If you have a repayment plan, modification or foreclosure postponement offer get it in writing.  Demanding you agree to an over the phone, verbal agreement is likely worthless and in my opinion proves that they aren’t willing to send it to you in writing.

Does this story sound familiar? A homeowner struggling with his mortgage payment wants to work something out to avoid foreclosure.  On TV and in his local paper he sees that lenders have pledged to help distressed homeowners.   He calls the loan servicer (whom he thinks is the actual owner of his mortgage), asking for the homeowner assistance department.  What follows is a series of transfers, hold music and vague answers.

Currently, the most likely answer is… “We’re here to help.  Please submit 10-15 documents and we’ll review you for a modification.”   Now the game is afoot but the homeowner has no idea he is starting the fax machine black hole game.  After sending documents two or three times, the servicer tells him that his file is now in review and he can skip the current payment.  This is where the homeowner could use a handy-dandy tape recorder.

30, 60, 90 days and few dozen phone calls later all without any payments and now the loan is seriously delinquent.  A trip to the mailbox reveals the Notice of Acceleration.  The homeowner is in a panic, so he calls the law firm at the bottom of the Notice. The law firm eventually puts the homeowner in touch with someone from the servicer that says, “Don’t worry. We’re gonna work this out.”

Now the homeowner is thinking, “Yeh you said that on the 12 previous phone calls and yet you are trying to foreclosure.”  He frantically calls the law firm back “Don’t worry,” they say, “We are just following the wishes of your servicer and if they are almost done with your paperwork and everything looks great.   You’ll be fine.”

The next letter is the Notice of Trustee Sale.  The house is going to be sold in 21 days on the first Tuesday of the next month.

The homeowner asks, “Why did they lie to me?”

Make no mistake, the lender is the enemy.  They are in business to make money.  In most every case, the lender wants the house back, plain and simple.

Why you ask?  Because very likely they either:

a)       Never put out a dime on your house.  (ex.  you borrowed the money from another bank and now the current bank reaps the rewards.)

b)       They bought your loan on the cheap.  (ex. they bought your loan for $0.25 on the $1.00 they want to foreclose and flip it for $0.80 and make a fast buck.)

If you are in default, seek help immediately.

-       The Bank Slayer

MERS Basic Corporate Information

• MERS is incorporated within the State of Delaware.
• MERS was first incorporated in Delaware in 1999.
• The total number of shares of common stock authorized by MERS’ articles of incorporation is 1,000.
• The total number of shares of MERS common stock actually issued is 1,000.
• MERS is a wholly owned subsidiary of MERSCorp, Inc.
• MERS’ principal place of business at 1595 Spring Hill Road, Suite 310, Vienna, Virginia 22182
• MERS’ national data center is located in Plano, Texas.
• MERS’ serves as a “nominee” of mortgages and deeds of trust recorded in all fifty states.
• Over 50 million loans have been registered on the MERS system.
• MERS’ federal tax identification number is “541927784”.

The Nature of MERS’ Business

• MERS does not take applications for, underwrite or negotiate mortgage loans.
• MERS does not make or originate mortgage loans to consumers.
• MERS does not extend any credit to consumers.
• MERS has no role in the origination or original funding of the mortgages or deeds of trust for which it serves as “nominee”.
• MERS does not service mortgage loans.
• MERS does not sell mortgage loans.
• MERS is not an investor who acquires mortgage loans on the secondary market.
• MERS does not ever receive or process mortgage applications.
• MERS simply holds mortgage liens in a nominee capacity and through its electronic registry, tracks changes in the ownership of mortgage loans and servicing rights related thereto.
• MERS© System is not a vehicle for creating or transferring beneficial interests in mortgage loans.
• MERS is not named as a beneficiary of the alleged promissory note.

