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.
Articles |The FORUM |Law Library |Videos | Fraudsters & Co. |File Complaints |How they STEAL |Search MSFraud |Contact Us
William A. Roper, Jr.
MERS has been a subject of occasional Forum posts from time to time.  Regretably, it appears that the Forum lacks a useful discussion of the MERS Milestone Report, a key report available to servicer members showing the ownership of both beneficial ownership of the note, as well as identity of the mortgage servicer during its registration on the MERS system.

This afternoon, I posted an MERS Milestone Report from the Hooker case at my Scribd pages.

I also added a few explanatory comments about the MERS Milestone Report within the pre-existing thread discussing the Hooker v. Northwest Trustee Services decision:

 

"WSJ: "Oregon Judge Denies Foreclosure, Challenges MERS" - Hooker v. Northwest Trustee Services, Inc."

http://ssgoldstar.websitetoolbox.com/post?id=5290147


I will add additional elaborating explanation about MERS Milestone Reports in future posts to this thread as time allows.

Comments and queries by others are solicited, encouraged and appreciated!
Quote 0 0
OHIO FRAUDclosure
William,
As you stated this topic, and specifically this report, (MERS Milestone Report) has not been "usefully" addressed in forum discussions. However, in addition to your explanations (and cited case law and decisions), there exists a number of valuable depositions that directly address the existence and contents (information contained within) of the MERS Milestone Reports.

With that said, at this time, I will not make any direct references or links, to any particular depositions as they are often (and mistakenly) interpreted as evidence or case law or to have some determinative judicial FACT as to the DEPOSITION usefulness - in another case. It is the MERS Milestone Report and information it contains that is USEFUL ...and not the deposition.
So please follow this thread (guided properly by William A. Roper Jr.) and allow it to develop ....before deciding to improperly use this as a defensive weapon. Often referred to as a.... "fire-ready-aim" tactic.

My comments are to educate and inform readers. Your attorney needs to be aware of the what, where, how and why for this TYPE of information.
 
For transparency and clarity:  I am not an attorney and I am not offering legal advice. The OHIO FRAUDclosure blog - does not advise, respond or act on the behalf of any attorney or legal firm. I am here sharing knowledge garnered from 10 years in the financial & banking arena combined with a 5 year foreclosure experience.
OHIO FRAUDclosure



Quote 0 0
Texas
Regarding the MERS Milestone report.
TOS = Transfer of Servicing Rights
TOB = Transfer of Beneficial Ownership

Herein, the MERS smoke and mirrors starts:

Transfer of Beneficial Ownership of "What", is it the paper tangible Mortgage Note (UCC 3) and  Mortgage Note's Security Instrument (Local Laws of Jurisdiction) or is it the ownership of the electronic payment intangible payment stream (UCC 9) where the payment intangible's payment stream is secured by {an electronic digitized computer graphic image of the paper tangible Mortgage Note which is secured by the Mortgage Note's Security Instrument}?
 

Quote 0 0
William A. Roper, Jr.

Quote:
Texas said:

Transfer of Beneficial Ownership of "What", is it the paper tangible Mortgage Note (UCC 3) and Mortgage Note's Security Instrument (Local Laws of Jurisdiction) or is it the ownership of the electronic payment intangible payment stream (UCC 9) where the payment intangible's payment stream is secured by {an electronic digitized computer graphic image of the paper tangible Mortgage Note which is secured by the Mortgage Note's Security Instrument}? 


Texas:

Before answering further, it is singularly important to note that MERS has NO ROLE whatsoever in the input or the quality control of the data going into its registration system (other than control of privileged accounts that could be used to override or reverse transactions if a dispute arose amongst its Members).  MERS Members make the changes to the data within the MERS Registry.  So the data actually is only as accurate as the correctness of these data entries.

Secondly, it is important to also clarify that input of additional information to update registration information, whether as to a Transfer of Servicing Rights OR a Transfer of Beneficial Ownership requires no actual physical or digital proof to MERS.  That is, if a servicer indicates through data input into the registry that there has been a servicing transfer, then from the persoective of MERS' Registry it is so, whether or not the servcing rights to that particular loan were actually transferred.
 
