Scalia Sets Standard for Massive Mortgage Fraud Class Action Law Suit

Scalia Sets Standard for Massive Mortgage Fraud Class Action Law Suit

by Michael Collins

There hasn’t been much in the way of justice for the average citizen for quite a while. Often, those accused of crimes cannot afford adequate representation and are subject to “let’s make a deal justice.” If you’re unfortunate enough to be sued or party to a divorce proceeding, you soon learn that the court system is an entitlement program for attorneys, not a civilized means of settling disputes. (Image)

The last decade has been devastating for what many thought were inviolable fundamental rights. The Bush administration dismantled as much of the Constitution as time allowed including habeas corpus which prevents detention without a charge. Through a presidential directive, an even older legal tradition went by the way, the right to be indicted and tried before facing capital punishment. I am, of course, referring to President Obama’s declared option to assassinate citizens of the United States identified as terrorists by anonymous bureaucrats.

The Scalia opinion in Wal-Mart Stores, Inc. v. Dukes seems like another brick in the wall that protects the powerful against the intrusions of civil rights and equal treatment sought by the rest of us. Brought in behalf of Wal-Mart’s female employees, the suit sought compensation for 1.5 million women subjected to wage discrimination.

Scalia’s opinion killed the case before the evidence was considered. He argued that the group of women suing failed were not a true “class” that met the requirements for a class action lawsuit. The women bring suit needed to show that Wal-Mart had a discriminatory evaluation procedure or “operated under a general policy of discrimination” (Wal-Mart v Dukes, pages 16-27).

Outcomes don’t matter to Scalia. The very real disparities in income highly correlated with gender were not relevant. Never mind that there was evidence of massive financial discrimination. It was all about a lack of evidence for specific prior acts by the company. Is he serious?

This doesn’t sound very good for class action law suits in general. What company has openly discriminatory assessments for promotion or an explicitly documented “general policy of discrimination?” Were Scalia any more obvious as a blocking back for the corporate elite, he’d have to wear company logos on his judicial robe while rendering decisions.

Lenders had a Specific Uniform Policy to Commit Illegal Acts against Borrowers

The Mortgage Electronic Registration System (MERS) was created by Fannie Mae, the Mortgage Bankers Association, and key big bank lenders in the real estate finance industry. Gretchen Morgenson reported that MERS is involved in 60 million mortgages. MERS created the electronic recording system and operates it through a subsidiary. It neither loans nor collects mortgage payments. You’d never know that reading a majority of mortgages.

Professor Christopher L. Peterson of the law school at the University of Utah noted the pervasive presence of MERS in United States mortgages:

“In boilerplate security agreements included in mortgages all around the country, lenders include this clause:

MERS is Mortgage Electronic Registration Systems, Inc. MERS is a separate corporation that is acting solely as a nominee for Lender and Lender’s successors and assigns. MERS is the mortgagee under this Security Instrument. MERS is organized and existing under the laws of Delaware, and has an address and telephone number …” Peterson, September 19, 2010

This language represents a legal contradiction, clearly stated by lenders when they included this boilerplate in mortgages, notes and other lending documents. You are either a “nominee” (proxy) for the lender or the lender. This is a misrepresentation on its face. MERS could never be the mortgagee because it didn’t fund the mortgage, collect payments, or service the loans. Professor Peterson provided a detailed review of the flaws I MERS claims of legal standing in 2010. (Also see ForeclosureGate Deal – The Mandatory Cover Up re Peterson’s analysis)

The foundation of over of the 60 million MERS tainted mortgages is based on misrepresentation. MERS was not what said it was. It was something entirely different. The misrepresentation represents the most basic form of contract fraud.

On June 7, the Supreme Court of the State of New York, Appellate Division: Second Judicial Department dismissed a foreclosure action by the Bank of New York (Bank of New York, etc., respondent, v Stephen Silverberg, et al., appellants, et al., defendants). The New York Court stated: “In sum, because MERS was never the lawful holder or assignee of the notes described and identified in the consolidation agreement, the corrected assignment of mortgage is a nullity, and MERS was without authority to assign the power to foreclose to the plaintiff. Consequently, the plaintiff failed to show that it had standing to foreclose.” (Decided June 7, 2011)

In the opening line of the Wal-Mart decision, Justice Scalia noted, “We are presented with one of the most expansive class actions ever.”

