Tag Archives: William Hultman

WHY UNDATED INDORSEMENTS FAIL

Under the subject matter of Debt Collection, Foreclosures and Chain of Title Education …  and Op-Ed as well:

UPDATED ON MARCH 19, 2017

The following diatribe is not to be construed as legal advice, but rather for educational purposes only.

A number of issues have surfaced in recent years, in light of the foreclosure crisis, two of which involvement indorsements on the promissory notes (or their respective allonges) and one regarding who the real parties in interest are when the MERS® System is involved.  By no means is any of this finite, as research is continually ongoing as to the “flaws” in the MERS business model, which to me, is impliedly criminal in nature. I don’t care whether this “business model” has been trademarked either.  It has left the door open for criminal RICO behavior and MERSCORP and its shareholders provided the platform for the thievery.

To me, the MERS® System was not only created as a platform by which to (as MERS’s own officers tell it) electronically transfer mortgages and notes within a database (owned by then-MERSCORP, Inc.), but also to act “as the getaway car” in the theft of tens of millions of residential properties across America ever since MERS became involved in mortgage foreclosures.  Like it or not, this smacks of criminal RICO.  MERS and its parent, of course, will deny any wrongdoing, like they did when I released the Williamson County Real Property Records Audit in January of 2013.

In fact, MERS was so vehemently upset with the release of the Williamson County Report that they caused to be published almost a full-page ad in the Austin American-Statesman newspaper on February 7, 2013, denying any wrongdoing and attempting to rebut the contents of the Report, which was reviewed by more than a half dozen foreclosure defense attorneys prior to its release and was accompanied by a legal opinion. One would have to ask, “How could little ole’ Dave Krieger write a report that would piss off the MERS hierarchy all the way to Reston, Virginia?”

I was inundated by phone calls from reporters at the time, attempting to elicit a comment as to MERS’s statement that “it didn’t do anything wrong”.  My simple response to them was: “If MERS didn’t do anything wrong, then why is everybody suing them?”  The reporters just laughed, affirmatively responding in kind and didn’t ask me any more follow-up questions.

In previous posts, I have attempted to identify who the real “agent” (MERSCORP calls it a “nominee”) is in the mortgage loan security instruments.  The term used in MERS-related paperwork is “Electronic Agent”.  There is only ONE “Electronic Agent” named in the back-office documents that virtually all foreclosure defense attorneys never get to see … and it’s NOT MERS.  I personally asked for those documents when writing discovery to MERS and MERSCORP in the Robinson case, which by the way is protected by work product privilege.   The Robinsons never got those documents because MERS and MERSCORP wouldn’t produce them.  Does this sound familiar to you?  Not if you didn’t know you had to ask for them, because they do in fact, exist. MERS just flat out want to verify its agency relationship with its members; frankly, because it doesn’t have any agency relationship with its members.  If you read the DiLibero case in Rhode Island, the Supreme Court noted that the executory contract was with MERSCORP, Inc. … or didn’t you pay attention to that part?  MERS obviously doesn’t want you to … and for good reason.

The “Electronic Agent” in the document I’m referring to is MERSCORP, Inc. (now MERSCORP Holdings, Inc.).  The Agreement I’m talking about is attached here: eta_warehouse_template_v6-mers-and-borrower4

In the foregoing document, in order to be successful in discovery, research shows you have to have a completed document between MERSCORP and the “member-user” of the MERS® System. The differences in your understanding of how these documents work appears to determine whether or not you’ll win your foreclosure case.  But that is only one element of liability here.

When I spoke of “the getaway car”, it generally means, an accomplice helped the robbers get away with the goods.  The getaway car driver generally is considered equally culpable in the crime (in this case, the theft of property by fraud) and is generally sentenced to prison, along with the perpetrators and actual actors in the scheme (the MERSCORP member-subscribers who use the MERS® System).  In criminal RICO, two or more actors are necessary, in a specific pattern of behavior, to orchestrate an act which results in an actual loss of money or property, which in this case, involved borrowers’ payments to a lender for a specific period of time, accompanied by a down payment (sometimes as much as 20% or more), in obtaining one of these so-called, MERS-originated Mortgages or Deeds of Trust.

