Source: http://stopforeclosurefraud.com/tag/rico-2/
Timestamp: 2019-04-25 07:45:36+00:00

Document:
Weems v. Coker, 70 Ga. 746, 749 (Ga. 1883); Cummings v. Anderson, 173 B.R.
For whatever reason scribd download is not permitting this to be downloaded.
Author David DeGraw and Prof. William Black talk about the politicians supporting the OWS movement for their own political gain as opposed to those who truly believe in the protests.
TOO Big to FAIL, doesn’t have to mean they’re TOO Big not to JAIL.
Three years ago this week, the financial system came unhinged. In rapid-fire succession, one major financial institution after another crumpled as years of recklessness on Wall Street and regulatory neglect in Washington took their toll. Before it was over, the federal government had committed trillions of dollars to bail out the nation’s largest banks and the economy was in tatters, with gnawing questions remaining about what went wrong and who was responsible.
The unraveling had dire consequences. Twenty-four million Americans are unemployed or unable to find full-time work, with wages as a share of gross domestic product at the lowest level since the 1930s. Meanwhile, the banks barely skipped a beat, with compensation at publicly traded Wall Street firms reaching a record $135 billion in 2010.
By 2008, the housing market’s collapse forced those companies to take more than six times as much, $669 billion, in emergency loans from the U.S. Federal Reserve. The loans dwarfed the $160 billion in public bailouts the top 10 got from the U.S. Treasury, yet until now the full amounts have remained secret.
The action is presently before the Court on Defendants’ motion to dismiss (“motion”) [Doc. 15], filed on November 22, 2010. For the following reasons, the Court GRANTS IN PART and DENIES IN PART the motion.
Plaintiff filed his complaint against Ocwen Loan Servicing, LLC (“Ocwen”), Mortgage Electronic Registration Systems, Inc. (“MERS”), and Merscorp, Inc. (“Merscorp”) on November 1, 2010. In the complaint, Plaintiff raises state law claims against Defendants for declaratory judgment, injunctive relief, cancellation of deed to secure debt, slander of title, quiet title, wrongful foreclosure, intentional infliction of emotional distress, and negligence. (Compl. at 1-20.) He also raises a claim under the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. 1961-1968.
Defendants filed a motion to dismiss the complaint on November 22, 2010, that contended: (1) Plaintiff failed to effect service of process, (2) Plaintiff’s claim for wrongful foreclosure based on Defendant’s failure to properly mail the foreclosure notice was moot, because Defendant canceled the November foreclosure sale, and (3) all counts based on allegations that the security deed is void failed to state a claim. (Defs.’ Mem. Supp. Mot. Dismiss at 6-15.) Plaintiff filed a response in opposition to the motion to dismiss on December 9, 2010,2 and Defendants filed a reply on December 22, 2010.
In determining whether a complaint states a claim upon which relief can be granted, courts accept the factual allegations in the complaint as true and construe them in the light most favorable to the plaintiff. Hill v. White, 321 F.3d 1334, 1335 (11th Cir. 2003). To survive a motion to dismiss, a complaint must allege facts that, if true, “state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009) (quotations omitted). A claim is plausible where the plaintiff alleges factual content that “allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. The plausibility standard requires that a plaintiff allege sufficient facts “to raise a reasonable expectation that discovery will reveal evidence” that supports the plaintiff’s claim. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 556 (2007).
The Court recognizes that Plaintiff is appearing pro se. Thus, his complaint is to be liberally construed and “held to less stringent standards than formal pleadings drafted by lawyers.” Erickson v. Pardus, 551 U.S. 89, 94 (2007) (citations and internal quotation marks omitted).
Defendants argue that Plaintiff’s claims arising out of failure to send the foreclosure notice to the proper address are moot because the foreclosure did not go forward on November 2, 2010. However, a court may refuse to dismiss as moot claims in which the former controversy is one “capable of repetition, yet evading review.” United Steelworkers of America v. Bishop, 598 F.2d 408, 412 (5th Cir. 1979) (internal citations omitted).3 Claims will be preserved for review on this basis when they meet the following criteria: (1) “the challenged action was too brief in duration to be fully litigated prior to its cessation or expiration,” and (2) there is a reasonable likelihood that the plaintiff will face the same challenged conduct again. Id. As Plaintiff is still in default on his mortgage, and the Court’s predecessor judge terminated the injunction barring foreclosure on January 3, 2011, it is very likely that Defendants will again attempt a nonjudicial foreclosure. Since the statutorily required notice of foreclosure sale is only required to be sent 30 days prior to the sale date, there would not likely be time to adjudicate this issue should it arise again by virtue of another foreclosure sale notice mailed to the incorrect address. See O.C.G.A. § 44-14- 162.2. Plaintiff contends that Defendant failed to send proper notice, despite his written provision of an updated address. (Compl. ¶ 16.) Under these circumstances, the Court declines to dismiss as moot Plaintiff’s claims for wrongful foreclosure arising out of failure to give the required foreclosure notice.
The issues presented here regarding ownership of the note and the effectiveness of an assignment executed by MERS have been the subject of much litigation, in this district and throughout the country. Therefore, the Court takes this opportunity to carefully address the complex issues presented.
