By Dave Krieger (Op-Ed) – September 10, 2012

When I was lecturing at the V. G. Young Institute’s annual Texas Clerks School in January, an interesting question was posed to me by one of the clerks (after having delivered a scathing presentation entitled MERS 101) regarding title insurance coverage.

“How is it that title companies can issue insurance policies when there are suspect issues with MERS and clouds on title?” she asked.

A great question, surprisingly. More surprisingly was my answer: “The title companies are merely ‘writing around’ the defects in the chain of title.”

I could see jaws dropping around the room. I continued with my answer:

“In virtually every title commitment issued there exists a ‘Schedule B: Exclusions’; under most every set of exclusions (generally under the 2nd or 3rd sentence), a title company can refuse coverage if the issue creating the problem isn’t recorded in the public records.”

More jaws dropped. They had put two and two together and things didn’t add up.

With the advent of the Bain v. MERS ruling (August 16, 2012) by the Washington Supreme Court, the landscape surrounding MERS’ ability to participate in non-judicial foreclosures has been vastly curtailed if not nullified with the ruling that MERS is not a valid beneficiary under the Washington Deed of Trust Act. The ramifications surrounding the yet-to-be-appealed decision are numerous and Stewart Title has now taken the liberty to introduce us to some of them … from a title company viewpoint as to insurability of title. Click here to download the .pdf version of that memo!

The “end game” for title companies appears to be on shaky ground and Stewart Title can now elect NOT to issue a commitment letter on REO (real estate owned) property that has been foreclosed on or is facing default, especially if MERS, Fannie Mae or Freddie Mac is involved!

That scenario in of itself creates a huge problem for the Washington real estate market, inevitably putting many REO and short sale transactions on hold. The Oregon Supreme Court may also uphold an appellate ruling that sticks it to MERS in much the same fashion as its neighbor to the north has. The Oregon real estate market is already feeling the ripple effect of that ruling. The shocking truth is however, is that if and when the litigation starts (and it will) regarding the fine points of this memo (regarding the legality of MERS to do anything and its subsequent involvement in any kind of improper foreclosure activity) Stewart Title and other major title companies that assisted in respective title searches and processing for these foreclosures on behalf of the major banks and their “trustees” could end up as defendants in costly and protracted litigation. Based on the inside track, Stewart and many of the other major title insurers have much to worry about.

The bigger problem is that despite the Washington Supremes’ ruling, MERS and its certifying officers are STILL FILING DOCUMENTS in the land records in Washington counties! Until the suits start flying and injunctions against this continued behavior start getting issued by the courts, things with MERS and the substitute trustees instituting these foreclosures will be status quo.

One can simply assume that the damages will be easy to prove; but robosigning, even though it still continues to this day despite the AG settlement, is not in of itself a crime. It’s what’s in the underlying meaning behind the act that is the real problem. Insurability of title is a real problem. It has been ever since MERS’ business model permeated the nation’s land records.

The title companies appear to be “in bed” (generally) with MERS. After all, the American Land Title Association was one of its founding members. Total irony, I know … a land title non-profit trying to tell MERS members and America’s rank and file clerks and recorders that their current system of records maintenance is too slow for securitization.

Couple the foregoing scenario with hordes of ignorant recorders, clerks, auditors and registers of deeds and you’ve got a recipe for disaster within the national land recording system on a massive scale!

It will take a century to clean up the mess that MERS and its minions created in 13 short years. No act of Congress can solve this problem. Give it 24 months … this issue will be in front of the U.S. Supreme Court. Once and for all I can say with a certainly, “Is that your final answer?”

This is an issue the courts largely choose to ignore … for now.


By Dave Krieger

This opinion is based on legal research only and cannot be construed as legal advice!


The point being here … if you didn’t learn anything about quieting titles in the book “Clouded Titles”, it would be best suited perhaps to espouse the deeds of U.S. Bank and Wells Fargo as they attempted to do what I call “a quiet title action in reverse”.

At first glance, this case involves procedural and agency relationship errors. For those of you in the Commonwealth of Massachusetts, you’ll note from the slip order issued by the Massachusetts Supreme Court that the actions preceding their ruling were brought “in the Land Court under G.L. c. 240 § 6, which authorizes actions to quiet or establish the title to land situated in the commonwealth or to remove a cloud from the title thereto.”

