The Market Ticker – MERS Catfight in DC: Parse This One Carefully

MERS Catfight in DC: Parse This One Carefully

Heh heh heh….

A noteholder’s security interest in a DC home should normally be reflected in the public land records maintained by the District’s Recorder of Deeds. Under District law, in contrast to the laws of many states, each deed or other document transferring a mortgage interest must be recorded with the Recorder of Deeds within 30 days of execution. This requirement is not satisfied by private tracking of mortgage interests through the Mortgage Electronic Registration Systems (MERS).

The District has a non-judicial foreclosure process that begins with a Notice of Foreclosure on a form prescribed by the Recorder of Deeds. The form requires identification of a “Holder of the Note” and a “Security Instrument recorded in the land records of the District of Columbia.” According to today’s enforcement statement: “The homeowner who receives such a notice is entitled to presume that the recordation of the security interest complies with District law, and that each intermediate transfer of the security interest between the original maker of the note and the current holder of the note is documented in the public record.”

MERS said in response:

Mortgage Electronic Registration Systems, Inc. (MERS) holds the security interest in the deed of trust when MERS is identified as the beneficiary of record, as nominee for the lender and the lender’s successors and assigns. At closing, the lender and borrower name MERS as the beneficiary. The deed of trust is recorded with the Recorder of Deeds in compliance with the District of Columbia’s laws. MERS executes an assignment if the security interest is transferred from MERS to another entity and the assignment is recorded. For example, if the mortgage loan goes into default, and MERS is not the foreclosing entity, then MERS will execute an assignment showing the transfer of the security interest from MERS to the note-holder who will be foreclosing. The assignment is recorded as required under DC’s laws.

NO IT’S NOT.

MERS private recording system IS NOT A PUBLIC RECORD.

Read The District’s position again:

Under District law, in contrast to the laws of many states, each deed or other document transferring a mortgage interest must be recorded with the Recorder of Deeds within 30 days of execution. This requirement is not satisfied by private tracking of mortgage interests through the Mortgage Electronic Registration Systems (MERS).

Under District of Columbia Law each transfer must be separately recorded with the District at the time it occurs.

It cannot be done later, and it cannot be done in a private database.  It has to be done at the District Offices, with fees paid.

For a securitized mortgage the transfer chain typically goes from the originator (which may be a bank or “Joe’s Bait and Mortgage”) through a sponsor (the “Securitizer), a depositor (a SPV to get “bankruptcy remote” treatment and qualify as a “true sale”) and then through to the trust, often passing through another entity (who is also often the servicer later on) in the process.

MERS claims that this is all kosher if they record who the note-holder is in fact now.  The District says otherwise – that each transfer has to be recorded within 30 days of it happening. That is, you can’t record late, you can’t record retroactively, and a private database doesn’t count – only the District’s official records, for which one pays a fee to record and gets a nice stamp from the recorder’s office, do.

Good luck MERS; this one looks pretty black-letter.

Incidentally, if you’re interested in some of the UCC issues and how this winds up being a serious cluster-**** now, when everyone tries to avoid paying these fees and/or transferring the paper at all, start reading here, and then for the “how it all fits together” go look here.

It has been my position since 2007 that the reason these notes and documents were not transferred was not simple laziness or even “economic efficiency” (that is, simply keeping the money that was supposed to be paid to recorder’s offices) – rather, the purpose for this was obfuscation of the original paperwork because such prevents audits that would have disclosed very early on that the Representations and Warranties made to investors were being wantonly violated.  You can’t audit what you don’t have!

Of course the problem with this obfuscation is that when the Pooling and Servicing agreements also represents that the paperwork was transferred you wind up with a separate and distinct fraud problem – intentionally not complying with that PSA while selling securities to investors is a rather big problem all on its own – and one that, now several years down the road, cannot be retroactively cured.

Good luck MERS.

