62 million homes may be foreclosure-proof ... what you need to know

[Waiting For Everyman]

I'm putting this in GD rather than Editorials so that the maximum number of people will see it. If you're in foreclosure or default, this article sums up the reasoning for a defense which has worked in numerous states, and it lists the main case citations you'll need to show your lawyer as a beginning point. I'm in the same boat (for 2 years, representing myself with the help of info on the net) so good luck to us all.

HOMEOWNERS' REBELLION:
COULD 62 MILLION HOMES BE FORECLOSURE-PROOF?

Ellen Brown, August 18th, 2010

http://www.webofdebt.com/articles/homeowners.php

<snip>

Over 62 million mortgages are now held in the name of MERS, an electronic recording system devised by and for the convenience of the mortgage industry. A California bankruptcy court, following landmark cases in other jurisdictions, recently held that this electronic shortcut makes it impossible for banks to establish their ownership of property titles—and therefore to foreclose on mortgaged properties. The logical result could be 62 million homes that are foreclosure-proof.

<snip>

MERS was developed in the early 1990s by a number of financial entities, including Bank of America, Countrywide, Fannie Mae, and Freddie Mac, allegedly to allow consumers to pay less for mortgage loans. That did not actually happen, but what MERS did allow was the securitization and shuffling around of mortgages behind a veil of anonymity. The result was not only to cheat local governments out of their recording fees but to defeat the purpose of the recording laws, which was to guarantee purchasers clean title. Worse, MERS facilitated an explosion of predatory lending in which lenders could not be held to account because they could not be identified, either by the preyed-upon borrowers or by the investors seduced into buying bundles of worthless mortgages. As alleged in a Nevada class action called Lopez vs. Executive Trustee Services, et al.:

Before MERS, it would not have been possible for mortgages with no market value . . . to be sold at a profit or collateralized and sold as mortgage-backed securities. Before MERS, it would not have been possible for the Defendant banks and AIG to conceal from government regulators the extent of risk of financial losses those entities faced from the predatory origination of residential loans and the fraudulent re-sale and securitization of those otherwise non-marketable loans. Before MERS, the actual beneficiary of every Deed of Trust on every parcel in the United States and the State of Nevada could be readily ascertained by merely reviewing the public records at the local recorder’s office where documents reflecting any ownership interest in real property are kept....

After MERS, . . . the servicing rights were transferred after the origination of the loan to an entity so large that communication with the servicer became difficult if not impossible .... The servicer was interested in only one thing – making a profit from the foreclosure of the borrower’s residence – so that the entire predatory cycle of fraudulent origination, resale, and securitization of yet another predatory loan could occur again. This is the legacy of MERS, and the entire scheme was predicated upon the fraudulent designation of MERS as the ‘beneficiary’ under millions of deeds of trust in Nevada and other states.

_________________________

Btw, MERS is entirely owned by the big banks - all of them. Even if a mortgage isn't involved in MERS (mine isn't) the party suing is probably a similarly phoney entity which doesn't own the note, so the same principles apply. Also a CA federal court has recently ruled that homeowners are intended 3rd party beneficiaries to the HAMP contract with banks, giving us standing to sue for a mod. (Marques v. Wells Fargo) Details here:

http://mandelman.ml-implode.com/2010/08/federal-court-borrower-is-intended-3rd-party-beneficiary-of-hamp-contract-%E2%80%93-homeowners-can-sue-for-breach/

[jtuck004]

1. The other side of the ownership coin is that 62 million homes could never be sold...

And if they can't make you pay for the home, and you can't sell it, maybe they stop paying property taxes too? Whatcha gonna do? Foreclose on my property?

There goes money for schools, teachers, fire, etc...

[Waiting For Everyman]

2. On the flip, flip side, counties may soon start recovering their recording fees

going back a decade or so. Or at least as much of it as the banks can pay.

[jtuck004]

23. I wonder how screwed up this really is.

It may be that the bank is holding a $650,000 signature note with no collateral. If they don't own the home, who would the county (or whomever) recover from? The homeowner can't own a home without a title, and neither can the bank.

