Foreclosure Defense Florida

Foreclosure in Florida/MERS and the Shadow Mortgage/Foreclosure Market

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

5 Comments

  • Greg says:

    And it should be noted that the advent and deployment of MERS gave no corresponding benefit to its non-members: It fact it reduced the protection of the largest section of the public, the existing homeowners, new buyers and new lenders, stripping away their ability to examine and conduct a complete and meaningful public records search to assure themselves of the truth in property and mortgage loan ownership. In essence, A private company, MERS, run and owned by the big box lenders has privatized a huge portion of our public records in a most undemocratic fashion.

  • MERS, Mortgage Electronic Registration Systems

    “¢Basic Corporate Information

    “¢MERS is incorporated within the State of Delaware.
    “¢MERS was first incorporated in Delaware in 1999.
    “¢The total number of shares of common stock authorized by MERSʼ articles of incorporation is 1,000.
    “¢The total number of shares of MERS common stock actually issued is 1,000.
    “¢MERS is a wholly owned subsidiary of MERS Corp, Inc.
    “¢MERS principal place of business at 1595 Spring Hill Road, Suite 310, Vienna, Virginia 22182
    “¢MERS national data center is located in Plano, Texas.
    “¢MERS serves as a ” nominee” of mortgages and deeds of trust recorded in all fifty states.
    “¢Over 55 million loans have been registered on the MERS system.
    “¢MERS federal tax identification number is ” 541927784″³.

    “¢The Nature of MERSʼ Business

    “¢MERS does not take applications for, underwrite or negotiate mortgage loans.
    “¢MERS does not make or originate mortgage loans to consumers.
    “¢MERS does not extend any credit to consumers.
    “¢MERS has no role in the origination or original funding of the mortgages or deeds of trust for which it serves as ” nominee”.
    “¢MERS does not service mortgage loans.
    “¢MERS does not sell mortgage loans.
    “¢MERS is not an investor who acquires mortgage loans on the secondary market.
    “¢MERS does not ever receive or process mortgage applications.
    “¢MERS is simply named as a nominee and its parent company MERS Corp Inc., maintains an electronic registry, tracks changes in the ownership of mortgage loans and servicing rights related thereto.
    “¢MERS © System is not a vehicle for creating or transferring beneficial interests in mortgage loans.
    “¢MERS is not named as a beneficiary of the alleged promissory note.

    “¢Ownership of Promissory Notes or Mortgage Indebtedness

    “¢MERS is never the owner of the promissory note for which it seeks foreclosure.
    “¢MERS has no legal or beneficial interest in the promissory note underlying the security instrument for which it serves as ” nominee”.
    “¢MERS has no legal or beneficial interest in the loan instrument underlying the security instrument for which it serves as ” nominee”
    “¢MERS has no legal or beneficial interest in the mortgage indebtedness underlying the security instrument for which it serves as ” nominee”.
    “¢MERS has no interest at all in the promissory note evidencing the mortgage indebtedness.
    “¢MERS is not a party to the alleged mortgage indebtedness underlying the security instrument for which it serves as ” nominee”.
    “¢MERS has no financial or other interest in whether or not a mortgage loan is repaid.
    “¢MERS is not the owner of the promissory note secured by the mortgage and has no rights to the payments made by the debtor on such promissory note.
    “¢MERS does not make or acquire promissory notes or debt instruments of any nature and therefore cannot be said to be acquiring mortgage loans.
    “¢MERS has no interest in the notes secured by mortgages or the mortgage servicing rights related thereto.
    “¢MERS does not acquire any interest (legal or beneficial) in the loan instrument (i.e., the promissory note or other debt instrument).
    “¢MERS has no rights whatsoever to any payments made on account of such mortgage loans, to any servicing rights related to such mortgage loans, or to any mortgaged properties securing such mortgage loans. The note owner appoints MERS to be its agent to only hold the mortgage lien interest, not to hold any interest in the note.
    “¢MERS does not hold any interest (legal or beneficial) in the promissory notes that are secured by such mortgages or in any servicing rights associated with the mortgage loan.
    “¢The debtor on the note owes no obligation to MERS and does not pay MERS on the note.