I also have to mention identity theft here, because nowhere in any of these security instruments does it say that MERS, as an agent for the lender, should be allowed access to your social security number and other personal identifying information.  This becomes evident when anyone gets on the MERS Servicer ID Search system and wants to know who their “investor” is, which in of itself also promulgates fraud because MERSCORP, who owns the site, disclaims the site for accuracy because it’s just the driver of the getaway car.  The actual “actors” who perpetrated the fraud are the servicers who use the “System” to put whatever they want the borrower to see.  Borrowers actually believe the shit these servicers post on that site and use it in court. This is exactly what MERSCORP wants you to do.  And you fall for it?  Apparently, even the foreclosure defense attorneys don’t know what a Warehouse Lender template form is, because if they did, they’d be using it to unravel the MERS® System in front of the judge, demanding a filled-out, signed copy of the bloody form!  This is where the agency relationship was created folks … but not with MERS!  It was created with MERSCORP … as the “Electronic Agent”!  Nowhere in your security instrument does it say “MERSCORP” anywhere.  Look at all the millions of homes that were stolen using MERS and MERSCORP as the getaway car (in all those purported MERS assignments) when in fact, the corporate resolution giving then-Secretary William Hultman has never surfaced, despite being demanded to produce in discovery in the Ukpe case in New Jersey.

I spoke with former federal prosecutor Mark J. Malone by phone about this “corporate resolution”, supposedly generated in April of 1998, which he doubt even exists … which is why MERS won’t produce it.

I put those results in the OSCEOLA COUNTY FORENSIC EXAMINATION and caused them to be released to the Clerk of the Circuit Court of Osceola County, Florida on December 30, 2014.  After that Report was released to the public in 2015, there wasn’t a peep to be heard out of Reston, Virginia (where MERS and MERSCORP are headquartered), contrary to the stink they made when the Williamson County report was released.  That’s because the Osecola County Report intimated criminal RICO, “getaway car” implications for MERS and its parent.  Every one of the Board of Directors OF MERS and MERSCORP needs to be put in prison, and for well more time than what DOCX’s Lorraine Brown got.  Lorraine Brown was only an ass-puppet for Lender Processing Services, Inc., who quickly dumped DOCX to decrease its potential liability.  That’s pretty much like the CIA disavowing one of its agent’s actions when the agent is caught, to cut its ties to any potential liability down the road.  Instead, the U.S. Department of Justice, along with the Tampa FBI and the Osceola County Sheriff’s Department, whitewashed the Report by attacking the Clerk and myself.  It was more important to the Sheriff’s Department how much it cost to certify the 17 cases of evidence still in its possession, and who paid for it, rather than who was responsible for all of the criminal allegations that the Sheriff’s Department itself was involved in, because it got paid $90 per eviction, creating potential liability by extension of the fraud.  No wonder they all wanted to bury this by smearing me and the Clerk in the media.  This “issue” isn’t going to go away, because people (including attorneys and university researchers, are downloading this report and reading it in droves) are waking up to the real truths of the matter.  Giving the Sheriff’s Department in Osceola County the investigative powers regarding this Report is like the “fox guarding the henhouse”.

Also bear in mind that then-9th Circuit States Attorney, Jeff Ashton, declined to investigate the report (obviously, because it would be political suicide for him to “grow a pair”) and turned it over to the Sheriff’s Department, claiming “you have to follow the chain of command.  Meanwhile, Ashton decided that he’d rather “grow a pair”, among other things, viewing the AshleyMadison.com website on company time, which is one of the reasons he did not get re-elected in the Democratic Primary in 2016.  This means that the new 9th Circuit States Attorney, Aramis Ayala, is going to have to come out strong in favor of the people of her Circuit and do the right thing by investigating this report and convening a grand jury to investigate its contents.  If it means the Sheriff’s Department in Osceola County has to face civil litigation for its participation in eviction of all of those homeowners, so be it.

