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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Sandy
This is exactly as we knew is the case with MERS, but it's great to see it thoroughly addressed.

http://findsenlaw.wordpress.com/2011/02/12/new-case-debunks-mers-in-re-agard-new-york-bankruptcy-court-well-reasoned-opinion/

Here is an excerpt, just to give you an idea what is in the full document:

Although the Court is constrained in this case to give full force and effect to the state court judgment
of foreclosure, there are numerous other cases before this Court which present identical issues with
respect to MERS and in which there have been no prior dispositive state court decisions. This Court
has deferred rulings on dozens of other motions for relief from stay pending the resolution of the
issue of whether an entity which acquires its interests in a mortgage by way of assignment from MERS,
as nominee, is a valid secured creditor with standing to seek relief from the automatic stay. It is for this
reason that the Court’s decision in this matter will address the issue of whether the Movant has
established standing in this case notwithstanding the
existence of the foreclosure judgment. The Court believes this analysis is necessary for the
precedential effect it will have on other cases pending before this Court.


The Court recognizes that an adverse ruling regarding MERS’s authority to assign
mortgages or act on behalf of its member/lenders could have a significant impact on MERS and
upon the lenders which do business with MERS throughout the United States. However, the
Court must resolve the instant matter by applying the laws as they exist today. It is up to the
legislative branch, if it chooses, to amend the current statutes to confer upon MERS the requisite
authority to assign mortgages under its current business practices. MERS and its partners made
the decision to create and operate under a business model that was designed in large part to avoid
the requirements of the traditional mortgage recording process. This Court does not accept the
argument that because MERS may be involved with 50% of all residential mortgages in the
country, that is reason enough for this Court to turn a blind eye to the fact that this process does
not comply with the law
.
...


...Aside from the inappropriate reliance upon the statutory definition of “mortgagee,” MERS’s
position that it can be both the mortgagee and an agent of the mortgagee is absurd, at best.


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Personally I find the final paragraph of the ruling to be the most poetic:

This Court finds that MERS’s theory that it can act as a “common agent” for undisclosed principals is not supported by the law The relationship between MERS and its lenders and its distortion of its alleged “nominee” status was appropriately described by the Supreme Court of Kansas as follows: “The parties appear to have defined the word [nominee] in much the same way that the blind men of Indian legend described an elephant – their description depended on which part they were touching at any given time.”  Landmark Nat’l Bank v. Kesler, 216 P.3d158, 166-67 (Kan. 2010).


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Texas
Is "undisclosed principals" the same as "Unidentified Indorsee"?
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Angelo
Sandy
This was an amazing find, this is what most of us MERS homeowners have been waiting for.  For a court to step up and see that this business model was a fraud from the beginning, and was the start of the biggest land grab since the american indians lost their land.

I would love to see the full decision and the pleadings of the case.  If anybody could post those, it would be great!

Also, would love William R. analysis of this stunning decision.
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William A. Roper, Jr.
I especially liked:
"Aside from the inappropriate reliance upon the statutory definition of “mortgagee,” MERS’s position that it can be both the mortgagee and an agent of the mortgagee is absurd, at best."

Judge Robert GROSSMAN doesn't equivocate!

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Angelo
Bill

Whats your take on this decision? I have never seen a case where the judge ruled in favor of the plaintiff, but handed down an opinion that was, in all actuality, in favor of the defendant. 

How binding is this decision on other BK judges?, and could this possibly make all MERS mortgages unsecured?

Also, could the plaintiff appeal this decision since it was granted the motion for relief of stay.  What would there be to appeal?
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William A. Roper, Jr.
Angelo:

I also found the decision to be bizarre due to its essentially unnecessary holding regarding MERS in light of the court's finding that the debtor's opposition to the claim was essentially barred by res judicata due to the prior foreclosure judgment.

And on the basis that the MERS holdings were essentially dicta, unnecessary to the disposition of the case, the holding might not withstand the scrutiny of an appeal to the U.S. District Court.  On the other hand, given that the decision allows for a lift of stay permitting the sale of the subject property, it is hard to see how the creditor would appeal the decision.

