FREE HOUSE? MAN BEATS BANK – And Creates Mortgage Banking MERS Bomb

COMBO Title and Securitization Search, Report, Documents, Analysis & Commentary

EDITOR’S NOTE: If you don’t get your chain of title and claims of securitization of your loan analyzed after reading this article and watching these short videos, you are walking away from your own wealth. The “free house” that you are accused of trying to take is being stolen by parties with no financial interests in your loan. We know you want to pay your honest debts, but do you really want someone who is not your creditor to get the money or the house? What will you say to the REAL creditor if he shows up and demands payment (again)? With whom will you speak when you find out that title companies will refuse to issue a new policy when you refinance or sell your house?

REMINDER: ALTHOUGH MOST SITUATIONS INVOLVING MERS START WITH MERS ON THE LOAN DOCUMENTS THERE IS A LARGE BASE, UNKNOWN IN NUMBER, THAT WERE ASSIGNED TO MERS AFTER CLOSING UNKNOWN TO THE BORROWER. SO JUST BECAUSE YOU DON’T SEE MERS IN THE CHAIN OF TITLE DOESN’T MEAN IT WASN’T USED TO SIDESTEP RECORDING REQUIREMENTS AND FEES. REMEMBER THAT WHEN YOU ASK QUESTIONS IN DISCOVERY.

Remember also that there is a name game with MERS — MERS, MERSCORP, Mortgage Electronic Registration Systems, Inc., and Mortgage Electronic Registration System, Inc. to  name a few. Sometimes more than one of these separate entities, some of which were dissolved, may show up along side others with similar names in the same chain of title.

READ DAILY BAIL ARTICLE

MAN BEATS BANK – And Creates Mortgage Banking MERS Bomb –

Lost Paperwork Means Free Homes For Borrowers

SEE GREAT DESCRIPTION OF MERS IN CONGRESSIONAL HEARING

SEE 62 MILLION MERS MORTGAGES AND FORECLOSURES INVALID

Very interesting story, and not without ramifications for other states.

Walter Keane poses for a portrait at his office.  Keane filed and recently won a lawsuit that resulted in several homeowners in Utah getting title to their property, even if they owed the full mortgage, all because of chaos introduced into the nation’s property recording system by MERS.

The attorney for another man in Draper, Utah, says he has won two other cases this way, and another attorney in Utah got a default judgment giving title to borrowers who owed $417,000 on a home.

Utah Professor Chris Peterson weighs in on the significance of the rulings.

In Utah, missing paperwork means a lot; Borrowers gain title for free.

Sources

David Dayen at FDL

Salt Lake City Tribune

A Utah court case in which the owner of a Draper townhouse got clear title to the property, even though he still owed $132,000 on it, raises new legal and financial questions about a property-records database created by mortgage bankers.

The award of a title free of liens means that whoever owns the promissory note on the Draper property — likely a group of faraway investors — no longer has the right to foreclose to collect on a delinquent loan. Indeed, the townhouse owner has sold the property and kept the money. Those who own the promissory note probably don’t even know what occurred.

Decisions such as the one 3rd District Judge Glen Iwasaki handed down in the Draper case could have a big impact as the state wends its way through hundreds of lawsuits involving foreclosures, loans on properties for more than they’re worth and predatory lending practices that led Utahns to lose their homes as the real-estate bubble burst.

More from David Dayen…

This is all tied up with MERS, the online database that has stood in for the land records system in as many as 60% of the mortgages in America over the past decade or so.  As we’ve seen, MERS is essentially a way for the largest banks to avoid recording fees, by naming them as the mortgagee on the original record and then transferring the mortgage and the note through their database.  The problem is that MERS is named as an owner on loans in which it has no financial interest, and the judicial system doesn’t yet know how to manage that.  This has confused the hell out of title insurance companies, who cannot determine who holds the note or even who can collect payments on it.  As a result, in this case, the courts and the title company failed to figure any of that out, so they gave title back to the homeowner.

The attorney for the man in Draper, Utah, says he has won two other cases this way, and another attorney in Utah got a default judgment giving title to borrowers who owed $417,000 on a home.

The owners of the note could always go back and try to recoup this money, but as Christopher Peterson of the University of Utah says in the article, MERS calls into question their ability to succeed:

Under laws adopted by all 50 states, the owner of a “negotiable instrument” such as a promissory note must be in physical possession of the document, said Peterson. Otherwise it would be like someone trying to cash a photocopy of a check instead of the actual check.

“One cannot be a holder of a note unless one is in physical possession of that note,” he said.

But Peterson said evidence is coming out in courts that shows the actual promissory notes or mortgages signed by buyers were not transferred as the notes made their way into the mortgage-backed securities investment pools.

That could mean in these cases that no one is in a position to try to collect because the actual notes are lost or destroyed, potentially making some promissory notes investors think they hold worthless.

Start watching at the 1-minute mark.  Includes excellent testimony from foreclosure lawyer Thomas Cox, and Utah professor Dr. Chris Peterson.  Detailed article on MERS inside.

Hearing took place Dec. 15, 2010.

Tags: MERS
Posted in bubble, Corruption, Eviction, securities fraud |