The successful defense is that the entity that thinks they have title has no standing. It would follow that the entity who has the title (whoever had it before) has no standing either, since they didn't pay for it and signed it away. That leaves a homeowner with no valid title to the property they are living in. You can't tax someone on something they don't have title to, (well, you could try, but I bet it wouldn't hold up in court).

A number of judges seem to have held that there is no legal owner. So this would require a court-ordered restructing to rebuild the original titles and assign them to the plot and the home, redo the loan, and re-obligate the homeowner. In that case, the county is just SOL on collecting taxes, because there is no entity that was legally obligated to pay taxes on a property that no one held title to. The city\country might try to condemn the property, but who are they going to take it from?

Even just a little bit of study should tell people what a problem the financial sector has visited upon us, over and above the financial crisis they started with toxic assets. And yet people still want to blame the homeowner.

LOL.

[lunatica]

3. Yet are homeowners supposed to be good people and keep paying mortgages that

are, in essence, non existent? Should they keep paying into what has become a black hole bank that pockets the money illegally?

This is why we're having a worse economic collapse than expected. And who gets the say it's over and own the pink slip?

It's a lose lose for everyone.

[jtuck004]

18. No, they should be removed from the home they can't pay for.

Then the value will drop. And then the titles can be rescontructed legally.

And eventually the economy will lower to the point that it is really at. With millions more people unemployed and homeless.

All of which is simply delayed as long as TPTB are sending banks trillions of dollars and trying to
figure out who is the least politically powerful group they can cut funds from.

And the reason for our economic collapse is not the 2 trillion of subprime. It is the in excess of $100 trillion of toxic assets, leveraged at 10, 20, even 40 to 1 on top of our mortgage market still sitting in banks, in pensions, behind the veil of the fed, and a hundred other places, a lot of it based on mortgages that they should never have promoted to people.

It makes our housing market look puny by comparison. But it is complicated, and our government has funded organizations so they don't have to open these up to public scrutiny. It's easier to blame some poor guy with a screwed up mortgage.

[taught_me_patience]

4. This is going nowhere

Pipe dreaming at best and downright dangerous information at worst.

[Waiting For Everyman]

6. It has been 'going somewhere' since the 2007 Boyko decision.

You are not informed.

This is exactly why the big banks are backing off foreclosure right now. Or did you think it was because they're so ethical and conscientious?

[Subdivisions]

21. Please elaborate. n/t

[taught_me_patience]

51. It's a legal technicality that will be resolved quickly

The housing industry will not be shut down because of something like this.

[DirkGently]

5. Not likely. No one but banks likes MERS, but if this argument held sway,

millions of properties would have failed titles overnight. Not going to happen. If we want foreclosure relief, we need to pass foreclosure relief. Asking the banks nicely isn't going to work, but neither are wild theories like invalidating every title ever affected by MERS.

[Waiting For Everyman]

7. Are you saying that Ellen Brown doesn't know

what she's talking about? Then that's news to the homeowners in the cases she cites (just a few of many other similar cases btw).

[DirkGently]

22. She's wrong about millions of homes being "foreclosure proof," yes. I know

this stuff sounds revelatory, but it's not. It's a fringe take on something that, while not unworthy of discussion, simply will not have this result. And no one should be hoping that it does, because the resulting chaos would cause a lot more harm than good.

[Waiting For Everyman]

25. Judges have decided differently, more frequently all the time.

Seems to me that's the proof of the pudding, not your opinion. What do you care anyway?

[DirkGently]

27. No one's ruling the mortgages are permanently unenforceable. Reality is the proof in the pudding.

I'm not trying rain on your parade. Talk to a lawyer. There are things you can do. Erasing your mortgage because MERS was involved just isn't one of them. Did you know you can spread your arrearages out for up to 60 months in a Ch. 13 bankruptcy?




Editted, for. punctualization;

[Waiting For Everyman]

28. Lawyers are the ones doing these cases, not chimpanzees.

A growing number of judges over the last 3 years have found that MERS doesn't have standing or title to anything. You are the one who is behind the learning curve.

