SHOCKER!!   Buyer of a short sale doesn’t own the property he just purchased (or does he?).  Seller of the short sale paid off the wrong party (or did he?).

The below email was sent to Neil Garfield at Living Lies.  Sadly this is not shocking at we know of two other lawsuits where the seller and the buyer acted in good faith and sold the property and the money was sent to BofA (and MERS was involved as well) and later the “real” owner of the deed of trust came forward and demanded that the transaction be undone due to a mistaken release of the deed of trust by the wrong party.

What does this mean to a real estate agent involved in the transaction?

Get an attorney involved – preferably BEFORE the short sale closes.  Why?  Quite simply you need to make sure that the transaction is buttoned up tight.   Many of the short sales that involve an attorney and litigation against the pretender lender will require a settlement agreement to be signed at closing (or at least have enough documentation that the seller & buyer have some ground to stand on).

But what does a settlement agreement do and how does it help you as the real estate agent?

First, the pretender lender whose is receiving the proceeds of the short sale “swears” they are the real lender or working for the real lender (like Fannie Mae).  Second, a well crafted settlement agreement will indemnify the seller (or whichever parties are named) – meaning that the lender getting the money has to defend the seller if they are sued over the specifics related to the settlement, i.e. the short sale.

Does the buyer lose the house and does the real estate agent have to give back their commission?

Very likely the answer is no.  But you will have to hire an attorney to fight this battle for you.   The title company should be on the hook for the value of the home – meaning they will either have to pay off the “real” lender or the new homeowner.   The downside is that it could cost more than the commission just to fight this type of suit AND the title insurance is only good for the amount of the policy (if the house was bought for less than full value or thousands of dollars in updates/remodeling has been performed you could lose this amount).

Bottom Line

Short sales and even purchasing foreclosure can be great equity and value builders for the buyers and assist the seller with disposing of a property but a good title company and good lawyer can help you keep this value hopefully keep your sanity and commission.

Seek legal counsel from a real estate attorney and one who has experience in dealing with short sale and foreclosure.

- The Bank Slayer

Talk about a title NIGHTMARE.  As you will see below in a blurb from April Charney, a large national servicer (U.S. Mortgage) STOLE mortgages belonging to credit unions for which they were servicing the Notes.  ($142 million worth of loans!!!).

U.S. Mortgage sold the loans to Fannie Mae and kept all the money but kept sending the mortgage payments to the credit unions and Fannie Mae so no one ever knew.  Eventually after stealing the loans and selling to a very aggressive Fannie Mae as purchaser, the servicer went bankrupt.   The credit unions moved to service the loans themselves or transfer them to another servicer and found out the servicer had stolen their loans and sold them.

In the case below a specific credit union wants the loans back but Fannie already sold them into the securities market and/or doesn’t want to give them up AND wants the mortgage payments sent to them.

The credit union’s beef with Fannie is that Fannie audited U.S. Mortgage each year and blessed their internal processes but when buying the loan failed to always secure the original notes AND the property records only show the credit union’s deed of trust and NO ASSIGNMENT from the credit union to the servicer or anyone else.  Hence, the loan still belonged to the credit union.

Among some of the fascinating elements in the case is one in which employees at the servicer even produced fake promissory notes and signed blue ink pretending to be the borrower when on occasion Fannie actually asked for the original notes.

This is a good example of the lies and theft going on behind closed doors.

- The Bank Slayer

From: April Charney [April.Charney@jaxlegalaid.org]

SUFFOLK FEDERAL CREDIT UNION,
Plaintiff,
vs.
FEDERAL NATIONAL MORTGAGE
ASSOCIATION
Defendant

Case 2:10-cv-02763-GEB

In 2009, “Suffolk learned that U.S. Mortgage ha[d] stolen 189 of the mortgage loans it was servicing (the “Stolen Mortgages”), worth more than $42 million2 and sold them to Fannie Mae.” (Id. at ¶ 7.) Suffolk states in its Complaint that “McGrath and another U.S. Mortgage employee, Ron Carti, had prepared and signed loan transfer documents that falsely identified themselves as executives of Suffolk” and that “Fannie Mae accepted the documents and paid U.S. Mortgage millions of dollars without ever checking into McGrath’s or Carti’s authority to execute loan transfer documents on behalf of Suffolk.” (Id. at ¶ 7.)

