Craig Watkins Makes Good on Threat to Sue Mortgage Processor Over "Tens of Millions"

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Back in August, Dallas County District Attorney Craig Watkins said he was taking a long, hard look at Mortgage Electronic Registration System, which, as we noted at the time, was created in 1995 by Fannie Mae, Freddie Mac and other financial institutions to speed up the recording and transfer of mortgages previously processed by county clerks' offices across the country. But in actuality, according to myriad media accounts, MERS has around 50 employees who do little more than document the transfers at around $25 a keystroke without paying the counties in which the transactions take place  -- which is why Watkins claimed that MERS was holding on to "tens of millions in uncollected filing fees that are potentially owed to Dallas County," money he threatened to go after in court if need be.

Moments ago, he made good on his threat: On the other side is the complaint filed against MERS, Stewart Title Company and Bank of America in Dallas County District Court, which reads less like a lawsuit -- at least, initially -- and more like a treatise on the events leading up to the financial collapse of 2008, the history of the mortgage system in the U.S. and why "public recordation of mortgage interests in the U.S dates back to at least the middle of the 17th Century," augmented with charts, graphs and quotes from Frederic Mishkin and Paul Krugman. Which I know you're dying to read at the end of a long workday. We don't get to Dallas County and its deed records till page 35 of the 48-page complaint. So, then, to the press release we go.
Today, District Attorney Craig Watkins on behalf of Dallas County, Texas, commenced an action against MERSCORP, Mortgage Electronic Registration System ("MERS"), Bank of America, and others seeking a judicial determination of whether the MERS System established by the mortgage banking industry to electronically track home mortgages violates Texas law related to the public recording of interests in home loans and the mortgages securing them.

"This is the first step to recoup the tens of millions in uncollected filing fees owed to the citizens of Dallas County," said Dallas County District Attorney Craig Watkins.
Like I said before, Watkins didn't think of this all by himself: Massachusetts Attorney General Martha Coakley is going after MERS on charges of foreclosure fraud, and there are many other pending suits making the same or related allegations, all smoldering remnants of the foreclosure disaster of '08. All the relevant Dallas County docs follow. Dallas County DA Craig Watkins Sues MERS
District Attorney Craig Watkins Brings Lawsuit against MERS on Behalf of Dallas County

(DALLAS, TX - September 20, 2011) - Today, District Attorney Craig Watkins on behalf of Dallas County, Texas, commenced an action against MERSCORP, Mortgage Electronic Registration System ("MERS"), Bank of America, and others seeking a judicial determination of whether the MERS System established by the mortgage banking industry to electronically track home mortgages violates Texas law related to the public recording of interests in home loans and the mortgages securing them.

"This is the first step to recoup the tens of millions in uncollected filing fees owed to the citizens of Dallas County," said Dallas County District Attorney Craig Watkins.

MERS is a subsidiary of MERSCORP, Inc. ("MERSCORP"). MERSCORP was established and is owned by banks and members of the mortgage finance industry such as Bank of America, CitiMortgage, Inc., HSBC Finance Corporation, and Wells Fargo Bank, N.A. MERS operates a national electronic registry that tracks beneficial ownership interests and servicing rights associated with residential mortgage loans and any transfer of or changes in those interests or rights.

MERS was established to act as a shadow recording system for the millions of mortgages in the United States, save its members money by avoiding filing fees in counties like Dallas County, and facilitate the buying and selling of mortgage rights as commodities.

There are approximately 5,000 participating members of MERS, of which 3,000 are residential mortgage servicers. Members register loans and may report transfers, foreclosures, and other changes to the status of residential mortgage loans on the MERS System.

There are currently approximately 31 million active residential mortgage loans registered on the MERS System. Since its inception, MERS has attempted to track more than 60 million mortgages nationwide, and tens of thousands in Dallas County alone. But because transfers of notes are not always reported to MERS, the MERS' electronic record of mortgages may or may not accurately reflect the transfers of any given mortgage or servicing rights that have occurred over the past several years.

Lenders ordinarily file a record of their rights in the deed records of the county where the property is located. The county clerk maintains those records as notice to the public of the identity of persons who loaned money for the purchase of the property and who have rights to foreclose upon the property if the loan is not repaid.