A promissory note and a security deed are two separate, but interrelated, instruments. See Frank S. Alexander, GEORGIA REAL ESTATE FINANCE AND FORECLOSURE LAW, § 3:7 (2010-11 ed.). The security deed arises from the indebtedness memorialized in the promissory note, and “the deed’s power of sale depend[s] on default under the note.” Boaz v. Latson, 580 S.E.2d 572, 578 (Ga. Ct. App. 2003), rev’d on other grounds, 598 S.E.2d 485, 487 (Ga. 2004). Historically, the note and security deed have traveled together. If an originating lender decided to sell a mortgage loan, that lender would endorse and physically transfer the note (a negotiable instrument) to a new holder, and assign the security deed to that holder as well. See Bowen v. Tucker Fed. Sav. & Loan Assoc., 438 S.E.2d 121, 122 (Ga. Ct. App. 1993) (“the holder of a note who is also the grantee of a security deed has the right to exercise the power of sale in the security deed upon default”). The parties would then record the assignment in the county deed room, giving record notice to the homeowner and all the world of who held the mortgage. Christopher L. Peterson, Foreclosure, Subprime Mortgage Lending, and the Mortgage Electronic Registration System, 78 U. CIN. L. REV. 1359, 1362 (2009-10).
With the rise of securitization of mortgage loans, the financial services industry sought to maximize profitability by developing shortcuts to these cumbersome paperwork requirements. Peterson, 78 U. CIN. L. REV. at 1368-69. One such costsaving method was to have the original lender endorse the note in blank, so that it would not have to be specifically endorsed to every holder in the chain of ownership. In the securitization process, ownership of a note might be transferred four or five times, from the original lender to the issuer of the securities, through one or more special purpose entities, and finally to the trustee bank, which holds the legal interest in the note for the benefit of the securities holders. Id. at 1367; Adam Ashcraft and Til Schuermann, Understanding the Securitization of Subprime Mortgage Credit, 318 FEDERAL RESERVE BANK OF NEW YORK STAFF REPORT at 5 (2008).
Along the same lines, the mortgage industry created MERS to facilitate tracking ownership of mortgage loans without the necessity of executing and recording assignments of the security deeds. Peterson, 78 U. CIN. L. REV. at 1369.
registers the original loan on MERS’s electronic system.
accomplished electronically under the MERS system.
Taylor, Bean & Whitaker v. Brown, 583 S.E.2d 844, 845 n.1 (Ga. 2003) (internal citations omitted).
Whereas the cost-saving benefits to the mortgage banking industry of the MERS system are clear, its harmony with Georgia real estate law is less evident. Indeed, the use of MERS as a record “holder” of the security instrument (and tracking system for actual ownership of same) has created a great deal of confusion for homeowners attempting to communicate with the owner of their loan, as well as for judges and lawyers attempting to parse out ownership of the debt and authority to foreclose. See Landmark Nat’l Bank v. Kesler, 216 P.3d 158, 168 (Kan. 2009).
Several of Plaintiff’s claims rest on the argument that the security deed is void because of the fact that MERS was named as the grantee-as-nominee in the security deed rather than Guarantee Rate, the actual lender and payee on the note. This argument is unsupported by Georgia law. Separation of the note and security deed creates a question of what entity would have the authority to foreclose, but does not render either instrument void. See Boaz, 580 S.E.2d at 578; Alexander at § 3.7. Therefore, the Court dismisses Plaintiff’s claims for declaratory judgment (Count I), cancellation of the security deed (Count III), slander of title (Count IV), and quiet title (Count V), all of which seek either injunctive relief or damages based on the assertion that the security deed is void because of the MERS involvement.
Although the separation of the note and the security deed does not render either instrument void, it does create a substantial question of what entity has the right to foreclose when the borrower defaults on the loan. The Georgia Supreme Court has expressly reserved ruling on the question of “whether MERS, as nominee for the original lender and its successors, has the power to foreclose on an existing security deed either with or without the participation of the existing note holder.” Taylor, Bean & Whitaker v. Brown, 583 S.E.2d at 848. Many other courts have questioned MERS’s right to foreclose or effect an assignment of a security instrument, as it admittedly holds no beneficial interest in the note or security instrument. See Landmark v. Kesler, 216 P.3d at 167 (“If MERS is only the mortgagee, without ownership of the mortgage instrument, it does not have an enforceable right.”); Bellistri v. Ocwen Loan Servicing, LLC, 284 S.W.3d 619, 624 (Mo. Ct. App. 2009) (“MERS never held the promissory note, thus its assignment of the deed of trust to Ocwen separate from the note had no force.”); In re Agard, No. 810-77338, 2011 WL 499959, at *16 (E.D.N.Y. Feb. 10, 2011) (“[W]ithout more, this Court finds that MERS’s ‘nominee’ status and the rights bestowed upon MERS within the Mortgage itself, are insufficient to empower MERS to effectuate a valid assignment of mortgage.”).
it, or to explain why it was not forthcoming at the trial?
Weems v. Coker, 70 Ga. 746, 749 (1883), cited by Truitt v. Moister, 11 B.R. 15 (Bankr. N.D. Ga. 1981); see also Bowen, 438 S.E.2d at 122; Boaz, 580 S.E.2d at 578; Cummings v. Anderson, 173 B.R. 959, 963 (Bankr. N.D. Ga. 1994) (foreclosure was null and void where the entity foreclosing did not have an actual assignment of the note and security deed), aff’d, 112 F.3d 1172 (11th Cir. 1997); Weston v. Towson, No. 5:04- CV-416, 2006 WL 2246206, at *6 (M.D. Ga. Aug. 4, 2006) (“[T]he holder of the note continues to retain remedies under the security deed so long as the debt evidenced by the note has not been satisfied.”).