The same is true of beneficial ownership.
 
The servicer does NOT prove any negotiation -- indorsement and delivery -- to MERS.  Neither does the servicer prove that there is a valid contract for the sale of the servicing rights or consideration tendered and received in respect of such transfer.

All legal transactions under the UCC or statute of frauds to actually convey such rights are completed exogenously to the MERS Registry and there exists no procedure for MERS to actually verify the authenticity of any asserted transaction.

I would call the express attention of all to this language with the MERS governing document "MERS Terms and Conditions":
6.  MERS and the Member agree that: (i) the MERS System is not a vehicle for creating or transferring beneficial interests in mortgage loans, (ii) transfers of servicing interests reflected on the MERS System are subject to the consent of the beneficial owner of the mortgage loans, and (iii) membership in MERS or use of the MERS System shall not modify or superesede any agreement between or among the Members having interests in mortgage loans registered on the MERS System.

See:

 

MERS Terms and Conditions (2008)

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


I would also expressly recommend a review of the inaugural post within my thread:

"Facts About MERS / MERS Unmasked"

http://ssgoldstar.websitetoolbox.com/post?id=2063120


This having been said, it is abundantly clear that what is intended by a transfer of beneficial ownership is the sale rather than the negotiation of the loan.

This is certainly true because there are a number of possible and even likely negotiations for every loan which might or might not be reflected on the MERS system.  For example, the note is typically indorsed and delivered to the warehousing lender within 72 hours of the loan.  This is a pledge of the loan and a negotiation, NOT a sale.  Similarly, contrary to the express explanations of the typical registration statements, the sequence of loan sale transactions might NOT be accompanied by corresponding negotiations.  The note is actually negotiated to the institutional custodian, which is merely an agent of the trustee, which is the beneficial owner, on behalf of the mortgage trust

These facts continue to be misrepresented and mangled by a variety of self-proclaimed expert bystanders whose collective knowledge of secutization could fill a thimble!

Similarly, very often in a foreclosure action, the servicer actually obtains the note from the institutional custodian (or pretends to do so) and then files suit in its own name as the holder (often falsely representing to the courts that it is also the owner).  The timely delivery of a properly indorsed note from the institutional custodian to the servicer might very well make the servicer the holder, but this does not alter the ownership of the loan UNLESS there has been a required repurchase of the loan by teh servicer pursuant to a breach in the original representations and warranties of the originating seller and enforcement of the warranty. 

Although required repurchase OUGHT TO BE happening a LOT, it actually is NOT, as corrupt U.S. politicans continue to look the other way to enforcement of the warranties, thereby accomplishing a further closet bailout of the large banks by shifting losses to the U.S. taxpayer.

The bottom line is that the MERS Milestone Report ought not be viewed as a reliable record of negotiations, but rather only a record of servicer representations as to ownership and servicing of the loan.  Even so, it can be quite useful, as the MERS Milestone Report very often contradicts the various allegations of the plaintiff and sworn averments of the robo-perjurers and shows the assignment presented to the court to be a forgery. 

There exists other more reliable proof of the fact of actual negotiation.
Quote 0 0
Bill
I have seen a few examples of MERS milestones in different cases.  I have a couple questions:

1.  Do I want this in evidence or not?

2.  Who are the milestones helping?

3.  Who can authenticate the milestones?

4.  Can the Plaintiff introduce the milestones or does it need to come from MERS?

5.  Can you ask for the milestones in discovery from the Bank/Servicer or would it need to come from MERS?

6.  A little more interesting (and humorous) the Plaintiff's attorney post commencement drafted the assignment for MERS to execute, could I serve the Plaintiff's counsel MERS discovery.  The are representing MERS in some capacity, they are drafting documents for them.

It would be great to hear a few opinions on the milestone uses/pitfalls.

Quote 0 0
Robert P.
I will add
7. do you think it could be requested and recieved with a QWR?
Quote 0 0
Bill

Robert P. wrote:
I will add
7. do you think it could be requested and received with a QWR?


