I recently had the highly unusual experience of speaking directly with a state legislator, and I have to admit that it's been so long since I've tried working within the system that I was completely unprepared to make any detailed demands or complaints.

Are there still some TF folks around who can help refine arguments and come up with compelling plans to give state legislators who are willing to hear us out?


--My Vague Understanding of What's Wrong with MERS--

* Allows an enormous numbers of banks to unilaterally take ownership of property through a single shell corporation: MERS.

* Circumvents local real estate transaction laws: property can change hands dozens of times in MERS without approval from anyone in the property locale.

* Fee avoidance: banks using MERS pay no local fees for the transfers they make.


--My Vague Idea of What Should Be Done--

* State law should be passed to prevent companies from offering title transfer services that mimic what existing local records already provide, and to prevent companies from acting as shells with no actual ownership interest.

* Registrars should be tasked with beginning a process to clean the records of MERS assignments and re-establish full chain of title for all property that went into MERS. Back-fees should be charged for each transfer in order to fund the program.


--Other Thoughts--

* Robo-signing/notary fraud, from what I understand, is a separate issue. Though it may have been brought about in attempt to clean up MERS records, it should be addressed as its own specific crime.

* To what degree has the ship sailed on these issues due to the 50 state settlement?

* I know and respect the Bezzle argument, that it's foolish and immoral to be spending my time on this or involve myself with government, but please don't crap on the thread if you feel that way.

It seems to me that you are over-thinking this.

There is NOTHING wrong with MERS if it used by the banking system to streamline their own internal record-keeping. The problem is that the legal system seems to have granted to MERS legal standing as a formal, official source of information. The position should be: if it ain't officially recorded in the recorder's office, it didn't happen.

Remove the legal standing of MERS and everything sorts itself out - banks and financial institutions would be trampling all over each other to get to the recorders' offices to fix things.

So Peterm99, are you saying this is something we need not involve legislators with? That the banks can head down to the local registrars office and set things straight if judges block their foreclosures?

There have been two MERS cases in my state:

Peace v. MERS, No. 4:09 CV 00966, 2010 WL 2384263 (E.D. Ark. June 11, 2010) (MERS’ assignment to Note purchaser was valid and properly gave purchaser standing to appoint an agent to initiate a non -judicial foreclosure).

MERS v. Stephanie Gabler, et al., Case No. 2004 17 II, Circuit Court of Garland County, Arkansas (2004) (“MERS has standing to seek relief for its Writ of Assistance and is the proper party to foreclose the mortgage as MERS is the mortgagee of record and holder of the promissory note.”) http://www.dailykos.com/story/2010/10/07....

No, I'm not saying that.

I'm saying that legislation needs to be extremely simple, e.g., "The transfer of ownership of, or ownership interest in, real property within the borders of any county within the state of (insert name of state) shall be legally valid only if officially recorded with the county recorder's office." (ETA: Or something along those lines - my terminology may not be very good. IANAL) That's all that's necessary, IMO.

ETA: That would put the onus on providing all necessary info to fix things on the banks/financial institutions themselves, rather than on homeowners and/or the county recorders' offices.

(This assumes that standards and practices are in place at the recorder's office to preclude fraudulent recordings, etc. If not, then that's gotta be specified, as well.)

Fine the crap out of the banks for each defect. All of the laws are on the books now. Just start handing out fines and hand any empty house back to the family it was stolen from. Banks need to show the math ie have they been paid for that house by any party? Those same tax payers that paid off on those same houses. With their taxes. Or with their 401k.Or with city and or state funds. Claw all that **** back. Fine the banks out of existence. jmo

Andysvw wrote..

Fine the crap out of the banks for each defect.

Absolutely. Anything provided to the court that is fraudulent is liable for all sorts of penalties - the problem is that many (most?? virtually all??) of the courts have been ignoring mortgage-related frauds that are presented to them by financial institutions. Also, as Karl and others have pointed out, courts seem to have ignored the fact that many of the mortgage notes have been "made good" via CDSs, etc.

Quote:

All of the laws are on the books now.

True, for laws against fraud. A law such as I proposed previously is not. Another positive feature of such a law is that not only does it serve to force a clean-up of the current mess, it removes the opportunity for "new and improved" versions of MERS creating similar messes in the future.

Fine them? They'll just take it from the taxpayer. Have you learned nothing from the $25 billion taxpayer funded robo-signing settlement?

The lawlessness of the banks, and the cover provided them by our (s)elected officials have rendered innefectual any form of non-physical enforcement. Jail would be the best option before random foreclosees and MF Global customers start going postal.

They cant get that much from the tax payers. 65 million mortgages x 3 = splat.

The very idea that a bank lost A deed is preposterous. They lost one note six times. The cat is out of the bag, They ARE pimpin out your deed.