For a fee, MERS allows lenders to show MERS as the "mortgagee" or "beneficiary" of the lender's rights to the property if the loan is not repaid, even though MERS is not actually the beneficiary. MERS acts as a placeholder for the lender as to the lender's mortgage rights, but not the lender's rights to receive the loan payments. In that way, the lender is able to sell its rights to receive the loan payments and MERS agrees to protect the purchaser of the loan by remaining on the deed records as the "beneficiary" of the mortgage. So long as MERS remains on the deed records as the beneficiary, MERS asserts that subsequent purchasers can avoid having to file their acquisition of the rights to the loan payments and pay the associated filing fees.

Dallas County, Texas, believes that the MERS System may violate a number of laws applicable to the recordation of mortgages in Texas and has asked the court to order MERS and the other defendants to pay statutory penalties to Dallas County for having filed mortgage records which improperly claim that MERS is a beneficiary of tens of thousands of mortgages filed in the Dallas County deed records and for the filing fees that Dallas County would have been paid had all transfers of the subject mortgages been properly recorded in the deed records.
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real estate lawyer
real estate lawyer

Real Estate also called immovable property includes the ownership and possession of land along with anything permanently affixed to that land such as buildings, garages, improvements and buildings.

Jonathan Eric Odom
Jonathan Eric Odom

CHEERS to DA Craig Watkins!!! Someone has to pick the fight and let it might as well be him. Has anyone seen the latest video from 60 Minutes? "Why Aren't We Prosecuting Wall Street?"GO CRAIG GO.You are an inspiration to AmeriDream - where we teach the little guys to fight back AND use your rights!!!AMERIDREAM EDUCATIONAL CONCEPTS educates, empowers and encourages homeowners to discover the answers to questions regarding their mortgage: Do you know who really owns your mortgage? Do you know your rights regarding your mortgage? AmeriDream’s mission is to teach people how to obtain these answers and implement their Administrative Remedy, which is each American’s right under the US Constitution, thereby putting you in a better position to settle with your bank.ALL HOMEOWNERS, regardless of standing with their mortgage companies or banks are encouraged to contact us for more information.Visit our website: www.adreamconcepts.com or call 214.646.1450

Kenneth Council
Kenneth Council

§ 13.001. VALIDITY OF UNRECORDED INSTRUMENT. (a) A conveyance of real property or an interest in real property or a mortgage or deed of trust is void as to a creditor or to a subsequent purchaser for a valuable consideration without notice unless the instrument has been acknowledged, sworn to, or proved and filed for record as required by law.

Kenneth Council
Kenneth Council

Fraud in Texas carries a four (4) years statute of limitations penalty. If you are a home owner affected/infected (even if your home has been foreclosed on---if Mers is mentioned in the Deed of Trust/Assignment of or appointment of substitute trustee---the transaction is 98% a fraudulent document. Provable by researching the court records concerning the home.This being the case where is the State Attorney General on this? Should he not be stepping to commence criminal complaints against the people responsible for massive state fraud---not seen since the fox and jacobs (saving and loans) days. 

I am personally going to file a request with Attorney General Abbot to have criminal investigation began against Mers; based on the fact that my family has been victimized/hoodwinked by this company or agency or registry. 

We invested 20k cash money into the purchase and upgrade of a home in Williamson County; only to see the Deed of Trust sold (within months) and servicing transferred to HSBC. I think the original lender was a mere shadow or front company for the eventual owners of property (HSBC) who used MERS (THEIR DATA BASE) to effect ecommerce deals to avoid paying TAXES IN TEXAS on the said deals.

My question is where does the consumer go; whose been a victim of this company/system/registry to get local or state redress. 

Is the citizen just to file a criminal complaint against the fraudulent entity; reporting the crime (in my case a matter of public records)?  

Ru78vu82
Ru78vu82

I find it interesting that the attorneys representing Dallas County in this frivolous suit all are major players in the Democratic Party.  This smells of a payback by Watkins to his political supporters, who will get a big chunk of whatever settlement is reached.  Meanwhile, the reputation of the Dallas County political system will take yet another blow.  Look out Jersey City, we are gaining on you! 

Gary
Gary

I hear this lawsuit is being handled by Private Law Firm, Malouf & Nockels, LLC. on behalf of the DA's Office.. Their fees will be taken from any rewards gleaned from suit.