Ownership of Promissory Notes or Mortgage Indebtedness

• MERS is never the owner of the promissory note for which it seeks foreclosure.
• MERS has no legal or beneficial interest in the promissory note underlying the security instrument for which it serves as “nominee”.
• MERS has no legal or beneficial interest in the loan instrument underlying the security instrument for which it serves as “nominee”
• MERS has no legal or beneficial interest in the mortgage indebtedness underlying the security instrument for which it serves as “nominee”.
• MERS has no interest at all in the promissory note evidencing the mortgage indebtedness.
• MERS is not a party to the alleged mortgage indebtedness underlying the security instrument for which it serves as “nominee”.
• MERS has no financial or other interest in whether or not a mortgage loan is repaid.
• MERS is not the owner of the promissory note secured by the mortgage and has no rights to the payments made by the debtor on such promissory note.
• MERS does not make or acquire promissory notes or debt instruments of any nature and therefore cannot be said to be acquiring mortgage loans.
• MERS has no interest in the notes secured by mortgages or the mortgage servicing rights related thereto.
• MERS does not acquire any interest (legal or beneficial) in the loan instrument (i.e., the promissory note or other debt instrument).
• MERS has no rights whatsoever to any payments made on account of such mortgage loans, to any servicing rights related to such mortgage loans, or to any mortgaged properties securing such mortgage loans.
• The note owner appoints MERS to be its agent to only hold the mortgage lien interest, not to hold any interest in the note.
• MERS does not hold any interest (legal or beneficial) in the promissory notes that are secured by such mortgages or in any servicing rights associated with the mortgage loan.
• The debtor on the note owes no obligation to MERS and does not pay MERS on the note.

MERS’ Accounting of Mortgage Indebtedness / MERS Not At Risk

• MERS is not entitled to receive any of the payments associated with the alleged mortgage indebtedness.
• MERS is not entitled to receive any of the interest revenue associated with mortgage indebtedness for which it serves as “nominee”.
• Interest revenue related to the mortgage indebtedness for which MERS serves as “nominee” is never reflected within MERS’ bookkeeping or accounting records nor does such interest influence MERS’ earnings.
• Mortgage indebtedness for which MERS serves as the serves as “nominee” is not reflected as an asset on MERS’ financial statements.
• Failure to collect the outstanding balance of a mortgage loan will not result in an accounting loss by MERS.
• When a foreclosure is completed, MERS never actually retains or enjoys the use of any of the proceeds from a sale of the foreclosed property, but rather would remit such proceeds to the true party at interest.
• MERS is not actually at risk as to the payment or nonpayment of the mortgages or deeds of trust for which it serves as “nominee”.
• MERS has no pecuniary interest in the promissory notes or the mortgage indebtedness for which it serves as “nominee”.
• MERS is not personally aggrieved by any alleged default of a promissory note for which it serves as “nominee”.
• There exists no real controversy between MERS and any mortgagor alleged to be in default.
• MERS has never suffered any injury by arising out of any alleged default of a promissory note for which it serves as “nominee”.

MERS’ Interest in the Mortgage Security Instrument

• MERS holds the mortgage lien as nominee for the owner of the promissory note.
• MERS, in a nominee capacity for lenders, merely acquires legal title to the security instrument (i.e., the deed of trust or mortgage that secures the loan).
• MERS simply holds legal title to mortgages and deeds of trust as a nominee for the owner of the promissory note.
• MERS immobilizes the mortgage lien while transfers of the promissory notes and servicing rights continue to occur.
• The investor continues to own and hold the promissory note, but under the MERS® System, the servicing entity only holds contractual servicing rights and MERS holds legal title to the mortgage as nominee for the benefit of the investor (or owner and holder of the note) and not for itself.
• In effect, the mortgage lien becomes immobilized by MERS continuing to hold the mortgage lien when the note is sold from one investor to another via an endorsement and delivery of the note or the transfer of servicing rights from one MERS member to another MERS member via a purchase and sale agreement which is a non-recordable contract right.
• Legal title to the mortgage or deed of trust remains in MERS after such transfers and is tracked by MERS in its electronic registry.

