were getting to the escrow account that was wiring your funds to the closing agent; and all of the details regarding the validity of the “lender” and “mortgagee of record”.
  4. You had no idea what the acronym “MIN” meant … nor had you any idea of the 18-digit number following that acronym.
  5. You had no idea your loan was being securitized through a Real Estate Mortgage Investment Conduit (REMIC) on Wall Street.
  6. You had no idea that your home loan was being funded by investors unknown to you.

Yet, you got hoodwinked into signing your life away to a life of potential PTFD (Post-Traumatic Foreclosure Disorder), should you fail to make your monthly mortgage payments!

What constitutes diversity jurisdiction?

In order to be able to remove a lawsuit to federal court (which is a court of limited jurisdiction), two things have to occur:

  1. The Plaintiff is a resident of State “A”, while the Defendant(s) are known to be residents of State “B”.
  2. The amount in controversy must exceed $75,000.

Gee … I wonder what would happen if the homeowner showed the caption as:

Joan Demarest and the Registered Holders of Nomura Home Equity Loan, Inc., Asset-Backed Certificates, Series 2006-HE2 … as joint petitioners … with NO defendants listed … and asked for a declaratory judgment ruling on the merits of WHO got screwed in this deal?  Where’s the controversy then?  (you attorneys can chime in here)

In order to have justiciable controversy (the makings of a proper lawsuit that a court can claim jurisdiction to rule on), you have to have a Plaintiff and a Defendant(s).  If you have “joint petitioners” and NO defendants, how can there be a “controversy” if both joint petitioners agree on the same thing?  Despite the fact that the certificate holders are from all over the world, some of them (To Be Determined) may be in the state you’re residing in (State “A”).   If there’s no State “B”, then why list DOES 1-10, inclusive, like this case did?    I actually litigated a case (while out of state) through the mail, with a co-party, as joint petitioners, and got my ruling from a court in Missouri!  Does that surprise you?

Diversity FAILS if … 

  1. There is no amount in controversy (which is what you have in a declaratory relief case, like a cancellation and expungement action (C&E) over a bogus document in the land records; and
  2. You aren’t naming out-of-state defendants until the in-state defendants respond and lock the case up in state court.

Does this make any legal sense to you?

This is part of what we taught in the C&E Workshop in Las Vegas April 6th and 7th. 

America’s land records are a “crime scene”!

MERS’s flawed business model helped make it that way.  Over 80-million homeowners who unknowingly borrowed investor money through securitized mortgages did the rest of the damage.  It was “intentional” on MERS’s part.   It was ‘unintentional” on the homeowners’ part.

Despite the fact you can beat diversity, certain entities will remove the case to federal court anyway, just to F**K with you and your pocketbook!  MERS is one of those entities.

There is a right way and a wrong way to approach this scenario.  What Joan Demarest did in her case was the wrong way.

The “trustee” is a necessary party in Deed of Trust states!

You should know that if you name the trustee in your lawsuit, it’s likely that the trustee is “headquartered” out-of-state.   The trustee (in this case) was declared by the 9th Circuit panel to be a “real party to the controversy for purposes of diversity jurisdiction when he possess certain customary powers to hold, manage, and dispose of assets for the benefit of others”.

This case was filed in Los Angeles County Superior Court on May 27, 2016.  You would think that by then, anyone involved in this case could have figured out what the “end result” could be … but NO!  We have attorneys out there that like to use the “shotgun approach” instead of the “sniper approach”.  This is why California Attorney Al West and I put together “The C & E on Steroids!”   It’s a sniper approach to cleaning up the “crime scene”.   If you clean up the “crime scene”, then what evidence is there that a crime occurred?  What evidence is there that a party has standing to foreclose when the intended “consequence” of an assignment is declared void, cancelled and expunged from the land records?

This is why we found instructional appellate case law to support our research and methodology for doing these types of “sniper approach” end game strategies.  Everyone wants an “end game”.  Getting to that point is why people run into trouble having their dirty laundry removed to federal court where it’s likely to get dismissed on a 12(b)(6) motion.  And the foreclosure happens anyway, because “we’re too pissed to think straight!”

