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 A. Roper, Jr.
In an interesting decision by Justice John B. NESBITT of the Wayne County, NY Supreme Court, Justice NESBITT found that MERS has no inherent right to receive notices of tax sales in New York State.  The case is:

Matter of the Foreclosure of Tax Liens by the County of Wayne, 2010 NY Slip Op 30628(U) [March 24, 2010]
http://www.nycourts.gov/reporter/pdfs/2010/2010_30628.pdf


This is very similar to the Arkansas Supreme Court case identified to this Forum a year ago by "Knows About MERS":

Mortgage Elec. Registration Sys. v. Southwest Homes of Ark., No. 08-1299, SUPREME COURT OF ARKANSAS, 2009 Ark. LEXIS 121, March 19, 2009, Opinion Delivered.
http://courts.arkansas.gov/court_opinions/sc/2009a/20090319/published/08-1299.pdf


Those relying upon MERS as their nominee seemingly cannot be assured that they will be advised of tax sales of properties in either New York or Arkansas!
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Mr. Roper, a bit confused here... is this a matter of someone with a paid off home.. that can not meet their "tax obligation" only? This is dear to me since work with many seniors and people with fixed and moderate to low incomes that have been very hard hit by inflated "property assessments" here in NY , due to the housing bubble. People with homes owned free and clear way but are having trouble with paying property taxes that over the last 6 years have gone up astronomically  and have yet to reflect the devaluation of real estate....

Is this a grasp at "equity" in tax sales on a mortgage that they have had no part in...



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William A. Roper, Jr.
PJ: 

These cases are only perepherally related to foreclosure, but are sort of central to an understanding of how the Courts are looking at MERS.

In both cases, the central issue was whether MERS was entitled to notice of a formal proceeding where it was the "nominee" or "mortgagee" of record.

In essence, both courts reasoned that a nominee is merely an agent and that if the principal is notified, there really isn't a need to separately notify a "nominee" too!

But this inherently means that if another entity initiates a foreclosure on a property, either on a tax lien, or possibly even on a senior mortgage lien, that the interests of a lienholder -- primary in the instance of a tax lien or junior in the case of a first mortgage lien -- might very well be extinguished by merely showing that notice was served upon the Lender of record rather than the nominee.

This is problematic, because the originator shown as the Lender in the promissory note and or mortgage has usually sold the promissory note and assigned the mortgage and is no longer interested in the matter.  If the mortgage investor had recorded an assignment of mortgage concurrent with the sale of the mortgage, then the purchaser would be entitled to notice, because it would be the record owner. 

The entire MERS scheme presupposes that by naming MERS that this firm can receive notices on the mortgage investors' behalf and that MERS will notify the correct ultimate owner.  But if the courts find that MERS is not entitled to a notice, as is now the case statewide in Arkansas and as found by the SUpreme Court in Wayne County, NY, then a notice to the originating lender is sufficient and the mortgage investor may never learn of these sorts of proceedings!

This is particularly problematic against the backdrop that so many lenders have gone bankrupt during the financial meltdown!  The original Lender may no longer be in business.  But by failing to record each assignment consistent with the state's statutory scheme set forth in the recording acts, the identity of the ultimate owner of the mortgage remains unknown, except to MERS and MERS is not entitled to notice! 
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The Equitable One
Excellent find William A.

I like your analysis.

I fear we are now living in a time that will be reverberating through our society for a number of decades. Hundreds of years of real estate/property law is being completely cast aside in the span of a few short years. The title defects being created right in front of us may render hundreds of thousands, if not millions, of homes unsaleable. I picture home buyers in 2035 instructing their realtors to refrain from showing them any properties involved in a foreclosure between 2000 and 2015 (or 2025....)

MERS has certainly  played its own individual role in this. Or maybe not, as they are a member institution nothing they do is really "individual."

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    In Florida, MERS is specifically registered with the Department of State
Division of Corporations as a Registered Agent, not a normal for profit
business.
    MERS own rules forbid members from foreclosing in the name of MERS in
the State of Florida, so this confirms their standing as merely a Registered
Agent for service of process and nothing else.
    A Registered Agent has no standing to assign or satisfy a mortgage unless
it also has a Power of Attorney, which MERS never has.
    This seems to conflict with the Judge's view in the New York case. If
anyone disagrees with my analysis, I'd like to hear about it, since I intend
to present this argument in a Motion to Dismiss in Florida. Your input would
be appreciated.
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Mike  -  Be careful of this ruling regarding MERS  ---- http://www.encyclopedia.com/doc/1G1-162358345.html

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William A. Roper, Jr.
I have added this decision to the cases I have posted at my Scribd site to somewhat improve discoverability of the opinion:

http://www.scribd.com/doc/55843043/Matter-of-the-Foreclosure-of-Tax-Liens-by-the-County-of-Wayne-NY-2010


This case is a NY trial court decision consistent with the appellate court decisions discussed in several other threads, including:

"MAJOR MERS DECISION KANSAS SUPREME COURT MERS HAS NO RIGHTS"

http://ssgoldstar.websitetoolbox.com/post?id=3671071


"Decision of the Arkansas Supreme Court Eviscerates MERS Franchise in AR"

http://ssgoldstar.websitetoolbox.com/post?id=3442180


"Terrific New Indiana Decision Further Erodes MERS Franchise: CitiMortgage v. Barabas"

http://ssgoldstar.websitetoolbox.com/post?id=5264483

 

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Ginger
This all gets so frustrating. I think it's peculiar that in the recent rash of notices I've seen of BofA/BAC transfers, the homeowner is advised that MERS is the party to receive legal notice. 
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