It is easy to see from the Court's decision that the Judge was absolutely irate that the creditor wasted the Court's time by allowing the full development of the MERS standing issue, when the creditor could have simply claim res judicata all along.  It almost appears as though MERS allowed the case to go forward as an experiment, perhaps thinking that this Judge was more favorably disposed to its position than he actually was.  That is, this particular case was essentially not losable since the res judicata issue was there all along.

The decision is instructive, but not binding on any other Federal Bankruptcy District.  And it is instructive but not binding on state courts.

Since Federal Bankruptcy Courts draw upon the commercial law and the real estate law appropriate to the jurisdiction of the underlying negotiable instrument, the negotiation and the mortgage, the Bankruptcy Court for the Eastern District of New York was mostly relying upon New York law and New York decisions to underpin its reasoning.

So this decision is far more likely to be given weight by other Federal Bankruptcy Courts in New York than by the Bankruptcy Courts in other states, simply because the decision largely rests not so much on Federal law, but rather New York law.

I am inclined to think that the decision may very well be an enormous problem for MERS in New York state, though.  NewYork state courts are already very hostile to MERS, particularly in Kings County and Suffolk County.  The Eastern District of New York includes Long Island and specifically Suffolk County.  So I am very much inclined to believe that this decision will embolden the Suffolk County courts to reach similar holdings.

It should also be noted that when the New York Court of Appeals first addressed issues relating to MERS in the Romaine case, it exhibited more than a little hostility to the concept.  Given the well reasoned holding of the Maine Supreme Court in the Saunders case, I fully expect the New York Court of Appeals to totally eviscerate MERS when the matter of MERS' role reaches that court.

I expect that this decision will open the floodgates to adverse MERS decisions in the New York trial courts.  These will then percolate up, ultimately reaching the New York Court of Appeals in 2012 or 2013.

Ironically, even as this opens the floodgates, the initial effects may amount to little more than a trickle.  Since New York foreclosure mill law firms are generally unwilling to sign the new required attorney affirmations, very few NY cases are actually moving forward to decision.

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The Equitable One
I had considered the potential of an Appeal on this, but hadn't looked at it from the perspective of appealing a decision that was ultimately favorable to the potential appellant. That is a different wrinkle. Seems kind of silly really.

Appellant: I want to appeal.

Court: But you won the underlying case.

Appellant: I don't care. I still want to appeal.

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Amused
Appellant:  "Well, I know that I won, but things the Judge said hurt my feelings!  Make him take them back."
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William A. Roper, Jr.
Nick TIMORAOS of the Wall Street Journal has weighed in on the In Re Agard case with a story posted yesterday evening:

WSJ:  "U.S. Bankruptcy Judge Questions Legal Claims of MERS", by Nick TIMORAOS (February 14, 2011, 6:34 PM ET)
http://blogs.wsj.com/developments/2011/02/14/us-bankruptcy-judge-questions-legal-claims-of-mers

Add your comment!

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Walt

The holding of U.S. Bankruptcy Judge Robert E. Grossman in the case In Re Agard was reversed by U.S. District Judge Joanna Seybert:

 

Bloomberg: "MERS Judge Sets Aside Bankruptcy Court’s Critical Ruling" (March 29, 2012)
http://www.bloomberg.com/news/2012-03-29/mers-judge-sets-aside-bankruptcy-court-s-critical-ruling-1-.html

 

The District Court found that Judge Grossman's holding in In Re Agard was unnecessary dicta, constituting an unconstitutional advisory opinion on the role of MERS.

 

 

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HungarianProse
Walt wrote:
The holding of U.S. Bankruptcy Judge Robert E. Grossman in the case In Re Agard was reversed by U.S. District Judge Joanna Seybert:

 

Bloomberg: "MERS Judge Sets Aside Bankruptcy Court’s Critical Ruling" (March 29, 2012)
http://www.bloomberg.com/news/2012-03-29/mers-judge-sets-aside-bankruptcy-court-s-critical-ruling-1-.html


The District Court found that Judge Grossman's holding in In Re Agard was unnecessary dicta, constituting an unconstitutional advisory opinion on the role of MERS.


MERS has 9 lives,,,,,,,,,,,,,,,or more

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J

What did the Court mean by declaring "Grossman's holding.....constitut[ed] an unconstitutional advisory opinion on the role of MERS."?

 

Where does this case go from here? 

 

How does this affect rendered decisions citing In Re Agard?

