MERS is simply a servicing vehicle and aggregator for securitized mortgages. You have to look at the broader macroeconomic forces for the cause of the mortgage crisis. While Wall St. certainly has much responsibility for the crisis, also remember that no one had guns to the heads of many of these borrowers–they were borrowing way too much that they could afford–a mind set that unfortunately became part of the American way. It’s the credit card mentality. With the devaluation of the real estate market, these borrowers couldn’t refinance with the expectation of rising values.

However I linked to this post in an article in my blog foolish fish dot com “who is mortgage electronic”

Without Mers the current collapse could not have happened and though it is considered best practice to blame foreclosure on delinquent dead beat home owners my 2 cents places the lions share of the blame firmly at the feet of Mers which is an AKA alias for Freddie, Fannie, Chase, BoA, Wells, and any other mega lender who comes to mind. And isn’t it hilarious that the first two players on the above list are AKA aliases for Uncle Sam himself.
Chris.

Go Judge Long!!!

* Massachusetts School of Law, Class of ‘09. Sworn in 11/30/09.

The banks have no one to blame but themselves. The banks have lost all credibility with good reason. When the banks are ask to substantiate their positions they cannot.

As a consumer bankruptcy attorney I have a client who came within 1 day of losing his house to foreclosure to a lender who did not have the legal right to foreclose. Upon further investigation the lender could not produce the promissory note nor the mortgage assignment. It has became apparent that the lender cannot even ascertain how or if it ever became the holder of the note or mortgage.

Granted this may be an isolated case; but should not even one person be entitled to the protection of our laws.

I suspect lenders will solve these issues for the same reason that they created this labyrinth – Greed.

It should be incumbent on the lenders doing the foreclosing that they can *immediately* demonstrate ownership of the loan, not ultimately. This is plainly a documentation issue, and if the banks had bothered to do their paperwork promptly and thoughtfully, they wouldn’t have this problem.

The state’s interest (both as supported by the Legislature, and just in plain common sense) is in fostering home ownership until the homeowner clearly has no legal right to be there. To let someone foreclose without clear possession of the title makes as much sense as letting a homeowner sell the property without clear title either.

This ruling is stunning to say the least. The news brought up old emotions of a kind of trauma which were surprisingly ready to surface.

When the foreclosure occurred, I was exhausted and did not have the means to fight the foreclosure proceedings. I merely accepted the events as my fate.

Oh, and the people who bid for my house got it for a SONG, and the interest rates had come down by then, too, lucky them! Plus, they bought it for less than what the mortgage was, so the lender lost money, and they would have lost nothing if they had been at all flexible.

After that, the value of that property skyrocketed in the next boomlet, and even today the property is worth way more than when I had it.

May I appeal to people concerned that, in my humble opinion, I was no deadbeat. Here’s what happened:

After a divorce, it was time for one more bad/luck bad/timing circumstance for this young end baby boomer. (Unaffordable home prices when I came of age, and then those glorious years of 18% mortgage rates, what blessings!) I had worked HARD and always paid obligations for decades. The house was put up for sale, but, the real estate market had crashed as a bubble, and the old axiom that real estate is a safe investment was shown to be false, for the first time in MY life.

There were some financial difficulties over a period of a couple of months for various reasons. When I owed three months’ payments (think about this, this happens within 8 weeks), I had scraped back together two months’ payments (including taxes and insurance) and tried to make the payments. I also had a plan to make the next two payments within 30 days and told the bank this, and it was doable. But they had already tacked on a hefty “lawyers fee” as well, and they would not take “partial” money owed, and they were piling on extra interest and penalties. The bank refused to work with me in this way or any way. The major problem in this case was the swiftness of the foreclosure proceedings. I begged the bank to work with me and promised they would not be out one red cent if they would just give me a tiny bit more time.

Later in that real estate crash I read in the news that the banks eventually did “work with” lenders and help them afford to catch up and stay in their homes, and I thought, lucky them!

So, not only had I lost all equity in the downturn, I lost my home and was homeless. It was also very humiliating. After working so hard to acquire and pay for this home since I was a child, for decades, I now had nothing to show for that effort.

I do think the way we conduct business in this country could improve by being more just, and could create more prosperity for all.

An assignment does not merely “confirm” that a mortgage loan has been transferred. A mortgage loan has two components: the note and the mortgage. If the note is properly transferred to the ultimate owner, this does not actually transfer the mortgage with it. As Judge Long explained very clearly, the mortgage is an interest in the property itself, and it contains the right to foreclose. This right to foreclose is not transferred to the owner of the note unless and until the mortgage is validly assigned from one mortgagee to another. It was clear in these cases that the banks purporting to foreclose did not own the mortgage and had no right to foreclose.

As for the “fundamental legal principle” that the mortgage follows the note, the law is not that simple. The principal is that the holder of the note has the right to have the mortgage assigned to it by the holder of the mortgage. Until the noteholder exercises this right, or an assignment is otherwise made, the noteholder simply does not own the mortgage, and has no right to foreclose.

In many cases it is simply not true that “[t]here’s no question” the loans were validly transferred. It has been widely reported that often the lenders attempting to foreclose cannot produce the relevant note (see Gretchen Mortgenston’s related column here: http://bit.ly/2F1dCa). Without the note, the bank has no evidence that it, and not some other bank, owns the mortgage loan.

Judge Long was correct in saying that this is not a question of form over substance. The foreclosure statute provides very little protection to homeowners, who never have the chance to contest a foreclosure in court, or to force the foreclosing lender to prove that it owns the loan. The requirement that the lender has to actually hold the mortgage, and announce this fact to the public before the auction, is one of the only protections that homeowners have. The lenders who clearly did not follow this requirement undermined this minimal consumer protection in the statute.

Hopefully this case will help prod the Legislature to change the foreclosure statute by requiring lenders to actually prove they own a loan before foreclosing. This would resolve many of these issues in the future.

Here is what a lawyer in Tennessee states:
davidgmills, on September 23rd, 2009 at 11:35 pm Said:

Yes.

Mers is listed as a nominee of the lender on the Deed of Trust which is the document that puts a lien on your property and allows the lender to foreclose. What the Kansas court has said is that you can’t be a nominee of a lender who has sold the note. Most lenders have sold the note. This is very basic agency/principal law. A nominee is an agent. When the principal changes, a new agent is required. But the common Deed of Trust used in these securitized transactions, which is used all over, makes MERS the agent of the lender until the loan is paid off, no matter who the lender is. The law simply does not allow MERS to continue to be an agent of a new owner. So MERS has no authority to act as agent. Someone new would have to be the agent but the new owners of the loan never appoint a new agent.

It gets worse for the banks. MERS is also listed as the beneficiary of the Deed of Trust. A recent ARK Supreme Court has said MERS can’t be the beneficiary of the Deed of Trust even though the Deed of Trust says so. That means there is no trust at all because MERS is the sole beneficiary and you can’t have a trust without a beneficiary. No trust means no valid lien.

I get emails daily from people wanting my complaint. It explains why the court should stop my lender from demanding any more money from me and why the court should remove the lien on my property. Many lawyers now have read it and agree I am right. (I am a lawyer as well).

MERS opinion:
http://webofdebt.wordpress.com/2009/09/21/landmark-decision-promises-massive-relief-for-homeowners-and-trouble-for-banks/

Comments that has additional information from Mr. Mills the attorney who is also establishing precedence with his own filed complaint (brief):
http://webofdebt.wordpress.com/2009/09/21/landmark-decision-promises-massive-relief-for-homeowners-and-trouble-for-banks/#comments