Plaintiff has alleged that Ocwen is attempting to foreclose when it is not the holder of the note. (Compl. ¶ 25.) Moreover, in publishing the foreclosure notice, Ocwen did not purport to be acting as agent for the actual holder of the note, but rather asserted that it was acting on its own behalf. (Id. ¶ 61.) These allegations clearly support a claim for wrongful foreclosure.8 The Court need not reach the question of whether an agent for the holder of the debt can carry out a power of sale foreclosure under Georgia law, as Ocwen did not advertise the foreclosure as agent for any disclosed principal. Defendants further argue that there can be no cause of action for wrongful foreclosure here because the foreclosure has not taken place. However, courts have recognized a cause of action for wrongful attempted foreclosure when a foreclosure action was commenced, but not completed, where plaintiffs have shown that a defendant “knowingly published an untrue and derogatory statement concerning the plaintiffs’ financial conditions and that damages were sustained as a direct result.” Sale City Peanut & Milling Co. v. Planters & Citizens Bank, 130 S.E.2d 518, 520 (Ga. Ct. App. 1963).9 Furthermore, Plaintiff is clearly seeking injunctive relief barring Ocwen from foreclosing wrongfully because it allegedly is not the holder of the note. (Compl. ¶¶ 40-43, 63.) A court may enjoin a nonjudicial foreclosure sale in a wrongful foreclosure action where the authority to foreclose is in question. See Atlanta Dwellings, Inc. v. Wright, 527 S.E.2d 854, 856 (Ga. 2000); West v. Koufman, 384 S.E.2d 664, 666 (Ga. 1989); Cotton v. First Nat’l Bank of Gwinnett Co., 220 S.E.2d 132 (Ga. 1975).
Thus, Plaintiff’s claims for injunctive relief (Count II), wrongful foreclosure (Count VI), and negligence (Count VIII) are not subject to dismissal at this time.
Defendants have not made any argument for dismissal of the claims for intentional infliction of emotional distress (Count VII) or RICO (Count IX) other than their general argument that Ocwen had the right to foreclose, which cannot prevail at this stage for the reasons cited above. Therefore, because Defendants have not challenged these claims, Court does not address them in this Order.
For the foregoing reasons, Defendants’ motion to dismiss  is GRANTED IN PART and DENIED IN PART. Plaintiff’s claims for declaratory judgment (Count I), cancellation of the security deed (Count III), slander of title (Count IV), and quiet title (Count V) are DISMISSED. Defendants’ motion to dismiss Plaintiff’s claims for injunctive relief (Count II), wrongful foreclosure (Count VI), negligence (Count VIII), intentional infliction of emotional distress (Count VII), and RICO (Count IX) is DENIED.
IT IS SO ORDERED, this 7th day of July, 2011.
1 The facts described here are taken from Plaintiff’s complaint [Doc. 1] and presumed true for purposes of resolving Defendants’ motion to dismiss. See infra Part II.
2 Plaintiff exceeded the twenty-five-page limit imposed by the local rules in his response brief. See Local Rule 7.1(D). Because Plaintiff is appearing pro se, he is entitled to some lenience from this Court regarding the formalities of litigation. However, Plaintiff is advised in the future to keep any original briefs to no more than twenty-five pages, and reply briefs to no more than fifteen pages.
3 In Bonner v. Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc), the Eleventh Circuit adopted as binding precedent all decisions of the former Fifth Circuit handed down prior to October 1, 1981.
4 The facts in the complaint must be presumed true at this stage. Hill v. White, 321 F.3d at 1335. Defendants assert that the Court may consider documents referenced in the complaint, including the promissory note and the purported assignment of the security deed to Ocwen, without converting this motion to a motion for summary judgment. However, Defendants are attempting to use these documents to dispute a central factual allegation of Plaintiff’s complaint, compared to the securities cases wherein courts have considered on a motion to dismiss documents required to be filed with the SEC of which the contents, and not the truth, were at issue. See Bryant v. Avado Brands, Inc., 187 F.3d 1271, 1278 (11th Cir. 1989) (“When SEC documents are relevant only to determine what statements or disclosures are actually contained therein, there can be little question as to authenticity, nor can the fact that such statements or disclosures were thus publicly filed be reasonably questioned.”); Oxford Asset Mgmt. Ltd. v. Jahar, 297 F.3d 1182, 1188 (11th Cir. 2002) (documents outside the complaint may only be considered at the motion to dismiss stage to show their contents, not for the truth of matters asserted therein). The Court must therefore assume at this motion to dismiss stage of the proceedings that Ocwen is not the holder of the note, based on the allegations of Plaintiff’s complaint. (Compl. ¶ 25.) Furthermore, the documents attached to the motion to dismiss do not support anyfactual finding to the contrary, as an assignment of the security deed is not indicative of who holds the note, and the promissory note shows no endorsement to Ocwen.
5 MERS is listed on the original security deed as the grantee of the instrument “as nominee” for the lender and lender’s successor and assigns.
6 Defendants cite O.C.G.A. § 44-14-64 and Redwine v. Frizzell, 190 S.E. 789 (Ga. 1937) to support their argument that the purported assignment of the security deed also transferred the promissory note. However, this statute and Redwine were authored at a time when the promissory note and the security deed where not commonly separated. Neither support the proposition that a party who has never held the promissory note (MERS) could transfer it by an assignment of the security deed.