How about a class action brought by tens of millions of citizens, Mr. Justice (sic)?

Had the homeowner signed a name other than his or hers, the contract would be deemed null and void. The same applies to the misrepresentation of MERS as the mortgagee.

The behavior of MERS was and remains fraudulent. The lender contracts through MERS should all be declared null and void.

Proof that the Misrepresentation was Intentional

As mortgage backed securities (MBS) were taking off, Moody’s investment issued an opinion on the legal risk to mortgage backed securities (MBS) investors faced form investments based on MERS. This was the green light for the orgy of derivative trading based on mortgages, including the subprime fiasco.

Without citing one single court case or authority and absent any contradiction from lenders or MERS, Moody’s argued that “common law principles” supported the use of MERS. Moody’s predicted that foreclosures would not be “materially impacted” and that, after an “adjustment period,” courts and attorneys would “get familiar with MERS.”

This was wrong at the time it was published. The stunning inaccuracy has been demonstrated in court decisions across the country. But the Moody’s opinion of 1999 was issued, ex cathedra, as it were. It stood unchallenged by the lenders. They knew or should have known that there was no legal support for this arrangement.

MERS and lender behavior during foreclosure proceedings provides another powerful demonstration of illegal intent. Even though it was not entitled to do so as the mortgagee and note holder, MERS was the named party in tens of thousands of foreclosure actions.

The lenders also showed a clear pattern of knowing disregard for the law by filing defective claims in bankruptcy courts. Professor Katherine Porter of the University of Iowa and Harvard University law schools examined 1700 Chapter 13 bankruptcy filings. The study reported that over half of foreclosure claims lacked “one or more of the required pieces of documentation for a bankruptcy claim.” Lender fees were “poorly identified” and “seemed unreasonable.” Porter concluded:

“The bankruptcy data reinforce concerns about the overall reliability of the mortgage service industry to charge homeowners only the correct and legal amount of the debt and to comply with applicable consumer protection laws.” Katherine M. Porter, 2008

With all of their resources, lenders filing mortgage claims in court should be expected to make very few mistakes and almost never leave out documents required by law to make the foreclosure enforceable. They knew or should have known that this was happening. Their behavior shows major contempt for the law and is likely illegal.

MERS Mortgage Holders Meet Scalia’s Requirement for a “Class”

They have a common grievance, the fraudulent misrepresentation by MERS that it was the mortgagee.

They can prove specific violations of law prior, during, and after the fact. The contract contained a fundamental misrepresentation; one that MERS and lenders knew was a misrepresentation. For a subclass, those who were subject to foreclosure proceedings as part of a MERS contract, the illegality is demonstrated by the pattern of repeated incomplete filings while attesting to the court that the filings were complete.

Will the court ever hear a class action by millions of homeowners demanding the cancellation of mortgages contracted through MERS?

Will it cancel existing mortgages and reverse foreclosures with damages paid? Of course not. But it should. It meets the Scalia standard for class actions to a tee.


This article may be reproduced entirely or in part with attribution of authorship and a link to this article.


h/t Tim

10 Responses to “Scalia Sets Standard for Massive Mortgage Fraud Class Action Law Suit”
  1. Michael says:

    I wonder what is going on with all the banks suing each other. Can they sue each other then file bankruptcy? What irony… Oh but they print all the federal reserve notes anyway, then demand payment in actual substance.

    Oh wait.. they file bankruptcy, then demand repayment on the fraudulent loans they made with paper that’s right I forgot. roflmao

    I thought they were all lawyers, and suppose to know the law. If they are suppose to know the law, then they should be held accountable. They have no excuse. Their own law says so. “Ignorance of fact may excuse, but not ignorance of law”. AND “Ignorance of the Law does not excuse misconduct in anyone, least of all a sworn officer of the law”. Unless there are NO sworn officers in their institutions.

    Maxims of law also says: Usury is odious in law. [Exodus 22:25, Leviticus 25:36-37, Nehemiah 5:7,10, Proverbs 28:8, Ezekiel 18:8,13,17; 22:12]

    The biggest part of anything to be called fraud, was when we gave them a security instrument called a NOTE, it was suppose to be set off to the National Debt right? And that is when the Banks came up with this grand idea of saying “here is a LOAN now pay THAT back with usury”.

