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Is the Jig up for MERS?

posted by Jean Braucher

The Mortgage Electronic Registration System (MERS) has been the target in a lot of lawsuits during the mortgage crisis for its shoddy, opaque practices. But because these suits tend to be brought by borrowers in default, the courts have been willing to stretch the law to dismiss plaintiffs' claims. Something new is going on now. The Delaware Attorney General on October 27 sued MERS, a Delaware corporation, for deceptive trade practices for sowing confusion among investors and consumers and running an extra-legal registration system riddled with errors. The Delaware AG, Beau Biden, son of the vice president, is invoking the importance of transparent recording of property interests as a central part of American democracy since the colonial era. Some other AGs and other public officials are pursuing similar legal theories. The argument is that nothing is more important to our democracy than secure property rights recorded in transparent public records, and that the mortgage industry should not be permitted to take this away from us. To read about this new development, visit the Delaware Department of Justice web site, at http://attorneygeneral.delaware.gov/

Comments

a couple weeks ago, i was quite surprised to see the ohio county i live in, Geauga, enter into a class action against MERS, MERSCORP, & its member banks, on behalf of all counties in ohio…the geauga county lawsuit charges that the "defendants systematically broke chains of title throughout Ohio counties' public land records by creating "gaps" due to missing mortgage assignments they failed to record, or by recording patently false and/or misleading mortgage assignments. Defendants' purposeful failure to record has eviscerated the accuracy of Ohio counties' public land records, rendering them unreliable and unverifiable -- damage to public land records that may never be entirely remedied" ...

http://www.marketwatch.com/story/bernstein-liebhard-llp-announces-filing-of-a-class-action-against-mers-and-its-members-2011-10-13

Back in June, the Appellate Division 2nd. Dept. in Bof NY v. Silverberg came down with a decision that might have shut down MERS in NY for good.

"This matter involves the enforcement of the rules that govern real property and whether such rules should be bent to accommodate a system that has taken on a life of its own. The issue presented on this appeal is whether a party has standing to commence a foreclosure action when that party's assignor—in this case, Mortgage Electronic Registration Systems, Inc. (hereinafter MERS)—was listed in the underlying mortgage instruments as a nominee and mortgagee for the purpose of recording, but was never the actual holder or assignee of the underlying notes. We answer this question in the negative."

We need to pass this decision on to all, and maybe we can get some real traction against this Racketeering enterprise!!

http://www.nycourts.gov/reporter/3dseries/2011/2011_05002.htm

MERS is but one tentacle of what I've come to think of as the Mortgage Security Cartel. LPS is another. You can a general idea of who is part of the Cartel by comparing the founding members of MERS with the TBTF banks that were stress-tested by the Treasury Dept.

These lawsuits are only interesting if they pierce the corporate veil to get to the banks that used and abused MERS. Which is quite possible, and add that to the other mortgage fraud lawsuits which are being brought against the banks, BofA in particular, and it may mean that some of the stress-tested banks may fail due to the liabilities that the stress tests so carefully overlooked.

Another possible cause for failure is a bank run by disgusted customers. In theory, we have a system for ensuring that our banks are sound, but the emergency lending portion requires trust between banks with the regulators acting a the guarantors of that trust. What the Lehman bros bankruptcy showed is that the regulatory oversight is so negligent that banks can't trust their fellow banks to be solvent enough to rescue or be rescued in an emergency. Do you trust our regulatory agencies? The OCC: Office of the Corrupt Comptroller,motto: What do we Comptroll? Nothing of Consequence! The SEC, Motto: we break the law on records retention to better protect our wall street clients/future employers.

Washington County, Pennsylvania Brings Class Action on behalf of PA’s 67 counties to Recover Recording “MERS” Fees Lost to Wall Street

http://stopforeclosurefraud.com/2011/10/30/washington-county-pennsylvania-brings-class-action-on-behalf-of-pa%e2%80%99s-67-counties-to-recover-recording-mers-fees-lost-to-wall-street/

@Patrick (G)

You're absolutely correct!

This is an excellent site that was ahead of the game with all this information. I cannot believe the regulators have not stopped them from doing business. The Jig must be up.

http://stopforeclosurefraud.com/lps-101/

http://stopforeclosurefraud.com/mers-101/

One thing MERS did was to hide the identities of the holders of predatory mortgages. I have long suspected that MERS was part of a major scam involving those mortgages.

Many of the predatory mortgages were sold as “adjustable rate” but the only adjustment was continuously up. In my view those mortgages were deliberately designed to go into default and foreclosure. You can’t keep raising the rate on a loan without hitting a point where the borrower can’t pay.

I’m curious about how much money was made betting in the derivatives market that the mortgage securities would become worthless. And I’m especially curious if any of the people who made that money influenced the terms of those predatory mortgages to help ensure that the bonds would crash.

Buying the derivatives did not require owning the mortgage bonds, even though the derivatives were supposedly bondholder protection for the value of the bonds. The whole situation could have been a major scam where the perpetrators left few fingerprints.

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