I must confess I get a perverse sense of satisfaction from watching MERS suffering pushback on a variety of fronts. The latest, as we mentioned a few weeks ago, is the prospect of litigation by various local governments asserting the right to the recording fees that the MERS system bypassed.
The press release below is from the Guilford County Register of Deeds in North Carolina. As you can see, he is exploring the county’s options for recouping recording fees he believes that MERS owe to Guilford County, to the tune of $1.3 million (hat tip Lisa Epstein via ForeclosureFraud).
I particularly like this sentence:
“Do we want land records in America to be governed by major banking conglomerates on Wall Street or the people and laws of the United States of America?”
As we have indicated, MERS is far from a deep pockets target. And no one has yet filed a lawsuit; litigation is an expensive proposition for both parties. You could easily see the county spending more that it could possibly collect in legal costs.
The real question is whether a clever lawyer can find a legal theory that would allow the local governments to sue not just MERS but one of the parties that benefitted from the MERS process, presumably the sponsors. And then you’d need to file it on a class action basis so that the legal cost divided over a large number of plaintiffs would still allow for reasonable recoveries.
Thigpen to Take on MERS, Mortgage Giants
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“Do we want land records in America to be governed by major banking conglomerates on Wall Street or the people and laws of the United States of America?”
Did he mean to say “laws of the United States”, as in advocating that the federal government centralize land records (a favorite “solution” for the MERS situation among Big Government liberals)? That is absolutely NOT what we need or want. Talk about a backdoor way to legalize MERS.
The counties and towns need to get more aggressive about placing liens on any REO implicated in this, as well as in the case of bank-abandoned “toxic titles”.
They should then auction the land to themselves and use it cooperatively as seed land to start rebuilding our communities on a decentralized, autonomous basis.
Actually, I’m quite happy with the local registration of land title, and don’t want that to be a federal function. But then, I’m not a Big Government Liberal, so I guess I don’t count.
“Did he mean to say “laws of the United States”, as in advocating that the federal government centralize land records (a favorite “solution” for the MERS situation among Big Government liberals)? That is absolutely NOT what we need or want. Talk about a backdoor way to legalize MERS.”
Given that, as County Register of Deeds, he’d have job security issues if land records went federal, I’d wager that that’s not his intention.
If you read the whole letter, it’s pretty clear that he wants to maintain local county control over registration.
Yves wrote: ‘I must confess I get a perverse sense of satisfaction from watching MERS suffering pushback on a variety of fronts.’
Come now. There’s nothing perverse about your satisfaction.
A large segment of the FIRE industry decided to ignore existing property law going back centuries — and the fact that they were trading the mortgages on the homes of real people back and forth — and dared anybody to challenge them while they created their own alternate universe of fraud.
I hope the wrath of God descends on the scum myself.
I completely agree with you. There’s nothing perverse about wanting to see MERS either brought into compliance or dissolved and made to pay legal penalties for their negligence in adhering to clearly established law.
At some point they decided that they were going to do things their own way, to their own benefit because they knew best. They couldn’t be bothered with doing something as trivial and outdated as actually complying with property laws.
I can’t think of an entity more deserving of a total legal smackdown for deciding they were above the law. The utter belligerence and audacity of creating a business model that existed for the sole purpose of circumventing property laws they deemed to cumbersome, staggers the imagination. The fact that nothing has been done on this to date is the source of major frustration for those that have been following this debacle.
In at time where everyone is slashing budgets due to shortfalls caused by the financial implosion in which MERS was a key player, it seems rational and fair to pursue the fees this entity was created to illegally circumvent.
It seems MERS is a fraudulent front. Couldn’t they be charged with the RICO act?