The Private Law Firm probaby could have pursued this case as a class action Lawsuit without the DA's input. Some people will do anything for publicity.

Montana5
Montana5

Al Capone was taken down on a tax evasion charge.  If this is what it takes to bring down MERS and Banksters of America, so be it.    At least Watkins is doing something to stand up to the thieves, unlike Greg Abbott, our crummy Attorney GeneraL

Edgar
Edgar

Dismissed on summary judgment.  Completely frivolous.  Record is designed solely to perfect lender's public notice so as to protect the priority of the lender's interest.  This idea that the public has an interest in ensuring that documents are recorded is nonsense.

If Watkins is going after MERS, he should also go after every blind trustee and nominee who has ever held property in the name of celebrity or wealthy person...that's no different.

NewsDog
NewsDog

I’m in the mortgage business and Watkins is barking up an empty tree. There isn’t a legal issue, it’s all about money. You are not legally required to record property documents (Warranty Deed, Deed of Trust, Assignments) recording them just gives a public record of interests in a property and helps give a clear picture of ownership. I guarantee you that lenders will record the Deed of Trust/Mortgage on every loan they make. But when loans are sold from one servicer to another getting all the Assignments recorded in the proper county gets confusing and exhausting, not to mention expensive. MERS acts as a central repository and tracks the transfers of loans internally, and in my experience quite well. Any homeowner with a MERS registered loan knows exactly who holds the Note on their home. Ask them where they send the monthly payment. Watkins is about to tell a tale told by an idiot, full of sound and fury, signifying nothing.

Kenneth Council
Kenneth Council

A point that many people including lawyers overlook in reference to Texas Real Estate Law: is that the Deed of Trust is a contract between Borrower and original Lender/Trustee:Most Deed of Trust filed in the last 15 years usually mention Mers as a beneficiary of the Deed; and investing Mers with the powers of Trustee in the event of default by borrower.When the Borrower signs the Deed they agree to these terms of the contract. Today there is much misdirection as to the legality of this practice; as well as confusion about the use of Mers. Personally I think Mers has the right to act on the behalf of the original lender; however in many foreclosure cases between 1/2009 and 1/2010 Mers appears to have stopped foreclosing in its Name and the Loan Servicer (HSBC in this case) commences the foreclosure in their name. When a loan servicer like HSBC commences the foreclosure (and there is no mention of HSBC in the original deed of trust; nor any recorded assignment of HSBC as substitute trustee; then HSBC is powerless under Texas Law to act as a party to the original deed of trust).In fact in my case the Removal of Trustee and Appointment of Substitute Trustee reads in pertinent part...

"Where as, on September 27, 2006, Brenda Council and Kenneth Council, Husband and Wife executed and delivered to Gilbert Barteau as Trustee, a certain Deed of Trust securing a Promissory Note in the original principal sum of 142,000, payable to the order of Mortgage Electronic Registration, INC, acting solely as nominee for Concorde Acceptance Corporation; said Deed of Trust is recorded In The Office of The County Clerk of the Deed of Trust or Lane Mortgage Records of Williamson County, Texas and reference is hereby made to said Deed of Trust for a description of the aforesaid Promissory Note, the terms and covenants of the aforesaid Deed of Trust and the land and premises therein conveyed;Where as, default, as same is defined in the aforesaid Promissory Note and/or the aforesaid Deed of Trust, has occurred; andWhere as the Holder of said Promissory Note desires to appoint Juanita Strickland..., as Substitute Trustee."

Note: whereas the Holder of Said Promissory Note desires to appoint --- Substitute Trust. Why doesn't it say Gilbert Barteau, Mortgage Electronic Registration System, and or Concorde Acceptance desires to appoint substitute trustee?Because they had no desires, in fact Concorde Acceptance the original lender went out of business 2 years before the purported default. 

The Removal of Trustee and Appointment of Substitute Trustee reads in pertinent part...

"Now, therefore, the undersigned HSBC Mortgage Services INC, legal owner and holder of said Promissory Note, does hereby REMOVE with or without cause as provided in the Deed of Trust the above named Trustee and all Successors or Substitute Trustee heretofore appointed, and does hereby Appoint and Constitute the said Juanita Strickland...as Substitute Trustee in said Deed of Trust, who shall have all powers and estate delegated to the original Trustee and said Trustee's successors, if any, and does hereby Request said Substitute Trustee to sell the real property described in said Deed of Trust in accordance with the terms and provisions thereof."