    “¢MERSʼ Accounting of Mortgage Indebtedness / MERS Not At Risk

    “¢MERS is not entitled to receive any of the payments associated with the alleged mortgage indebtedness.
    “¢MERS is not entitled to receive any of the interest revenue associated with mortgage indebtedness for which it serves as ” nominee”.
    “¢Interest revenue related to the mortgage indebtedness for which MERS serves as ” nominee” is never reflected within MERS bookkeeping or accounting records nor does such interest influence MERS earnings.
    “¢Mortgage indebtedness for which MERS serves as the serves as ” nominee” is not reflected as an asset on MERS financial statements.
    “¢Failure to collect the outstanding balance of a mortgage loan will not result in an accounting loss by MERS.
    “¢When a foreclosure is completed, MERS never actually retains or enjoys the use of any of the proceeds from a sale of the foreclosed property, but rather would remit such proceeds to the true party at interest.
    “¢MERS is not actually at risk as to the payment or nonpayment of the mortgages or deeds of trust for which it serves as ” nominee”.
    “¢MERS has no pecuniary interest in the promissory notes or the mortgage indebtedness for which it serves as ” nominee”.
    “¢MERS is not personally aggrieved by any alleged default of a promissory note for which it serves as ” nominee”.
    “¢There exists no real controversy between MERS and any mortgagor alleged to be in default.
    “¢MERS has never suffered any injury by arising out of any alleged default of a promissory note for which it serves as ” nominee”.

    “¢MERSʼ Interest in the Mortgage Security Instrument

    “¢MERS is named on the mortgage as nominee for the owner of the promissory note.
    “¢MERS, in a nominee capacity for lenders, claims that it merely acquires legal title to the security instrument (i.e., the deed of trust or mortgage that secures the loan).
    “¢MERS claims that it holds legal title to mortgages and deeds of trust as a nominee for the owner of the promissory note.
    “¢MERS claims that it immobilizes the mortgage lien while transfers of the promissory notes and servicing rights continue to occur.
    “¢The lender or investor continues to own and hold the promissory note, but under the MERS ® System, the servicing entity only holds contractual servicing rights and MERS holds legal title to the mortgage as nominee for the benefit of the investor (or owner and holder of the note) and not for itself.
    “¢MERS claims that one of the advantages of its paperless systems is that the mortgage lien becomes immobilized by MERS continuing to hold the mortgage lien when the note is sold from one investor to another via an endorsement and delivery of the note or the transfer of servicing rights from one MERS member to another MERS member via a purchase and sale agreement which is a non-recordable contract right.
    “¢MERS claims that the legal title to the mortgage or deed of trust remains in MERS after such transfers and is tracked by MERS in its electronic registry.

    “¢Beneficial Interest in the Mortgage Indebtedness

    “¢MERS claims to hold legal title to the mortgage for the benefit of the owner of the note.
    “¢The beneficial interest in the mortgage (or person or entity whose interest is secured by the mortgage) runs to the owner and holder of the promissory note and/or servicing rights thereunder.
    “¢MERS has no interest at all in the promissory note evidencing the mortgage loan.
    “¢MERS does not acquire an interest in promissory notes or debt instruments of any nature.
    “¢The beneficial interest in the mortgage (or the person or entity whose interest is secured by the mortgage) runs to the owner and holder of the promissory note (NOT MERS).