Look at your mortgage or deed of trust and tell me if you see MERSCORP listed as the “nominee”! 

Now … what is non-disclosure to you?

Were you ever told that MERSCORP was the “Electronic Agent” behind the scenes?  Of course not.  Is the MERS® System patent a matter of public record in the U. S. Patent and Trademark Office?  It sure is.  Is that constructive notice in the land records where the property is located?  Nope.  That’s because the “driver of the getaway car” had to remain the real secret here.

This is why I also believe that once the documents (notes an mortgages) were uploaded into the MERS® System, they were no longer needed; and thus, were shredded. I know that there are other contradictory opinions out there, but I relied on the 2009 Florida Mortgage Bankers Association letter to Judge Jennifer Bailey that implied that they didn’t need the original documents anymore.  Thus, I believe that there are no longer any original documents out there, just electronic copies that are reproduced for trial.  And because of UETA and eSign acts, electronic copies conveniently fit the bill … but they’re not the originals, are they?

Now the indorsements …

In the most recent decision, the Supreme Court of Hawaii, in Bank of America, N.A. v. Reyes-Toledo (see the 28-page opinion here: 2017-feb-28-hsct-pulished-opinion) opined (in part) the following:

“Bank of America has maintained that it was the holder of the Note based on the Egan Declaration and the blank indorsement on the Note. Accordingly, we consider whether the Bank produced sufficient evidence to demonstrate that it was entitled to enforce the Note as a holder of the instrument at the time that the foreclosure proceedings were commenced. The negotiation asserted by Bank of America involved negotiation by blank indorsement and transfer of possession of the Note. In contrast, a special indorsement occurs if the indorsement is made by the holder of an instrument and theindorsement identifies a person to whom it makes the instrument payable. When an instrument is specially indorsed, it becomes payable to the identified person and may be negotiated only by the indorsement of that person. Id. A blank indorsement occurs when an indorsement is made by the holder of an instrument and is not a special indorsement; in other words, a blank indorsement is not payable to an identified person.   When indorsed in blank, an instrument becomes payable to bearer and may be negotiated by transfer or possession alone until specially indorsed.

Here, the Note, which was attached to Bank of America’s motion for summary judgment as Exhibit A, contains two indorsements. One indorsement is a special indorsement by Countrywide Bank, FSB, to Countrywide Home Loans, Inc.  The other is a blank indorsement by Countrywide Home Loans, Inc.  Thus, because the Note was last negotiated by a blank indorsement, it may be negotiated by transfer of possession. Although Bank of America produced evidence that it possessed the blank-indorsed Note at the time it sought summary judgment, a material question of fact exists as to whether Bank of America possessed the Note, or was otherwise a holder, at the time it brought the foreclosure action. Indeed, the copy of the Note attached to the summary judgment motion does not reflect the date of the blank indorsement, and the Egan Declaration, which was made after the filing of the complaint in this case, does not indicate when the indorsement occurred. Further, there is no additional evidence in the record regarding the date of the indorsements or whether Bank of America possessed the Note at the time of the filing of the complaint. Thus, there is a material question of fact as to whether Bank of America was the holder of the Note at the time the foreclosure proceedings were commenced, which in turn raises the issue of whether Bank of America had standing to foreclose on the Property at the time it brought the foreclosure action.

Here, there is no evidence in the record, either through the Note itself, the Egan Declaration, or the other documents attached to the motion for summary judgment, showing that the blank indorsement on the Note occurred prior to the initiation of the suit. Consequently, there is a genuine issue as to whether Bank of America was entitled to foreclose when it commenced the proceeding. Thus, viewing the facts and inferences in the light most favorable to Homeowner, there is a genuine issue of material fact as to whether Bank of America held the Note at the time it filed the complaint. Accordingly, Bank of America failed to meet its burden of demonstrating that it was entitled to judgment as a matter of law, and the circuit court erred in granting Bank of America’s motion for summary judgment. For the reasons discussed, the ICA’s April 13, 2016 judgment on appeal is vacated. The circuit court’s December 9, 2014 Judgment is also vacated to the extent it grants summary judgment to Bank of America. The case is remanded to the ICA for a determination of whether the circuit court erred in dismissing Homeowner’s counterclaims.”