The theft of the Stolen Mortgages occurred throughout years 2004, 2005, 2006, 2007, 2008, and 2009, during which time “U.S. Mortgage officers and employees . . . selected loans that Suffolk had instructed CU National to retain in Suffolk’s portfolio and . . . sold those loans to Fannie Mae without Suffolk’s knowledge or authorization.” (Id. at ¶ 39.) “U.S. Mortgage sold the Stolen Mortgages to Fannie Mae by having McGrath and Carti execute the documentation themselves” despite the fact that only authorized Suffolk employees had authority to sign these documents. (Id. at ¶ 41.) Neither McGrath nor Carti had the authority to execute these documents. (Id. at ¶¶ 71-77.)

In addition, U.S. Mortgage “concealed its actions from Suffolk . . . for years by continuing to make monthly payments on the stolen mortgages as if they remained in [Suffolk's] portfolio[].” (Id. at ¶ 9.) “McGrath has already pleaded guilty to crimes in connection with his unauthorized sales of the Stolen Mortgages and, in doing so, had admitted that he and Carti executed loan transfer documents purportedly on Suffolk’s behalf without Suffolk’s authorization.” (Id. at ¶ 48.)

McGrath also admitted that “he did not always deliver an authentic original note to Fannie Mae in his unauthorized sales” and that in some cases “he forged the name of the borrower on a newly created note” and in others “he had color copies of notes made and delivered a copy of the note to Fannie Mae.” (Id. at 51.)

(Paragraph 42 of the Complaint states that the Stolen Mortgages were worth more than $142 million. (Compl. ¶ 42; Doc. No. 1.))

Special guest Mike Baker from Chevy Chase Funding will be taking calls and answering questions about your mortgage related issues – with a focus on property tax issues this morning on CBS Radio’s Houston Morning Show on 650 AM or live digitally from 7am-8am.   Call now at 713-965-0650.

Talk 650 AM

Last week, The Gore Law Firm scored four Temprorary Restraining Orders agains various banks.  Congrats but frankly it is hard, very hard to convince a Judge that someone who is not paying their mortgage should not be foreclosed upon – even if the bank hasn’t produced a vaild note.

Why?  Simply put a homeowner/borrower is facing three common obstacles:

1. It appears to the Judge (and the bank’s attorney will paint it this way) that the “dead beat” homeowner is trying to get a windfall by living for “free” or getting a “free house”.
2. The bank’s attorney will tell the Judge, “We have the note but by the way the Texas Property Code doesn’t require us to bring in the note.”
3. The Judge, who well may be very intelligent, usually doesn’t understand the actual process goes on behind the funding of a mortgage.

Neil Garfield points this out in a recent post.

Bottom line is there is a reason that most judicial seats require that the Judge has a law degree and in many cases has a certain amount of trial experience.  They learn how things work and how to apply the law.  If they don’t understand how a mortgage is funded then your road just got a lot tough.

- The Bank Slayer

Judge it is as simple as this — the borrower signed a note and the lender received a bond. Those are two different things. If you let them continue with this fraud you are giving houses to brokers who never put up a dime for the funding of the loan.

This will be a subject of the telephone conferences for members.

Judges are never going to like an argument, that essentially says “look, I know I owe the money, it’s just that I don’t think I should have to pay it because these are bad people.” That’s not law, that is directly provoking a judge to say “get out of here.”

If litigants are attempting to get judges to say they don’t have any requirement to pay on an obligation that obviously came into existence, then they would even lose in front of Boyco, Shack, and Burford. That isn’t law, that is policy. It isn’t litigation it is lobbying. Judges don’t make the laws they enforce them, or at least that is what they are supposed to do. The problems I keep seeing from some parts of the country is that lawyers don’t know their rules of evidence, they don’t know trial tactics, and they don’t understand securitization.

