MERS Mortgage Transfers Deemed Illegal by Federal Bankruptcy Judge

[Aurumag]

MERS Mortgage Transfers Deemed Illegal by Federal Judge
By Michael Kraus on February 15, 2011


A new ruling from the United States Bankruptcy Court for the Eastern District of New York, In re: Ferrel L. Agard could have a massive impact on the housing finance system moving forward. As detailed on Bloomberg yesterday, Judge Robert E. Grossman ruled that the controversial Mortgage Electronic Registration System (MERS) does not have the right to transfer mortgages.

“The court recognizes that an adverse ruling regarding MERS’s authority to assign mortgages or act on behalf of its member/lenders could have a significant impact on MERS and upon the lenders which do business with MERS throughout the United States. However the court must resolve the instant matter by applying the laws as they exist today. It is up to the legislative branch, if it chooses, to amend the current statutes to confer upon MERS the requisite authority to assign mortgages under a business model that was designed in large part to avoid the requirements of the traditional mortgage recording process. This Court does not accept the argument that because MERS may be involved with 50% of all residential mortgages in the country, that is reason enough for this Court to turn a blind eye to the fact that this process does not comply with the law.”

MERS was created in large part to allow mortgage originators to more easily securitize mortgages and bundle them into mortgage backed securities, while avoiding many of the transfer fees imposed by various county or state offices. It has been at the center of the robo-signing foreclosure crisis, and many have questioned whether mortgages and titles transferred through MERS are valid, and whether MERS has standing to foreclose on properties.

... LINKS

http://www.bloomberg.com/news/2011-0...udge-says.html

http://www.totalmortgage.com/blog/mo...al-judge/10184

Here's another one I like even better:

United States Bankruptcy Judge Robert Grossman has ruled that MERS's business practices are unlawful. He explicitly acknowledged that this ruling sets a precedent that has far-reaching implications for half of the mortgages in this country. MERS is dead. The banks are in big trouble. And all foreclosures should be stopped immediately while the legislative branch comes up with a solution.

...

LINK:

http://www.huffingtonpost.com/l-rand..._b_824167.html

[Usury]

Hmmm...haven't read the entire article, but sounds like a Bankruptcy judge rules that MERS violates law with no reference to what law he is referring? Sounds like a liberal federal judge appointment overstepping his authority to me--no big surprise there.

Also, the standing to foreclose is a separate legal argument from the validity of transfer argument. I agree that foreclosing in the name of MERS could be considered invalid, but that is easily remedied by recording an assignment out of MERS to the final servicer that is foreclosing. Whereupon both the security instrument and a RECORDED assignment and a Note endorsed to the servicer can be easily provided (since the Note has nothing to do with MERS) all in the name of the same entity that is foreclosing. Based on this, where is the problem? I'm sorry but I fail to see where MERS as Original Mortgagee violates either the letter or spirit of any existing laws (with the possible exception of the letter of a recording law in Mass or Penn one--can't remember which state it was off the top of my head).

This is a huge mess.....we have a number of judge ruling on different MERS issues going both ways (the majority have ruled in favor of MERS). We need a supreme court ruling or legislative law passed upholding the MERS process ASAP so that we can move on. If it does come down to the final decision as MERS is invalid, then we will have reached TEOTWAWKI....financial armageddon. As I've said before, unlike some others on this board, I'm not really looking forward to an extended great depression with a huge increase in suffering in this country. Think you might get a free house out of it? Think again...the majority of foreclosures are proceeding normally despite a few odd rulings. In addition, if the rulings uphold, there is concern that prior mortgages and releases could be invalidated as well--so who really owns your property? Is total financial and housing collapse the plan? Does this give the Marxist in Chief an excuse to Nationalize both the entire banking and housing industries?

[Aurumag]

...


This is a huge mess.....we have a number of judge ruling on different MERS issues going both ways (the majority have ruled in favor of MERS). We need a supreme court ruling or legislative law passed upholding the MERS process ASAP so that we can move on. If it does come down to the final decision as MERS is invalid, then we will have reached TEOTWAWKI....financial armageddon. ...

If it is to be (e-fiat) financial armageddon, then so be it!

[Goldhedge]

What is the truth?

This thread says the judge ruled in favor of MERS...

http://www.goldismoney2.com/showthre...465#post345465

[Usury]

The truth is that there have been different rulings on the same and slightly different issues related to MERS in different states going both ways. In fact on MERS website they have links to multiple rulings in their favor. Of course they conveniently leave out the rulings not in their favor, but having following this issue for some time I am firmly convinced the favorable rulings outnumber the unfavorable.

Here is the link to their website with favorable rulings and other news: http://www.mersinc.org/news/index.aspx

[Aurumag]

The truth is that there have been different rulings on the same and slightly different issues related to MERS in different states going both ways. In fact on MERS website they have links to multiple rulings in their favor. Of course they conveniently leave out the rulings not in their favor, but having following this issue for some time I am firmly convinced the favorable rulings outnumber the unfavorable.

Here is the link to their website with favorable rulings and other news: http://www.mersinc.org/news/index.aspx

Then I am glad I could add some counterweight for the "scales of justice."

I agree with you that the MERS issue needs to be settled once and for all, but I seriously doubt that SCOTUS would want to take the case, considering the financial can of armageddon it has already opened to those, like myself, who seek the truth.