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Foreclosure Defense Florida

The Anti-MERS Mortgage Manifesto

Greg Clark is a brilliant Clearwater, Florida attorney who has been a practicing title attorney for 30 years.   For hundreds of years, a title attorney’s job was to examine all of the records that related to a property and then issue an attorney’s opinion of title or title insurance policy confirming that if his client purchased the property or lent money against the property, they were doing so free of any claims by another other person or party who might claim an interest in the property.   I say that the job “used to be” because after the development of the Mortgage Electronic Registration System or MERS, no attorney can tell you what other party might claim an interest in the property because that information is locked away deep inside a private company…MERS.   A mortgage is recorded in the county public records, but who owns it and who may have any rights to that mortgage is a closely held secret.

Kessler, Azize, New Millennial, BAC Funding The Cases That Crack MERS

A good example of what goes wrong in the secret system is a case called JP Morgan v. New Millennial, a Pinellas County case that was decided correctly by Judge Douglas Baird, who was unfortunately reversed by the Second District Court of Appeal.   I’m going to write a full post on this case later, but it is an important case to know and understand so I post the entire case here. Support for Greg’s important argument is found in a Kansas Supreme Court case, Kessler v. Landmark, which is found here.   A fascinating thing about the Kessler opinion out of way far away Kansas is that it cites another Pinellas County Case, Azize v. MERS, found here.   Now here’s what’s fascinating about the Azize opinion.   MERS “won” that case…the Second DCA found that they could proceed with the foreclosure cases they had filed, but even though they “won” the case, neither MERS nor lenders cite that case or want courts to pay attention to that case.   The reason why is found in footnote number 2:

Although the complaint does not allege how or why MERS came to be the   owner and holder of the note, the trial court’s dismissal wasnot based on this deficit.Since the trial court did not base its ruling on this issue,we offer no opinion as to whether the complaint fails to
properly plead a cause of action without this information being alleged

By now everyone’s read the BAC Funding case, so I won’t waste time with the opinion, what I will share is the appellate brief that most people haven’t read.   The brief answers many of the questions that are not adequately explained in the Order, and the brief is the important, “secret” information…the “secret” brief can be found here.   This brief should be provided to every judge who hears foreclosure cases to help them apply the BAC opinion to cases in their courtroom that match the facts described in the BAC brief.

What do we know about secrets when they relate to public policy? What place do secrets have in our of public court systems?

Secrets are bad news in almost every context, but they’re especially bad when it comes to matters of public policy and our court systems.   So anyway, Greg Clark makes a brilliant argument that the MERS system is a total violation of real property laws that have existed for literally hundreds of years and that the consequences of this system that violates the law are going to be catastrophic.   Greg posted a comment to my recent questions about the MERS system….I struggled with his argument at first, but as he explains below, the problem is not all that complex and the fundamental violations of law are pretty clear:

Let me give you the short answer to your question of ” why the MERS assignments”, if Johns Gillian and its progeny applies: IT DOESN’T and the higher ups, who didn’t want to spend $10.50 (to our clerks of court) to do just one extra assignment, know it.

You see, the original introduction of MERS was post closing, that is, the note and mortgage were, at inception, put into the name of the original lender so you had compliance with the rule of common law, of unity of title of the note and mortgage into one holder. It was after that that the unenforceable attempt at splitting the note from the mortgage, by assignment, occurred, which assignment Florida law holds as a nullity (see Vance, Sobel, etc.).

So the assignment being invalid simply means that you go back ” revert’ to the original transaction which was clean and unified in one holder, thus John/Gillian would have applied.

But now it doesn’t because of that extra $10.50 the lenders and mers wanted to pocket. Almost immediately after they started the post closing assignments lenders saw that $10.50 expense and decided to instead split the note and mortgage at the closing, AT INCEPTION, and, in essence, keep the money for themselves (ah, multiplied by 50 or 60 million loans that works out to 5 or 6 billion dollars if my math is right). Problem is that Florida law, which follows the common law of almost every state in the union states that bifurcation of the mortgage from the note renders the mortgage unenforceable, a nullity, was ignored.

This basic principal against note/mortgage splitting was reiterated in the U.S. Supreme court in the Carpenter case a long time ago, even before Johns/Gillian.   To date their exists no statutory or case law abrogating this fundamental concept of property law, which we inherited from English common law, unmodified.

MERS and the foreclosing lender proxies simply hoped (and still hope) they can moonwalk away from the scene of this title failure with these invalid assignments hoping no one notices the fact that an assignment can rise no higher in dignity that the failure of title upon which it is based.

Whats more, even poetic, is that the ” MERS mortgage” (even if the court wants to ignore this fundamental failure of title at inception) contains no right, in the grant of the mortgage, allowing MERS to assign its duties as NOMINEE or to transfer or otherwise assign the mortgage.

