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When is Foreclosure Theft? When the Mortgage is Recorded at MERS

As I’ve said many times, whenever you criticize the banks you get pushback from their employees and lawyers handling their home thefts (whoops I meant “foreclosures”). About ten days ago I posted a brief update on the state of play, and received the usual comments. (Here: http://www.economonitor.com/lrwray/2012/02/22/yes-virginia-foreclosure-is-theft/#idc-container)

Indeed, they went beyond “usual” as one bank lawyer tried to defend home theft as a “victimless crime”: “As a lawyer who did foreclosure work for many years for both borrowers and lenders, I assure you that robosigning is a victimless technicality. In only a handful of exceptions is there a wrongful foreclosure in which the outcome would have changed had the technicality been corrected. I am astonished to see foreclosure characterized as “theft” on an otherwise reputable site.”

Well, I guess it is nice that the lawyer thinks this site is “otherwise reputable”. But, in fact, robosigning is a go-to-jail crime. And illegally taking a home is certainly not victimless. Let us count the victims:

*The homeowner. Often the banks seize the wrong properties—because MERS (more below) recorded the wrong address. Often they steal homes that never had a mortgage. Or they lose the payments the homeowner tried to make, then claim default, then steal the home. Or they advise the homeowner to stop making payments in order to qualify for a “loan mod” (better terms on a new mortgage, often under one of the government programs)—then steal the home. But banks and their lawyers consider these “victimless crimes”.

*The neighborhood. All homeowners in the area suffer lost property values and higher crime rates. Local government lose revenues, so cut services. Workers are forced to turn down better job offers because they cannot afford to move—stuck with underwater mortgages and homes they cannot sell. Banksters see “no harm, no foul”.

*The national economy. Ten million jobs lost. Over ten trillion dollars of lost wealth. We know the banksters’ view of this: new opportunities for the top 1%! (As I’ve argued—back in 2005!—it is all part of Bush’s “ownership society” agenda: pump up home prices and when the bubble bursts, all property will get concentrated into the hands of the wealthiest, the true owners of our society.)

*The justice system. Looking the other way when lawyers and their banks openly lie to judges, falsify documents, and engage in property theft turns our justice system into just another branch of the kleptocracy that Wall Street is creating—what Wall Street calls the “new plutocracy”—government of, by, and for the top tenth of one percent.

*Property rights. Over the past half a millennium western property law was developed precisely to prevent some feudal lord or modern bankster from showing up and claiming title in order to steal property. This is why in the US every property sale had to be recorded—in pen and ink—at the county recorder’s office. The mortgage note and deed had to be retained by the creditor and presented to foreclose on a delinquent homeowner. It had to match the county records of ownership. That has now been destroyed in the US. Anyone with a good enough lawyer and a compliant judge can now claim your property. Who suffers? Everyone. Except the top 1% that can afford to buy lawyers and judges.

A lawyer wrote to me in response to this bankster lawyer’s comment to me:

Must have been a Lender/Servicer/Plaintiff attorney! “Victimless???” Let me tell you this short war story:

During an argument (small chamber hearing — wish it had been in a large courtroom with others present), the Judge asked both the Plaintiff Attorney and me (as defense attorney) if we paid our mortgages? Both of us answered,”Yes.”

The Judge then offered, of course, that he, too, paid his mortgage and then added: “So, you see we all must pay our mortgages.”

This was my response to the Judge: “Yes, Your Honor, I am able to pay my mortgage because I am paid by the homeowners to defend their cases. The Plaintiff-Bank attorney is able to pay his mortgage because the banks pay him to prosecute their cases. And you, Your Honor, are able to pay your mortgage because you are paid by the taxpayers to adjudicate these cases.

Essentially, all of us are ‘standing on the backs’ of the homeowners who (through no fault of their own) are out of jobs or underpaid, and who are ‘underwater with barely a straw to breath through’ — all as a direct result of this economic recession — An economic recession which was, quite literally, caused by THIS Plaintiff and others like it in the financial industry.