Watch the movie “American Sniper”.  Then, liken that mindset to your approach.  Knowing WHEN, WHERE, HOW and WHY you need to “take out” a target makes all the difference in the world.

Look for The C & E on Steroids!, along with the DVD training video kit, available in early May, only on CloudedTitles.com!

Sniper training at your fingertips!

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MERS AND ITS ROLE AS A PLAINTIFF AND DEFENDANT … OR THE LACK THEREOF!

(OP-ED) — This is an educational overview as to what has taken place in the American legal forums in the last two decades and my take on what it all means:

UPDATE: Please see my comments to Lori’s question in the comments section as to Bank of America’s claimed “successor by merger” BS to BAC Home Loans Servicing LP fka Countrywide Home Loans Servicing, LP, especially using MERS to hide the real truth!

HISTORICAL PERSPECTIVE

On January 1, 1999, Mortgage Electronic Registration Systems, Inc. and its parent MERSCORP, Inc. (“MERSCORP”), surfaced as a new brainchild of the mortgage industry after two previously-failed efforts to put an effective electronic database into useable form.

MERSCORP is the “brain” part of  the “brainchild” … Mortgage Electronic Registration Systems, Inc. is the “child” part of the “brainchild”.

The acronym known as “MERS” was attached to the “brainchild” to further confuse the system of things from being able to specifically identify whether the parent or the baby bastard child is coming into play at any given moment.

According to research done by Robert M. Janes, J.D. (retired attorney) in his work SHELLGAME MERS, Contrived Confusion (available at esprouts.com), the “MERS” known in mortgages and deeds of trust as Mortgage Electronic Registration Systems, Inc. HAS NO “MEMBERS”, despite what attorneys for “MERS” have told judges all across America.  The entire system of things has bought into this crap.  Our entire judicial system has been permeated with lies.  As Hitler’s propaganda minister Joseph Goebbels stated (paraphrased), “tell a lie long enough and often enough and people will come to believe it as truth.”

MERSCORP however owned everything known as the MERS® System, up until the time that Intercontinental Exchange, Inc. (“ICE”, who also owns the New York Stock Exchange) bought MERSCORP and all of its assets and transferred all of the MERS servers to Mahwah, New Jersey, where ICE’s data servers are located.  This happened in October of 2018.  From February of 2012 until October of 2018, MERSCORP was merged into MERSCORP Holdings, Inc. and operated as such until ICE acquired it.

MERSCORP had all of the “Members” who technically are users and subscribers of its “MERS® System”.   They have an executory contract with MERSCORP.  As far as I can tell, when ICE acquired MERSCORP Holdings, Inc., ALL of the databases, memberships and every other facet of MERS went with the sale and transfer to ICE.

These latest developments also beg the question: Do I have to sue Intercontinental Exchange, Inc. if I want to go after MERSCORP Holdings, Inc., since ICE now owns MERSCORP?   That’s a question for counsel to answer; however, I personally wouldn’t sue either one of them, knowing what I know about NOT giving MERS a “leg up” … and given the fact that MERSCORP is now backed by the power of Wall Street funding!

MERS WANTS TO BE “ALL THINGS TO ALL PEOPLE”

Unfortunately for MERS, one State (Tennessee)’s Supreme Court gutted MERS’s business model like a chicken in the Ditto decision.  See attached:

MERS v DITTO_TN Supreme Court rules against MERS!

Unfortunately for the other 49 States, their respective Supreme Courts did not issue a ruling as succinctly as Tennessee’s ruling was.   Only Washington (Bain), Oregon (Niday and Brandrup), Montana (Pilgeram), Maine (Greenleaf and Saunders), New York (Agard, Bresler, Collymore and Silverberg), Kansas (Kesler), Arkansas (SW Homes), Nebraska (Dept. of Banking and Finance) and Missouri (Bellistri) did some damage to the MERS® System, but nowhere near the damage inflicted in Ditto.

Sadly, for the rest of the country, especially in Minnesota (Jackson) and Michigan (Sauerman), where the foregoing cases have propelled the MERS business model into fruition, homeowners in those states (except Minnesota and Michigan, where homeowners are essentially f**cked) have a long, uphill battle against any securitized trust that made use of the MERS® System to do its bidding.

