Mortgage Servicing Fraud
occurs post loan origination when mortgage servicers use false statements and book-keeping entries, fabricated assignments, forged signatures and utter counterfeit intangible Notes to take a homeowner's property and equity.
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William

I always see stuff where people question if a person has the authority to assign a mortgage as an officer of MERS.  In recent depositions both the CEO and VP state MERS has no employees.  Just signing officers appointed by corporate resolution.  Is there a legal argument there?  MERS is granting a person the authority to sign on their behalf.  What is the real problem?

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William A. Roper, Jr.
William:

There are actually a variety of legal problems.  Some of the very most acute of these problems are presented where MERS purports to act as the nominee of a defunct or extinct entity.  Basic agency law going back several hundred years shows us that an agent (nominee) can only perform those acts which are possible or authorized to a principal.

It is axiomatic that a principal cannot execute instruments after the death of the principal.  The principal cannot act after his or her own death.  A power of attorney therefore confers no authority after death.

Instead, the power to act on behalf of an estate passes to an executor or court appointed administrator to act on behalf of an estate.  A person purporting to act under a power of attorney after the death of a principal is merely pretending to authority.

Things are not much different in respect of corporations, though there are a couple of different levels of misrepresentation in respect of defunct corporations.

First, in many instances, the insolvent corporations originating these mortgages have been in a court supervised receivorship.  In a bankruptcy setting, management of a corporation's affairs is usually vested in a court appointed and supervised trustee.  And most dispositions of corporate assets would require court approval, if not a blanket court vesting authority in a trustee to act in certain matters without returning to the court for new permission.

In many instances, mortgage servicers have forged MERS assignments on the basis on long invalid powers of attorney purporting to act on behalf of the Lender in receivorship.  Very often, following receivorship, the Lender corporation is dissolved and its corporate charter is surrendered.

This is the corporate equivalent of death.  After the corporate charter is surrendered, the corporation is a nullity.  Even this does not give MERS "corporate officers" any pause in executing assignment forgeries. 

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I would recommend to you today's excellent Reuters article by Scot J. PALTROW:

"Special report: Legal woes mount for a foreclosure kingpin" (Reuters, Mon Dec 6, 2010 2:10pm EST)
http://www.reuters.com/article/idUSTRE6B547N20101206

 

"Lender Processing Services, Foreclosure Giant, Faces Growing Legal Trouble" (Huffington Post, First Posted: 12- 6-10 02:03 PM)

http://www.huffingtonpost.com//2010/12/06/lender-processing-services-legal-woes_n_792663.html


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I have posted some comments to the latter version.

* * *

I will post some additional critical comments about MERS' authority later.
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William

So what happens to a mortgage that is in the name of a lender in bankruptcy?  MERS I'm sure is going to say the note was transfered.  Maybe it was, maybe it wasn't.  Can the mortgage be transfered without permission from the bankruptcy trustee/court even if the note was transfered because it is still in the bankrupt company's name?

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William A. Roper, Jr.
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William said
MERS I'm sure is going to say the note was transfered.


William: 

You fundamentally misunderstand the MERS business model.  MERS HAS NO KNOWLEDGE OR CORPORATE INFORMATION AS TO THE LOCATION OR DISPOSITION OF THE PROMISSORY NOTE.

MERS does NOT itself track the ownership or holdership of the note.  Note that MERS has NO EMPLOYEES.  There is NO ONE at MERS that is entering ANY data into the system.  ALL OF THE DATA IS ENTERED INTO THE MERS REGISTRY SYSTEM BY MERS MEMBERS AND ITS RELIABILITY IS ONLY AS GOOD AS THE DATA ENTRY AND/OR INFORMATION UNDERLYING THE DATA ENTRY.

So if MERS' registry SAYS that a particular entity owns or holds a promissory note, it is because an MERS member has entered data into the computer making such an assertion.

MERS' Rules expressly provide that the registry system is NOT a means of transferring interests in mortgages, but rather simply a means of registering and memorializing the transfers which are separately done.

Notwithstanding, MERS and the servicer will ALWAYS UNLAWFULLY RESIST discovery which would reveal what information DOES appear within MERS' records.

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William said
Can the mortgage be transfered without permission from the bankruptcy trustee/court even if the note was transfered because it is still in the bankrupt company's name?