In fact, Your Honor, you, as a public servant, have already witnessed cuts in the court clerk’s office and other judicial resources. Even you, yourself, may have concerns of reduced income or ‘cutting-down of the courts’ as a result of this economic recession .”

The Judge reacted by visibly pulling back in his winged, cushioned chair, and with eyes-wide-open and responded: “My God, we’re here arguing ‘a car accident’ and you’re arguing ‘A MURDER! ‘ ”

Without, blinking an eye, I leaned forward and responded, ” ‘Exactly,’ Your Honor, this Plaintiff and others like it have, indeed, MURDERED our national economy, our state economies, as well as small businesses, communities, and our families (which include the elderly and children).

Yes, Your Honor, I am arguing a MURDER.” The Point (as to “Victimless”): There are so many VICTIMS that it is impossible to take a “body count!” PLUS, our Due Process Rights, Official Land Recording System, Judicial System (as a whole), and CENTURIES of property law have all been, at the least, CRITICALLY INJURED (if not worse).

When is a foreclosure a theft? When the mortgage was recorded at MERS. MERS has no standing to foreclose. The typical mortgage was bought and sold about ten times before it finally got securitized. And those sales and purchases were not recorded at the county recorder’s office. Several important court cases have ruled that servicers using MERS have no standing to foreclose because the chain of title was thereby broken. That is about two-thirds of all mortgages made since the megabanks created the MERS monster. Now, those who go up against banks trying to foreclose using the “MERS destroyed the chain of title” defense do not always win. Judges are having a hard time getting their minds around the fact that banks have destroyed property law in the US. Or, they make a calculation that recognizing this fact will throw the whole real estate sector into disarray, hence overlook the home thefts as the lesser of evils.

I am going to do a more detailed update on the more recent rulings. Meanwhile here is a link to a good site with a lot of information: http://msfraud.org/LAW/Lounge/Lounge.html It is instructive just to read down the list of the variety of frauds the banks are using to illegally take homes, things like:

o Falsely claiming to be the owner/holder of the mortgage;

o Falsely claiming standing by use of names such as Trustee, Assignee, Nominee, Beneficiary, etc.;

o Fraudulently invoking the jurisdiction of the court; o Preying on the ignorance of the court and homeowner;

o Falsely claiming Pooling & Servicing Agreements, industry standards, rules, guidelines or other industry-authored writings supersede the law;

o Failing to follow PSA guidelines;

o Robo-Signing legal documents without the legal authority to do so.

o Entering on-time payments as late, to exact illegal and unauthorized fees;

o Manipulating account records;

o Backdating legal documents;

o Filing forged documents in courts and public records;

o Charging force-placed insurance when the homeowner already has full coverage;

o Falsely reporting a default to the credit bureaus when it is the pretender lender who is manufacturing the default;

o Paying property taxes late, then charging the late penalties to the borrower;

o Paying taxes and insurance on the wrong property;

o Refusing payments to guarantee default;

o Adding thousands of dollars in unearned legal fees to create a default;

o Ignoring customer complaints and “qualified written requests”;

o Arrogantly violating numerous laws and regulations;

o Coercing the homeowner into signing a forbearance agreement to strip away their legal rights;

o Falsifying records and documents;

o Committing fraud upon the courts by stating they are the Holder and Owner of the Note – when in fact – they do not own or hold the “original” Note;

o Intentionally causing delays to run up your legal expenses;

o Creating fictitious documents (Lost Note Affidavits, Power of Attorney, etc.);

o Triggering the terms of the null and void Deed of Trust/Mortgage

o Apply to the trust for reimbursement after deducting the fees from the borrowers p&i payments, (Known as double-dipping)

o Rounding up ARM rates when on a downward trend; o Not adhering to the terms of the loan documents;

o Creating additional false deficiencies through a variety of questionable practices;

o Adding misc. fees to purposely create a deficiency with the borrower’s next payment;

o Not applying payments to principal and interest;

o Committing perjury through misrepresentations;

