By Dave Krieger
It’s news that’s almost too good to be true for not only borrowers but also for 49 states attorneys general that have banded together to attack lenders for violation of state laws with the recording of documents that were improperly notarized and attested to by robo-signors, something I cover heavily in the book “Clouded Titles”.
The Joint Statement of the Mortgage Foreclosure Multistate Group was just issued by the National Association of Attorneys General; and as of this posting, President-Elect of that organization, AG Rob McKenna of Washington took to the media to explain his state’s position on the matter and the fact that his office (already known to this author beforehand) was going to launch an investigation into the organizations responsible for filing what are pretty much considered to be “bogus assignments” and conveyances by improper attestations.
The sequence of events leading up to this press release was not anticipated so suddenly …
On October 9, 2010, Mortgage Electronic Registration Systems, Inc. CEO R.K. Arnold caused to be issued a national press release, of which this author views as doublespeak and damage control, which was posted on major news sites all over America, espousing the value of MERS and its ability to track mortgages …. quoted in part:
“MERS is one important component of the complex infrastructure of America’s housing finance system. Billions of dollars of mortgage money flow through the financial system every year. It takes many, often-unseen mechanical processes to properly get those funds into the hands of qualified homebuyers. Technology designed to reduce paperwork has a very positive effect on families and communities. They may not see it, but these things save money and time, creating reliability and stability in the system.”
MERS is a bankruptcy remote entity that has no assets or liabilities, no income or expenses; and no employees. It does not cover the actions of its “certifying officers”, who are now being accused of playing a part in the robo-signing activities which is drawing fire from the attorneys general and further muddying up the recordation system with documents that could clearly be challenged as having clouded the title to a homeowner’s property.
This author suspects that the title companies are going to have something to say about their participation in anything involving MERS with the latest reports of JPMorgan Chase’s CEO Jamie Dimon, announcing four days later that his bank has stopped using MERS, based on court arguments by Chase’s lawyers that the MERS system is unable to accurately prove ownership of mortgages. The repercussions of this announcement cut right to the core of MERS’s credibility; but there’s more to the eye to those who have been aggressively following this chain of unraveling events. The MERS press release came out four days before the Dimon announcement, thus it appears that MERS was trying to cover its own rear end, knowing that this announcement was pending.
Conversely, for those planning litigation against their lenders and their subordinate trustees in non-judicial foreclosure states to quiet title, the announcement by Chase not only bodes negatively on MERS’s credibility, it also sets new discovery parameters necessary to attack the rest of the electronic recordation system in the impeachment of recorded documentation by other lenders.
“There’s no qualitative difference between judicial and non-judicial foreclosure states; it’s a procedural difference. Fraud is fraud, no matter what state you’re in; if it’s front of the court, it’s in front of the court,” says Seattle attorney Jill Smith of Natural Resources Law Group PLLC.
“If participating MERS lenders think they’re going to ‘fix’ the broken chains of title they’ve created in courthouses all over America to millions of titles to property, they are woefully mistaken”, concludes Dallas attorney Wade Kricken, who is launching quiet title actions on behalf of north Texas homeowners.
With the release of this latest news comes the forethought that other major lenders may be contemplating similar actions; pulling away from MERS in an effort to further distance themselves from the robo-signors who may be coming under fire personally for their actions.
Some insiders the author is talking to are already speculating Chapter 11 filings by some of the major lenders before this mess gets completely out of hand. The author sees that as a potential for the lenders to further write down losses on loans that were actually investor-funded, in order to distance themselves from capital gains issues.