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The 9th U.S. Circuit Court of Appeals had really no choice but to reject the weak argument presented by Arizona homeowners in their foreclosure case. The homeowners argued that they were misinformed about the operations of how MERS worked. In other words they somewhat relied on the misinformation and suffered injury as a result. Calling MERS a SHAM! Which the homeowners also felt prevented them from contacting the party holding the loan to get a loan modification repayment plan.
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In a letter from Judge Conseulo Callahan writing from the unanimous three-judge panel, said that ?Mortgage Electronic Registration System is a legitimate way for lenders to store deeds when the loans are transferred from one lender to another.?
This is where Improper Mortgage Securitization comes into play. Why every homeowner facing foreclosure, foreclosure defense lawyers, and forensic loan auditors need to understand when securitization is flawed. Most importantly those trying to stop or void foreclosure need to know how to explain when improper mortgage securitization exists!
The problem with MERS is that while they are setup to store deeds when loans are transferred from one lender to another which is legitimate but if securitization is improper the holder receiving transfer is NOT a Holder In Due Course. Now it becomes a universal problem for MERS because this is a violation of Uniform Commercial Code.
This is where MERS will die when using the Improper Mortgage Securitization foreclosure defense. So MERS acts as an nominee, a separate entity to store the deeds being transferred? This answer to this question is yes. Okay, it is a legitimate business model! But what authority is expressly given in the NOTE that grants MERS permission to transfer the NOTE with the deed?!! The Arizona homeowners Did NOT argue this important foreclosure defense and would prove improper mortgage securitization exists! Why? I have YET to see one note that grants MERS such authority. Believe me I have inspected thousands of mortgage notes including my own.
Consider This:
?Even if we were to accept the plaintiffs? premises that MERS is a sham beneficiary and the note is split from the deed, we would reject the plaintiffs? conclusion that, as a necessary consequence, no party has the power to foreclose,? Callahan wrote. She said such a claim could succeed only where MERS initiated foreclosure in its own name, or where the designation of MERS violates state recording and foreclosure statutes, neither of which is at issue here.
This is silly on behalf of the Arizona homeowners because essentially a loan was originated and somewhere somebody is owed! This prime example of wearing a t-shirt that says ?Give Me A FREE House Please I Am A Deadbeat?.
For MERS this gets even more complicated because certainly there are thousands of homes that were foreclosed in MERS name and listed as the lender in the legal paper. That class action coming SOON is to be continued, let?s just hope those homeowners have good legal representation that know what Improper Mortgage Securitization is and HOW to explain it.
Could the Arizona homeowners have won against MERS? If they argued the foreclosure defense of Improper Mortgage Securitization they could have easily won. After all contracts such as a mortgage NOTE is governed by Uniform Commercial Code. Another killer for MERS is fabrication of mortgage assignment transfers and the use of Robo signers. Every mortgage assignment must be fact checked by the assignor! Was it ever examined did MERS violate state recording and foreclosure statutes? There are too many things wrong with why the Arizona homeowners were defeated by MERS.
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