o Withholding or redacting discovery evidence;

o Tampering with court transcripts and removing evidence from the record;

o Conjuring up events that never happened while refusing to provide documentation to support their fallacies;

o Refusing to cooperate with attempts to refinance and stop the illegal foreclosure;

o Using abuse of litigation, appeals and malicious prosecution to litigate forever;

o Payoffs to the consumer’s attorney, law enforcement officials, judges, court personnel and government officials;

o Threats & intimidation; o Electronic surveillance;

o Wire Fraud / Mail Fraud;

o Conspiracy;

o Fraud in the inducement;

o Unjust Enrichment;

o Embezzlement;

o Racketeering – RICO;

o Extortion;

o Abuse of Process;

o Violation of ethics;

o Grand Theft;

o Extortion;

o Tax Fraud (REMIC);

o Public Corruption;

o Notary Fraud;

o Evidence Tampering;

o Theft of Government Services;

o Perjury;

o Felonious Influence of Public Officials;

o Money Laundering;

o Insurance Fraud;

o Securities Fraud;

o Constitutional and Civil Right violations.

Ah, yes, the banks are truly innovative. Keep this in mind the next time some bank lawyer tries to convince you that all this is “victimless crime”. Now many will say: “but the homeowner was delinquent, so the home theft by the banksters was justified!” Why was the homeowner delinquent? Because the banksters have tacked on fees, lost payments, doctored documents and so on. Nay, they need only be delinquent BECAUSE the bank that wants their home says they are!

And for those willing to wade through a ruling, there was an excellent recent decision in El Paso, Texas in the 171st district court. It found MERS to be “grossly negligent”, that it had “fraudulently misrepresented” standing as beneficial owner of notes and mortgages, that it had failed to properly record the property, and that it had engaged in a “conspiracy”. There have been several such cases that rule against the legal basis of MERS’s business model—which then invalidates the whole “theory” that electronic recording can replace pen and ink recording in the county recorder’s office. And that, dear Virginia, means there is no legal basis for foreclosure of property registered at MERS and all such foreclosures are property theft.

22 Responses to “When is Foreclosure Theft? When the Mortgage is Recorded at MERS”

SergioMarch 3rd, 2012 at 2:46 am

There was much more damage caused by robo-signing than I could have imagined. This truly went beyond what I would have thought

RussMarch 3rd, 2012 at 3:37 am

One of the best articles on the topic I have read in some time. Shame it can not be an OP ED at the NY Times.

mphippMarch 3rd, 2012 at 7:17 pm

So here is a debate question for, Romney (vs) Obama; Maybe; Dear Sirs, Please compare and contrast the plight of the Irish taxpayer as he/she in defiance, mirrors that of the US taxpayer regarding their plight in the forced assumption of debt of unsecured bondholders of ECB Banks or as in the US-(AIG, TOO Big to Fail institutions-Ci-ti,JP Morgan/Chase, Wells Goldman Sachs Hedge Fund Organizations etc.) Why is it currently acceptable when considering our US Constitution that we now force a US Tax payers to hire lawyers to fight the US Government picked Winner whose lawyers are financially backed up by those tax dollars paid by (us) taxpayers to defend property rights, wrongfully exercised Personal Guarantee's, illegal foreclosures, wrongful Garnishments, etc. Why! MR. Romney and MR. Obama is this happening in the context one person one vote as you consider the affects of (BANKS,MONEY,INFLUENCE,LEVERAGE,PACS,ETC.) and will this process continue if you are the next commander and Chief?

r123March 5th, 2012 at 1:36 am

Randy-

Yes! Murder. That's what it is. What an eloquent quote from the court proceeding. Lots of these mortgages in foreclosure are owned by things like mortgage reits. If you own them you are a murderer.

RayPhenicieMarch 11th, 2012 at 2:31 pm

If MERS was rolled out in 1993 according to Nolan Robinson at http://msfraud.org/LAW/lawarticles/Case-Against-A
then this whole scam really has been going on since then. I have a hunch the issue of unrealistic appraisals on real estate has a long history reaching back into the mid 1970's.