7 “The security instrument or assignment thereof vesting the secured creditor with title to the security instrument shall be filed prior to the time of sale in the office of the clerk of the superior court of the county in which the real property is located.” O.C.G.A. § 44-14-162(b) (emphasis added). “Notice of the initiation of proceedings to exercise a power of sale in a mortgage, security deed, or other lien contract shall be given to the debtor by the secured creditor no later than 30 days before the date of the proposed foreclosure.” O.C.G.A. § 44-14-162.2(a) (emphasis added).
8 Defendants cite Nicholson v. OneWest Bank, No. 1:10-CV-0795, 2010 WL 2732325 (N.D.Ga. Apr. 20, 2010) for the proposition that MERS has the ability to foreclose even if it does not hold the promissory note. However, in Nicholson the court denied a motion for TRO because the plaintiff in that case failed to carry his burden on a TRO motion to show the likelihood of success on the merits when he failed to overcome the defendant OneWest’s showing that it held both the note and security deed. Id. at *4. Nicholson is therefore inapposite to the facts that must be assumed true herein.
Defendants also cite Trent v. Mortgage Electronic Registration Systems, Inc., 288 Fed. Appx. 571 (11th Cir. 2008) (unpublished) and Mortgage Electronic Registration Systems, Inc. v. Revoredo, 955 So.2d 33 (Fla. Dist. Ct. App.2007). These cases interpret Florida law and therefore are not relevant to the instant case.
9 It is not clear whether Plaintiff can prevail on a claim for wrongful attempted foreclosure, which requires a showing of intentional publication of derogatory and untrue financial information about the complainant. See Sale City Peanut, 130 S.E.2d at 520. Plaintiff does not specify in the complaint whether he was actually in default on the mortgage at the time Ocwen commenced foreclosure proceedings against him or whether a default had been cured through a loan modification. However, to the extent Plaintiff fails to establish the required elements for the tort of attempted wrongful foreclosure, his claim for wrongful foreclosure may proceed as a claim for injunctive relief.
“Traditionally, a bank would tell the Department of Justice when an employee engaged in crimes, but what do you do when the bank itself is run by a criminal enterprise?” said Solomon L. Wisenberg, former chief of a Justice Department financial institutions fraud unit.
As the financial storm brewed in the summer of 2008 and institutions feared for their survival, a bit of good news bubbled through large banks and the law firms that defend them.
Federal prosecutors officially adopted new guidelines about charging corporations with crimes — a softer approach that, longtime white-collar lawyers and former federal prosecutors say, helps explain the dearth of criminal cases despite a raft of inquiries into the financial crisis.
Of this list, five issues are prosecution-ready, where individual states have jurisdiction. These include: 1) Force-Placed Insurance; 2) Illegal “Pyramid” Servicing Fees; 3) Fraud Documents for Sale; 4) False Affidavits, Perjury (Robo-Signing) and 5) Foreclosure Mills, Process servers.
1. Mail and wire fraud.
5. Laundering of monetary instruments.
6. Monetary transactions in property derived from specified unlawful activities.
7. Relating to trafficking in goods and services bearing counterfeit marks.
8. Fraud in the sale of securities.
obtained default judgments against them.
injunctive relief, declaratory relief, and damages.
WaPO: First, the electronic mortgage superhighway. Then, the pileup.
In the early 1990s, the biggest names in the mortgage industry hatched a plan for a new electronic clearinghouse that would transform the home loan business – and unlock billions of dollars of new investments and profits.
At the time, mortgage documents were moved almost exclusively by hand and mail, a throwback to an era in which people kept stock certificates, too. That made it hard for banks to bundle home loans and sell them to investors. By contrast, a central electronic clearinghouse would allow the companies to transfer thousands of mortgages instantaneously, greasing the wheels of a system in which loans could be bought and sold repeatedly and quickly.
“Assignments are creatures of 17th-century real property law; they do not coexist easily with high-volume, late 20th-century secondary mortgage market transactions,” Phyllis K. Slesinger, then senior director of investor relations for the Mortgage Bankers Association, wrote in paper explaining the system.
Oct. 19 (Bloomberg) — Bank of America Corp. and its Countrywide Home Loans unit were sued by two Indiana residents claiming that perjured affidavits were used to foreclose on their Knightstown home.
Plaintiffs Dwayne Ransom Davis and Melisa Davis accused the lender and its unit of racketeering in a complaint filed today in federal court in Indianapolis. Their lawyer, Irwin Levin, confirmed the filing in a phone interview. The filing couldn’t be independently verified.
“The defendants and their cohorts engaged in a pattern of racketeering activity in which they routinely and repeatedly prepared perjured affidavits in order to rapidly churn foreclosures,” the couple said in the complaint.
Bank of America, the largest U.S. lender, resumed foreclosures yesterday, after a 10-day nationwide pause to review more than 100,000 cases.
Mortgage Electronic Registration Systems, Inc (MERS) has a very long history. The beginning stages have remained a mystery until now.
In 1989, Brian Hershkowitz developed the “Whole Loan Book Entry” concept while serving as a director for the Mortgage Bankers Association (MBA). In 1990, he first introduced this concept to seven different industry groups; Document Custodian, Originators, Servicers, Title Insurers, County Recorders, Government Sponsored Enterprises (GSE’s) and Warehouse/Interim Lenders. The reception was very positive and it was viewed as a very useful recording system to be used for how equity and debt securities could be identified and managed.