No.

But you are also missing something else.  These assignments are merely forgeries which were created solely for use as false evidence in foreclosure cases or to support false non-judicial foreclosures.

The issue of the authority of the person executing the purported instrument is actually a red herring.

This is kind of like arguing about whether forger A or forger B was the correct forger to print off counterfeit bank notes.  Neither of these criminals EVER has authority to create a statutory forgery or a false business record.
 
While one could have a valid argument about which of the forgers bears criminal responsibility, the identity of the forger and whether he was authorized by someone to illegally counterfeit money is immaterial to the fact that the counterfeits are legal nullities having no value whatsoever.
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William

I really appreciat the help.  I do see now I did misunderstand the MERS model.  What should I read that will help me understand better?  I have the Terms and Conditions from Mers' website.  What are the important docs from MERS I should get fimiliar with and where can I download them? 

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I know in the courts where my case is being held, there has been numerous summary judgement affirmations from a foreclosure mill that states...

 "said assignment was prepared and executed prior to the commencement of this action and the fact that it was recorded subsequently is irrelevant.  In fact the assignment need not be in writing at all.  While a written assignment of a mortgage is evidence of ownership of that mortgage, case law holds that a mortgage can be transfered by delivery, without A WRITTEN ASSIGNMENT."
They then go on and state numerous cases where this holds.....

I would like to know what is the responce, they are in essence saying, that even if we profered a forged instrument to the court it doesnt matter because the mortgage follows the note. 

And the judges here are allowing these SOB to get away with it.  As long as there is a copy of the note, they are claiming that this all the evidence that they need to prove transfer.

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William A. Roper, Jr.
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William said
What are the important docs from MERS I should get fimiliar with and where can I download them?


Besides the MERS Terms and Conditions, also be sure to read the MERS Rules of Membership.

MERS Terms and Conditions (2008)

http://www.scribd.com/doc/44807159/MERS-Terms-and-Conditions-2008

 

MERS Rules of Membership (June 2009)

http://www.scribd.com/doc/44806946/MERS-Rules-of-Membership-June-2009


These give a pretty good basic background of the business arrangement between MERS and its members.

But the single most important document is unquestionably:

 

MERS Appellant's Brief in MERS v. Nebraska Dept. of Banking and Commerce

http://www.scribd.com/doc/44806946/MERS-Rules-of-Membership-June-2009

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William A. Roper, Jr.
Angelo:

The KEY to defeating the mortgage investors and their foreclosure mill law firms is good discovery.

The argument that no assignment is necessary is potent and legally valid in pretty much every jursidiction except Ohio.

What you need to bear in mind is that the argument presupposes that the plaintiff can PROVE indorsement and delivery of the promissory note.  The forgery of the assignment is usually undertaken by the plaintiff to prove ownership.  Then, if you show the assignment to be a forgery, the argument shifts and the plaintiff says in essence, "Never mind".  They tell the Court to disregard the forged assignment and to focus on the promissory note.

And they argue that even if the assignment was forged, that it was only a little paperwork error and that it is immaterial.

You need to use discovery to TIE DOWN the plaintiff's arguments and to both discover the true facts of the case AND to give the plaintiff an oppotunity to answer other questions falsely under oath.

It is one thing to point to the forgery when you have conducted NO DISCOVERY.  It is yet another to point to the forgery and also be prepared to show that the plaintiff engaged in other serious misconduct within its discovery responses.

Take a look at some of my suggested discovery questions within the context of the question you pose.  Think about where you might be if you had ANSWERS to some of these questions when you are able to prove the assignment to be a forgery.

Also, review my suggestions relating to OBJECTIONS to evidence based upon hearsay and the Best Evidence rule.

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William

I have found in discovery and interrogatories and discovery requests to the plaintiff regarding transfer, sale and wires that typical lawyer response is the same......

"Objection, vague, ambiguous, overbroad, unduly burdensome, not reasonably calculated to lead to admissible evidence."

One after the other the same response.

They are stonewalling......I just keep asking to them to compel with no response.


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william
Don't they have to give specific reasons to deny discovery requests?  Is a general generic "no" response like posted above to stonewall a violation of my due process?  If they say it's over burdensome because I want 3000 pages on request for production #1 maybe they are right and I need to state why I need them, take them in an electronic format, or narrow it down. 