I'm pretty sure you are not going to have much luck with a QWR requesting information that the Servicer doesn't have.  MERS is a separate company.  They will just play dumb.  Discovery in a court case where MERS, the bank, the trustee, the Plaintiff's attorney, and the servicer are all intertwined in a web of mischief and fraud is quite a different matter.
Quote 0 0
William A. Roper, Jr.
Quote:
Bill said:
1. Do I want this in evidence or not?


This depends upon the facts of your case.

Quote:
Bill said:
2. Who are the milestones helping? 


The MERS Milestone Report helps to establish the true facts of the case.

Quote:
Bill said:
3. Who can authenticate the milestones?


The Services who are MERS Members (ALL of the major servicers) have User IDs and Passwords to hit the MERS Registry through a Virtual Private Network using the Internet.  They regularly do this to register new loans and to update various other MERS status information for ALL loans.  Updates can be done both by batch file, as well as dynamic data entry for a particular loan.

Any servicer employee with an MERS User ID and password ought to be able to access the MERS Milestone Report for your loan.  It should NOT be necessary to run separate discovery against MERS.

However, you can rely upon the fact that the servicer and foreclosure mill law firm WILL engage in egregious discovery abuse and REFUSE to furnish the MERS Milestone Report.  They will NEVER provide it without a court order.  Bear this in mind when designing your discovery.

The person who pulls the data from the MERS Registry can and should authenticate it.

Quote:
Bill said:
4. Can the Plaintiff introduce the milestones or does it need to come from MERS?


The Plaintiff could seek to put the Milestone Report into evidence, but it really does NOT prove anything for them.

It proves that the plaintiff ALLEGES a certain beneficial ownership history.  It does NOT prove whether a the note was indorsed and delivered.

Generally speaking, in certain fact situations, it can eviscerate the plaintiff's allegations and fairly conclusively prove serious misconduct.  It can very rarely HELP their case.

But it COULD HURT YOUR CASE, again, depending upon the fact situation.

Quote:
Bill said:
5. Can you ask for the milestones in discovery from the Bank/Servicer or would it need to come from MERS?


The servicer definitely has access to the MERS Milestone Report and could be required to produce it in discovery.  But as mentioned above, they will almost certainly OBJECT and refuse to produce it UNLESS ordered to do so by the court.

It would probably help to have a strong expert witness who could testify by affidavit that the MERS Milestone Report is a standard report readily accessible to the servicer which could be produced in a matter of a minute or two at no cost whatsoever.

This would help overcome the objection that the request was overly broad, unduly burdensome . . .

Quote:
Bill said:
6. A little more interesting (and humorous) the Plaintiff's attorney post commencement drafted the assignment for MERS to execute, could I serve the Plaintiff's counsel MERS discovery. The are representing MERS in some capacity, they are drafting documents for them.


This is likely to be very unproductive.  While non-member law firms sometimes arrange to have their employees appointed as MERS officers, this would NOT necessarily entitle that officer to an MERS User ID and password.  To the contrary, the folks who have access to the MERS registry may not be MERS officers AT ALL.

(Incidentally, it would be a VERY GOOD DEPOSITION QUESTION to ask a robo-forger or robo-perjurer whether they had an MERS User ID and Password.  Without one of each, they have NO ACCESS TO THE MERS REGISTRY!)

Not only is the attorney UNLIKELY to have system access, but he is going to fortify his egregious discovery abuse with assertions of attorney-client privilege, which is precisely the reason that they are doing things this way!

You stand a far better chance of piercing attorney-client privilege by first obtaining the MERS Milestone by other means and then using the Milestone report to show that the attorney was engaged in criminal misconduct!

Of course, as soon as you can prove that, the plaintiff will suddenly be very interested in a settlement to include non-disclosure.

Quote:
Robert P. said:
7. do you think it could be requested and recieved with a QWR?


You can request ANYTHING with your QWR.  I seriously DOUBT that they are going to give it to you.  Whether you can get a court to AGREE that failure to furnish the Milestone Report is a RESPA violation is questionable.