What the homeowners’ attorneys miss … 
The bigger picture here is the agency relationship claimed to have been possessed by MERS at the time of assignment.  Because the note indorsements are never dated, there’s no proof of when the effective date of transfer occurred.  Thus, in the foregoing instance, WHEN did Bank of America possess the Note?
Before, or after, it filed the complaint.  If the Warehouse Lender agreement says the Borrower, isn’t YOU, but the originating broker, and the interim funding lender is not the party you got the loan from,
As Bob Janes, J.D. has noted, agency must be proven by the Grantor, not the Grantee.  That means that MERS cannot self-authenticate its own agency relationships by and through its officers or through its counsel (“just take my word for it, your Honor”).  As much as you don’t trust lenders, their agents don’t fare much better if the lender lies and the agent repeats the lie in court.
I hardly ever see anyone specifically arguing UCC in court, let alone an undated indorsement and its relevant meaning when it comes to being able to enforce the note.  There is plenty of existing case law … and Hawaii just set another prime example of such.  This may mean a fight for another day, but when it comes to the recorded assignments involving MERS, one has to understand that the people in Reston, Virginia did not dot all their “i’s” and cross all their “t’s” when it came to allowing servicers to run rampant, using the MERS® System to defraud homeowners by publishing information on the MERS website to mislead homeowners, and then use contrived “Certifying Officers” (when the agency relationship of these employees, of the Servicer) is in question. We may not be able to challenge the assignment in every State, but then again, did the attorney even try to depose the robosigner and the notary to get more details.
UPDATE: 
I have had many folks present me with scenarios wherein the Allonge or “extra page” containing a blank indorsement was used at trial.  If you examine most of the case rulings, certain courts have presented us with commentary (discussion) on the subject of what constitutes a proper allonge under the Uniform Commercial Code.
EXTRA PAGES
These could involve document manufacturing, which might be sufficient to create issues of material fact necessary to avoid summary judgment and/or a motion to dismiss:  (1) what was scanned by the servicer (because that’s where we are assuming the copy of the note came from) that shows up as an extra page was either (a.) an extra page attached to the note that was separate to the note pages themselves, “created out of thin air”; (b.) an extra page attached to the note that was not a separate page from the last page of the Note, but was actually the “back side” of the note, which could be challenged as improper, as anyone could have rubber-stamped an indorsement onto the back page; or (c.) the document manufacturing by the servicer (of which we know Ocwen for example, does, because of reports indicating the same borrower’s note in 4 different stages of manufacture) in an attempt to create standing for its client lender.  The multiple creation of different notes has found its way into certain proceedings, which is enough to ask: Which one is the real note?
UNNAMED ALLONGES

Most courts I’ve read up on have issued rulings specific to HOW allonges are supposed to be attached to promissory notes and WHEN they are supposed to be used.  I would suspect that if a note has an extra page with no title on it (e.g., “ALLONGE TO NOTE”) that someone inside the servicer arbitrarily chose to attach an indorsement-in-blank stamp on an extra page to imply (or give the bank’s attorneys reason to imply) that it’s an allonge, when all it is, is a sheet of white paper with an indorsement stamp on it and does not constitute and allonge because it’s not properly labeled.

The other problem with allonges is that commonly, the space under the Borrower’s signature is supposed to be “filled up” with stamps BEFORE extra pages are being used.  When there is a whole page of room for indorsement stamps, followed by an extra page (properly labeled or not) reeks of document manufacturing.  In any case, there should be a specific objection made on the record … or someone needs to go back and research what constitutes a proper allonge.
DOCUMENT EXAMINATION

I know of at least 3 document examiners across the U. S. that can show up in court and testify as to whether a note is “original” or not.  I have to ask myself WHY lenders wait until the last minute to show up with the “original note” for the judge.  In one case in New Jersey, the bank’s law firm showed up (via a cover lawyer and not the lawyer who filed the foreclosure complaint) with a “faxed copy” of the note, claiming that it was the original.  That was objected to, of course, but the judge bought it anyway.  That case is on appeal.  With a document examiner at the ready when and if a hearing can be scheduled (or a deposition for production of the note for examination) to vet the document properly through an examiner, might scare the bank from bringing it in at all … which brings me to the last point.