The banks are stopping foreclosures because they know this. Not because they want to, and not because they're careful.

It makes no difference to me, I already know about this. I'm trying to share information with those who don't. They can think it over for themselves. You've stated your opinion.

[DirkGently]

30. No, I've stated legal fact. This woman is misleading people and you are mistaken.

Banks are not stopping foreclosures over this. They are putting the brakes on because their foreclosure "mills" got nailed faking affidavits and "robo-signing" court documents. The MERS thing might cause a lender to have to re-plead or even re-foreclose, but they're not going to simply erase a mortgage debt over something like this.

This is a bad urban legend. Again, I'm not trying to give you a hard time. And it actually is kind of a big deal. But there are no free mortgages coming anyone's way. Sorry.

[Waiting For Everyman]

31. Nobody said "free mortgages", that isn't the point anyway

It's not being foreclosed and thereby bringing the banks to the negotiating table in a realistic way. This is not urban legend it is current and gaining more cases by the day. This has been building for 3 years, and I have been following it that long.

Further more, the foreclosures were stopped not for sloppy paperwork - that's the banks' euphemism for illegal paperwork. But that isn't even the big deal. Those notes are not in the REMICs and they can't be put in now. MERS is only the method by which that happened. Read up.

[DirkGently]

35. Your headline is "foreclosure proof." That's not happening. At all. Period.

If you want to talk about slowing a foreclosure and / or seeking a workout, that's a different subject. It's possible headaches associated with these MERS arguments could delay a foreclosure -- they've got so many going that any hiccup will cause a delay. There are a lot of things that can be done. But this MERS issue isn't going to make 60 million houses "foreclosure proof."

No one's going to find that these mortgages are wholly unenforceable. The case you cited higher in the thread is a fine example. Dismissal *without prejudice* where MERS tried to be the plaintiff. That means the case can be re-filed. Lenders don't usually bring foreclosures in MERS' name anyway, but if they do, and it doesn't work, all that changes is that another party becomes the Plaintiff.

*Someone* owns the mortgage, so someone CAN foreclose.

Again, I'm all for people arming themselves with *good* information, but to the extent anyone's interpreting these decisions as making mortgages unenforceable, this isn't it.

[Waiting For Everyman]

37. This is nothing but a diversion. The info is there for those who need it.

The article is clear and logical and factual. Most people here understand English, there's no need to dissect the meaning of a word.

And some of these case have been dismissed with prejudice, prior sales have been overturned, etc. Time will prove that these titles are toxic (unenforceable), but people in default need this info now, not months from now or whenever that becomes a news headline.

This story was denied too. For 3 years. Gee, turned out to be true.

[LostinNY]

8. When people were closing on new homes in two weeks....

That just seemed odd to me. How could the proper paperwork, title search, etc be done? I knew banks were cutting corners in an attempt to get homes sold they knew were overpriced and that they knew they were just going to sell the mortgages. While I believe people are responsible for their debts, in these foreclosure cases, the bank was the so-called expert offering their product/ services. I believe they lied to people. And they, the bailed out banks, should face the consequences.

Now, although I've been a lurker for six years, this is only my second post. I find the people that post on here to be compassionate and intelligent. (for the most part!) I like coming home at night and reading DU wisdom!

So I don't mean to hijack this thread, but I can't yet start one of my own. I feel for all of you facing foreclosure. We just caught up on our mortgage, putting every cent into it for about the past eight months to bring it current. We are lucky to have a good amount of equity in our home, we bought a fixer upper cheap ten years ago and fixed it up ourselves. When we bought it, it had no flooring except for plywood, walls needed work, bathroom was horrible, etc. But it was OURS! We spent the first night in it appreciative that we had our own home. It's 130 years old and always in need of work we can't afford but it's got character !