Moreover, I would NEVER lead off by asking for an MERS Milestone.  As soon as you ask for the Milestone, you will immediately be telegraphing a level of sophistication that will cause them to quickly retreat, repackage and cover up.

What the servicers and foreclosure mills are really good at is LYING, evidence fabrication, forgery and perjury.

Given the choice of lying or telling the truth, they will very often lie, if only to keep in practice!  In fact, lying about everything seems to be a matter of special (dis)honor amongst these thieves!

Instead of taking the plaintiff to school and showing them how much I know about them, I would start off and ask a few gentle questions and let them begin lying under oath.  Then let them lie a little more and a little more.

By the time the matter is up for summary judgment, you want the plaintiff's cousel to resemble Pinochio!

Those of you who feel impelled to help the plaintiff recover from its lying habits so that they can look like Boy Scouts with lots of foreclosure merit badges, are on totally the wrong wavelength!
Quote 0 0
William A. Roper, Jr.
Nye LaValle's Early Insight Into MERS

I separately mentioned within the Hooker thread that I first learned of the MERS Milestone Reports from Nye LaValle in late 2006 or early 2007.

As important as these reports can be, they have received very little attention compared to many other foreclosure defense topics.

I wanted to share some of the other early mentions by Nye.

Here are some prior posts by Nye on this topic:

Quote:
Nye LaValle said (02/07/08 at 09:15 PM):
PS. you can NEVER believe what they SAY in testimony or see in docs such as notes even with stamps and the assignments. You MUST see accounting docs and where the note comes on and off their books in addition to the checks or wire transmittals paid for the note.

If a MERS loan with MIN #, you need the MERS MILESTONE DOCUMENT which will show ownership transfers.



See:

 

...or anyone else that can chime in.....

http://ssgoldstar.websitetoolbox.com/post?id=2480551



Quote:
Nye LaValle said (11/27/07 at 02:35 PM):
You must see the MONEY that was exchanged and where and when it came on an off the books. ANY lawyer who does not try to do this is not doing his job! YOU CANNOT TRUST WHAT IS ON MERS OR IN THE COUNTY LAND RECORDS!!!! MOST ARE FORGERIES AND ASSIGNMENTS CREATED AFTER THE FACT.

Only seeing the MONEY trail match the ASSIGNMENT AND ENDORSEMENT TRAIL as well as MERS "milestone" records if you get them, will prove who owns your note at any given time.


See:

The mess that Boyko made-a not so complimentary analysis

http://ssgoldstar.websitetoolbox.com/post?id=2321439



Quote:
Nye LaValle said (07/27/08 at 03:20 PM):
If on MERS, you need to request the MERS MILESTONE doc!


See:

How to find the right Pooling and servicing agreement?

http://ssgoldstar.websitetoolbox.com/post?id=2860598

Quote 0 0
Bill
Wow, 2007, Nye was really ahead of the power curve on MERS. 

Quote 0 0
William A. Roper, Jr.
Quote:
Bill said:
Wow, 2007, Nye was really ahead of the power curve on MERS.

 
When I was in the mortgage business, MERS did not exist.  So MERS was a somewhat disorienting aspect of the mortgage business.
 
When I first found the MS Fraud web site, Jack, Anne Holden, Nye LaValle, Mike Dillon, Moose, Greg, Gary Wait and several others schooled me up on MERS and mortgage servicing fraud.
 
But Nye was particularly well informed about MERS and gave me some great insight!
Quote 0 0
bert
Here is an example:

http://www.scribd.com/doc/58710228/Hooker-v-Northwest-Trustee-DEFs-Declaration-31-Jan-2011
Quote 0 0
William A. Roper, Jr.
Nye LaValle also mentions the MERS Milestone Report in his publication:

"Report on Fradulent & Forged Assignment of Mortgages & Deeds in U.S. Foreclosures", by Nye LaValle (Pew Mortgage Institute, 2010)

http://www.scribd.com/doc/58724289/Pew-Mortgage-Instiutute-Report-of-Fraudulent-and-Forged-Assignments-2010


This report has also been posted in the MS Fraud Legal Lounge pretty much since its publication:

http://www.msfraud.org/law/lounge/2010assignmentfraudreport.pdf




Quote 0 0
Texas
Roper: what about the following.