Are these guys successful just stating generically we aren't going to give you anything?
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William

Also how do you claim to own the note and refuse to give the history of transactions that prove you are the owner? 

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Mr William A. Roper, Jr.  ---  do you have a link to the:

MERS Appellant's Brief in MERS v. Nebraska Dept. of Banking and Commerce  ??

 

 

Thank you in advance ---- TNL

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The single most important piece of evidence to get admitted into the record in any foreclosure which involves MERS is the MERS Appellant’s Beief in MERS v. Nebraska Dept. of Banking and Finance., No. S-04-786. , SUPREME COURT OF NEBRASKA, 270 Neb. 529; 704 N.W.2d 784; 2005 Neb. LEXIS 177, October 21, 2005, Filed:

http://www.scribd.com/full/40664635?access_key=key-p098ahy8qx133ekhjq9

It eviscerates ANY argument that MERS ever had any economic interest in the promissory note and shows the assignment purporting to convey the note from MERS to a plaintiff to be a bald forgery.

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William A. Roper, Jr.
Apologies.  I see that I erroneously repeated the link to the MERS Rules of Membership above rather than giving the correct link to the MERS Appellant's Brief:

MERS Appellant's Brief in MERS v. Nebraska Dept. of Banking and Commerce

http://www.scribd.com/doc/40664635/MERS-Appellants-Brief-MERS-v-Nebraska-Dept-of-Banking-Filed-15-Oct-2004

 

 

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William

How do you authenticate the MERS's Nebraska brief to get it admitted into evidence? 

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William:

You ask some EXCELLENT questions, my friend!  This same question could also be applied to the MERS Terms and Conditions and the MERSCorp Rules of Membership.

The answer to this quesiton is going to depend upon the law, particularly the Rules of Civil Procedure, of your jurisdiction.  Moreover, the answer may also somewhat vary depending upon the stage of your foreclosure litigation.

In most places, authentication is accomplished by (a) a supporting affidavit, (b) an interrogatory response, (c) a response to a request for admission, (d) a response to a production request, (e) a response to a deposition or deposition on written questions, and/or (f) a stipulation.

Methods (b) through (e) involve discovery.  Unfortunately, mortgage plaintiffs routinely engage in discovery abuse and cannot be relied upon to respond to discovery requests as the law requires.  But you probably need to at least TRY.

*

A particular problem exists with the MERS Appellant's Brief because the Clerk of the Nebraska Supreme Court does not routinely certify documents.  That is, you can write to the Clerk of the Supreme Court and obtain a copy of the Brief directly from the Clerk, which I would encourage you to do.  But this will NOT be a certified copy.

The Clerk is (or was) otherwise VERY HELPFUL.  The Clerk offered to send me a copy of the brief by oral request, simply enclosing an invoice.  The cost of copies was then minimal.  The Clerk sent me the copy the same date I orally requested it (the Clerk was adament that no written request was necessary).

Notwithstanding the friendliness and convenience of the Clerk, I would encourage you to request the copy by written letter, if time is available.  Within the letter, expressly ASK FOR a certified copy of the Brief.  Keep a copy of the letter.  Consider having some OTHER extremely reliable and responsible non-party to the suit make the request on your behalf.  This gets you an affidavit from a third party disinterested witness.

Hopefully, you will receive a written letter in response from the Clerk including an explanation that the Clerk doens't certify copies.  You should also have the mailing envelope from the Clerk.  Have the person making the request sign a proper, admissible affidavit certifying that the copy of the Brief was that received directly from the Clerk of the Nebraska Supreme Court, including the requesting letter, the response letter (if any), the invoice and the mailing envelope as additional supporting exhibits.  Have the affidavit be extremely precise as to the circumstances and identification of each exhibit, describing each with some precision.

*

Even with such an affidavit, I would NOT rest upon my laurels nor would I stop with merely a supporting affidavit.  I would expressly conduct discovery intended to authenticate the Brief.

This can be a little problematic.  It is unfortunate to waste an interrogatory on such authentication.  Also, the mortgage servicer may very well claim NOT to have any knowledge of the Brief and claim that they are unable to authenticate it.  But this also somewhat immunizes you against an allegation that they doubt its authenticity and you have put them on notice of your intent to use the Brief as evidence well in advance of the summary judgment hearing or trial.