    They can call it private or public or anything they want, it is still usury. I think I remember back in the day the devil and God made an agreement while Satan negotiated with God about the hedge around JOB. The agreement was basically he couldn’t kill him. With that in mind.. we have been killing ourselves.. simply because the advisory caused many to believe a lie, and cause separation, division, and strife. How can two people walk together if they are not in agreement?

    So now that the “powers that be” have done a good job at causing separation, division, and an unequal people, how do we get back together?

    “Do we not all have one Father? Hath not one God created us all?”

  2. lvent says:

    The Supreme Court is on a 3 month summer vacation and at least 3 Supreme Court Justices are “teaching” over in ITALY on their summer vacation. HOW LOVELY!!! They don’t give a RAT’S ASS about the AMERICAN people. They are all owned by the NEW WORLD ORDER TYRANNY. THEY SHOULD ALL RESIGN. THEY ARE ALL CORRUPT AND — USELESS. NO ONE SHOULD GET A LIFETIME APPOINTMENT IN A GOVERNMENT JOB.. THAT IS A/K/A A DICTATORSHIP.

  3. Correct me if I am wrong. My outlook on this is I find class action lawsuits to pay little but satisfaction to the people who sign up. You can not go after anything decent. So if the banks want to settle for less, they could hire an attorney that would get a settlement, give you pennies if that maybe 20.00 or thirty dollars each and make off like banditts themselves and prevent the people who signed up from a real law suit action. It would pay the banks to send in attorneys like that. Only the people after that sued that did not agree to a small payment would benefit from the class action. Make sure you never intend to sue for something more than satisfaction and I know I trust no one. A class action could actually help keep the banks from paying out more on law suits. The only one I would join out of satisfaction and nowing I will never sue the fed and knowing anonomous has done a lot of good for this country is the one against the fed by anonomous, being put together..

  4. Ron Moss says:

    If our national debt is the direct rresult of FRAUD. it looks to me that it should be void or voidable. The constitution states that Congrewss shall have power to coin money and regulate the value thereof.

    And, the supreme Court, in 1937 ruled,”/ Congress cannot abdicate it’s duty.

    • Michael says:

      Those are some goodies to use as a defense.

      “The constitution states that Congress shall have power to coin money and regulate the value thereof.

      And, the supreme Court, in 1937 ruled,”/ Congress cannot abdicate it’s duty.”

  5. Lie all of it says:

    DOesnt any one find it strange how they r complaining about our economy but if 25% of us are either unemployed or underemployed (we dont get the real nubers ever) that is how much federal taxes not paid because we r not working enough why do our whinny elected offials fail to recognize the corelation? we need our billion dollar bailout

  6. coolpillow says:

    If any attorneys actually DO have the brass ones to start a 50 State Class Action suit- SIGN ME UP !

    I hope they nail the banks, the servicers and the foreclosure mill attorneys.

    And I want to see Bawney Fwank, Chris Dodd, Maxine Waters, Franklin Reigns and the rest-dressed in ornage jumpsuits and frogmarched into Gitmo!

  7. Readdocs says:

    Nothing will effectively be done to stop this and reverse the damages until it’s too late. The whole structure of

    buying and owning private property will have to collapse before anyone steps up and puts a permanent stop to

    it. By that time millions more titles will have been permanently damaged beyond repair. it will be too late when

    the ones who could have corrected this get a good stare at what has been done.

  8. lvent says:

    They are not kidding anyone, MERS is no more than a WASHING MACHINE FOR FRAUD.. Fannie Mae uses their Bankster/Mortgage Lender/Servicer minions to launder their fraud through MERS and mix it up so to take the heat off of Fannie Mae, the ORIGINATORS OF THE MORTGAGE FRAUD PONZI SCHEME. It is like Where’s Waldo? WALDO IS FANNIE MAE. BUST ‘EM.

  9. Scotty Simpson says:

    Now who or which law firm has the BALL’s to stand up against MERS and Fannie Mae, Freddies Mac and all the other big Banks with deep pockets in Congress? The law suits I have seen is the Banks, we the Tax Payers bailed out giving the money back to the rich.

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