Keep it simple!! And now you have the added burden of clearing up a hostile environment. These lawyers are arguing philosophy when they should be arguing evidence. Understanding securitization is only part of the battle. Securitization information gives you the certainty of knowing what to look for. It doesn’t prove anything in and of itself. If the affidavit is not from a competent witness it is inadmissible regardless of whether the loan was securitized or not. Securitization tells us that the affidavit is virtually NEVER from a competent witness. Competency is OATH—PERSONAL KNOWLEDGE FROM PERSONAL PERCEPTION—MEMORY— AND COMMUNICATION. If the affidavit does not specifically tell the story of what the witness knows, how they know it, and without relying upon what other people told them, then it is not admissible.

If opposing counsel says he represents xyz trust and you have information showing that the trust doesn’t exist, you got him. If a notice of default is sent out and you have the records that show that these same people are reporting to the investors that the loan is fully performing and they are making payment to the investor on that loan, then it isn’t it default or it raises a question of fact (including the existence of co-obligors). You can’t argue theory to a judge with a calendar that is already too full you must argue LAW that the Judge is already familiar with and can’t argue with. Something that is incontrovertible, with a court reporter in the room so that if he the Judge goes the wrong way you can go up on appeal.

I know it isn’t fair or right and probably not even legal or constitutional to put the burden on the borrower of coming up with facts that controvert presumptions in the Judge’s mind — where no evidence has been presented by the party seeking affirmative relief (foreclosure). But that is it. When the objection is raised it must be raised timely, succinctly and with a SHORT explanation of why you think it should be sustained. At this point you need to go in with the transcripts and rulings of a dozen judges who were ruling “just like you judge” because they also thought this was a crock and that the borrowers were trying to get out of a legitimate debt. But each one of these Judges changed their minds and suddenly realized they have been rubber-stamping fraudulent foreclosures.

Each of of these Judges realized we were not saying there was no obligation. Each one realized that the paperwork was not done properly and that they probably had the wrong party seeking foreclosure. One of the Judges picked up on it himself when he realized the same property was being foreclosed on the same note and mortgage by two different parties claiming to be lenders each having the right to foreclose. We have the evidence that we should not be required to produce and they don’t have the supporting evidence or witnesses that they SHOULD be required to produce. It isn’t justice or due process to grant their motions just on the theory that they wouldn’t be here if they didn’t have the right to foreclose.

We’re not entitled to any presumption that the chain of title is broken. And they are not entitled to any presumption that the chain of title is clear. They must provide the proof. We’re not saying we don’t owe money, we are saying we don’t know how much and to whom, because they won’t give us a full accounting of the entire transaction nor the names and contact information of the people who actually funded the loan. And they are committing fraud upon this court when they represent themselves otherwise. But Judges are believing them because they have the word “Bank” in their names or some other official sounding institutional name.

Judge it is as simple as this — the borrower signed a note and the lender received a bond. Those are two different things. If you let them continue with this fraud you are giving houses to brokers who never put up a dime for the funding of the loan.

COMBO TITLE AND SECURITIZATION ANALYSIS PAY MONTHLY

This is another example of the need to determine exactly where you mortgage loan resides.  If you used to be with a mortgage company that no longer exists or filed bankruptcy than it is very likley your tax dollars have bailed out your mortgage.

While this is more funny than helpful, this Bloomberg article points out a need that is real.  Proper plans need to be in place to resolve the “To Big To Fail” problem other than us the taxpayer pciking up the tab.

Nothing like paying twice huh?

- The Bank Slayer

FDIC Approves Proposal for Large Banks to Write ‘Funeral Plans’

May 11 (Bloomberg) — The Federal Deposit Insurance Corp. board approved a proposed rule that would require about 40 U.S. financial institutions to submit annual contingent resolution plans — “funeral plans” — that would demonstrate how to wind down the company in the event of its failure.