THE REAL KEY REASON INDORSEMENTS FAIL

Let’s assume the 424(b)(5) Prospectus has been obtained in certified form from the SEC.  I suggest using the entire prospectus because the Pooling and Servicing Agreement (“PSA”) just isn’t enough.  The information within the Prospectus ties the Borrower’s loan to an “offering” through the sales pitch, which is the Prospectus to the investors, signed under penalty of perjury under the Sarbanes-Oxley Act.  The PSA may contain the section, “Assignment of the Mortgage Loans” under § 2.01; however, the PSA does not make up the WHOLE of the document it is contained within, the Prospectus.

If there are 3 true sales, including transfer from the Depositor to the Trust, as prescribed by the governing regulations of the Trust under § 2.01, shown within the entire Prospectus, in the portion known as the PSA, then where in the chain of indorsements is the endorsement to the Depositor and from the Depositor to the Trust?  The PSA is only a portion of the entire “picture”.  Without the framework of the Prospectus to back it up, your evidence can be challenged by the bank’s attorneys.  Oh, believe me, they had this whole thing figured out before the issues with REMICs ever surfaced in Court.  No judge wants to read a 300+ page document.  Someone has to.

SECOND UPDATE: 

In continuing the pattern of misbehavior, a most recent case out of Florida’s Fourth District Court of Appeals shows us multiple indorsements (albeit undated) present an entirely different issue as to standing.  When a bank proffers more than one note and the indorsements are different, this provides us with more ammunition to rebuff its advances that it has standing to proceed against you in a foreclosure case, as demonstrated below, in a single-page ruling:

Carty v. Bank of America, NA, Fla: Dist. Court of Appeals, 4th Dist. 2017 – Google Scholar

It’s not that we haven’t explored this avenue in previous posts.  It’s just that the courts are now just starting to recognize that our arguments really do have merit!

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Filed under Chain of Title Education, Debt Collection and Foreclosures, Op-Ed Piece

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

FILING QUIET TITLE ACTIONS: THE RIGHT TIME VERSUS THE WRONG TIME

This op-ed piece is not legal advice, just the poster’s observations!

Within the last few months, I’ve been receiving emails and phone calls from people who are either contemplating filing a quiet title action to clear title to their property or have actually filed one and are wondering if they did the right thing.

I say (in non-lawyer-like fashion), “It depends on what attorney you talk to.”

Many attorneys across the country have won numerous quiet title actions, trespass to try title actions and suits to remove a cloud; however, this quasi in rem realm now supports a different type of quiet title action … those involving securitized mortgages, which mean the involvement of Mortgage Electronic Registration Systems, Inc. (MERS).  There are few attorneys that understand quasi in rem actions and fewer have not won them let alone satisfactorily addressed them in a court of law or of equity.

In the latest California cases involving MERS and its parent, MERSCORP Holdings Inc., MERS’s counsel has brought the same three arguments into play (whether amended or not):

  1. That MERS and MERSCORP’s civil rights have been deprived under the 5th and 14th Amendments to due process;
  2. That the California quiet title statutes are unconstitutional; and
  3. That both entities are entitled to Notice of any quiet title action brought where they are named as anything on the affected mortgage or deed of trust;

In both the Robinson and Johnston cases, MERS and MERSCORP’s attorneys asserted these claims.  In the Johnston case however, the judge did not agree with the word “Robinson” every time MERS’s attorneys brought their name up.  It never ceases to amaze me how two judges in the same federal district can come up with two different thought processes on whether or not a California Superior Court Judge committed a civil conspiracy against MERS and MERSCORP by ruling on a petition to quiet title when there is no recorded interest in the real property records that specifically identifies WHO (besides the property owners) holds superior title.

