This is Part 3 of a 3-part series on MERS and its attempts to “bat clean-up” (another word for damage control). For more information, and to read the preamble to my response to MERS’s PR campaign, see Parts 1 and 2 of 3 on http://www.cloudedtitles.com.
As long as we’re going to “set the record straight” … one has to understand what is posted on the Williamson County Clerk’s website at http://www.wilco.org:
Texas Property Code Sec. 11.001. PLACE OF RECORDING. (a) To be effectively recorded, an instrument relating to real property must be eligible for recording and must be recorded in the county in which a part of the property is located. However, if such an instrument grants a security interest by a utility as defined in Section 261.001, Business & Commerce Code, the instrument may be recorded as required by Sections 261.004 and 261.006 of that code, and if such instrument is so recorded, the lien and the secured interest created by such instrument shall be deemed perfected for all purposes.
Texas Local Government Code 192.001 General items. The county clerk shall record each deed, mortgage or other instrument that is required or permitted by law to be recorded.
192.007 To release, transfer, assign or take another action relating to an instrument that is filed, registered or recorded in the office of the county clerk, a person must file, register, or record another instrument relating to the action in the same manner as the original instrument was required to be filed, registered or recorded.
I emphasized the last sentence in bold-faced type. It clearly says a person MUST FILE, no exceptions, including MERS-originated mortgages and deeds of trust any document that affects the original recorded instrument (that includes all of these assignments the banks using the MERS business model and electronic database largely ignore … to save money!
Again, as I pointed out in Part 2 of 3 of this rebuttal series, pricey assertions can come back to bite you in the butt:
- As to the paragraph that talks about the borrower naming MERS as the beneficiary of the deed of trust? I would have to question exactly how many Borrowers really KNEW who MERS was when they went to the closing table because most of the homeowners I’ve talked to said they had no idea who MERS was and the title companies handling the closing sure didn’t explain it to them. It amazes me that if people knew about MERS when they went to the closing table, why is the Williamson County real property records office now packed with concerned homeowners searching through their documents since the audit was released, searching for MERS-related documents?
- In the rebuttal letter, Beckmann tells the Williamson County Commissioners that they heard this testimony on January 22, 2013, when in fact, the Commissioners’ Court heard this testimony on January 29, 2013. What does that say for Beckmann not getting HIS facts straight?
- Again, in the paragraph above the bullet points in the ad MERS ran, it says, by using the MERS system, “the need for certain assignments is eliminated, thereby reducing paperwork and errors and lowering the overall cost of home financing. This role is disclosed and explained to the borrower on the first pages of the deed of trust, which they have signed.” Sure, the borrowers signed the document, but in assuming that the need for all of the assignments that SHOULD HAVE BEEN recorded in the land records is eliminated clearly violates Section 192.007 of the Texas Local Government Code. I also have to reflect back as to “who” explained this to the borrowers at closing. Again, most I’ve talked to have no idea who MERS was or what they represented.
- The so-called “explanations” MERS claims are provided in deeds of trust are seemingly vague and ambiguous, for the purposes of arguing whatever their attorneys want to argue to “stay in the game”. Further, I’d like to know who the “successors and assigns of MERS” are as shown under TRANSFER OF RIGHTS IN THE PROPERTY, because this definition sure as hell isn’t defined under Definition “C” or “E” in the long-form deeds of trust. In fact, those “definitions” don’t even mention who the successors and assigns of MERS are or how they’re involved contractually. That tells me a lot about the deficiencies in MERS’s business model.
- To respond point-for-point on the “bullet points” in this ad:
- (1) Disclosing liens to property in any given county does NOT disclose who theintervening assignees are that are transacting business outside of the county land records.
- (2) Most of the Texas Clerks had no idea that the definition giving MERS any authority in the land records as a “national book entry system” was enacted; it got past them.
- (3) MERS used to foreclose until they were challenged to the point of issuing a Policy Bulletin (2011-5) telling its members that as of July 22, 2011, they were no longer to foreclose in the name of MERS; thus, this statement is in my book, a “half-truth”.
