Comment

Comment by G. lewis on December 25, 2009 at 7:55am

You raise and interesting question.

While MERS believes (and may even think) they have some power, in fact they have little or none. They are nothing more than a service that tracks the mortgage NOTE and, in their minds, a Note that's separated from the mortgage via securitization. (Legally, they cannot be separated.)

Your article quotes > First they all state “…..acknowledge that it has received full payment and satisfaction, and in consideration thereof, does hereby cancel and discharge said Mortgage”...

In my humble opinion, that statement by MERS is NOT worth the paper it's written on.

MERS has NO legal standing to release the Note, much less the mortgage. They NEVER owned it. No money was ever received other than fees collected for tracking services. They are NOT the servicing company or agent. [Many court cases exist that rule on this fact.]

Pay an inquisitive visit to NEIL GARFIELD'S site a href="http://livinglies.wordpress.com/>" target="_blank">http://livinglies.wordpress.com/>; He's an attorney who well understands the true nature of MERS and the entire derivatives debacle. There you will find an amazing amount of USEFUL information. (Find and read his bio.)

You may then (if you don't already) come to understand that this MERS/securitization problem will likely CLOUD THE TITLE of ANY property where MERS acted as a "Nominee"; a term which they don't define in their legal disclosures.

As a former Commercial Realtor from the Stone Age, I would today NEVER close (as a buyer or seller) on a property without having the certified physical Note staring (without blinking) at me from the closing table. This, no matter what the process or temporary funding that must exist in order to transport the note from it is before the closing.

No ORIGINAL Note, NO transaction. Period.

Of course the Note must be accompanied by certified documentation that ALL [repeat; all] LEGAL OWNERS of the Note have signed-off on the release. This includes a verified chain of any "holders-in-due-course" investors that bought the derivative mortgage backed bonds.

Therein lies the nub of the MERS problem. Very few of the transactions they have registered can produce a certified holder-in-due-course record of ALL those who bought/sold the derivative MBO

Finally, this MERS/securitization problem has the potential to bring down the economy. [Yes, I'm well aware of all the other really bad economic messes we're in.]

I've been monitoring this building disaster since I serendipitously ran across the Federal Judge Boyko case in Cleveland in November 2007. That U.S. Ferderal judge threw out 14 foreclosure actions brought by Deutches Bank; all this in spite of the bank's army of hollow-eyed-killer lawyers.

The Judge Boyko case caught my attention; "pattern recognition" and all that.

Most cordially, Glenn
P.S. Enjoyed your Ning site; I'm in process of creating the Library of Mind Mapping which will be hosted by Ning as well.

Comment by DanaVoelzke on December 15, 2009 at 4:44pm

Dear Broker Bryant,
Thank you for reminding us not to forget about the boring back office stuff that we all forget needs to happen once the short sale is already over.

I think MERS is set up not to have any power other than attempting to standardize mortgages so they can be traded and moved around easily, like a depository for shares of publicly traded companies, but I am NOT an expert.

There were two interesting things I saw on the website you linked to. 1) on the Homeowners page, this phrase "Contrary to popular belief, it is your Servicer and not the lender that can negotiate the terms of the loan with you. " What are the implications of this phrase for short sale approval by the investor?? and 2) you can find out the name of the mortgage servicer on any home clicking this link https://www.mers-servicerid.org/sis/. I did not know that before it will be helpful for my listing appointments.
Thanks!!

Comment by Laurel Starks on December 12, 2009 at 4:10pm

As for an answer to your question, I have no idea. MERS is getting too far outside of my "scope" and my brain, honestly, does not have the energy to put more thought into it - but it is an interesting point you make.

I have a question as to how many, if any, deficiency judgments are being issued. Bryant - aren't you in Florida? I am in California, which is an anti-deficiency state. However, the anti-deficiency rules are written to pertain only to foreclosures, not short sales. An attorney I work closely with has yet to see a case where the lender has pursued a borrower, and the borrower has contested it. In fact, we don't know of a case where the lender has pursued a deficiency judgment after a short sale at all.

My attorney colleague would argue that a borrower cannot "waive" their right to the anti-deficiency protection, and that by the lender doing a short sale, the lender has in effect "waived" their right to a foreclosure, thereby waiving their right to a lawful pursuit of a deficiency judgment.

Have you seen, or do you know of, a lender actually pursuing a deficiency judgment (not just collection activity, but a true deficiency judgment) post-short sale?