In 1991, Mr. Hershkowtiz published Farming It Out in Mortgage Banking Magazine. His main discussion in this article is primarily about getting the opinion of the experts in the technology outsourcing service industry. In 1992, Mr. Hershkowitz published another article called Cutting Edge Solutions in Mortgage Banking Magazine. In this particular article he mentions the actual meeting that took place at the Mortgage Bankers Association of America (MBA) headquarters with many key players that are known today as some of MERSCORP’s shareholders, such as, Fannie Mae and Freddie Mac. In this meeting they discussed a “System” that will bring changes in mortgage records.
Mr. Hershkowitz went on to become President and COO of LandSafe Credit, a leading settlement service provider that was a subsidiary of Countrywide. Mr. Hershkowitz also spent several years serving Countrywide in the areas of strategic planning and executive management.
In 2001, Mr. Hershkowitz became Executive Vice President at Fidelity National Information Services (FNIS) and President of its mortgage and information services division. His responsibilities included management of the Company’s data offerings, including public records information, credit reporting information, flood hazard compliance data, real estate tax information and collateral valuation services. He left FNIS in November of 2006 to become Chief Executive Officer of Maximum Value Group, a consulting firm focused on providing advice to private equity and other market participants in the area of banking and mortgages.
MERS has evolved into a totally different purpose today.
Mortgage Electronic Registration Systems, Inc. is a wholly owned subsidiary of MERSCORP Inc., located at 1595 Spring Hill Rd Ste 310 Vienna, VA 22182.
MERS was founded by the mortgage industry. MERS tracks “changes” in the ownership of the beneficial and servicing interests of mortgage loans as they are bought and sold among MERS members or others. Simultaneously, MERS acts as the “mortgagee” of record in a “nominee” capacity (a form of agency) for the beneficial owners of these loans.
To ensure widespread acceptance within the industry, MERS sought to have security instruments modified to contain MERS as the original mortgagee (MOM) language. MERS began to change decades of business practices after the two biggest mortgage funders in the U.S. the Federal Home Loan Mortgage Corporation (Freddie Mac) and the Ferderal National Mortgage Association (Fannie Mae) modified their Uniform Security Instruments to include MOM language. Their approval opened the doors to incorporate MERS into loans at origination.
Soon after, U.S. government agencies like the Veterans Administration, Federal Housing administration and Government National Mortgage Association (Ginne Mae), and several state housing agencies followed both Fannie/Freddie to approve MERS.
More than 60 percent of all newly-originated mortgages are registered in MERS. Its mission is to register every mortgage loan in the United States on the MERS System. Since 1997, more than 65 million home mortgages have been assigned a Mortgage Identification Number (MIN) and have been registered on the MERS System.
The mortgage-backed security (MBS) sector tested the viability of MERS because a substantial number of mortgages are securitized in the secondary market. In February 1999, Lehman Brothers was the first company to include MERS registered loans in a MBS.
Moody’s Investor Service issued an independent Structured Finance special report on MERS and it’s impact of MBS transactions and found that where the securitzer used MERS, new assignments of mortgages to the trustee of MBS transactions were not necessary.
Since MERS is a privately owned data system and not public, all mortgages and assignments must be recorded in order to perfect a lien. Since they failed to record assignments when these loans often traded ownership several times before any assignment was created, the legal issue is apparent. MERS may have destroyed the public land records by breaking the chain of title to millions of homes.
In this same article Mr. Arnold also states “The sheer volume of transfers between servicing companies and the resulting need to record assignments caused a heavy drag on the secondary market. Loan servicing can trade several times before even the first assignment in a chain is recorded, leaving the public land records clogged with unnecessary assignments. Sometimes these assignments are recorded in the wrong sequence, clouding title to the property”. Mr. Arnold never mentions the fact that the mortgage notes have been securitized, thereby becoming “negotiable securities” under the Uniform Commercial Code.
According to affidavits such as these, not only have the borrowers lost contact with the lenders, but the same is true that MERS did as well.
On September 25, 2009, Mr. R.K. Arnold was deposed in Alabama. Mr. Arnold admitted MERS does not have a beneficial interest in any loan, does not loan money and does not suffer a default if monies are not paid. On November 11, 2009, William C. Hultman was deposed in Alabama and made the same admissions.
Aside from not recording assignments, Mr. Arnold failed to mention that the certifying officers given authority to execute sensitive loan documents would not be paid employees of MERS. This raises the critical legal question as to how one can act as a certified officer and execute any equitable interest on behalf of any security instruments without being an employee of MERS.
you a salaried employee of MERS?
Q Are any of the employees of MERS, Inc.
A I don’t understand your question.
A There is no MERS, Inc.
Systems, Inc. Does it have paid employees?
A No, it does not.
Q Does it have employees?
of MERS that they report to, is that correct, who is an employee?
If so, how does anyone have any authority to sign security instruments encumbered by any loan documents, if these certifying officers are not paid employees and never attend corporate meetings in the capacity as Vice President, Assistant Secretary, etc. with Mortgage Electronic Registration System, Inc..
Federal and state judges across America are realizing that the mortgage industry’s nominee is backfiring.
In Mr. Arnold’s own words, “For these servicing companies to perform their duties satisfactorily, the note and mortgage were bifurcated. The investor or its designee held the note and named the servicing company as mortgagee, a structure that became standard.” What has become a satisfactory standard structure for the mortgage industry has not been found by many courts to be legally sufficient to foreclose upon the property.