FDIC board members voted unanimously to release the proposal for public comment during a meeting in Washington today. The proposed rule would apply to depository institutions with more than $10 billion in assets that are part of a bank holding company with assets of more than $100 billion.

Senators Mark Warner, a Virginia Democrat, and Bob Corker, a Tennessee Republican, have pushed for a similar proposal for all large financial institutions in the financial-overhaul bill now on the Senate floor.

To contact the reporter on this story: Phil Mattingly in Washington at pmattingly@bloomberg.net

Yes it is true.  I have seen it with my own eyes and IN WRITING.  In our office we have on record a statement from Freddie Mac, which they submitted to the courts, that “Freddie Mac has made all relevant and required payments to the investors on behalf of the borrowers.” Did you catch that?!?!

Yes, Freddie Mac acting as the Master Servicer, has been making payments to the debt owners of a mortgage.  How can the borrower be in default?

Thanks to Timothy McCandless for his article highlighting how this happens.  In his example the servicer made payments.

This homeowner “might” owe the money to somebody, but not the creditor as the creditor has received the payment in full. Remember – this is from a public STATEMENT filed with the SEC to the investors describing what they were PAID. The party foreclosing is not entitled to power of sale as they are not the creditor. The creditor has received all payments and the homeowner has not defaulted.

- The Bank Slayer

No Default The Servicer is making the payments !!!

In the sercuritization game there are many co-obligors and you may not be in default after all. In the pooling agreement the servicer must agree to advance payment in the event of a missed payment by debtor.

Who is the obligor? Is there a default? Remember – this is financial engineering at its best. This is the American way to be creative and inventful. These guys are so good that homeowners can stop paying their loan and the creditors get paid anyway. They just forgot to tell the homeowners – and the courts. Some people call this forgetfulness fraud upon the court.

When they added the loans into the pool they attached numerous conditions to them. What might some of those conditions be? One of them is a condition for the servicer (making them an obligor). If the servicer doesn’t receive the homeowners payment, they MUST advance the payment (principal and interest) to keep the flow of revenue to the creditors (read this in the SEC filings). Don’t believe me? Think it can’t be proven? Read on …

The following is in regards to the IndyMac INDX 2xx5-xxx trust …

Let’s look at the April 2010 loan level files. Look at the these specific fields (for loan #xxxxxxxxx):

BEGINNING BALANCE SCHEDULED PRINCIPAL CURTAILMENTS PAYOFFS NEGATIVE AMORTIZATION ENDING BALANCE TOTAL PRINCIPAL SCHEDULED PAYMENT RELATED INDEX RATE NOTE RATE SCHEDULED INTEREST SERVICING FEE RATE SERVICING FEES NET RATE NET INTEREST TRUSTEE FEE RATE TRUSTEE FEES LPMI FEES OTHER FEES TOTAL FEES INVESTOR RATE TOTAL PTR INTEREST
523275.38 939.51 0 0 522335.87 939.51 2956.3 0.04625 2016.79 0.00375 163.52 0.0425 1853.27 0.000055 2.4 0 0 165.92 0.0424451 1850.87

Now look at the March 2010 loan level files. Look at these same specific fields (again for loan #xxxxxxxxx).

BEGINNING BALANCE SCHEDULED PRINCIPAL CURTAILMENTS PAYOFFS NEGATIVE AMORTIZATION ENDING BALANCE TOTAL PRINCIPAL SCHEDULED PAYMENT RELATED INDEX RATE NOTE RATE SCHEDULED INTEREST SERVICING FEE RATE SERVICING FEES NET RATE NET INTEREST TRUSTEE FEE RATE TRUSTEE FEES LPMI FEES OTHER FEES TOTAL FEES INVESTOR RATE TOTAL PTR INTEREST
524211.28 935.9 0 0 523275.38 935.9 2956.3 0.04625 2020.4 0.00375 163.82 0.0425 1856.58 0.000055 2.4 0 0 166.22 0.042445 1854.18

(Note the ending balance for March 2010 is 523275.38 – how come the balance is going DOWN?). On the March 2010 loan level files the servicer is also reporting the account is 90+ days delinquent. The homeowner is not and has not been making payments.