 


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t

Anyone surprised or distressed about the holding of the U.S. District Court in MERS v. Agard need only scoll up and read Mr. Roper's responsive post to Angelo's query:

 

Quote:
I also found the decision to be bizarre due to its essentially unnecessary holding regarding MERS in light of the court's finding that the debtor's opposition to the claim was essentially barred by res judicata due to the prior foreclosure judgment.

And on the basis that the MERS holdings were essentially dicta, unnecessary to the disposition of the case, the holding might not withstand the scrutiny of an appeal to the U.S. District Court.   On the other hand, given that the decision allows for a lift of stay permitting the sale of the subject property, it is hard to see how the creditor would appeal the decision.

It is easy to see from the Court's decision that the Judge was absolutely irate that the creditor wasted the Court's time by allowing the full development of the MERS standing issue, when the creditor could have simply claim res judicata all along. It almost appears as though MERS allowed the case to go forward as an experiment, perhaps thinking that this Judge was more favorably disposed to its position than he actually was. That is, this particular case was essentially not losable since the res judicata issue was there all along.
 

 

Mr. Roper at 02/15/11 at 02:05 AM:

 

http://ssgoldstar.websitetoolbox.com/post/show_single_post?pid=1267281992&postcount=7

 

Compare the language of U.S. District Judge Joanna Seybert in vacating that portion of Judge Grossman's decision:

"MERS argues that to the extent that the Stay Opinion addresses and attempts to resolve issues beyond the application of Rooker-Feldman and res judicata, it is an improper advisory opinion and should be vacated.  The Court agrees.  In holding that Rooker-Feldman (or in the alternative, res judicata) barred revisiting the issue of Select/U.S. Bank’s standing as a secured creditor, the Bankruptcy Court recognized that it lacked subject matter jurisdiction over the dispute, see Hoblock v. Albany Cnty. Bd. of Elections, 422 F.3d 77, 83 (2d Cir. 2005) (recognizing that the Rooker-Feldman doctrine “goes to subjectmatter jurisdiction”), thus the issue of whether MERS had authority to assign the Mortgage was no longer before the Bankruptcy Court.  In other words, there was no longer a live case or controversy.  Judge Grossman’s discussion and analysis addressed a now-hypothetical issue: whether Select/U.S. Bank would have had standing absent the Judgment of Foreclosure, see In re Agard, 444 B.R. at 245.  And Judge Grossman’s conclusion--that MERS did not have authority to assign the Mortgage--had no effect on the parties or the bankruptcy.

 

Accordingly, this portion of the Stay Order constitutes an unconstitutional advisory opinion and must be vacated.  See Unalachtigo Band of the Nanticoke Lenni Lenape Nation v. Corzine, 606 F.3d 126 (3d Cir. 2010) (vacating in part a district court’s opinion that addressed an intervenor’s motion to dismiss after sua sponte dismissing the complaint for lack of standing); Heldor, 989 F.2d at 709 (vacating an order entered by the bankruptcy court after the issue was mooted by the withdrawal of the objections to the motion); In re Nunez, 2000 WL 655983, at *7 (vacating a decision of the bankruptcy court addressing a standing issue raised by the court sua sponte after all motions had been granted or withdrawn and the underlying bankruptcies terminated)."

 

In other words, Judge Joanna Seybert agreed exactly with Mr. Roper's posted conclusion from February 2011 that the MERS holding was merely dicta!

 

Once again, a major court decision shows that Mr. Roper is the leading legal analyst on foreclosure defense nationally.  Mr. Roper gave us the unvarnished truth!

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t

Quote:
What did the Court mean by declaring "Grossman's holding.....constitut[ed] an unconstitutional advisory opinion on the role of MERS."?

Where does this case go from here? 

 

 

J, go back and read the In Re Agard decision.  Then read Judge Seybert's holding.

 

Look at what Mr. Roper posted.

 

In the U.S. Bankruptcy Court decision, Judge Robert Grossman first found that the issues relating to the creditors claims had already been litigated to conclusion in state court in the underlying foreclosure case and were therefore barred by res judicata and the Rooker-Feldman doctrine.