In the initial oral arguments in the Robinson case, the federal judge (Gutierrez) spent 45 minutes arguing with MERS’s Counsel (Owen Campbell from Severson & Werson in Irvine, California) over what rights MERS and MERSCORP didn’t have.   Then, months later, reversed himself in response to a judgment on the pleadings that was (I believe), illogically misfiled by the Robinson’s then-counsel (Susan Murphy, who I would never retain to defend my title if my life depended on it).  How does this happen, you ask?  Political pressure?  Maybe.  Judicial pressure?  Maybe.   Payoff or bribe?  Hmmm.  Makes you wonder, doesn’t it?

But the point is, when you ask an attorney HOW MANY quiet title actions he (or she) has won involving quasi in rem issues, you’re likely to get:

  1. A deflected response; or in the alternative,
  2. An argument against filing quiet title actions.

After talking to many attorneys, I have determined (in my own paralegal-consultant sort of way) that there is a right time and a wrong time to file a quiet title action.

The Wrong Time to File a Quiet Title Action

Quiet title actions invoke a remedy in equity.  By all fundamental reasoning, quiet title actions do not give cause to resolving issues of standing when a foreclosure is present; thus, the time to NOT file a quiet title action is when you are facing foreclosure.  My research shows that judges are likely to view your quiet title action as a “ploy” and when the banks’ attorney walks into court and says, “Your Honor, they just want a free house!”, your quiet title action goes right out the window!

Why?  Because you failed to attack and defeat the foreclosure FIRST!   This is done by making the other side prove its case.  Most of the time, the homeowner, who’s already so pissed off they could literally sink their teeth into the opposing attorney’s ass as soon as he/she opens their mouth, is screaming “fraud” in the courtroom, especially if they’re pro se (or pro per, I don’t care).  They bring in armloads of research in an attempt to “prove a negative”, which I deem appears counterproductive to the effort of making the other side prove its case.

In the alternative, they file a quiet title action, along with ten other claims for damages (or let their attorneys do it for them), naming a dozen or so defendants (to which I say, “the attorney should’ve known better), which enormously drives up the cost of litigation.

Why?  Because it costs money to serve all of the named defendants and money to publish against unknown defendants, that’s why!  Then you have to factor in that each defendant will file an answer (oh, and here you thought they would all default?  Seriously?) and each answer they file requires a measured response.  Each measured response will cost you big time.  That too adds to the costs of litigation.   Then there is discovery on each defendant.  Multiply your discovery costs (along with the depositions) for each defendant.  Now you’re talking some serious coin.  This could have all been prevented with a little hindsight.

It is my belief, along with most of the successful foreclosure defense litigators I work alongside (as a consultant or contributor to the effort) of, that Rule #1 is “MAKE THE OTHER SIDE PROVE ITS CASE!”   Half the time, they can’t.

SURVEY SAYS: Stop the foreclosure first.  Get a dismissal.  Then look into the other option.  Countersuit or quiet title action. 

The Right Time to File a Quiet Title Action

Because of the MERS® System business model, there is an “Achilles’ Heel” that apparently was recognized by Judge Gutierrez in the Robinson case.  At the time the quiet title action was filed, there was no recorded assignment of deed of trust in the real property records of Los Angeles County, California.  The original lender, United Pacific Mortgage, was defunct (that means, out of business and couldn’t be located) and had to be served through the Secretary of State, by permission of the Court (the Superior Court).   The numerous quiet title actions filed by Al West took (on average) of about six months.  It should also be noted in the Robinson case that at the time of the quiet title filing, there was no alleged default; thus, no controversy to rule on, despite any non-appearance by any claimants.

Thus, if you’re NOT in default (that too, has to be rightfully determined, given the propensity in securitization that the investors who actually funded your loan were paid and the sponsor-seller of the REMIC made money at least 5X over the loan amount) and your original lender is out of business … WHO ARE YOU GOING TO SERVE?   The lender of record.  This is what makes quiet title actions so “timely” in this scenario.