Barry Ritholtz, Jim Willie and Karl Denninger have discussed the RICO angle..
http://www.marketoracle.co.uk/Article23276.html
Gold and Silver Breakout as Fascist Business Model Crumbles, Mortgage Market Fraud
By: Jim_Willie_CB
The cases where people have been removed from their homes, even when no bank loan exists (as in owned free & clear), by means of fraudulent, forged, and counterfeited documents, has finally provoked RICO law provisions. Witness organized crime extended from Wall Street, whose roots lie most likely in Fannie Mae itself. The legal industry has finally joined the fray in class action lawsuits. Defense citing errors made have been met with accusations of fraud, quite a different game.
Observe the Wall Street mortgage bond fraud, conflict of interest, counterfeit bonds, naked bond shorting, high frequency trade skimming, hidden monetization of USTreasury auctions, and the MERS database reliance. The MERS database and countless home foreclosures are at the center of legal investigations. Even a sitting US Senator has called for investigation of JPMorgan, Bank of America, and GMAC, regardless of their size, prominence, influence, or prestige
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http://www.ritholtz.com/blog/2010/10/foreclosure-fraud-reveals-structural-legal-crisis/
Foreclosure Fraud Reveals Structural & Legal Crisis
By Barry Ritholtz
And we will see that at every step along the process, the reckless rush for easy profits has systemically undermined these legal property rights — how mortgages are recorded, the bungled bundling of notes to be securitized, the electronic system that fictionalized the process of assembling transfer documents, and how all the players along the way — The investment firms, banks, law firms, even court system, utterly lost sight of what they were doing.
Because of the egregious abuse of the property transfers in the legal system, MERS eventually lost its legal shield and cloak of privacy.
More significant than that, their unique combination of legal fictions and incompetence implies a huge underlying problem with many of the structured finance. This means that Residential mortgage-backed securities (RMBS) and Collateralized Debt Obligation (CDO) that relied on MERS have enormous structural problems.
Karl Denniger went so far as to suggest the entire MERS/structured finance industry engages in such systemic illegality as to be guilty of RICO — the Racketeering statute used to bring down drug lords and mafia kingpins. If he is right, and I suspect he is, our Banana Republic status is getting ever closer.
Rather than repeat that diatribe, let me show exactly how endemic this is, via the price list for fabricating Foreclosure documents. From naked capitalism, (4ClosureFraud Posts Lender Processing Services Mortgage Document Fabrication Price Sheet), http://www.nakedcapitalism.com/2010/10/4closurefraud-posts-docx-mortgage-document-fabrication-price-sheet.html we learn that for a price, a firm will fabricate whatever documents need for foreclosure, real or otherwise.
This makes Denniger’s RICO accusation even more poignant. Need paper work for a foreclosure, legal or otherwise? There’s an app for that.
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http://market-ticker.org/akcs-www?post=168144
MERS/MBS/Foreclosure Goes RICO
Karl Denninger
It’s about damned time.
This is worth a read, even though it’s VERY long. The bottom line is that all the Tickers I’ve written on this subject, from bad conveyances into REMICs, to the tax issues, to the fraudulent documents, to the fact that the MBS are “empty boxes”, up and down the line – it’s all in here.
Anyone who thinks this is a “nothingburger” after reading this has rocks in their head.
This is a rather lengthy filing, 124 pages worth. It asserts virtually everything that I’ve written about for the last three years related to REMICs and MBS (that the notes were not conveyed and now can’t be under the law), and alleges Racketeering.
http://www.scribd.com/doc/38654717/Class-Action-vs-Mortgage-Electronic-Registration-Systems-Gmac-Deutsche-Bank-Nation-Star-Aurora-Bac-Citi-Us-Bank-Lps-Et-Al
Yes, MERS is simply an agent of large banks established for the sole purpose of avoiding filing fees under state real estate statutes. That sounds like a criminal conspiracy to defraud states of revenue, wish I new RICO law better. If that doesn’t work then I wish state judges would allow homeowners to file actions to quit claim on mortgages and if the bank or Securitization trust can’t show a proper assignment and doesn’t have possession of note then the homeowner gets the house free of any encumberance. This woul have the affect of de-collaterlizing any MBS security and then the investors would sue everyone involved for fraud, negligence and breach of contract/fiduciary duty. The public could sit back and watch the whole system eat itself in court. I’m tearing up just thinking about how beautiful it could be.