    “¢MERS As Holder

    “¢ MERS is never the holder of a promissory note in the ordinary course of business.
    “¢MERS is not a custodian of promissory notes underlying the security instrument for which it serves as ” nominee”.
    “¢MERS does not even maintain copies of promissory notes underlying the security instrument for which it serves as ” nominee”.
    “¢Sometimes when an investor or servicer desires to foreclose, the servicer obtains the promissory note from the custodian holding the note on behalf of the mortgage investor and places that note in the hands of a servicer employee who has been ” appointed” as an officer (vice president and assistant secretary) of MERS by corporate resolution. This technique is used by attorneys who purport to be representing MERS to feign standing by MERS to foreclose the mortgage by claiming that MERS is the holder of the promissory note. When in fact MERS, by its inventors design is never the holder of the promissory note.
    “¢When a promissory note is placed in the hands of a servicer employee that employee will then assume the position as a MERS officer de jour and pretend that this transfer of custody of the note into the hands of this nominal officer (without any transfer of ownership or beneficial interest) renders MERS the holder.
    “¢No consideration or compensation is exchanged between the owner of the promissory note and MERS in consideration of this transfer in custody. MERS is a bankruptcy remote corporation, and does not have any assets.
    “¢Even when the promissory note is physically placed in the hands of the servicers employee who is, at best, a nominal MERS officer, MERS has no actual authority to control the foreclosure or the legal actions undertaken in its name.
    “¢MERS will never willingly reveal the identity of the owner of the promissory note unless ordered to do so by the court. Nor will the law firms who pretend to represent MERS.
    “¢MERS will never willingly reveal the identity of the prior holders of the promissory note unless ordered to do so by the court. Nor will the law firms who pretend to represent MERS.
    “¢Since the transfer in custody of the promissory note is not for consideration, this transfer of custody is not reflected in any contemporaneous accounting records. MERS does not hold any loans nor pay any legal fees to foreclose any loans. MERS is essentially a shell.
    “¢MERS is never a holder in due course when the transfer of custody occurs after default.
    “¢MERS is never the holder when the promissory note is shown to be lost or stolen.
    “¢So-called ” certifying officers” of MERS have submitted thousands if not tens of
    “¢thousands of affidavits in Court proceedings falsely claiming that MERS was the holder of the promissory note or that the note had been lost.
    “¢An increasing number of courts have learned of the fast and loose practice of various foreclosure attorneys preparing and the submitting affidavits signed by ” certifying officers” of MERS wherein the statements contained in these affidavits are ” disingenuous and/or outright misrepresentations”
    “¢Courts which have actually scrutinized the statements contained in these certifying officers affidavits have determined that these affidavit statements were not admissible because they were signed by people who had no personal knowledge of the facts
    “¢contained in the affidavits. They were therefore not competent to testify to the alleged facts.
    “¢The Hon. Linda B. Riegle, U.S. Bankrutpcy Judge, recently took issue with several affidavits that had been filed in support of several Motions for Relief from Stay by attorneys purporting to represent MERS. Judge Riegle refused to accept the affidavits of people claiming to be ” Certifying Officers of MERS” which were submitted by attorneys purporting to represent MERS in an attempt to feign standing by pretending to be a holder of notes. Hawkins 2009 WL 901766 (Bkrtcy-D.Nev. March 31, 2009) The Court found that the affiants were not competent to testify concerning the underlying loans. ” Ms. Mechs bald assertion that she has ” reviewed the loan file” is inadequate to show that she is personally knowledgeable of the facts”.
    “¢Similarly the Hon. Terry L. Meyers, U.S. Chief Bankruptcy Judge, recently rejected a post hearing submission of an affidavit sign by a lawyer purporting to represent MERS in motion to lift stay. Judge Meyers enumerated six (6) reasons that he was rejecting the affidavit which had been submitted in a last ditch attempt by legal counsel purporting to represent MERS to establish standing for MERS by claiming MERS was the holder of the underlying promissory note. Judge Meyers found the affidavit statements by counsel claiming to represent MERS was inadmissible because the lawyer as a witness was not competent to testify regarding various documents and a note the lawyers sworn statements ” appeared to be based nit on the affiants (counsel) personal knowledge button the assertions of someone else . . . . the proffer of this ” new” note as the ” original” note directly contradicts MERSʼ prior representations that the Note attached to the Motion was true and correct and the operatice document in this matter”