The muncipalities were bilked out of hundreds of millions of dollars. This is appealing to State Legislators. Hit them with it hard.

The construct of MERS was to blatantly avoid recording fees, whereby in the process, they have entirely destroyed property rights. Like the whistleblower referenced in Karl's Ticker today cites, 'She could pay off her mortgage note with Deutche Bank tomorrow, but she'd still never have clear title to her home, because DB doesn't have it to GIVE.'

I like the idea of state wide grand juries. With broad power to chase down every penny of state monies. In particular invested monies.

Here is the email I received last:

Quote:

I enjoyed visiting with you yesterday. I appreciate the heads up on MERS. They sound bad to me. I completely agree with you that all changes in property ownership must be of record at the county clerk's office. I would be very willing to consider sponsoring legislation to address it if needed in Arkansas. I will ask staff to evaluate the issue for me with respect to current state of Arkansas law - I suppose that we might be in good enough shape already. But I'll have them check. Thanks for your note. David Johnson

Pika, what would be your response to someone who argues this: "DB could give the homeowner the title because MERS transfers it to DB. MERS is a _some legal entity_ so they have the right to do that."

The only thing I could come up with in response is that one of the ghost banks from MERS might also try to claim it. How to decide which one is valid? But if that issue isn't coming up at all in state courts it doesn't make much sense to legislate for it.

Mpekar

DB cannot hand over a deed they dont have. The defects in the records are a county matter. Only the county courts can issue a new deed. The last thing we need is banks being allowed to print up deeds. JMO but if the bank cant hand over the deed at the end of the contract they owe the home owner all the monies ever paid to them for the property. On both the home owner side and the MBS side.
Keep in mind the MBS was AAA rated. As such the deed was to be kept in the trust. No deed then it is not a security. That issue is huge as money was stolen from all kinds of funds that could not be invested legally into anything not rated AAA. Witch is the big money crime. Ripping off families was just a side scam.
State employed people flushed billions of dollars of state money into this trash. In my opinion every single person that sold a MBS is guilty. Any buyer of said AAA rated security is suspect as well. They should have known better.
The notary fraud issue is not small potatoes. It is central to all of these crimes. My guess is they had to have committed mail fraud just to create the MBS. By submitting MERS faxes to the trusts. When we finally get to look in the trusts we will find so much fraud it will boggle the mind. Every player in the MBS industry was a party to it. They all knew better.

How about each state forming its own SEC? With people that have a vested interest locally?

We already have one here.

http://www.ssb.state.tx.us/

Unfortunately, the state securities board has had the experience of getting underway with major fraud investigations only to have the feds jump in and claim control since these bad actors also have national regulators.

Supremacy or incest, whatever you want to call it.

The state securities board can make referrals for criminal prosecution to the state AG. The state AG signed on to the foreclosuregate work-out. He may not intend to make any more waves. Our state is locked in battle with the federal government over other issues.

Then take back any cases that dont go the states way. Retry in local courts. Refuse the request for change of venue. The idea is to thin them out. Cracks will appear. Little pieces of the puzzle will pop out. Go after the SEC in county courts too. If the SEC oversteps its authority toss them in county jail. If they fail to go far enough hammer them even harder. A crook with a badge is still a crook.

Its about the rule of law. The more we demand it the more we will get. We should start locally and climb out of this hole. We are in to deep to just jump out.JMO

This is all way over my pay grade.

If you are referring to MBS, then they are trust share certificates and the trust would have been domiciled in NY or Delaware. Therefore NY or Delaware law prevails. I don't believe a TX securities agency would be helpful.

I agree with Peter that a statute that requires recording of all conveyances of deeds of trusts or mortgage liens would be the single most helpful piece of legislation. Most likely there is not currently such legislation in place. Not only would that provide for the reinstitution or accurate records but all transfer taxes must be paid at the time of recording. It might not even meet much opposition right now since no mortgages are being securitized (or very, very few). Better yet, in addition, pass an additional statute requiring all lenders to file any current unrecorded mortgages they hold within a specified period of time......but that's less likely to pass. Either way, recording all conveyances negates any disadvantages from using MERS. You'll know who owns your mortgage and the county collects all its recording fees.

(The original promissory note is not recorded, never has been, and is kept by the current owner of the debt along with the original deed of trust/mortgage lien, until the loan is paid off.)

Finally, you can't get the county clerks/recorders to screen the documents for fraud. They aren't qualified. I'm sure every state has a statute or disclaimer that says they aren't responsible for the authenticity of the documents they record. However, if robosigning is discovered, or false affidavits, we need to have local DA's start prosecuting for forgery and perjury, or other remedies available.

bump

In answer to the original question: A rusty chainsaw up the ass of everyone involved in this scam.

AAAmen!

Kamala Harris is going to have her state wide grand jury.