Beginning balance is 523,275.38 and ending balance is 522,335.87!!!

Scheduled Principal is 939.51 and the total principal is 939.51

523,275.38 – 939.51 = 522,335.87 (they show the principle has been reduced!)

Scheduled payment is 2956.30

Scheduled Interest is 2016.79 and net interest is 1853.27

939.51 + 2016.79 = 2956.30 (the scheduled payment)

Servicing fee = 163.52

2016.79 – 163.52 = 1853.27 (net interest)

Total PTR Interest is 1850.87 (Trustee fee is 2.40 so 1850.87 + 2.40 = 1853.27 which is the net interest)

The reason they have to ADVANCE the fees is because the fees are still paid and (apparently) come out of the interest portion of the payment.

This homeowner “might” owe the money to somebody, but not the creditor as the creditor has received the payment in full. Remember – this is a STATEMENT to the investors describing what they were PAID. The party foreclosing is not entitled to power of sale as they are not the creditor. The creditor has received all payments and the homeowner has not defaulted.

The method used seems to be inconsistent between deals. I checked for another homeowner in another IndyMac Trust (IndyMac xxxx 2xx7-xx) and the homeowner had interest only payments (so the principal didn’t go down) however, the interest looks like it is being paid. For other homeowners in this deal they are using the “curtailment” field and the ending principal balance is RISING.

This is just the statement to the certifiateholders. You can BET the sub-servicer and the master servicer are keeping full accounting records that they are NOT reporting to the homeowner, the investors or the courts.

Timothy McCandless Esq. @ http://timothymccandless.wordpress.com/about/

Citing the need to protect borrowers from mortgage payments that potentially balloon out of control, Fannie Mae is putting forward new standards for the purchase and securitization of adjustable-rate mortgage (ARM) products.

Why stop now?  You have unlimited U.S. taxpayer money.   Everyone NEEDS to have a home.  More loans, more loans, more loans.  A mortgage loan in every pot.  Say it together.

Bottom Line:  Until homeowners are educated on the true and total cost of home ownership AND brokers stop gouging folks, a tweak here or there will be countered by lenders needing to make a fast buck and will continue to dupe borrowers.

- The Bank Slayer

Fannie Modifies Criteria for Purchase and Securitization of ARMs

Citing the need to protect borrowers from mortgage payments that potentially balloon out of control, Fannie Mae (FNM ^[1]: 1.22 -3.17%) is putting forward new standards for the purchase and securitization of adjustable-rate mortgage (ARM) products. The government sponsored entity is also tweaking its rules on interst0only products.

This is a common question posed to us.  Can I do a short sale AND a bankruptcy.  The answer is yes, BUT.

Below is a short article by a Boston BK attorney who I think does a decent job of explaining both options.  That said, I think that way too often homeowners jump right to the bankruptcy plan when a short sale would “do them just fine.”

Bottom Line:  No need to blow-up your credit for years with a BK if instead you can pull off a short sale and get back on your feet.

- The Bank Slayer

Bankruptcy and Short Sales

by Nicholas Ortiz, Boston Bankruptcy Attorney

Should I try a short sale, file bankruptcy, or both? That is the question. Do short sales and bankruptcy make sense together? The answer is, not usually.

Often when people are in the eye of a financial storm they address problems piecemeal. They may try credit counseling for credit card debt, an offer in compromise for tax debt, and to get out from under a burdensome mortgage they might try the obvious: selling their house. The problem with this last idea is obvious, if the house is “under water” or, in other words, saddled with a mortgage worth more than the house, one can’t sell it without the lender’s permission. That’s called a short sale.

A short sale happens when a lender agrees to allow a person to sell his house for an amount that does not result in the mortgage being paid off. Along with mortgage modifications, short sales are a useful tactic to try when a mortgage is the main source of trouble. There are also significant credit reporting advantages to a short sale over the alternative, a foreclosure.