Sorry to go on and on but we face a new major financial challenge: our Sallie Mae serviced student loan! Sallie Mae is horrible and has treated us worse than GMAC our mortgage company ever did. Last year we got our spousal consolidation loans into the IBR program (Income based repayment), and because every year you have to send in new financial info., we just did this. We've been turned down. My husband only made a couple more thousand this year than last. So now all of the interest that has been adding up (that through IBR we wouldn't have to pay if we stayed in the program a certain number of years) is being added to the loan. Our payment was $554 this past year, now they say it will be $1600 a month! We could barely pay the $554! I don't know what to do! we called them three times and they said the decision is final, and refused to transfer my husband to the department that actually made the decision!

My anxiety level is through the roof. I have suffered depression for 10 years, and not had a job. No antidepressants have ever really worked. I have raised our two children in that time, a stay at home mom. Do I have a chance at a disability discharge? My husband has worked so hard to try and keep our heads above water financially. I know he feels horrible. What can we do?

[taught_me_patience]

11. Ammortize the student loan over a longer time period

to cut down your actual payment. Both my wife and I are ammortizing over 30 years. We're paying about $800/mo for nearly 200k in debt. If it were a 10 year ammortization, we'd be paying $2,500/mo

[Waiting For Everyman]

12. I'm with you LostinNY, I bought my home new 14 years ago, 50% equity in it now

No worries about hijacking, post all you want in this thread. I hear you on student loans too - I can't get an IBR because I have a PLUS loan for my daughter, and they weren't included in the program. No students should be saddled with anywhere near the debt they're carrying.

I do understand how stressful it is these days, just trying to make ends meet. :hug:

[LostinNY]

13. Thanks :)

And I never understood why PLUS or other student loans can't be included in certain programs. A student loan is a student loan is a student loan!! If the loan was to get an education include it!

[taught_me_patience]

54. You hijack a thread asking for advice

I provided it and you simply ignore my advice? Rude.

[flvegan]

9. This is pretty irresponsible to suggest.

[Waiting For Everyman]

10. Tell Ellen Brown n/t

[lumberjack_jeff]

14. Cool! How to buy a house and not pay for it.

You can find anything on the internet.

[MineralMan]

15. I would not risk a penny on advice given by Ellen Brown.

She's all over the place, starting with quack medicine, and now she's giving mortgage advice? This woman is in the business of writing and selling books to the hopeless and the helpless.

Do not pay any attention to her advice. That's my advice.

If you have a mortgage, make your payments if you can. If you don't, you will lose your house eventually. There is no magic, instant way to erase a mortgage. You borrowed the money to buy the house. Someone will collect, or they will own your property at some point.

Ellen Brown is just looking to sell her new book. Buy it, and maybe she'll be able to pay her mortgage.

Go visit her web site. Read some stuff on the web. Just because she's on HuffPo does not mean she's right. Lots of crap on that website.

[Waiting For Everyman]

19. Be that as it may, judges around the country are upholding these cases

meaning that what she's writing is true. That is no longer even a question - there's lots of sources to say the same things. It isn't just her, not by a long shot.

Nobody's looking for a free house, they're looking for reasonable terms they can pay in an economic holocaust. Discouraging people who need help from defending themselves is a really questionable thing to do.

Why do you care? Or is something in it for you (and the other naysayers here)?

[DirkGently]

24. No they aren't. The cases mentioned don't point toward millions of "foreclosure proof" houses.

She's extrapolating something that isn't going to happen. And again, you don't want it to. A lot of people own houses that were purportedly foreclosed this way, and their titles would evaporate. This is bad advice akin to "You don't have to pay income taxes because 'it isn't in the Constitution.'"

None of which is to say what's going on is insignificant, that MERS isn't a problematic shortcut for lenders, or that mortgage assignments and the foreclosure process won't be affected. But no one's mortgage will be unforecloseable over this.

[Waiting For Everyman]

26. They all have the same qualifying characteristic, so yes they are.

[DirkGently]

29. No. This person is making a wild, fringe interpretation of the law that's not going anywhere.

Again, I'm no friend of the Dominant Paradigm, and I'm not against people thinking creatively when they're up against The Man. But this is a red herring. The most that will happen is that a foreclosure may be delayed, or may be restarted or done over, but no one will be "foreclosure proof." It's nonsense.