Beneficial Interest in the Mortgage Indebtedness

• MERS holds legal title to the mortgage for the benefit of the owner of the note.
• The beneficial interest in the mortgage (or person or entity whose interest is secured by the mortgage) runs to the owner and holder of the promissory note and/or servicing rights thereunder.
• MERS has no interest at all in the promissory note evidencing the mortgage loan.
• MERS does not acquire an interest in promissory notes or debt instruments of any nature.
• The beneficial interest in the mortgage (or the person or entity whose interest is secured by the mortgage) runs to the owner and holder of the promissory note (NOT MERS).

MERS As Holder

• MERS is never the holder of a promissory note in the ordinary course of business.
• MERS is not a custodian of promissory notes underlying the security instrument for which it serves as “nominee”.
• MERS does not even maintain copies of promissory notes underlying the security instrument for which it serves as “nominee”.
• Sometimes when an investor or servicer desires to foreclose, the servicer obtains the promissory note from the custodian holding the note on behalf of the mortgage investor and places that note in the hands of a servicer employee who has been appointed as an officer (vice president and assistant secretary) of MERS by corporate resolution.
• When a promissory note is placed in the hands of a servicer employee who is also an MERS officer, MERS asserts that this transfer of custody into the hands of this nominal officer (without any transfer of ownership or beneficial interest) renders MERS the holder.
• No consideration or compensation is exchanged between the owner of the promissory note and MERS in consideration of this transfer in custody.
• Even when the promissory note is physically placed in the hands of the servicer’s employee who is a nominal MERS officer, MERS has no actual authority to control the foreclosure or the legal actions undertaken in its name.
• MERS will never willingly reveal the identity of the owner of the promissory note unless ordered to do so by the court.
• MERS will never willingly reveal the identity of the prior holders of the promissory note unless ordered to do so by the court.
• Since the transfer in custody of the promissory note is not for consideration, this transfer of custody is not reflected in any contemporaneous accounting records.
• MERS is never a holder in due course when the transfer of custody occurs after default.
• MERS is never the holder when the promissory note is shown to be lost or stolen.

MERS’ Role in Mortgage Servicing

• MERS does not service mortgage loans.
• MERS is not the owner of the servicing rights relating to the mortgage loan and MERS does not service loans.
• MERS does not collect mortgage payments.
• MERS does not hold escrows for taxes and insurance.
• MERS does not provide any servicing functions on mortgage loans, whatsoever.
• Those rights are typically held by the servicer of the loan, who may or may not also be the holder of the note.

MERS’ Rights To Control the Foreclosure

• MERS must all times comply with the instructions of the holder of the mortgage loan promissory notes.
• MERS only acts when directed to by its members and for the sole benefit of the owners and holders of the promissory notes secured by the mortgage instruments naming MERS as nominee owner.
• MERS’ members employ and pay the attorneys bringing foreclosure actions in MERS’ name.

MERS’ Access To or Control Over Records or Documents

• MERS has never maintained archival copies of any mortgage application for which it serves as “nominee”.
• In its regular course of business, MERS as a corporation does not maintain physical possession or custody of promissory notes, deeds of trust or other mortgage security instruments on behalf of its principals.
• MERS as a corporation has no archive or repository of the promissory notes secured by deeds of trust or other mortgage security instruments for which it serves as nominee.
• MERS as a corporation is not a custodian of the promissory notes secured by deeds of trust or other mortgage security instruments for which it serves as nominee.
• MERS as a corporation has no archive or repository of the deeds of trust or other mortgage security instruments for which it serves as nominee.
• In its regular course of business, MERS as a corporation does not routinely receive or archive copies of the promissory notes secured by the mortgage security instruments for which it serves as nominee.
• In its regular course of business, MERS as a corporation does not routinely receive or archive copies of the mortgage security instruments for which it serves as nominee.
• Copies of the instruments attached to MERS’ petitions or complaints do not come from MERS’ corporate files or archives.
• In its regular course of business, MERS as a corporation does not input the promissory note or mortgage security instrument ownership registration data for new mortgages for which it serves as nominee, but rather the registration information for such mortgages are entered by the “member” mortgage lenders, investors and/or servicers originating, purchasing, and/or selling such mortgages or mortgage servicing rights.
• MERS does not maintain a central corporate archive of demands, notices, claims, appointments, releases, assignments, or other files, documents and/or communications relating to collections efforts undertaken by MERS officers appointed by corporate resolution and acting under its authority.