Again, MERS only acts as nominee for the mortgagee of record for any mortgage loan registered on the computer system MERS maintains, called the MERS System. MERS cannot negotiate a security instrument. Therefore, MERS certifying officers cannot have legal standing to assign what MERS does not own or hold.
Mortgage Electronic Registration Systems, Inc. v. Saunders, No. 09-640, 2010 WL 3168374, (Me. August 12, 2010) The Court explains that the only rights conveyed to MERS in either the Saunders’ mortgage or the corresponding promissory note are bare legal title to the property for the sole purpose of recording the mortgage and the corresponding right to record the mortgage with the Registry of Deeds. This comports with the limited role of a nominee. A nominee is a “person designated to act in place of another, usu[ally] in a very limited way,” or a “party who holds bare legal title for the benefit of others or who receives and distributes funds for the benefit of others.” Black’s Law Dictionary 1149 (9th ed. 2009).
In Re: Walker, Case No. 10-21656-E-11 – Eastern District of CA Bankruptcy court rules MERS has NO actionable interest in title. “Any attempt to transfer the beneficial interest of a trust deed without ownership of the underlying note is void under California law.” “MERS could not, as a matter of law, have transferred the note to Citibank from the original lender, Bayrock Mortgage Corp.” The Court’s ruled that MERS and Citibank are not the real parties in interest.
In US Bank v. Harpster the Law Offices Of David J. Stern committed fraud on the court by the evidence based on the Assignment of Mortgage that was created and notarized on December 5, 2007. However, that purported creation/notarization date was facially impossible: the stamp on the notary was dated May 19, 2012. Since Notary commissions only last four years in Florida (see F .S. Section 117.01 (l)), the notary stamp used on this instrument did not even exist until approximately five months after the purported date on the Assignment.
The Court specifically finds that the purported Assignment did not exist at the time of filing of this action; that the purported Assignment was subsequently created and the execution date and notarial date were fraudulently backdated, in a purposeful, intentional effort to mislead the Defendant and this Court. The Court rejects the Assignment and finds that is not entitled to introduction in evidence for any purpose. The Court finds that the Plaintiff does not have standing to bring its action.
The Court dismissed this case with prejudice.
In Duval County, Florida another foreclosure case was dismissed with prejudice for fraud on the court. In JPMorgan V. Pocopanni, the Court found that Fishman & Shapiro representing JPMorgan had actual knowledge at all times that the Complaint, the Assignment, and the Motion for Substitution were all false. The Court found that by clear and convincing evidence WAMU, Chase and Shapiro & Fishman committed fraud on this court.
Both these cases involved Mortgage Electronic Registration Systems Inc. assignments.
Two RICO Class Action lawsuits have commenced against Foreclosure Law Firms and MERSCORP for fabricating and forging documents that are entered into courts as evidence in order to have standing to foreclose. Unknown to judges and the borrowers, they accept these documents because they are executed under perjury of the law. These “tromp l’oeil” actions have finally surfaced and the courts has taking notice.
The lack of supervision and managing of MERS “Robo-Signers” has led to a national frenzy of fabrication, forgery and certifying officers wearing multiple corporate hats. Anyone who compares signatures of these certifying officers will see a major problem with forgery in hundreds of thousands affidavits and assignments which creates an enormous dark cloud of title defects to millions of homes across the US.
On August 10, 2010 Florida attorney general Bill McCollum announced that he is investigating three foreclosure law firms for allegedly providing fraudulent assignments and affidavits relating in foreclosure cases.
In a deposition taken in December 2009, GMAC employee Jeffrey Stephan said he signed 10,000 affidavits or similar documents a month without personally verifying who the mortgage holder was. That means many foreclosures could have taken place based on false documentation and many homes may have been unlawfully foreclosed on.
On September 20, 2010, GMAC halted foreclosures in 23 different states. Two of the three firms being investigated by the Florida attorney general, the Law Office of Marshall C. Watson and the Law Offices of David J. Stern PA, have represented GMAC in foreclosure proceedings.
This is not limited to only GMAC Mortgage. There are many hundreds of thousands of these same documents that are being created by many foreclosure law firms across the nation.
University of Utah law professor Christopher L. Peterson has raised the issue that MERS should be regarded as a debt collector. He argues that some of MERS’ methods are just the sort of deceptive practices that ought to be regulated under The Fair Debt Collection Practices Act (FDCPA), 15 U. S. C. §1692(a),(j).
Finally in May, 2009, Mr. Arnold said in Mortgage Technology Magazine, “Every system in the mortgage industry can switch MERS registry on or off at will,” referencing that both the Obama administration and Congressional leaders are aware of this.
President Obama and Congressional leaders it is time to permanently switch MERS lifeless device off!
Not until MERS became the primary focus for challenges to legal standing in foreclosure courts as reported by the alternative media, have the main stream media and the mortgage industry have begun to realize that property records cross the United States have become totally unreliable.
It has taken more than a decade for the courts to recognize that MERS has become a mortgage backfire system leaving clouded titles in over 65 million loans since 1997.
Courts across the nation must comply with the law. Any documents submitted to the courts regarding property ownership should be assumed to be nothing but smoke in a mirror.
No, Mr. Arnold, there’s no life at MERS.
DinSFLA, “nominee” of stopforeclosurefraud.com, a blog on Foreclosure Fraud.