There are other, more realistic paths you and others can pursue.

The banks have done a lot of wrong, and the way foreclosures are being run is atrocious. But no one's going to erase mortgages over this type of issue.

[Waiting For Everyman]

32. You can say this as many times as you want, but you are not correct.

Old Republic Title has shut down policies on foreclosures. And this is why.

[DirkGently]

33. No, it's the robo-signings that caused that. No one thinks MERS-related mortgages are unenforceable

[Waiting For Everyman]

34. You are uninformed. There's a much bigger problem underneath the robosigning.

The documents were fabricated BECAUSE the originals don't exist, and the ones that do are unenforceable.

Attorney Tom Cox of Maine turned over this rock by deposing a robosigner (homeowners already knew this was happening but it was being ignored). He made the deposition available to an attorney in Florida, after overcoming an attempt by the bank to keep it secret. The judge said no.

Cox blew it open. But there is much more to this than robosigning, that's only the superficial layer fraud. Wait and see.

[DirkGently]

38. No, you are misinformed. There's no suggestion the mortgages somehow "don't exist."

These foreclosure outfits make as little as $1,000 - $1,200 per case, and are under tremendous pressure to slam them through as quickly as possible. Communication with their giant, bureaucratic lender clients is nigh-on impossible. So (allegedly) they cut all kinds of nasty and possibly illegal corners putting their docs together. But not because the mortgages somehow aren't real.

These ARE big issues -- just not what you're making them out to be. Lenders did all kinds of reprehensible things slapping down these mortgages during the "bubble." Bad / non-existant underwriting, hard-selling mortgages with terrible terms like "pick a payment," etc. But they didn't make up fake mortgages. People signed real promissory notes. The money went to a real seller. Title changed hands, and/or prior mortgages were paid off. There may be significant problems with how Assignments of Mortgage were handled. It's a mess.

But this "foreclosure-proof" stuff is magical thinking. Sorry, but none of this stuff makes the mortgages themselves unenforceable. What could, and I believe has, happened here and there is that the court gets so annoyed with the foreclosure attorneys that they dismiss the case with prejudice. That's possible. But that's case-specific and is based on bad conduct. No one's going to decide that 60 million mortgages are just going to evaporate.

[Waiting For Everyman]

39. No, they're exactly the issue I'm making them out to be.

And you can say that a thousand times and it won't change the facts. I don't care if you believe it or not, ok? It's up to each person to read the article and take it from there.

Enough.

Look into the REMICs.

http://market-ticker.org/akcs-www?post=168218

[DirkGently]

40. You started a discussion thread. Your information is incorrect. Nothing personal.

[Waiting For Everyman]

41. Your are not an all-knowing god who can state what is correct, any more

than I am. What's your interest in this anyway, what do you care? Are you so afraid a few people might read an article?

[DirkGently]

43. My interest is in contributing to the discussion you started. Didn't claim to be God, that I recall.

If you've read my posts, you know I didn't come in here to poo-poo your attempts to arm yourself with information. On the contrary, I'd like for you and other people in bad situations to get whatever help you can. But if you want to arm yourself with legal information, you'd be much better off actually talking to a lawyer instead of latching on to the most flamboyant thing on the Internet, is all. Seriously. This is barely above Tax Protester quality stuff this lady is slinging.

And no, I have no sympathy for the banks, and am not a bankster myself, thanks. But if the "60 million foreclosure-proof" house theory was true, it would be very bad news for everyone, because the feeble housing market would flatline overnight as titles to millions of properties went up in smoke. We need real foreclosure relief, not fantasies like evaporating mortgages.

Again, *someone* owns these mortgages. Everyone pointing out that figuring out who that is can be a big, murky, disorganized problem, of which MERS is a big part is right. But just consider for a moment, on a purely common sense basis, the likelihood that courts will just decide 60 million real mortgages, representing real money which borrowers received and used to purchase houses, are simply gone. It's not going to happen.