Succinctly placed objections to MERS for those wanting to discuss this with the pro fraud folks would simply point out that MERS is a privately held company, US common law and local practice have always called for recording ownership and liens against property in a publicly available record so the local courthouse is the place to record all of those ownership changes required by securitization. Too bad most of the giant squid banks are not too well located in the hinterlands outside the major urban areas and sometimes they don't even cover themselves too well in the major urban areas. Alas, runners to the courthouse would have to be paid for their time and travel expenses. The giant squids have decided to conserve those funds to be passed up to the brain centers of the beast. This is not about convenience, it's obviously more about not wanting to spend the extra effort to maintain the mortgage because that is a cost. And then there's the issue of property law and common law and rule of law. Funny that.

here's the legal decision from the citation given above
Every state has adopted a recording act that governs the process of publically documenting
transfers of interests in land, including mortgages. The recording acts have two primary
objectives. “First and foremost, [they] are designed to protect purchasers who acquire interests in real property for a valuable consideration and without notice of prior interests from the enforcement of those claims.” Devine v. Town of Nantucket, 870 N.E.2d 591, 597 (Mass. 2007) (internal quotation marks omitted). As the Colorado Supreme Court has observed, “[r]ecording acts have been enacted in response to a need to provide protection for purchasers of real property against the risk of prior secret conveyances by the seller.” Brown v. Faatz, 197 P.3d 245, 252 (Colo. App. 2008) (quoting Page v. Fees-Krey, Inc., 617 P.2d 1188, 1192-93 (Colo. 1980)).
Second, “the recording acts create a public record from which prospective purchasers of interests in real property may ascertain the existence of prior claims that might affect their interests.” Devine, 870 N.E.2d at 597

yourmomaMarch 13th, 2012 at 8:53 pm

bottom line—the big fish eat small fish—you can cry about the details but these huge banks will end of with the properties–or 99% of them. You may be right, but it is hard to side with the deadbeat "owners" who are living for 3 years without making payments and crying about the banks. I work with several such people who good livings, and just want to stiff everyone and still keep the property—scum in my opinion.

AudreyApril 18th, 2012 at 11:47 pm

I came across this website and your article by coincidence, I am really impressed by it as I am going through something similar which I also consider that is called theft and fraud! One of my homeowner association managed to to foreclose me. I never stopped paying them, they stopped my payments and in turn made a 300$ bill into 6,000$ adding lawyer fees, late fees, title fees, ect. I never stopped paying my mortgage thinking that it was impossible for a home owners association to be able to do this so a couple of months ago I notified the bank. I wrote letters sent all my proof, they never got back to me. Today I find outon my own that I am no longer the owner and that the title of the property is now under the managements company's name. How did this happen? Why didn't anyone notify of this? When did this happen? Where do I go from here? I also feel that besides banks, home owner associations and courts are taking advantage of all this and are participating in property theft!

RyanDonovan89October 29th, 2012 at 9:14 pm

Most mortgage companies in ma have implemented this type of system since the rate of theft has been increasing over the past months. I seriously hope that this will make people change their mind when they plan on scamming their mortgages.

SimonstarJanuary 3rd, 2013 at 7:03 am

Such atrocious lawyers to exclaim that stealing homes of innocent people is a victimless crime! It is the same as saying that they do not really involve anyone at all. What about the homeowners whose houses were despicably snatched from them just so that the government can make more money out of future rental profits? Don't they deserve their rights too? Some lawyers uphold justice while others simply take advantage of their status for their personal gains. Very appalling indeed!

jsn737July 28th, 2014 at 3:34 am

we tried foreclosure defense with two different attorneys. seems like all they did was take our money as our mortgage balance kept increasing. Then a neighbor told us about http://loanmodificationillinois.com these guys actually got us a really good modification on our loan and helped get a principal reduction. I would rather bet on a sure thing than try a case with a big bank and their lawyers

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