They have painted themselves into a legal corner.

I’ve been practicing dirt law for some 30 years, writing title, crafting grant language, and chaining ownership, etc. and I understand that most if not all judges were former litigators who simply have no knowledge beyond their law school years in this subcategory of transactional practice and procedure, other than rubber stamping SJs presuming the plaintiffs bar will not lead them into error. (see and read the recent BAC Funding case out of our 2d DCA)

Its the same reason most people sit down and sign closing papers without thinking or reading them: because we have (or had) a solid and fair system or real property law in place for nearly a thousand years behind it each and every one of those deals.

It is now in great doubt whether it is fair or solid or even legal, with the disabling injection of the MERS mortgage and invisible lender lien holder now clouding our record titles.

Anyhow, what mystifies me most is why they took such a big chance. You would have thought that they would have at least tried to adopt nationwide recording/title law changes to allow the MERS mortgage splitting concept. I mean, they undertook the UCC article 9 changes which passed the 50 states to allow the securitization of debt, but they forgot to include the MERS configuration into the changes. They just assumed the real estate mortgage would simply tag along like a caboose into article nine. They rolled the bones that they could circumvent each states legislature and do a private deal with MERS. They likely feared the states would object to the degradation of their record title statutes and the evisceration of their public recording systems, not to mention the loss of recording fee revenue.

MERS, by the way is a privately owned company funded and financed by the big box lenders and, guess who else? The major title insurance companies and ALTA (American Land Title Association). This conflict of interest relationship does not allow for the independent accounting or transparency the public should have when it comes to the biggest investment of our lives. A guy like me who wants to investigate title to make sure my client gets a clean and clear deed or new mortgage can’t determine by relying on the public title records who owns the old mortgage loan that needs to be paid off. We simply run into the MERS strawman and have to hope they give us true and accurate info ““ if they give us any info at all ““ as to who to payoff to free title.

MERS is not a government agency looking out for the interests of the public. MERS is a profit driven closely held corporation. They openly seek to privatize all of our public records as they relate to real estate mortgages. Absolute power through control of information.

Absolute power, vested in the hands of private corporate interests.

Hardly egalitarian in a free democracy and open economy.

And this is why note/mortgage splitting, something that is already in derogation of our common law, should not be allowed.

Its just bad business.





  • Thanks for posting this. It’s an interesting argument. I’m curious to see how some of these novel arguments will effect the dynamics of my foreclosure mediations over the next several months.

    • Why would any defense attorney to any mediocre settlement in view of BAC Funding….go through discovery and if they cannot produce all the docs (and admissable evidence to show how the got the docs), No sum judge so go pound sand.

    • Greg Clark says:


      Thanks for reading the MERS article. I just sent an email to professor Peterson regarding his planned update to his 2008 article on MERS, and hope to hear back from him soon.

      I can’t even guess how this would affect mediation except to say that I would be motivated as a MERS mortgage lender to work a deal as fast as possible and keep this argument from seeing the light of day.

      My argument against the ethicacy of the MERS mortgage is founded on basic, longstanding principals of coveyancing law, agency law and mortgage law. Clearly, one person cannot sign a piece of paper and create an agency between two other non signing parties. Only the debtor signed the mortgage.

      Like the line of Florida cases that hold that any attempt to separate a mortgage from the note renders the mortgage a nullity in the hands of the transferee, separation at inception, from the very beginning, has the same effect: it renders the mortgage a nullity.

      Had the lender/note holder countersigned the mortgage at closing (as if a power of attorney) and had MERS interest, as putative holder of the mortgage, been clearly defined as “Agent with full authority and power to act in all matters as attorney in fact for lender” then at least one could argue that no real separation occured since an agent with full power is nothing more than an extention of his principal, the arm of the master.

      But MERS serves under grant from the Debtor, at the debtor’s behest. You see in this sense the debtor is the principal having appointed MERS to act as ambassador “nominee”. What’s more, the debtor only gave a limited role to MERS as mortgagee, as holder of the mortgage – which did not include the power to assign. All in all though it looks to me that they really messed up this mortgage and it fails as a meaningful and logical conveyance.

  • R. Burch says:

    I have read your article and many others concerning Mers “split the note”. Many of the court cases rule in favor of Mers due to the Mers membership agreement rules. Based upon this agreement the note and mortgage are not split when the original lender sells the note (only). However if a bankruptcy takes place the min number is automatically deactivated and by definition, a mers mortgage cannot exist without a min number and mers must be removed as mortgagee of record.However, mers is not always removed. What effect if any does this fact have on the “split the note theory”?

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