What you've laid down here is at best an overzealous interpretation of recent developments, and at worst really bad advice. The text of the article doesn't even particularly support the wild "foreclosure-proof" headline. It just isn't the case.

As for taking a hard line, I'd point out that you have completely dismissed every comment questioning the article, And it wasn't my intention to claim godlike omniscience. ;)

If you read my posts, I talked about the fact that entire mortgage foreclosure scene is indeed a serious situation, and no one knows for sure what all of the implications will be, but this one -- that 60 million mortgage borrowers are "foreclosure-proof" is extremely unlikely.

Not out to get you, Waiting. And yes, of course it's just an opinion. But it's an informed opinion, and it's offered in good faith.

[Waiting For Everyman]

44. You are arguing a non-point. And if you will notice, I point people to a lawyer in the OP.

You are arguing with yourself. If you think you're going to convince me that I don't know what I know, guess again. I've put 3 years of close research into this. I didn't just read an article or two yesterday. I've been following this as the winning cases were announced one by one, ever since the Boyko case.

[DirkGently]

46. Just trying to contribute. What you're saying just isn't the case.

Why the hostile? As for "Boyko," what do you think that decision means? I just read it, based on your comments, and it's a Dismissal Without Prejudice. Meaning whoever actually holds the debt could immediately turn around and file with the correct Plaintiff.

Now, if they can't figure out who that is, sure, the foreclosure will stall. But again, it's not like there's suddenly no mortgage, somehow.

[Waiting For Everyman]

47. Boyko was the first shot across the bow, not where it is today.

But whatever, every time you argue pointlessly the thread gets kicked.

Nobody ever said that SOMEWHERE there might not be an investor - merely that the "party in interest" is certainly NOT what appears on the filings. And I'm merely saying that the ruse is because they KNOW the real party in interest is chronically defective for purposes of a lawsuit. As this unfolds, bigger and bigger (which it will) ask yourself WHY all this fraud? Each and every big bank uses robosigners (lots of them, hundreds if not more across the country), each one usually produces about @8,000 of these frauds per month. This is NOT accidental. That's evident. It's procedure. That is directly stated in multiple depositions already. So WHY? Why is it done?

You'll get it, as more comes out.

[DirkGently]

49. It will definitely be interesting. Just don't agree it's going where the article suggests.

As for the robo-signings, why wouldn't we start with the simplest reason -- lenders are sloppy, lazy, cheap, unethical, and in a HURRY?

[ms.smiler]

42. DirkGently - my Promissory Note is payable to Advantage Financial

And the mortgagee on my Deed of Trust is Mortgage Electronic Registration Systems. MERS appears nowhere on my Promissory Note.

Explain to me please exactly how my property secures my loan.

[DirkGently]

45. The note and mortgage don't have to be given to the same entity.

You can borrow money from Bob, give him a note, and give a mortgage securing it to Sue. If you sign a mortgage giving someone a lien, they generally have a lien. No problem there. If MERS purports to be the actual holder of your Deed of Trust, it might have a problem, although they usually say, "as nominee for ____" You say you've "lawyered up?" Unless there's some specific law in your state saying a mortgage can only be given to the precise party named in the note, that's a non-issue. Did your lawyer actually tell you that the mortgage is no good for that reason?

Look, in my opinion, these types of arguments follow a certain "self-help" logic, which, while admirable in spirit, seldom works in the real world. Like the Tax Protester people who claim there's all kinds of Constitutional reasons why they don't have to pay. It's just too hairy to make these kinds of conclusions based on articles on the Internet. It's not all that complicated, but the process is in some ways maybe purposefully opaque, like toaster instructions translated from Korean.

I think these concerns with sloppy MERS transactions carry a bit more weight, and certainly if the lender who wants to foreclose actually cannot produce proof it holds the debt, that's a real issue. But consider:

- Did the borrower receive the money?

- Was it used to purchase the property, or pay off a purchase money loan?

- Did the borrower sign a Mortgage voluntarily giving a lien on the property in question?

