Property Ownership and Mortgage Interests From the Beginning of Recorded Time
If you’re facing foreclosure in Florida, you owe it to yourself to understand thousands of years of property law from around the world. You see, for hundreds of years in this country and quite literally for thousands of years throughout Europe, it was very simple to determine who owned a piece of property and what person or company held a mortgage or other interest in the property. One need only go to the county courthouse or feudal lord’s castle in the area where a property was located and every detail regarding that property from the beginning of recorded history until current time was available for inspection. If a property changed hands or a mortgage were given or taken on a piece of property the document reflecting that transfer was recorded with the property recorder. This simple and effective system protected purchasers of the property and anyone who would try to claim an interest in the property”¦such as mortgage lenders. Quite simply, if an interest in the property was not recorded in the one singular place where the property law of the area dictated the interest be recorded, that interest did not exist. This system that worked so well for hundreds of years was scrapped in recent years as part of an effort to evade payment of taxes and to facilitate the development of a shadow financial system called MERS, the Mortgage Electronic Registration System.
It Ain’t Broke, But MERS Will Fix It
Mortgages have always been bought and sold between the original lender who funded the loan and subsequent purchasers who paid off the first lender then became legally entitled to collect that debt from the borrower. When this purchase occurred, an Assignment of Mortgage was executed by the originating lender and recorded in the county alerting anyone who cared to look. That assignment told the world, ” Hey, XYZ Corporation doesn’t own this mortgage anymore, we’ve sold it to ABC Corporation go find them if you want information about this mortgage”. That formal Assignment of Mortgage kept things very clear for all parties involved in real estate ownership or transfers because all ownership and interest in property were all recorded in a place where all interested parties knew they were obliged to look.
MERS a Billion Dollar Dark Horse
MERS was created to allow billions of dollars in assets to be shifted from one entity to another with no regulation and no oversight. A secondary function of MERS was to allow these companies to evade paying taxes on the recording of documents- a function that has deprived local governments across the country of millions of dollars in tax revenue. The costs, both in lost tax revenue, and costs associated with the deficiencies in this new system are enormous. In the period beginning in 1999 and ending in March of 2008, Mortgage Electronic Registration Systems Inc., a/k/a/ MERS, has been named as a “mortgagee” on over fifty million mortgages. Yet MERS has never originated a single mortgage loan nor loaned a dime to a single borrower.
Lost Note, No Note = No Foreclosure
In reality MERS is really nothing more than a shell or a front corporation created by many of this country’s largest lenders as part of an effort to facilitate the quiet and hidden exchange of billions of dollars of assets into trusts in exchange for trillions of dollars of investor money. As this system has now collapsed, it is clear that it was a massive disaster and a failure of financial and legal policy to allow this unregulated system to spin so wildly out of control. A fundamental problem presented as we pick through the carcass of the American mortgage and financing system is this hidden or shadow system makes it virtually impossible to determine who or what company or interests are legally entitled to collect and enforce the mortgages recorded against mortgage of properties across America. One big problem was that the promissory notes were never actually delivered to the trustees of these trusts. Therefore these trusts have no evidence of ownership of the debts they purportedly purchased. Akin to purchasing a home without being given a deed, many of the Plaintiffs that seek to foreclose on properties in courts across the country lack the legal basis to file the claim and make the demands for payments they are currently making on homeowners. While it is nearly always clear that there is a mortgage properly recorded against a property and that the homeowner borrowed the money from some corporation”¦it is often totally unclear whether the Plaintiff who claims ownership or entitlement to enforce the debt really has this authority. To make matters worse many of the debts evidenced by these undelivered promissory notes were supposed to be secured by mortgage liens. However in place of mortgages being executed in favor of the original lender many of these mortgages were executed in favor of MERS. Because MERS never holds these notes or owns a debt it is not a creditor and some courts are finding that MERs cannot enforce these mortgages…..the consequences are potentially staggering……..
Stay tuned for Part II- Lost Notes and The Inability to Foreclose