This is an update to numerous posts in this space, most recently on July 19, 2011 entitled, "Prayers Over Bondi, Mortgage Finance "Unfair, Deceptive and Unconscionable" Actions
... Foreclosure Fraud by Foreclosure Plaintiffs, Continued.
"MERS" stands for "Mortgage Electronic Registry Systems". This company has nothing to do with the Clerks of Court in the States. It is a corporation made by Banks and other Lenders to save them the time and expense not only of recording all the Mortgages they take back to secure their Loans in the first place, but also to file Foreclosure Lawsuits against defaulting Homeowners-Mortgagors. Unfortunately, MERS did not make the loans and, in addition, MERS does not have the original note or a lawful excuse why not, in many cases.
There is a split among the Courts over whether MERS has standing to sue for Foreclosure under these circumstances. The percentage breakdown among the Courts is unclear. The judicial view that MERS has no standing to sue in such Foreclosure Cases is well-articulated by Federal Judge Robert E. Grossman, quoted by Gretchen Morgenson, "Fair Game / The Banks Still Want A Waiver" p. 1, col. 1 (New York Times Nat'l ed., "SundayBusiness" Section, July 24, 2011):
This court does not accept the argument that because MERS may be involved with 50 percent of all residential mortgages in the country, that is reason enough for this court to turn a blind eye to the fact that this process does not comply with the law.
The contrary view is expressed, for example, in a case involving the substantive law of Arizona, which is a Nonjudicial Foreclosure State meaning that the only involvement Courts in Arizona have with Foreclosures is when someone files a lawsuit to halt or to enforce one. See, e.g., Download Schayes v. BAC Home Loans Servicing, LLP (D. Ariz. Case Nos. CV.10.1893, CV.11.1074, Order Filed July 15, 2011) PUBLIC ACCESS also published as 2011 WL 2746322 *2 (D. Ariz. July 15, 2011)(only Defendant was "the current servicer" of a residential loan secured by a deed of trust; holding in case at bar in pertinent part both that the Plaintiffs had not adequately pled sufficient facts in their Complaint to withstand dismissal of their Claims, and had stated legally insufficient Claims, that the mortgage servicer "is incapable of foreclosing absent actual possession of the note," that the trust deed is invalid, or that the mortgage servicer lacks standing "to conduct a non-judicial foreclosure.")(authorized password required to access Westlaw).
Banks that own MERS are seeking releases of liability against claims that have not been made yet, it is reported by Gretchen Morgenson, "The Banks Still Want A Waiver," supra. The Banks are making this demand in their current negotiations with the 50 State Attorneys General. "Lawyers who have examined this issue say it would be unprecedented to grant a broad release from liability ... from claims that have not been investigated." Id.
Demanding a release from Unknown Claims is not exactly unprecedented on Wall Street, however. The U.S. Government, specifically the Federal Reserve Bank of New York and the Treasury Department, forced AIG to release in advance what a release demanded by AIG's counterparties on Credit Default Swaps specifically labeled as "Unknown Claims". See "AIG's Secret 'Unknown Claims' Release Worthless Paper?" posted here on July 6, 2010; and see "Who Fleeced the Fiduciaries? AIG's 'Unknown Claims' Release ... Could Be Worthless Paper" posted on Insurance Claims and Issues Blawg, also on July 6, 2010
The story about the hidden release of AIG's "Unknown Claims" was broken by New York Times Reporters Louise Story and Gretchen Morgenson. One of the few good things in this situation is that the newspaper and these fine reporters are still focused on this very important and unfortunately recurring story.
Please Read The Disclaimer.
Comments