If so, why would there be any expectation that the mortgage could be easily wiped away?


I don't like the lending practices that went on during the bubble. I don't like a lot of the practices the large-volume foreclosure firms use. ALL of these things might be useful in slowing a foreclosure. Virtually none will ultimately eliminate the mortgage.

Edit: Not saying it's not odd to have the different entities named on the note and mortgage. They generally travel together. And the entity on the mortgage couldn't sue on the note and vice versa. Sloppy and weird, but why would it be fatal to foreclosure?

[ms.smiler]

50. I’ve been researching these issues for two years.

After I refinanced, I spent a year feeling thankful that I avoided the defective mortgage products that were so abundant in the marketplace. I came to realize though that my loan wasn’t any better or any more legal than millions of other mortgages.

You and I can agree that homeowners created a debt when they borrowed money and signed a Promissory Note. You see that debt as secured while I see it as an unsecured debt. Many Federal bankruptcy courts share my view which leaves me with a smile as I formulated a sound position.

There is usually contradictory language in a MERS mortgage. In one place it states that MERS is the mortgagee. Elsewhere in the same document it states that MERS is acting solely as Nominee for Whomever. Which is it? Is MERS a mortgagee or just a Title holder?

When courts have ruled on these matters they conclude that MERS can call itself whatever it likes but that doesn’t make it true. Courts, including State Supreme Courts have ruled that MERS is not a mortgagee. They aren’t registered as a business in my state nor are they licensed as a lender in my state. They don’t loan anyone money nor are they entitled to collect any money from homeowners or the sale of property. They have no ownership or interest in the underlying Promissory Notes.

My mortgage has MERS as mortgagee. Courts are not recognizing MERS though as a mortgagee. My mortgage doesn’t have a valid/legal mortgagee which holds true for the millions of other Americans with MERS in their mortgages.

Doesn’t that mean that millions of Titles across the country are clouded?

I conclude that since my mortgage doesn't have a valid mortgagee, it only has a Title holder. It may well have been a valid mortgage as long as my loan originator held the Note, perhaps it wasn't valid. Since MERS appears nowhere on my Promissory Note, it can't sell, assign or transfer that Note.

So, what can MERS legally accomplish? At best, it can assign its position as Title holder to another company who then becomes the new Title holder. MERS can't assign what it does not own - the Promissory Note.

Courts have viewed this situation in two ways. Either they conclude that MERS does not have the ability or authority to assign a mortgage or that it does have the ability to assign a mortgage but succeeds only in splitting the mortgage from the Note.

So again, please explain how my property secures my loan.

DirkGently, you may not come to share my views on these matters but I hope I can at least explain my views and positions well enough that you will at least come to understand them.

Now the banksters set up this fraudulent system to benefit their securitization scam. As a business person, I spent about 3 months just trying to grasp and accept that the Masters of the Universe were indeed this stupid. They were out to save themselves every nickel possible. They didn’t want to pay recordation fees at the Recorder of Deeds offices nor did they even bother to register MERS as a business and/or lender in our states. MERS might at least pass the smell test if it was at least licensed as a lender, but the banksters didn’t bother to dot that “i” or spend that money.

This and more explains why I don’t believe that property secures those loans. Without a valid lien, no one can foreclose. There might still be a valid debt, if the original Note wasn’t destroyed and if there remains a balance due on the Promissory Note but homeowners have to hammer these companies in court to get any true and accurate accounting of all payments made on Promissory Notes. Homeowners have great difficulty just determining who really owns their loans and that suits our banks just fine.

So MERS is actually just a Title holder and lacks any authority to legally assign or transfer Promissory Notes. Our banks have been buying and selling then securitizing these Notes which were not secured by property, otherwise known as securities fraud. Once loan originators sold off the loans to Wall Street, there were never perfected liens against properties.