Management and Supervision

• In preparing affidavits and certifications, officers of MERS, including Vice Presidents and Assistant Secretaries, making representations under MERS’ authority and on MERS’ behalf, are not primarily relying upon books of account, documents, records or files within MERS’ corporate supervision, custody or control.
• Officers of MERS preparing affidavits and certifications, including Vice Presidents and Assistant Secretaries, and otherwise making representations under MERS’ authority and on MERS’ behalf, do not routinely furnish copies of these affidavits or certifications to MERS for corporate retention or archival.
• Officers of MERS preparing affidavits and certifications, including Vice Presidents and Assistant Secretaries, and otherwise making representations under MERS’ authority and on MERS’ behalf are not working under the supervision or direction of senior MERS officers or employees, but rather are supervised by personnel employed by mortgage investors or mortgage servicers.

We sent a standard RVD to IndyMac, now OneWest Bank, asking to validate the debt for a client.  Instead of the five day required turnaround for a response these morons sent it SEVEN MONTHS later.  That right, seven months after requested.  But wait it gets better…

Not only did it take seven months but they sent it four months after the client went AWOL on us and ended up being foreclosed!   To boot they mailed a copy to the house which of course was foreclosed and sold already.    You couldn’t make this stuff up.

The second nasty title cloud appears when homeowners have modified their loan or taken the dreaded “HomeSaver Advance” which was rampant the last few years.

Let’s examine the result of a typical HomeSaver Advanced deal.  Imagine falling several payments behind and now you owe the bank $8,000 in past due payments.  We know most of these payments are mainly interest with a tad of principle tossed in (in the early stages of the loan).  So now you have roughly $7,999 in past due interest.  The bank rolls out the HomeSaver Advance.  You sign on the dotted line, mail it back and “POOF” you are now current again.   What happened?  You just agreed to take the past due payments and convert it all to principle and add it to your loan balance.  It will now show up a second or third lien on your home which will need to be paid off when selling or refinancing the home.  This can quickly erode equity.

What about loan mod?  Ok, let’s see…you borrower the money for the purchase from AmeriQuest, made payments to Countrywide, refinanced with Chase and now make payments to AHMSI.   You fall behind and want a loan modification.  AHMSI rolls out the red carpet for a HAMP loan modification.  You sign away and make your trial payments.  You decide you can’t make the payments and you need to sell.  You get an offer and are ready to go to closing…but wait the Deed of Trust recorded on your home has one of the three previous banks and not AHMSI.   Tack on a new “loan modification agreement” signed by you and recorded by AHMSI saying you agree you owe a huge amount and that it is all owed to AHMSI.

Can you see where this is going?  Did AHMSI deliver to you a copy of the assignment of your Note from your previous lender?  Did Chase release the refinance Note?  These situations can be deal killers for selling the home.

-       The Bank Slayer

Testimony from a “copy” is inadmissible. Testimony is inadmissible unless it comes from a witness accepted by the court — not some lawyer lathering up his mouth and using finesse to escape the rules of evidence.   Every witness must be sworn, must have personal knowledge of the contents, must remember it ALL and be able to communicate it with specificity such that a court could rule without the court creating a document that had never been in existence before the evidentiary hearing.

Ever hear the old “buyers are liars”?  Some of attorneys are right there with ‘em. As soon as the Lawyer starts talking you should probably be objecting since he is not sworn, not a witness and never will be.

So what this means is that an affidavit that is sworn must be the “testimony” of a witness accepted by the court who has personal knowledge and is not reporting what was told to them by someone else and not be reporting what they read in another document.

Hats off to our friend Neil Garfield at Livinglies for a great piece on evidence.      Show me the proof!!!