REPUDIATION AGREEMENTS: A POTENTIAL WAY OUT

If you were lucky enough to have a mortgage loan originated by New Century Mortgage Corporation or Fieldstone Mortgage Company, you may have a legal solution as a possibility to consider in maneuvering through the legal pitfalls created by the use of MERS in your mortgage security instrument.

To date, to my knowledge and research, these two entities were the only two entities that had executory contracts with MERSCORP (or any form thereafter) repudiated their contracts with the MERS® System and its owner/parent MERSCORP Holdings, Inc.    See the attached below:

NCMC Notice of Repudiation

The foregoing repudiation was validated in the case of DiLibero v. MERS in Rhode Island.  I like to use this case because the Rhode Island Supreme Court likes to rub homeowners’ noses in MERS’s bullshit every chance it gets because Little Rhody’s lower courts have bought into the lies propounded by MERSCORP-retained attorneys.

See the case here: DiLibero v MERS_2015-13-190

In a previous post, I talked about the positive outcome of using the repudiation agreement as a means to assert the lack of standing of the Plaintiff Bank, unlike what happened in the Cruz v MERS case, where Cruz lost because he didn’t use the repudiation agreement. Duh?  (Was Cruz or his attorney even aware of this?)

See the case here: Cruz v. MERS_2015-12-136

The second known notice of repudiation was filed in the bankruptcy case of Fieldstone Mortgage Company, in a rather voluminous omnibus filing:

Fieldstone Mortgage Bankruptcy

As I teach in my COTA Workshops, repudiation of a contract in a Chapter 11 proceeding is like taking a dump.   Getting rid of excess baggage that could potentially weigh you down as to legal issues coming back to bite you in the ass.

In what I’ve just presented, both entities unilaterally decided they didn’t want to play in the MERS® System any further because they deemed it a potential liability and thus NOTICED MERS that they were ending their relationship with MERSCORP.  This has provided at least one homeowner with an “out”.

In what I deem is a “new twist” to the equation, the New York-based law firm of Jenner & Block (where Neil Barofsky works), issued a memo, dated January (2019), entitled “Recent Developments in Bankruptcy Law”, wherein Section 9 talks about “executory contracts” and where the debtor in possession (of whatever is part of the debtor’s estate or business) does not need court approval to repudiate (or cancel) an executory contract (see below):

NOTE: Click on the picture to see it in full size!

For a full copy of the report (in PDF format): Recent Developments in Bankruptcy Law, Jan 2019 (Jenner & Block)

What does THIS SAY for Chapter 11 petitioners who repudiate MERSCORP executory contracts NOT needing court approval?   How do you know a MERSCORP executory contract with a so-called “MERS Member” was cancelled by the Chapter 11 debtor unless you ask about it (in discovery)?   Would you care to go rummaging through bankruptcy court filings (at ten cents a page)?   The repudiation agreement by the defunct lender or notice of such may not even be in there!

MERS AS A PLAINTIFF

In the states that allow Mortgage Electronic Registration Systems, Inc. to file a foreclosure action against a borrower, MERS is simply claiming that it’s exercising its right to foreclose per the language in the security instrument.  In some cases I’ve seen, MERS’s attorneys even come in and attempt to claim a surplus after the sale, even though MERS itself receives no payments, incurs no financial harm, etc. (see Restatement of Mortgages, Third § 5.4), which I think the law firm is clearly attempting to pilfer whatever surplus it can get for its own gains and not those of MERS or its parent.

The problem I have with MERS being anywhere near a foreclosure is not so much the contractual angle, but the damage angle, based on the Spokeo v. Robins decision by the U.S. Supreme Court.  How was MERS damaged?    In the Robinson case in California, MERS plead to the 9th Circuit (as part of getting the appellate court to affirm the lower court’s ruling) that its business model would be harmed if the appellate court didn’t rule in its favor.  You see how the lie permeates into the appellate court system?

Sadly, I liken MERSCORP CEO Bill Beckmann and his Board of Directors as a little Hitler and his band of little crony “yes-men”.   They all need to be in jail!  And speaking of Hitler …

MERS AS A DEFENDANT

The main reason that MERS (as Mortgage Electronic Registration Systems, Inc.) is listed as a Defendant in foreclosure cases is because the Plaintiff REMIC or servicer (posing as the party claiming to have the right to enforce the security instrument) wants to notice MERS in order for MERSCORP employees to check the database to make sure that there aren’t any other “mesne assignees” hiding somewhere within the chain of custody of the electronic trading going on involving that alleged loan, in order to provide a “clearing” of potential unknown Defendants that may come in later and file a claim in the case.