[DirkGently]

52. MERS is screwy and maybe should go away. Does annihilate the mortgage, though.

First off, I appreciate your tone. I didn't intent to rub either you or Waiting the wrong way, and I'm by no means suggesting that there is nothing to complain about, or no way to defend a messy mortgage foreclosure. I'm trying to provide some supplemental and clarifying information for what's going on here. Specifically, while no one knows exactly what the outcome will be, the speculation that millions of mortgages and / or titles are going to become invalid is both unlikely and a bad idea for everyone. I'm in favor of foreclosure relief, like forced cramdowns to market value, which could actually work.

What you and Waiting are both missing in reading these materials is that even if MERS can foreclose, SOME entity can. If MERS was listed, as you note, inconsistently as both "mortgagee" and "nominee for mortgagee," the lending institution is the actual mortgagee, and can foreclose. i'm not aware of any court ruling anywhere finding that such an error turns a secured debt into unsecured. Further, even if the mortgage is no good, in many jurisdictions, if you received the money and used it to purchase real property or pay off a loan that was used to purchase real property, the lender is likely entitled to an equitable lien, on the property, on the basis that but for the money.

There's no argument that lending practices during the bubble were atrocious. Bad underwriting, hard-selling bad products, and grossly inflating the market by loaning any amount of money to anyone, on any property. And lenders ARE having all kinds of problems showing who actually holds these debts because of the wild, undocumented selling and trading done through MERS.

But I'd point out that 1) None of that is fraud against the *borrower*. Did the borrower get the money? Did the borrower voluntarily give a purchase-money or refi lien against the subject property? If so,

Nor is it "securities fraud" as you suggest. Therefore 2) It is highly unlikely courts will be ruling that millions of mortgage loans are suddenly unsecured, or than any title that touched MERS in any way is invalid.

As waiting points out, this is just opinion, of course. But I don't know of any professional who takes the view of the article in the OP.

Thanks, and good luck to all. It's a mess out there.

[DirkGently]

53. Sorry for all the typos above. ^ Was running out the door. It's "does NOT annihilate the mortgage,"

of course.

[tammywammy]

16. How do you know if your mortgage was involved with MERS? n/t

[ms.smiler]

17. Dig out your mortgage and see if MERS is the mortgagee

If so, your Note is payable to some other company. If your mortgage wasn't split from the Note the moment you signed it, it surely will be when MERS does an Assignment of Mortgage to some loan servicer. That is the company that collects your payments and will pretend that they own your mortgage and the Note should they decide to foreclosure on your property.

Making your payment each month is no guarantee that the company won't foreclose on your property. Often, loan servicers play with the escrow accounts to manufacture a supposed default and use it as an excuse to foreclose. They can also add expensive mortgage insurance to raise your payment and hopefully trigger a default.

You can even experience a foreclosure if you own your home and have no mortgage. Bank of America seems to specialize in foreclosing on properties that have no mortgage.

MERS has a look up tool here: https://www.mers-servicerid.org/sis/ Locate the MIN number on your mortgage and select Search by MIN

MERS now tells you who services your loan and who is the investor or owner of your mortgage.

You can also check Fannie Mae's look up tool, here: http://www.fanniemae.com/loanlookup/

Most Counties have online access and you can check your local records to see what has been filed.

You can call the company who collects your payments and ask them who owns your loan. See if any of this information is consistent, most likely it isn't.

lumberjack_jeff - you can indeed learn much on the Internet. It was two years ago that two DU members clued me in to the problems with mortgages, MERS, foreclosures, etc. I am now lawyered up as is my son.

Defrauded Americans don't owe the banksters one damn dime!

Edited for missing word in sentence.

[Waiting For Everyman]

20. There's also a registry at MERS.com n/t

[democracy1st]

36. K & R

[Manifestor_of_Light]

48. Ask them for a WRITTEN Deed of Trust.

If they don't have a Lien Note and Deed of Trust in writing, it is NOT LEGAL.

This is illegal under the Statute of Frauds.

Certain contracts must be in writing to be enforceable.
All contracts for the sale of property MUST BE IN WRITING.

This is REALLY BASIC contract law. First Year of law school stuff.


Yes I am a lawyer but I don't play one on TV, unlike The Shatner. :D