Note: the deed of trust in question defines the following: "Mers is a separate corporation that is acting solely as a nominee for Lender and Lender's successors or assigns."

HSBC as we read removed "all successors" if HSBC removed all successors or assigns then who has any power to foreclose?How did HSBC become invested with the powers to act?When you read below you will see that under Texas Law the holder of the note; whose not mentioned in the original deed of trust/contract between borrower and lender may not appoint a substitute trustee.

HSBC committed fraud in open court by holding itself out as having powers invested to act as the principal lender in this case, when it has none. HSBC is not mentioned in the original deed of trust nor does HSBC claims to have beem appointed or assigned to act on behalf of the Lender!

(I welcome your feedback.

Dane
Dane

Your comments deserve feedback Kenneth and Good luck on your fight.

The banksters had pulled off the biggest con in the history of the world (Bait and Switch). Every con needs a fool or should I say (an unsuspecting person who feels they deserve something they can't afford). Wanting a piece of the American dream is programmed in us all, and we all look for the opportunity especially when former Pres. GW. Bush made that dream selling announcement that his goal was for almost every American to be a home owner.

It appears you can afford the terms of the loan because you have the income and the down payment. What you did not understand was that you were making a bad investment because you were unknowingly participating in a system which is conning every hard working laborer who makes a simple investment (like a house) for the sake of their family. This happy home owner wasn't trying to get rich, but simply wanted to create a home environment for his family.

What the home owner didn't know was that purchasing a home during unregulated lending practices (proposed by the greedy/rich and approved by the needy politicians desiring campaign contributions) would be a terrible thing to do. The puppet masters (banksters /whoever) were encouraging mortgage lenders to give loans to anyone with a signature because they have investors (gamblers) whom they promised a guaranteed return at the sake of the home owner and tax payers because their investments were protected through federal (once private ) insurance companies with AAA+ ratings. For the educated investor it was a win/win situation right? Well they were also being suckered because there are only two guarantees in life. 1. You shall remain the color you are born with  2. You will die one day. Did they dare to think who will be paying for their guaranteed investment? They were as foolish as the American dreamer.

The problem was that when the home is foreclosed the investors (gamblers and banksters) will get paid in full on their investments. Therefore, it is more encouragement to cause foreclosures.( Did you know the loan servicers were offering loan modification, but first the mortgagor would have to qualify. The mortgagor qualifies after participating in a payment plan which causes the loan to default. Once late payment fees are accrued the mortgagor is  informed that he/she don’t qualify and an urgent lunp payment to make loan current is demanded. This is trickery and stealing when you think about it. Think about this the a 30 year mortgage loan amognst others are sold on the stock market which have maturity yield 10-15 years. Investors are promised a return on their money prior to a mortgagor makes good on their loan, Bankers enforced gangster policies, thus you have the term “BANKSTER”.

The banksters weren’t selling homes they were selling loans (signatures). Each signature was being sold several times. i.e a loan for $400,000 earned the banksters 3 million dollars, Banksters were creating money with signatures. They also needed a process and remedy to expedite the foreclosure process because time is money and they need the defaulted home owners from the possession of the house in order to get another sucker in. Thus, they created MERS and non-judicial policy in most states. Foreclosures were processed in non-judicial states at an alarming rate. It is interesting that the most attractive locations (cities) or non-judicial states are the most affected by foreclosures. Those states aren't so attractive anymore when every other house is vacant.

The developers, builders, realtors, lenders, construction, auto dealers and banks were having a whirlwind of business, by way of a con. It appeared no harm no fowl because everyone was getting what they wanted. It appeared to be a victimless crime because people shouldn't purchase what you can afford regardless if it is legitimate. When the home owners realized they made a mistake they would initially walk away from their foreclosed homes without fight. After all they couldn't afford their home because they lost their jobs or the adjustable rate bumped up. Mortgage lenders were convincing these home owners that they will be able to re-finance and etc. to con them into those subprime loans. Oh yeah did I forget to mention that when the foreclosures began, the bank CEO's were getting pay raises and bonuses.

At some point there were too many houses built and not enough people who can afford to purchase them. I think they ran out of suckers because word got around that couple so and so isn’t a couple anymore and did you know they lost their house? At first, there were some confusing as to which came first, did the loss of the house cause the breakup? It all seemed like a jinx either way you look at it.