I would also suggest that MERS was set-up to obfuscate the process and make a better environment for fraud. I don’t see free homes as the way out but rather prosecution of the control fraud at the top and get the mortgages put back to the original owner if they can’t show adequate transfer beyond that. But the brute force you suggest may be necessary to get the process started..
If I remember correctly, doesn’t MERS simply deputize officers of the institutions that they deal with? It seems that this might implicate the sponsor as well, if they were wearing two hats when they entered into an agreement designed to evade those fees.
Well the “class action,” is the traditional legal recourse where there are a large number of low-dollar plaintiffs who have been wronged by a single (or a small number of) defendant(s).
The lawyers need to go balls to the wall to get the MERS issue out there front and center for the public to see, before the banking industry reaches the currently discussed low ball settlement with itself, by way of its captured regulators.
Yves: “As we have indicated, MERS is far from a deep pockets target.”
What’s the value of the database? How much can I charge various parties for access if it were to become my legal property? What’s the cost to the banks/trusts if I simply shut it down?
Certainly, MERS doesn’t have deep pockets in terms of cash on hand. But they would seem to have one very large asset.
Hmmm, just like Libya. Will they hold the database hostage?
The owners of MERS could be found liable for all damages via a piercing of the corporate veil theory which would allow damages to be recovered against the owners (the TBTF banks, Fannie and Freddie et al). This requisite state laws would be dependent upon common law precedents in each state but generally would need to prove that MERS was an “instrumentality” of its owners which should not be too difficult to prove. For a very basic and generic understanding of the theory see: http://en.wikipedia.org/wiki/Piercing_the_corporate_veil.
Yves said: “The real question is whether a clever lawyer can find a legal theory that would allow the local governments to sue not just MERS but one of the parties that benefited from the MERS process, presumably the sponsors.”
I believe this has been filed in 23 (not sure of the actual number) states as of the end of 2010. This is the Nevada filing:
http://livinglies.files.wordpress.com/2010/06/nevada-qui-tam.pdf
Lo and Behold
Search your news today. After Arizona passed SB1259
Bank of America is now modifying loans in Arizona!
Why?
Because Arizona passed SB 1259 requiring the banks produce all necessary paperwork and note and assignments before the bank can take back the home.
Its impossible for the banks to produce these documents that is why they are using these fake robo signed documents.
Time for everyone to contact your congressperson and introduce legislation into every state to force these banks to produce all necessary paperwork to take homes.
California congressman Filner is the person to introduce this bill he is upset with the bank and says Chase bank has the blood of soldiers on its hands
Soldiers committing SUICIDE because these bank Servicers are stealiing their homes
read:
http://news.yahoo.com/s/yblog_thelookout/20110209/ts_yblog_thelookout/congressman-suggests-chase-has-american-soldiers-blood-on-it-hands
Contact this congressperson and tell him to introduce legislation like Arizona and Oregon
SB 484 Oregon
SB 1259 Arizona
I contacted his office today
760 355 8800
619 422 5963
Everyone else contact your congressperson. Let them know Bank servicers are stealing homes legislation like that in Arizona and Oregon needs to be passed in every state
If BofA doesn’t have the documents, what is being “modified?”
Are these “modifications” just a way to create a new and kosher debt obligations out of thin air?
I doubt that he will be able to recoup “lost” recording costs for instruments that are specifically not required to be recorded by North Carolina statute:
http://www.ncga.state.nc.us/enactedlegislation/statutes/pdf/bysection/chapter_47/gs_47-17.2.pdf
I am gratified when I read about a judge making MERS and their members comply with the law. But does not seem to be one of those cases. There does not appear to be any requirement that an assignment be recorded in North Carolina. Correct me if I am wrong, but provide a citation in North Carolina law please.