Updates to Recent Posts 7-22-11

Note: These are also being added to the bottoms of the posts.

New Century Post Update:

Two updates. First, I neglected to give Max Gardner credit for teaching me about the repudiation of MERS contracts and giving me the rejection by New Century and the lawsuit and exhibits relating to Fieldstone Mortgage’s similar MERS repudiation.

Second, after reading my post on New Century, attorney J. Arthur Roberts forwarded me some documents from one of his cases that deals with the same issue in a different context.

Roberts’s bankruptcy client had a loan and a MERS deed of trust with Sea Breeze Financial Services. Citimortgage filed a motion for relief from the automatic stay—essentially seeking the court’s permission to proceed with foreclosure—but the motion didn’t attach a note endorsed to Citi and it didn’t include an assignment either. After Roberts pointed that out, the Court told Citi to try again.

Citi did, and supplemented the filing with a new version of the note, endorsed by allonge, and an assignment that claimed it transferred the deed of trust and the note on August 16, 2010. (Link is to the note, allonge and assignment.) The assignment is very odd in that MERS is signing but not as the nominee for anyone. Presumably, however, MERS is acting as nominee for Sea Breeze. And that created another problem, as Roberts pointed out: Sea Breeze had gone out of business—filed dissolution papers—nine months earlier. Want to bet Citi or its contractor made the assignment, and presumably the allonge? The judge agreed with Roberts and told Citi to try a third time. We’ll see what Citi comes up with next.

MERS Post Update

Lynn Szymoniak sent me this MERS presentation which suggests another fundamental problem with many MERS Assignments. See page 3, brown box 2 at right and pages 23 and 24. Every MERS officer is supposed to be an employee and officer of the lender they’re signing on behalf of, and is only supposed to sign for loans registered to that lender. That is, a MERS officer signing for, say, Citi is supposed to be an employee and officer of Citi, and only sign for Citi loans.

People generally understand an “officer” of a corporation to be someone who has a corner office, or at least, real status in the company. The word shows up in all the big titles, after:  Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, etc.  But we’ve learned the people signing documents are low level $10/hr employees, sometimes of the company and sometimes their contractors. These people sign as MERS officers for many institutions and believe they’ve been given signing authority by those institutions (presumably by being made officers).

These things can only be simultaneously true if we have another one of these meaningless paper situations.

They’re not “officers” in the commonly understood way. The only way these signers on behalf of multiple institutions can also be “officers” of each is if “officer” means nothing. These people also aren’t employees of the lenders in by any definition I know of. But surely the requirement by MERS that a certifying officer be an officer and employee of the company isn’t an accident. I mean, MERS could have said “agent”; could have said “employee or contractor” etc. Presumably it matters because the assignments claim to transfer assets of the company.

Again, once judges really understand how meaningless MERS documents are—how they are designed to look meaningful while in fact are meaningless—I don’t think it will be pretty. I only hope law enforcement is paying attention too.

Tax the Corporate Chiefs Update

So far, only form letter email responses from each Senator; none from Rep. Bishop, although I did have a pleasant conversation with his staffer before the post went up. Interestingly, Senator Gillibrand’s auto response invited me to fax her my letter to get quicker attention, so I did. We’ll see how long it takes to get any kind of an answer. I’ll follow up with a phone call in a few days.

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