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4closureFraud.org


I sure could use some…

Comments
6 Responses to “The Market Ticker – MERS Catfight in DC: Parse This One Carefully”
  1. l vent says:

    SEE YOU TUBE VIDEOS UNDER FINANCIAL CRISIS 2010

  2. l vent says:

    WHY IS THE MAINSTREAM MEDIA NOT REPORTING THE REAL REASON THE AMERICAN PEOPLE ARE VOTING OUT ALL OF THE DEMOCRATS???? THE REAL REASON THE PEOPLE ARE VOTING ALL OF YOU SCUMBAGS OUT IS BECA– USE OF THE GREATEST ROBBERY OF THE AMERICAN PEOPLES WEALTH IN AMERICAN HISTORY. FRAUDCLOSUREGATE IS JUST THE TIP OF THE ICEBERG IN THE GREATEST STICK-UP OF THE AMERICAN PEOPLE IN US HISTORY. IT IS TIME FOR THE MEDIA AND THE PRESIDENT TO QUIT TRYING TO COVER-UP FOR THE BANKSTER CROOKS AND WALL STREET AND BEGIN TO RESTORE THIS NATIONS DIGNITY. STOP THE LIES, PRESIDENT OBAMA OR I WILL PERSONALLY LEAD THE RALLY CRY FOR YOUR IMPEACHMENT. FRAUDCLOSUREGATE IS AN INTERNATIONAL AND NATIONAL DISGRACE. STOP TRYING TO LAY THE BLAME ON OTHERS AND MAKE A STATEMENT FOR THE PEOPLE WHO ELECTED YOU AND PLACE A NATIONWIDE MORATORIUM ON ALL FORECLOSURES INDEFINITELY UNTIL YOU AND YOUR ADMINISTRATION CAN BEGIN TO CLEAN UP THE MESS WALL STREET AND THE BANKSTERS CREATED. THE MESS THIS GOVERNMENT CA– USED BY LETTING BANKSTERS AND WALL STREET BE UNREGULATED BY THE FEDERAL GOVERNMENT. EVERY AMERICAN CITIZEN SHOULD TAKE EVERY DIME OUT OF THEIR BANK ACCOUNTS, 401 K ACCOUNTS AND SEE WHERE THESE BANKS/ WALL STREET REALLY STAND. THE MONEY ISNT EVEN IN THERE, AM I CORRECT ON THIS, PRESIDENT OBAMA???? WHY DONT ALL AMERICAN CITIZENS GO THO THE BANKS TOMORROW AND FIND OUT THE TRUTH. STOP COVERING UP FOR THE BANKSTERS AND LET THEM COVER UP FOR THEIR FRAUD. OUR NATION IS BANKRUPT BECA– USE OF THEM AND THIS GOVERNMENT LETTING THEM OVERSPECULATE AND OVERLEVERAGE OUR FUTURES.

  3. Mo says:

    The next question is: can a citizen in a county sue MERS for avoiding paying taxes to the county?

  4. Paul L. Bishop says:

    This is just one more peel of the onion, it is at a minimum a tax avoidance isssue, and beyond that the District of Columbia will sort it out. Somebody is going to pay a lot of back taxes + penalties and probably some sanctions. For the title, escrow, notaries and Attys. it will be a far more serious issue – the Banks will get exactly what they deserve. Inside Job by Charles Ferguson recently released is a must see. Anyone that needs help with this see a DC Lawyer John Relman, jrelman@relmanlaw.com The chickens are finally coming home to roost. Google Herb & Marion Sandler of World Savings fame, see some of the foundations they funded, and see who contributed along side them. Acorn, Center for Resposible Lending, ProPublica ????

  5. housemanrob says:

    You cannot make this stuff up!! Nobody woud believe it could happen!

  6. sonya Brewer says:

    “Mortgage Electronic Registration Systems, Inc. (MERS) holds the security interest in the deed of trust when MERS is identified as the beneficiary of record, as nominee for the lender and the lender’s successors and assigns. At closing, the lender and borrower name MERS as the beneficiary.”

    That statement is untrue , in my case anyway, at my closing I didn’t name MERS to anything knowingly the lender was not present at closing either, when the closing Attorney got to the Mortgage she said she wasn’t going to read all the pages it was a standard mortgage that specified what property was covered under the terms of the note and only read the exhibit of the description of the property.

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