- (4) Whether anyone has ever wrongfully lost a home due to MERS is not really the issue here. What is at issue is the robosigning and suspect notary fraud and multiple signature variations the audit uncovered of those suspected of manufacturing documents to effectuate foreclosure.
- (5) Cloud on title by using MERS? Instead of owning up to the mistakes being made by its “certifying officers” (who are nothing more than employees of some servicer or third- party document manufacturer like DOCX, whose President is going to prison) and taking responsibility for it, Beckman eludes to the fact that title companies support MERS. I don’t see anywhere in this argument where Schedule B: Exclusions is mentioned in title policies, wherein the title company won’t insure a chain of title if the “defects” aren’t recorded. How convenient is that for MERS? Is Beckmann then drawing a legal conclusion here by saying having MERS as a beneficiary or mortgagee the problem? What about MERS as a nominee? The combination of the two seem to give the MERS “officers”, like the attorneys working at the foreclose mills the impetus to sign whatever they want in the name of MERS and attempt to convey notes into trust pools that MERS doesn’t have the apparent authority to do. And what about those intervening assignees whose interests aren’t recorded in the land records in violation of Section 192.007? I have an idea … why don’t we let the courts (or juries) decide what constitutes a “cloud on title” instead of Beckmann unilaterally drawing his own conclusions?
- (6) MERS provides transparency? Really? Even Jeff Thigpen challenged this as mere folly in the PRIA convention in San Antonio where he and Beckmann were panelists. Thigpen got more applause than Beckmann did. Remember, MERS disclaims accuracy on its website because its website is data-inputted by its member-subscribers with no regulatory oversight. This means what’s on the MERS database that shows up in Servicer ID searches is what the members WANT YOU TO SEE, whether it’s accurate or not. The intervening assignees still aren’t there … so I question this “transparency” argument. Horse puckey.
- Beckman then admits that MERS reduces fees paid to county recorders. No wonder the county services are being curtailed. The county recorders rely on the assignments of intervening owners for the revenue they need to keep their services going as their constituents expect. So it would seem that MERS isn’t doing the Texas County Clerks, or any other recorders for that matter, any real favors. But the MERS subscribers (the banks and their servicers) save billions annually.
- By admitting that the possibility exists that MERS could create title issues by NOT insisting that its members MUST RECORD their assignments goes right to the very heart of the argument against MERS for its members violations of Section 192.007 of the Texas Local Government Code.
- Beckmann says the allegations in the audit are unfounded … well … give it time Bill, one of these days, it will be proven just what MERS members did to the land records using the MERS business model, which I still say is flawed and screws the counties out of billions of dollars a year in recording fees. Maybe the foreclosure mill attorneys who supposedly signed all of the documents reviewed in the audit will have to answer to grand juries. They should be nervous, Bill.
- “The key fact is, MERS WORKS.” I’m about to vomit. MERS works for its members. MERS works for Wall Street. MERS didn’t save me any money. MERS will end up costing homeowners money in the long run. MERS didn’t save me any money. I haven’t heard MERS tell any of these so-called Borrowers at closing that if you don’t understand what MERS is, don’t sign this mortgage or deed of trust until you consult an attorney.
Again, a glorified PR stunt with little or no probative value; but lots of seemingly viable admissions to violating Texas Local Government Code. MERS even faxed this article directly to Commissioner Lisa Birkman of Precinct One in Williamson County, which contained Texas case law handy to support MERS arguments. Those cases weren’t included in the advertisement here.
This is why MERS ran this article. The audit hit a nerve. If it didn’t, why respond like this unless you’re trying to do damage control? I hear the attorneys who signed a lot of these Williamson County recorded documents are “nervous”. Again, they should be.
Dave Krieger is the author of the book Clouded Titles and Managing Member of DK Consultants LLC, San Antonio, Texas, whose firm was retained to conduct the Williamson County real property records audit.