Class Action Attorney Susan Chana Lask targets Foreclosure Mill Attorneys as source of foreclosure crisis.
This is the amended complaint against Foreclosure Mill Steven J. Baum and MERSCORP.
Want to join the Class? No problem!
Please contact: SUSAN CHANA LASK, ESQ.
Anyone can see the “Fiction” that was set into place from all the institutions in this article below. Each one of these named parties as a shareholder utilizes Mortgage Electronic Registration Systems, Inc., yet Washington never mentions this MERS device.
All this talk of false and misleading loans blah blah blah …I mean grab the bull by it’s nuts and put these criminals behind bars. Not just seek refunds! This clean up should also seek Racketeering Indictments.
U.S. lawmakers will grapple today with how to end the bailout of Fannie Mae and Freddie Mac after two years and almost $150 billion, and who pays the bill for bad loans made during the housing boom.
Regulators who seized control of the two mortgage lenders in 2008 are under pressure to stem losses for taxpayers and recoup money from banks that sold faulty loans to Fannie Mae and Freddie Mac — all without hindering the housing market’s recovery. Assistant Treasury Secretary Michael Barr and Edward DeMarco, acting director of the Federal Housing Finance Agency, are scheduled to testify today on their progress at the House Financial Services Committee.
The Obama administration and Congress are weighing the future of the two companies as part of an overhaul of the U.S. housing finance system. Fannie Mae, based in Washington, and Freddie Mac, based in McLean, Virginia, lost $166 billion on guarantees of single-family mortgages from the end of 2007 through the second quarter, according to the FHFA. Treasury Secretary Timothy F. Geithner has promised a comprehensive proposal by early next year.
“The biggest problem in the economy is that we have three or four million too many homes,” said Chris Kotowski, a banking analyst at Oppenheimer & Co. The solution “will take another two or three years to work out until we sop up the excess supply,” Kotowski said.
The clean-up includes seeking refunds from lenders who sold loans based on false or misleading information, and the two government-backed firms aren’t the only ones demanding buybacks. The Federal Reserve, private mortgage investors and mortgage insurers are combing through loan documents for faulty appraisals, inflated borrower incomes and missing documentation that would support a refund request.
I am working on a special project & need your help to gather as many MERS Assignments as we can possibly get.
What is especially needed are the Certifying Officers signing these assignments for MERS. I don’t care if it’s old, new, signed, undated, unmarked, lender has gone bankrupt ages ago…I just want them ALL!
Click the Envelope to load up your MERS Assignment(s).
As an investigation by the Florida Attorney General’s Office looms over its chairman and CEO, Plantation-based DJSP Enterprises reported a decline in both profits and income during the second quarter.
The foreclosure and title processing company (NASDAQ: DJSP) reported net income of $3.8 million, or 32 cents a share, on revenue of $56.1 million. That’s down from net income of $14.1 million, or 73 cents a share, on revenue of $61.7 million in the second quarter of 2009.
DJSP handles foreclosure legal work for major lenders, and its largest client is the Law Offices of David J. Stern, P.A. The lawyer is chairman and CEO of DJSP.
On Aug. 10, Attorney General Bill McCollum announced he had started an investigation of David J. Stern, P.A., along with three other Florida law firms, over whether they engaged in unfair and deceptive actions in the handling of foreclosure cases. There have been allegations that the law firms fabricated mortgage assignments to speed up foreclosures.
David J. Stern, P.A. responded to the news by stating that it would cooperate with the investigation and it has done nothing wrong.
In addition, a pending class action lawsuit accuses Stern and his firm of violating the RICO Act.
Readers of my articles will recall that I have warned as far back as December 2006, that the global banks will collapse when the Financial Tsunami hits the global economy in 2007. And as they say, the rest is history.
Quantitative Easing (QE I) spearheaded by the Chairman of delayed the inevitable demise of the fiat shadow money banking system slightly over 18 months.
That is why in November of 2009, I was so confident to warn my readers that by the end of the first quarter of 2010 at the earliest or by the second quarter of 2010 at the latest, the global economy will go into a tailspin. The recent alarm that the US economy has slowed down and in the words of Bernanke “the recent pace of growth is less vigorous than we expected” has all but vindicated my analysis. He warned that the outlook is uncertain and the economy “remains vulnerable to unexpected developments”.
Obviously, Bernanke’s words do not reveal the full extent of the fear that has gripped central bankers and the financial elites that assembled at the annual gathering at Jackson Hole, Wyoming. But, you can take it from me that they are very afraid.
Let me be plain and blunt. The “unexpected developments” Bernanke referred to is the collapse of the global banks. This is FED speak and to those in the loop, this is the dire warning.
So many renowned economists have misdiagnosed the objective and consequences of quantitative easing. Central bankers’ scribes and the global mass media hoodwinked the people by saying that QE will enable the banks to lend monies to cash-starved companies and jump start the economy. The low interest rate regime would encourage all and sundry to borrow, consume and invest.
This was the fairy tale.
Then, there were some economists who were worried that as a result of the FED’s printing press (electronic or otherwise) working overtime, hyper-inflation would set in soon after.
But nothing happened. The multiplier effect of fractional reserve banking did not take off. Bank lending in fact stalled.
Let me explain in simple terms step by step.
1) All the global banks were up to their eye-balls in toxic assets. All the AAA mortgage-backed securities etc. were in fact JUNK. But in the balance sheets of the banks and their special purpose vehicles (SPVs), they were stated to be worth US$ TRILLIONS.