In some jurisdictions, such as Texas, interrogatories which ask solely for the authentication of documents do not count against the limit on interrogatories one may ask.

You can ask for an admission through a request for admissions that the copy is a genuine copy of the Brief MERS filed.

*

If MERS is a party to your litigation, you can ask these questions of MERS directly using written discovery.  If MERS is a non-party, you can (a) name MERS in a third party complaint, serving MERS and bringing MERS in as a party (you would need a valid or at least viable theory to support this), or (b) serve MERS with a deposition on written questions asking for the authentication of the Brief.

The latter is probably the more efficient approach and could also be used to ask MERS other questions under oath about the Brief and its various allegations.

Similarly, you could take a deposition of a representative of MERS and ask for the production of the Brief in an accompanying subpoena.  Then you could ask the MERS representative questions about the Brief directly.

*

I would recommend a combined approach anticipating that the mortgage investor or servicer will engage in illegal discovery abuse and that you may need to seek the Court's intervention to get the necessary proof.  But if you have given the plaintiff the opportunity to authenticate the Brief by an interrogatory and/or request for admission, your attorney may be able to recover his or her fees in seeking the deposition where the plaintiff unlawfully resists discovery.
 
Finally, there is nothing wrong with asking the Court to take judicial notice of the copy(ies) of the Brief posted online or to take judicial notice of the Brief as it is filed with the Nebraska Supreme Court.  Also putting in a copy of the published decision in the Nebraska case is also another means of enhancing the credibility of the Brief.  It is undeniable that the Nebraska Supreme COurt decided this case.
 
*

In conclusion, also note that in a summary judgment setting the Courts in most jurisdictions are usually required to assume that all of the non-Movant's disputed evidence is true and to generally give the non-Movant benefit of the doubt.  This may or may not apply to admissibility, so I would NOT assume this to be the case, but getting both the precise text of the Rules and the cases relating to the Rules would seem to be a good idea and being prepared to argue that you should be accorded this indulgence by the court is possibly also a useful backstop.

In the end, you need to ask a qualified attorney from your jurisdiction this same question and to do your own research and due diligence as to the Rules and the law of your jurisdiction.  I simply describe a framework for further inquiry.

Best of luck!

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Like always, excellent post Bill.......

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Bill

Would someone go about proving up a Law Review or journal to the court in the same manner?  Or is it possible to just get the author to send you a tue copy of his work? 

 I think that there are some really good reviews that the judges should read before they rule in the banks favor. 
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William A. Roper, Jr.
Until we can get a good court ruling expressly recognizing the MERS Appellant's Brief in the Nebraska Case, one other possible parallel strategy is to pair up with another foreclosure defendant in a case in which MERS has a role.  Have both defendants obtain copies of the MERS Appellant's Brief as outlined above and then exchange affidavits of authenticity.

In this way, each litigant can file two authenticating affidavits, each attaching the MERS Brief they received from the Clerk of the Nebraska Supreme Court.

*

It is probably also meritworthy of mention that IF a borrower defending against a proof of claim OR a motion for relief of stay in a Bankruptcy setting can FILE A COPY OF THE BRIEF WITH AN AUTHENTICATING AFFIDAVIT, this would get an authenticated copy of the MERS Brief onto the Federal PACER document system.

Frankly, pleading the MERS Appellant's Brief in a Bankruptcy setting would seem to usually be a pretty good idea.

Having the document available on PACER together with a published Bankruptcy Court decision citing this MERS Appellant's Brief is probably the single best way to make the document more readily available to ALL nationally.
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Marty
In Mr. Roper's own words:

Quote:
William:

You ask some EXCELLENT questions, my friend! This same question could also be applied to the MERS Terms and Conditions and the MERSCorp Rules of Membership.

The answer to this quesiton is going to depend upon the law, particularly the Rules of Civil Procedure, of your jurisdiction. Moreover, the answer may also somewhat vary depending upon the stage of your foreclosure litigation.

In most places, authentication is accomplished by (a) a supporting affidavit, (b) an interrogatory response, (c) a response to a request for admission, (d) a response to a production request, (e) a response to a deposition or deposition on written questions, and/or (f) a stipulation.