    “¢MERSʼ Role in Mortgage Servicing

    “¢MERS does not service mortgage loans.
    “¢MERS is not the owner of the servicing rights relating to the mortgage loan and MERS does not service loans.
    “¢MERS does not collect mortgage payments.
    “¢MERS does not hold escrows for taxes and insurance.
    “¢MERS does not provide pr perform any servicing functions on mortgage loans, whatsoever.
    “¢Those rights are typically held by the servicer of the loan, who may or may not also be the holder of the note.

    “¢MERSʼ Rights To Control the Foreclosure

    “¢MERS Corp. must all times comply with the instructions of the holder of the mortgage loan promissory notes.
    “¢MERS Corp. only acts when directed to by its members and for the sole benefit of the owners and holders of the promissory notes secured by the mortgage instruments naming MERS as nominee owner.
    “¢MERS Corp. members employ and pay the attorneys bringing foreclosure actions in MERS name.

    “¢MERS Access To or Control Over Records or Documents

    “¢MERS has never maintained archival copies of any mortgage application for which it serves as ” nominee”.
    “¢In its regular course of business, MERS as a corporation does not maintain physical possession or custody of promissory notes, deeds of trust or other mortgage security instruments on behalf of its principals.
    “¢MERS as a corporation has no archive or repository of the promissory notes secured by deeds of trust or other mortgage security instruments for which it serves as nominee.
    “¢MERS as a corporation is not a custodian of the promissory notes secured by deeds of trust or other mortgage security instruments for which it serves as nominee.
    “¢MERS as a corporation has no archive or repository of the deeds of trust or other mortgage security instruments for which it serves as nominee.
    “¢In its regular course of business, MERS as a corporation does not routinely receive or archive copies of the promissory notes secured by the mortgage security instruments for which it serves as nominee.
    “¢In its regular course of business, MERS as a corporation does not routinely receive or archive copies of the mortgage security instruments for which it serves as nominee.
    “¢Copies of the instruments attached to MERS petitions or complaints do not come from

    “¢MERS corporate files or archives.

    “¢In its regular course of business, MERS as a corporation does not input the promissory note or mortgage security instrument ownership registration data for new mortgages for which it serves as nominee, but rather the registration information for such mortgages are entered by the ” member” mortgage lenders, investors and/or servicers originating, purchasing, and/or selling such mortgages or mortgage servicing rights.
    “¢MERS does not maintain a central corporate archive of demands, notices, claims, appointments, releases, assignments, or other files, documents and/or communications relating to collections efforts undertaken by MERS officers appointed by corporate resolution and acting under its authority.

    “¢Management and Supervision

    “¢In preparing affidavits and certifications, nominal officers of MERS, including Vice Presidents and Assistant Secretaries, making representations under MERS authority and on MERS behalf, are not primarily relying upon books of account, documents, records or files within MERS corporate supervision, custody or control.
    “¢Officers of MERS preparing affidavits and certifications, including Vice Presidents and Assistant Secretaries, and otherwise making representations under MERS authority and on MERS behalf, as a matter of routine do not furnish copies of these affidavits or certifications to MERS for corporate retention or archival.
    “¢Officers of MERS preparing affidavits and certifications, including Vice Presidents and Assistant Secretaries, and otherwise making representations under MERS authority and on MERS behalf are not working under the supervision or direction of senior MERS officers or employees, but rather are supervised by personnel employed by mortgage investors or mortgage servicers.

    Doing my part,

    4closureFraud
    https://4closurefraud.wordpress.com/

    • admin says:

      Holy smokes, assuming all that it is true, that is a huge information collection effort. I appreciate your post and will back link to your site for exposure, etc. Please feel free to back link to me and stay in touch.

    • admin says:

      Really like your blog and sharing information back and forth. Do you have cites for the information above of is it just based on accumulated data?

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