Bailee Letter?
Closing Instructions?
Wire Transfers?

I need not the answer, but there are many that might need.

Quote 0 0
William A. Roper, Jr.
Quote:
Texas said:
Roper: what about the following.

Bailee Letter?
Closing Instructions?
Wire Transfers?

I need not the answer, but there are many that might need.

 
Texas, those certainly might be interesting topics for other threads.  And perhaps you might want to start such threads.
 
When I stumbled across the mention of the MERS Milestone Report in Hooker several weeks ago, it reminded me that I hadn't seen any mention of this report at the Forum in some time.  My memory of prior mentions seems to have been clouded.  I had thought that there was a more complete older post on the topic (and there might have been such a post lost in the server crash several years ago), but perhaps my recollection is clouded by learning about the MERS Milestone Report through private e-mails from Nye.
 
When I separately searched Google, I was actually taken aback by the paucity of meaningful mentions amongst search results. 
 
So it is my intention to focus upon a further exposition of this topic for at least a couple of days.  I have some additional primary materials to share.

And there are also several other topics that I believe are of greater urgency than those you propose.  But to the extent that you believe these topics deserve sooner treatment, I am sure that the Forum would welcome your insights or questions!
Quote 0 0
Texas
Graphic Attached, I hope.
Click image for larger version - Name: MERS_MBS.jpg, Views: 213, Size: 156.86 KB
Quote 0 0
BISHOP
The MILESTONES document may show the actual foreclosing entity, servicers, sub-servicers, and the dates of actual acquisition of the note and mortgage from whom.

The information may be invaluable to establish actual ownership of the note and mortgage.

This document will allow sustainability of counter-claims against the real entity that is foreclosing. The counter-claim could be as simple as an equity stripping scheme hatched between the servicer, and the owner/holder of securitized mortgages.

Such a scheme to strip equity many times will involves a false claim of default either by a purposeful manipulation of dates of postings of mortgage payments.

By falsely claiming a default, the securitized party may obtain a payment from the insurer that may have insured the owner/holder against loss in the event of default. Thus, the securitized party, if paid in an amount of which it is insured, has money to expend on attorneys to foreclose for the default.

If it obtains title to the property, then it truly has scored a major victory in terms of the balance sheet.

If the law firm it employs to foreclose negotiates a new mortgage in a higher amount of principal, at a higher interest rate (due to the default and damaged credit rating of the borrower), it secures a mortgage brokerage fee.

The value of having the MILESTONES document cannot be underscored more.

Due to the fact that you have no idea who the players are without a program. 

The sifting process of determining just who is "on first" begins with this document.

Have the MILESTONES document certified by the secretary of MERS as a true and correct copy. Then, let the document take you where it leads to determine how your loan was declared in default.

If MERS claims that it is an agent for the foreclosing entity that appears in the MILESTONES document, the foreclosing entity should be named in the document as having received a transfer of ownership from the originating lender.

If MERS claims that it is the owner/holder of the note and mortgage in the complaint, that is a statement that may be refuted by downloading a copy of MERS' appellant brief in the Nebraska state court case that is available on this website in the LEGAL LOUNGE.

Either way, the MILESTONES document is invaluable in determining the true nature of the scheme and the players that are involved in the false foreclosure proceeding.


Quote 0 0
William A. Roper, Jr.
Since Hutchins is one of only a handful of cases that actually mentions the MERS Milestone Report, albeit in other than a useful context, it is probably appropriate to crosslink the thread discussing the recent Hutchens decision:

Indiana Appellate Decision Affirming SJ Shows Some Defendant Mistakes: Hutchens v. BAC Home Loans Servicing, LP

http://ssgoldstar.websitetoolbox.com/post?id=5373910

Quote 0 0
larry walker
please add me to your blog as a member, follower, thanks, Larry Walker
Quote 0 0
Anonymous
You're on POINT.
Read Anderson v. Burson
Maryland court decision.
We changed the law but still lost our house.
Quote 0 0
Write a reply...