The analysis by the High Court points to the law firms experienced with studying quiet title actions, yet the attorneys missed the boat on proving agency, which is a fundamental element of quiet title actions. Proving standing to foreclose on a mortgage or deed of trust is one thing; proving how you got the note to enforce on the other hand is part of what makes up the chain of title. When those assignments are not recorded, because they happen to be in the MERS system, or simply sold willy-nilly several times over without perfected security interests being recorded in the land records in the county where the property lies, you’ve got a problem. In these cases, the banks created their own problems without them even knowing it.


By Dave Krieger

When you first glance at page 1 of this House Bill, initiated by Ohio Congresswoman Marcy Kaptor, it’s almost as if you’d think, “Yes, there is a God!”

However, the “Transparency and Security in Mortgage Registration Act”, while nailing MERS in regards to prohibiting Fannie Mae, Freddie Mac and Ginnie Mae from owning or guaranteeing any MERS mortgage where MERS is claiming to be the “mortgagee of record” (which is about 65,000,000 properties), also dabbles with the idea of a “federal land title system”, something this author thinks may shortchange our states’ rights to real property recordation. (more…)


By Dave Krieger

It was a telephone conference you would have just died to be on. It appears that county recorders are starting to take notice of the losses in revenue with MERS’s circumvention of their recordation systems. By best conservative projections out of this conference, John O’Brien, Essex County Massachusetts Register of Deeds head is foaming mad that MERS has skated off with (in the event of at least one recordation past the initial filing of the mortgage) with $1.95-million dollars a year that rightfully belongs to Essex County. (more…)


By Dave Krieger

The title insurance companies have shifted the blame … to the lenders. What did you expect? Just visit the county courthouse and examine the records of a given homeowner who has a MERS mortgage or deed of trust and you’ll still find problems in the chain of title.

On October 1, 2010, when Version 1.1 of the book was launched onto the Internet, the strategy was based on previous information (of the previous six months) that title companies were going to be “exposing” themselves to unnecessary risk by guaranteeing title insurance to properties whose titles were slandered or clouded. This meant that one could get a homeowner’s indemnity policy with conditions and exceptions and use it to potentially create prima facie evidence in a quiet title action. This method actually “stuck” in one case that appears to be headed for settlement soon. Insider information has revealed that a federal judge has seen this author’s work (as have some bank attorneys) and they were impressed with the clarity and understanding put forward in the author’s assessments. (more…)

Dave Krieger appears on KVUE’s Midday newscast Consumervue segment.

Watch Dave Krieger on KVUE
Dave Krieger appears on KVUE’s Midday newscast Consumervue segment. Krieger speaks directly to homeowners who may be facing foreclosure through no fault of their own and the uncertain future our country faces as the plot “foreclosure mess” thickens. He reveals the motivation behind the book Clouded Titles and describes his personal experience dealing with quiet title action on two of his own properties. Dave address the subject of robo-signers and outlines a few examples of how his investigative efforts have turned up some unusual and questionable findings. He touches on the fact that Northwest Trustee Services is currently being investigated for wrongful disclosure. Anchor Olga Compos closes the interview by asking “how did we get into this foreclosure mess in the first place?” Krieger’s answer begins, “MERS …”


By Dave Krieger

The spin cycles are in motion and we haven’t even done the laundry yet. Reports are out that not only did Bank of America post third-quarter losses of $7.65-billion; the soothsayers are countering with “exposure scenarios”, showing $50-billion worth of risk (representing only 3% of the $2.1-trillion total) as good enough reason for Bank of America to seek Chapter 11 protection. It also appears that in this election season, a bailout or some other government “deal” is highly unlikely and would certainly exacerbate Bank of America’s problems.

I thought I was dreaming until I saw Chris Whalen’s posting and thought … gee, Bank of America certainly does have a liquidity problem to be forced to start up foreclosures again. One would certainly have to ask why the Obama administration just now announced intentions to launch a criminal investigation into all of this mess. Does someone in DC have a conscience? Or is this just another “CYA” as a cave to public pressure? With these kinds of pictures, the day traders would be “shorting” Bank of America stock and making a killing doing it.

One would have to wonder about the liquidity factor with all of this missing paperwork and the investors and insurance companies that certainly will be lining up to file fraud suits against the banking giant will certainly force some sort of decision. For BofA, it is significant. General Motors went into Chapter 11 after all and within three months they emerged stronger than ever. But then again, GM wasn’t proprietarily trading residential mortgage-backed securities on Wall Street either. This is a different animal.

My take? Bank of America’s decision to absorb Countrywide and Merrill-Lynch probably wasn’t one of their smartest moves. The paperwork issue that forced the moratorium of some of these foreclosures has forced Bank of America to go after over 100,000 more homes … and then comes the fun part. (more…)