 

Basically, Judge Grossman said that the arguments by Ferrel Agard didn't matter, because the U.S. Bankruptcy Court lacked the subject matter jurisdiction to re-litigate the validity of the creditor's claim.  Then Judge Grossman went on to discuss the MERS business model and to reach findings of fact and conclusions of law about whether MERS' involvement was Kosher.

 

Once Judge Grossman decided that the U.S. Bankruptcy Court lacked the jurisdiction to re-litigate the creditor's claim, the matter was over.  Everything else he had to say about the case was not merely dicta, but constituted an impermissible advisory opinion.

 

Mr. Roper saw this instantly and noted it in his thoughtful post.

 

It must be realized that while Judge Seybert's decision vacates the opinion and removes any authority therein, it does not find Judge Grossman's analysis to be legally erroneous (other than that he lacked the authority to reach this holding at all) nor does it really detract from the legal analysis about MERS appearing within the In Re Agard decision.

 

Also, bear in mind that there were two other far more important MERS decisions out of New York State in the Spring of 2011.  Both of these were chronicled and discussed by Mr. Roper.  These were the Weisblum and the Silverberg decisions, especially the latter!

 

It should be noted that while U.S. Bankruptcy Court rulings interpreting New York State law are NOT binding on New York State Courts, New York appellate decisions enunciating and articulating New York law ARE binding upon the U.S. Bankruptcy Courts in New York State!

 

So the practical effects of the ruling are nil.  Realize that since Ferrel Agard had already LOST the property to foreclosure and Judge Grossman had allowed the relief of stay, Agard had no dog in this hunt.  For this reason, MERS' appeal to the U.S. District Court was unopposed!

 

No doubt, it was also unopposed for another different reason.  As Mr. Roper pointed out in his post in February 2011, Judge Grossman's decision was legally erroneous because it was dicta!

 

MERS will of course use the decision to spread false propaganda that its business model has been vindicated upon appeal to the U.S. District Court, but this is simply untrue!  The U.S. District Court didn't need to discuss the merits of Judge Grossman's analysis, since he shouldn't have entered this aspect of the opinion at all.

 

Realize that in another U.S. Bankruptcy case where res judicata and Rooker-Feldman do not apply (where the borrower files for Bankruptcy before the foreclosure rather than after), Judge Grossman can enter this SAME decision, now also quoting both Weisblum and Silverberg as additional authority.

 

The very same decision and reasoning in respect of a live controversy would then probably be upheld rather than reversed on appeal!          

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Angelo
Thats why my Siri calls Mr. Roper "foreclosure GOD".....

We all knew this was going to happen, it was just a matter of time.  MERS thought they were slick and got their butts handed to them, They took a shot because they knew no matter what Grossman said, in the negative, they had the ability to appeal and claim , Dicta!  But if Grossman would have gave MERS his blessing, they would have then claimed victory in all Federal BK courts.  They had a free role!

On the bright side, what Grossman did was give us, and all other BK judges a road map for future litigation!!
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t

Quote:
Thats why my Siri calls Mr. Roper "foreclosure GOD".....

We all knew this was going to happen, it was just a matter of time. MERS thought they were slick and got their butts handed to them, They took a shot because they knew no matter what Grossman said, in the negative, they had the ability to appeal and claim , Dicta! But if Grossman would have gave MERS his blessing, they would have then claimed victory in all Federal BK courts. They had a free role!  
 

Agreed! 

 

Quote:
On the bright side, what Grossman did was give us, and all other BK judges a road map for future litigation!!
 

The discussion and law enunciated in In Re Agard is still every bit as compelling as it was when written by Judge Grossman.  One must believe that Judge Grossman has the text of his decision up on a word processor and can simply cut and paste the reasoning into a future decision in a proper case, adding appropriate references to Weisblum and Silverberg!

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DKAnh

The Agard Decision:

 

Agard v. SELECT PORTFOLIO SERVICING, INC., Dist. Court, ED New York 2012

 

http://scholar.google.com/scholar_case?case=9143440194392977029&hl=en&as_sdt=5,33&as_vis=1&oi=scholaralrt

 

ps I wonder if the 'new msf moderator" [anh] will allow this post or delete it as she has been doing or i should say 'cleansing' this forum!

 

pss keep up the good job msfraud administrator it is ur loss!

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DKAnh

pss "0 Active Chat Room Users"  04/04/2012 at 08:29 PM

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