Methods (b) through (e) involve discovery. Unfortunately, mortgage plaintiffs routinely engage in discovery abuse and cannot be relied upon to respond to discovery requests as the law requires. But you probably need to at least TRY.

*

A particular problem exists with the MERS Appellant's Brief because the Clerk of the Nebraska Supreme Court does not routinely certify documents. That is, you can write to the Clerk of the Supreme Court and obtain a copy of the Brief directly from the Clerk, which I would encourage you to do. But this will NOT be a certified copy.

The Clerk is (or was) otherwise VERY HELPFUL. The Clerk offered to send me a copy of the brief by oral request, simply enclosing an invoice. The cost of copies was then minimal. The Clerk sent me the copy the same date I orally requested it (the Clerk was adament that no written request was necessary).

Notwithstanding the friendliness and convenience of the Clerk, I would encourage you to request the copy by written letter, if time is available. Within the letter, expressly ASK FOR a certified copy of the Brief. Keep a copy of the letter. Consider having some OTHER extremely reliable and responsible non-party to the suit make the request on your behalf. This gets you an affidavit from a third party disinterested witness.

Hopefully, you will receive a written letter in response from the Clerk including an explanation that the Clerk doens't certify copies. You should also have the mailing envelope from the Clerk. Have the person making the request sign a proper, admissible affidavit certifying that the copy of the Brief was that received directly from the Clerk of the Nebraska Supreme Court, including the requesting letter, the response letter (if any), the invoice and the mailing envelope as additional supporting exhibits. Have the affidavit be extremely precise as to the circumstances and identification of each exhibit, describing each with some precision.

*

Even with such an affidavit, I would NOT rest upon my laurels nor would I stop with merely a supporting affidavit. I would expressly conduct discovery intended to authenticate the Brief.

This can be a little problematic. It is unfortunate to waste an interrogatory on such authentication. Also, the mortgage servicer may very well claim NOT to have any knowledge of the Brief and claim that they are unable to authenticate it. But this also somewhat immunizes you against an allegation that they doubt its authenticity and you have put them on notice of your intent to use the Brief as evidence well in advance of the summary judgment hearing or trial.

In some jurisdictions, such as Texas, interrogatories which ask solely for the authentication of documents do not count against the limit on interrogatories one may ask.

You can ask for an admission through a request for admissions that the copy is a genuine copy of the Brief MERS filed.

*

If MERS is a party to your litigation, you can ask these questions of MERS directly using written discovery. If MERS is a non-party, you can (a) name MERS in a third party complaint, serving MERS and bringing MERS in as a party (you would need a valid or at least viable theory to support this), or (b) serve MERS with a deposition on written questions asking for the authentication of the Brief.

The latter is probably the more efficient approach and could also be used to ask MERS other questions under oath about the Brief and its various allegations.

Similarly, you could take a deposition of a representative of MERS and ask for the production of the Brief in an accompanying subpoena. Then you could ask the MERS representative questions about the Brief directly.

*

I would recommend a combined approach anticipating that the mortgage investor or servicer will engage in illegal discovery abuse and that you may need to seek the Court's intervention to get the necessary proof. But if you have given the plaintiff the opportunity to authenticate the Brief by an interrogatory and/or request for admission, your attorney may be able to recover his or her fees in seeking the deposition where the plaintiff unlawfully resists discovery.

Finally, there is nothing wrong with asking the Court to take judicial notice of the copy(ies) of the Brief posted online or to take judicial notice of the Brief as it is filed with the Nebraska Supreme Court. Also putting in a copy of the published decision in the Nebraska case is also another means of enhancing the credibility of the Brief. It is undeniable that the Nebraska Supreme COurt decided this case.

*

In conclusion, also note that in a summary judgment setting the Courts in most jurisdictions are usually required to assume that all of the non-Movant's disputed evidence is true and to generally give the non-Movant benefit of the doubt. This may or may not apply to admissibility, so I would NOT assume this to be the case, but getting both the precise text of the Rules and the cases relating to the Rules would seem to be a good idea and being prepared to argue that you should be accorded this indulgence by the court is possibly also a useful backstop.

In the end, you need to ask a qualified attorney from your jurisdiction this same question and to do your own research and due diligence as to the Rules and the law of your jurisdiction. I simply describe a framework for further inquiry.

Best of luck!
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