But in bankruptcy it’s a different story. The main purpose of a short sale is, after all, to get out from under a mortgage debt. This can be achieved by “surrendering” a house in bankruptcy. This is possible in either a Chapter 7 or Chapter 13 bankruptcy. The surrender to the mortgage lender, however, still will occur via a foreclosure. That’s how a mortgage lender gets the house back after it’s surrendered. This results in some credit reporting damage, but the homeowner walks away from the mortgage debt with no deficiency debt. Consequently, a short sale is often unnecessary when someone has multiple debt problems and bankruptcy is inevitable.

However, with all that being said, a short sale can be possible and even advisable if the homeowner has the energy and the desire to avoid a foreclosure on his credit record (in addition to the bankruptcy) after the bankruptcy case is over. The timing on these post-bankruptcy short sales can be tricky. Ask your bankruptcy lawyer if this is an avenue you are interested in exploring. He or she may be able to refer you to a real estate broker experienced in short sales.

“There is no trust in this business” said the foreclosure trustee.  Scary huh?  This isn’t some fictional story.  This is real life in Harris County, Houston, Texas.

Recently, members of our team confronted the Trustee that was about to auction off the homestead of one of our clients.  In our hand was the Temporary Restraining Order, the ink still wet from a Judge’s signature; effectively stopping the foreclosure sale and saving this home owner.

When the TRO was handed to the Trustee he feigned surprise and acted as if he didn’t care one way or another if some local Judge had ordered the foreclosure sale to stop.  Why? He was on a mission for the bank or possible his buddies.  Sell the house.

As he glanced at the TRO our team said, “I guess that’s all you need.”  The Trustee’s retort, “You going to stick around to see if I still sell the house?”   Incredulously we said, “I trust you’re going to follow the Judge’s order.”  His curt reply, “There is no trust in this business.”

Amazing huh?   Sadly this Trustee who is supposed to sell a home to the highest bidder and show impartiality between the bank and the homeowner is untrustworthy.

Just take a trip down to the foreclosure auctions.  You’ll quickly see that homeowners are getting the shaft.

We have witnessed trustees high fiving each other after clearing the sale board.  why? Not a single house sold to a third party buyer, in other words they bid back every house to the bank.

Bottom Line: You can’t trust the trustee.  Want another example…read on below.

- The Bank Slayer

Department of Justice Press Release – Stockton Real Estate Executive Pleads Guilty to Bid Rigging at Auctions of Foreclosed Properties

For Immediate Release
April 16, 2010 United States Attorney’s Office
Eastern District of California
Contact: (916) 554-2700
From Dan Edstrom:

Stockton Real Estate Executive Pleads Guilty to Bid Rigging at Auctions of Foreclosed Properties

SACRAMENTO, CA—United States Attorney Benjamin B. Wagner and Assistant Attorney General Christine Varney of the Department of Justice’s Antitrust Division announced today that Anthony B. Ghio, 43, of Stockton, pleaded guilty today before United States District Judge Edward J. Garcia to conspiring to rig bids at public real estate foreclosure auctions held in San Joaquin County.

These charges arose from an ongoing federal antitrust investigation of fraud and bidding irregularities in certain real estate auctions in San Joaquin County. The investigation is being conducted by the U.S. Attorney’s Office for the Eastern District of California, the Antitrust Division’s San Francisco Office, the Federal Bureau of Investigation, and the San Joaquin County District Attorney’s Office.

According to Assistant United States Attorneys Robin R. Taylor and Russell L. Carlberg, who are prosecuting the case with assistance from Barbara Nelson and Richard Cohen of the Antitrust Division, Ghio admitted in his guilty plea that he conspired with a group of real estate speculators who agreed not to bid against each other at certain public real estate foreclosure auctions in San Joaquin County. The primary purpose of the conspiracy was to suppress and restrain competition and obtain selected real estate offered at San Joaquin County public foreclosure auctions at noncompetitive prices.