The MERS’ Business Model is Flawed! 

MERS is a “day late and a dollar short” on its business model.  This goes to show you that you can’t “have your (business model) cake and eat it too” (Geez, two cliches in one paragraph … I’m on my A-game today, folks!)  MERS promotes to its system users that it doesn’t have to pay recording fees. MERS makes all the money when its system’s users electronically transfer the borrower’s loan on the MERS® System; however, the MERS Rules of Membership specifically state that the users of the system don’t have to file or transfer anything on line if they don’t want to.  So, the Milestone Reports are disclaimed here as “a joke” and not worth using in discovery.  Even MERSCORP disclaims the information on its website for accuracy, knowing that its users don’t always “use” the system.

Now ask yourself why it is that MERS’ users think they can simply draft an assignment (with no knowledge of the validity of its contents) and record it, showing the Assignor being the originating (defunct) lender and the Assignee being the REMIC trust (who can’t accept assignment past the cut-off date of the REMIC, which of course, MERS will argue doesn’t matter because the Borrower is not (mistakenly) a party to securitization, when we know damned well they are!   So in this equation, there’s the Assignor, the Assignee and the TOTAL ASS (the one creating the assignment out of thin air with no proof of its contents)!

They’ve Been Warned! 

These morons are paid independent contract signers who sit there all day and sign hundreds of these documents in robotic fashion.  These are the entities that must be deposed.  In the long run, many of them will face jail time and will rat out their bosses to save their own asses.   Bank of America, N.A. is one of the biggest producers of these “manufactured assignments” and its “bosses” will face some real criminal issues at some point, I predict.  They’ve been warned!

Bank of America is not alone in its distorted thinking however.  Wells Fargo Bank has its own document manufacturing plant in Dakota County, Minnesota (and the Minnesota AG’s office is “watching it” with keen interest).  Citimortgage has a document manufacturing plant in St. Charles County, Missouri.  Chase has two known document manufacturing plants in Monroe, Louisiana and Columbus, Ohio (at its fortress).  You’ll see more self-assignment/self-serving-type garbage being generated by these folks.   All of this is done to create “standing” for whoever is going to attempt to steal your home in foreclosure using manufactured documents for the purposes of theft of property through the simple costs of litigation.   Be prepared to shell out for depositions in your foreclosure case.

Then there’s Nationwide Title Clearing, who was named in 40 separate allegations of criminal wrongdoing in the Osceola County Forensic Examination. They now boast over 16-million documents recorded (kind of like the sign under the “golden arches” that says (rhetorically), “over 16-million served”) in land records all over the country.  This is going to expose this band of folks to a whole plethora of criminal charges, because current evidence shows that the people manufacturing these documents are paid minions with flimsy “capacities” to support their activities.  When it all shakes down, NTC employees will rat out their superiors to the grand juries investigating NTC (“the writing is on the wall”).  OMG!  Another cliche!  Can you say, UPL?  That’s a felony folks!   You can’t “buy” your way out of prison like Jamie Dimon can!

We discuss this extensively in THE QUIET TITLE WAR MANUAL!   Keep watching the Clouded Titles website for details!

Back End Defense! 

In summation, there is NO GUARANTEE that (in the quasi in rem realm) that your quiet title action will hold as long as MERS is allowed to permeate the land records with the crap that its robomills put out in its name.  Hell, MERS doesn’t even know who’s generating what at any given moment.  How can they defend against that?   We still haven’t heard the last of the “alleged resolution” that gave William Hultman authority to appoint anyone as a “signer” for MERS, so that’s about 20,000+ robosigners that have an opportunity to “rat MERS out” to the grand jury to save their own asses!

You may be able to beat the rap, but you can’t beat the ride, eh Bill?

Yes, MERS does read this blog.  In another chapter, I’ll address the issue of how to get MERS’s attorneys disbarred.

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Filed under Quiet Title Education