2) The collapse of Lehman Bros and AIG exposed this ugly truth. All the global banks had liabilities in the US$ Trillions. They were all INSOLVENT. The central banks the world over conspired and agreed not to reveal the total liabilities of the global banks as that would cause a run on these banks, as happened in the case of Northern Rock in the U.K.
3) A devious scheme was devised by the FED, led by Bernanke to assist the global banks to unload systematically and in tranches the toxic assets so as to allow the banks to comply with RESERVE REQUIREMENTS under the fractional reserve banking system, and to continue their banking business. This is the essence of the bailout of the global banks by central bankers.
4) This devious scheme was effected by the FED’s quantitative easing (QE) – the purchase of toxic assets from the banks. The FED created “money out of thin air” and used that “money” to buy the toxic assets at face or book value from the banks, notwithstanding they were all junks and at the most, worth maybe ten cents to the dollar. Now, the FED is “loaded” with toxic assets once owned by the global banks. But these banks cannot declare and or admit to this state of affairs. Hence, this financial charade.
5) If we are to follow simple logic, the exercise would result in the global banks flushed with cash to enable them to lend to desperate consumers and cash-starved businesses. But the money did not go out as loans. Where did the money go?
6) It went back to the FED as reserves, and since the FED bought US$ trillions worth of toxic wastes, the “money” (it was merely book entries in the Fed’s books) that these global banks had were treated as “Excess Reserves”. This is a misnomer because it gave the ILLUSION that the banks are cash-rich and under the fractional reserve system would be able to lend out trillions worth of loans. But they did not. Why?
7) Because the global banks still have US$ trillions worth of toxic wastes in their balance sheets. They are still insolvent under the fractional reserve banking laws. The public must not be aware of this as otherwise, it would trigger a massive run on all the global banks!
8) Bernanke, the US Treasury and the global central bankers were all praying and hoping that given time (their estimation was 12 to 18 months) the housing market would recover and asset prices would resume to the levels before the crisis. .
Let me explain: A House was sold for say US$500,000. Borrower has a mortgage of US$450,000 or more. The house is now worth US$200,000 or less. Multiply this by the millions of houses sold between 2000 and 2008 and you will appreciate the extent of the financial black-hole. There is no way that any of the global banks can get out of this gigantic mess. And there is also no way that the FED and the global central bankers through QE can continue to buy such toxic wastes without showing their hands and exposing the lie that these banks are solvent.
It is my estimation that they have to QE up to US$20 trillion at the minimum. The FED and no central banker would dare “create such an amount of money out of thin air” without arousing the suspicions and or panic of sovereign creditors, investors and depositors. It is as good as declaring officially that all the banks are BANKRUPT.
9) But there is no other solution in the short and middle term except another bout of quantitative easing, QE II. Given the above caveat, QE II cannot exceed the amount of the previous QE without opening the proverbial Pandora Box.
10) But it is also a given that the FED will embark on QE II, as under the fractional reserve banking system, if the FED does not purchase additional toxic wastes, the global banks (faced with mounting foreclosures, etc.) will fall short of their reserve requirements.
11) You will also recall that the FED at the height of the crisis announced that interest will be paid on the so-called “excess reserves” of the global banks, thus enabling these banks to “earn” interest. So what we have is a merry-go-round of monies moving from the right pocket to the left pocket at the click of the computer mouse. The FED creates money, uses it to buy toxic assets, and the same money is then returned to the FED by the global banks to earn interest. By this fiction of QE, banks are flushed with cash which enable them to earn interest. Is it any wonder that these banks have declared record profits?
12) The global banks get rid of some of their toxic wastes at full value and at no costs, and get paid for unloading the toxic wastes via interest payments. Additionally, some of the “monies” are used by these banks to purchase US Treasuries (which also pay interests) which in turn allows the US Treasury to continue its deficit spending. THIS IS THE BAILOUT RIP OFF of the century.
Now that you fully understand this SCAM, it is left to be seen how the FED will get away with the next round of quantitative easing – QE II.
Obviously, the FED and the other central banks are hoping that in time, asset prices will recover and resume their previous values before the crisis. This is a fantasy. QE II will fail just as QE I failed to save the banks.
The patient is in intensive care and is for all intent and purposes brain dead, although the heart is still pumping albeit faintly. The Too Big To Fail Banks cannot be rescued and must be allowed to be liquidated. It will be painful, but it is necessary before there is recovery. This is a given.
When the ball hits the ceiling fan, sometime early 2011 at the earliest, there will be massive bank runs.
1) Disallow cash withdrawals from banks beyond a certain amount, say US$1,000 per day; 2) Disallow cash transactions up to a certain amount, say US$10,000 for certain transactions; 3) Transactions (investments) for metals (gold and silver) will be restricted; 4) Worst-case scenario – the confiscation of gold AS HAPPENED IN WORLD WAR II. 5) Imposition of capital controls etc.; 6) Legislations that will compel most daily commercial transactions to be conducted through Debit and or Credit Cards; 7) Legislations to make it a criminal offence for any contraventions of the above.
Maintain a bank balance sufficient to enable you to comply with the above potential impositions.
Start diversifying your assets away from dollar assets. Have foreign currencies in sufficient quantities in those jurisdictions where the above anticipated impositions are least likely to be implemented.
There will be a financial tsunami (round two) the likes of which the world has never seen.

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