Court documents show that after the conspirators’ designated bidder bought a property at a public auction, they would hold a second private auction. Each participating conspirator would submit bids in the private auction above the public auction price. The conspirator who bid the highest amount at the end of the private auction won the property. The difference between the noncompetitive price at the public auction and the winning bid at the second auction was the group’s illicit profit, and it was divided among the conspirators in payoffs. Ghio participated in the bid-rigging scheme from April 2009 until October 2009.

Ghio is charged with bid rigging, a violation of the Sherman Act, which carries a maximum penalty of 10 years in prison and a $1 million fine. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victim of the crime, if either of those amounts is greater than the statutory maximum fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory sentencing factors and the Federal Sentencing Guidelines, which take into account a number of variables.

The investigation is continuing. Anyone with information concerning bid rigging or fraud related to real estate foreclosure auctions should contact the Antitrust Division’s San Francisco Office at 415-436-6660 or visithttp://www.justice.gov/atr/contact/newcase.htm, or the FBI’s Sacramento Division at 916-481-9110, or the U.S. Attorneys Office for the Eastern District of California at 916-554-2900.

Media inquiries to the U.S. Attorney’s Office should be directed to Lauren Horwood at 916-554-2706. Media inquiries regarding the department’s Antitrust Division should be directed to Gina Talamona at 202-514-2007.

This law enforcement action is part of President Barack Obama’s Financial Fraud Enforcement Task Force.

MERS is scum.  It is used to conceal from you the homeowner the real man behind the curtain (the party who is holding your mortgage).

QUESTION:  So what is to be done with this evil smoke screen called MERS?

ANSWER: A good ‘ol Texas butt kicking.

What needs to happen in Oregon is the same as in other states.  MERS has to be busted for being what it is…a smoke screen.

I can tell you that we love when homeowners ask for help and they are being pursued by MERS.

We are crushing MERS here in Texas and have yet to lose a battle against the lender scumbags who use MERS to hide.

Call us today if MERS is threatening your home.

- The Bank Slayer

MERS SHOWDOWN LOOMING IN OREGON

From the desk of Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

The appellate courts of Oregon, like many states, have not yet spoken on the numerous issues surrounding MERS, including what MERS really is (legally); what alleged authority MERS has (notwithstanding boilerplate language in Deeds of Trusts or Mortgages); what MERS can or cannot do; and whether MERS assignments are of any legal effect. For those of you following the emerging case law on these issues, you know that the Supreme Courts of Kansas and Arkansas; the U.S. Bankruptcy Courts for the Districts of Nevada and Idaho; the state courts in Missouri, Vermont, and South Carolina; and other courts which have actually dissected the MERS language in Deeds of Trusts and Mortgages have consistently said “NO” to MERS: that MERS is not the “Beneficiary”; that MERS has no authority to transfer the promissory notes because it was never the owner thereof (as one cannot transfer what it does not own); that MERS is limited in its authority by its choice to designate itself “solely as nominee”; and that MERS thus essentially has no power to do anything. These recent court decisions are consistent in their holdings, and cite the same group of recent cases.

MERS is also limited by the very language of its contract which it has with lenders and servicers, as found by the Supreme Court of Nebraska which was cited in a decision from a state court in South Carolina. This language in MERS’ own contract provides that MERS agrees not to assert any rights to the loans or the properties mortgaged thereby. MERS’ own attorney affirmatively represented this to the Supreme Court of Nebraska when MERS was trying to get out of paying certain taxes. However, MERS then turns around in other states and tries to take the position that it has rights in a mortgage instrument and note sufficient to further a foreclosure, which is in fact the assertion of a right both as to the loan and as to the mortgaged property, which is in direct contradiction to MERS own contract provisions! Talk about speaking with a forked tongue!

Fortunately, the overwhelming majority of the recent decisions have seen through MERS’ doublespeak and inconsistent positions, and have struck down MERS’ authority to do anything other than to function as an electronic tracking entity for mortgage loans, period. Certain older decisions, where certain courts blindly accepted the MERS language in a mortgage instrument without really examining what MERS is and what MERS limited itself to, continue to be rejected or are in the minority.