THE SUPREME COURT HAS (TO DATE) NOT ALLOWED ANTI-MERS CASES TO COME BEFORE IT

Writs of Certiorari have tried and failed.  However, I still believe that we will continue to see more MERS-related decisions appealed to the nation’s highest court until the matter of MERS’s flawed business model and the damage it has inflicted on over 80-million homes finally gets resolved.

THE BOTTOM LINE IS STILL THE ASSIGNMENTS: THE DEVIL IS IN THE DETAILS! 

Again, if you go into the back of The Quiet Title War Manual, you will see state-by-state listings of statutes that cover certain elements of law involving quiet title, declaratory relief, deficiency judgment law, etc. … and below that section, three individual paragraphs on actionable statutes and case law involving violation of statute in the recording of documents into the land records which contain false information (many of which are felony-rooted in nature) or violate provisions of state consumer protection act laws.  We are now (based on my past posts) seeing the use of these mechanisms in attacking the banks’ attorney(s) (because sometimes there is more than one attorney or law firm involved in any given foreclosure) in turning a statutory violation into an ethical violation!

When a foreclosure mill attorney is put “at risk” of being suspended or being disbarred for suborning perjury, committing perjury or some other ethical misconduct, do you really think he (or she) is going to want to stay in the fight?   Further, what future substituted law firm would want to step “into the pile of poop” created by the first law firm, knowing it would put itself “at risk” of having its Errors & Omissions insurance policy attacked?

Things To Watch Out For …

  1. Any entity that has filed for Chapter 11 Bankruptcy before 2010 … as to whether they got court approval to repudiate the MERSCORP executory contract.

This provides you with a potential argument (or at least an affirmative defense to a foreclosure) that MERS and its alleged “agents” (“officers’)  for the “nominee” has any authority that was repudiated by the originating lender (debtor-in-possession);

2.  Assignments dated AFTER the originating lender filed for bankruptcy (easily discovered on Google or Google Scholar).

You especially want to check for language within the assignments (of mortgage or deed of trust) that says, “together with the Note”, because MERS cannot transfer what it does not have an interest in.   Secondly, not many people argue that there is no specific right delegated to MERS to “assign” anything.   Thirdly, NOTES ARE NEGOTIATED … not transferred or assigned; and

3.  Any mortgage foreclosure complaints, notices of trustee’s sale or similar notices that reflect that MERS has any authority to do anything, specific to the state of the union you are in.

Certain states, as I’ve mentioned before, do NOT allow MERS to do much of anything, while in other states, MERS can pretty much steamroller over homeowners.

My question is, why are you still living there?   Or better yet, why haven’t you attacked the assignments in Consumer Protection or statutory claims?

The Devil Is In The Details

Always check the assignment of mortgage or deed of trust for:

  1. Self-dealing (by the servicer and its employees);
  2. Claims that the note was “assigned” in addition to the mortgage or deed of trust by MERS;
  3. Names and addresses of law firms involved in the assignment;
  4. Names and addresses of title companies involved in the assignment;
  5. Names and addresses of servicers involved in the assignment that claim the Plaintiff’s address is in c/o the servicer’s address;
  6. Names of known robosigners involved in the assignment;
  7. Names of notaries participating in the assignment that are acknowledging under PENALTY OF PERJURY;
  8. Phony MERS addresses (like their alleged Ocala, Florida address, which actually belonged to Electronic Data Systems);
  9. Dates of assignments that well post-date the REMIC’s 424(b)(5) Prospectus Cut-Off and Closing Dates;
  10. Post-dating or back-dating of the assignment; and
  11. Documents created in one state that are executed in another state.

Any of these “details” can be used as evidence to go after the law firm attempting the foreclosure!   And THAT my friends … is how the system of things should work!

Coming soon …

P.S.: Hat tip to David A. Rogers, Esq. of Austin, Texas for the Fieldstone materials!

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