However, it purchasing and all that associated with it had stop and stop it did. Foreclosing on people who know the law was the pretender lender first mistake. In some cases homeowners were paying off their loans but there were confusion of location of the original note. You know when you pay off a loan the promissory note should be returned to you, well that was how it used to be. The insurance companies could not make good on the promise to back up bad debt and the investors sued.  An unfolding chain of events exposed the con. In the end Wall Street couldn’t sell fraudulent securities, insurance companies lost their AAA+ rating and now Gov't OWNED the Banks (who received government bonuses=bailout) and American Auto dealerships a.k.a.  (GMC =Government Motor Corporation).

Maybe it just me but can anyone else see that this was no mistake? Can anyone else see that when you see school buses picking and dropping off school children at motels that we have a serious situation on our hands. Home owners who fortunately hadn’t lost their jobs are in houses with underwater mortgages. (Can’t sell or refinanced because they owe more than what the house is worth). I know Pres. Obama announces that homeowners current on their mortgage can save $3,000/ year. Was he talking about the homeowner who purchase a house valued at $400,000 and is now valued at $200,000. Saving approximately $60,000 doesn't solve their problem.  PEOPLE ARE MOVING INTO THEIR NEIGHBORHOOD WHO PURCHASES THE SAME STYLE HOUSE FOR HALF OF WHAT THEY PAID FOR IT.

The banks get their return on their investment. The investors (incidentally are Politicians, lawyers and Judges) are getting their return on their investments by allowing the fraudulent foreclosure process to continue. Laws have been broken by the trustees (lawyers) servicing the loan and no one seems to care. The rights of someone else you protect today will be yours tomorrow.  However, the business owners who went out of business due to a bad economy are bankrupt. The home owners, who purchased their home when the market value was at an all-time high, lose. The intimate and business relationships severed through these hardships are beyond repair.

The sad part is there are culprits responsible and they go untouched. Our constitutional rights are diminishing right before our eyes and the broken laws by the rich are ignored or changed to make their illegal activity legal. It is sad, but maybe someone will listen. We all are being deceived. It's called the bait and switch. This is what the pretender lenders are doing to protect their investors and the income for their services.

Homeowners did not get what they were paying for under the meeting of the mind in which they signed their promissory notes/contracts. It is important to note that these contracts only have one signature. Who would have agreed to purchase a home, which I might add was the best risk investment once upon a time, if they knew it will be worth half as much in their near future.   The American dream became their nightmare. I apologize for utilizing the term sucker, because I know some hard working educated individuals who were also hoodwinked. A sucker is one who bought into the American dream and became a victim in believing in the system which doesn't have the average person or middleclass individual's best interest.

Oops. (perhaps too much).P.S. How do you spell check when you make comments? 

Kenneth Council
Kenneth Council

You don't know the game!the players are lender and borrower::::::::::::the borrower finds the seller (or contrawise)

the borrowers accepts money from lender to give to seller

borrower agrees to pay lender back....Deed of trust sets out termslender set rate of pay (month by month)

Lender (uses mers ---mers is a mere registry not an entity)Mers assumes lender role---how does that legally take place?Mers is not the lender---no money is paid to Mers----Money is paid to a mortgage servicer who is not the LENDER...(don't be confused ---most people are paying their money to a servicer; for whom they did not get their loan from...a servicer cannot become a lender based on a Mers transfer because no legal transfer of property occurs. The borrower has a right to any and all proceeds from moneys gained from property he has an investment in; he is the primary party---which is another why the counties require entries of sales made...as a homeowner I have a right to know what I am paying for and to whom I am paying it... 

Paul
Paul

Hey NewsDog ... is that the grape or cherry KoolAid that you drank?

Seriously, I have a "MERS" mortgage.  There is nothing, absolutely nothing, in the document that says that MERS is the OWNER of the mortgage.  It states that MERS is the agent for the owner of the mortgage for the purpose of tracking ownership.  Nothing more and nothing less. MERS does not own the mortgage or note; and, does not service the note.

The MERS document is one of the most odious, disgusting, pathetic documents that I have ever seen.  If you want a 1-4 residential mortgage you have to sign this document.  No changes allowed.  I am surprised that a MERS mortgage allows you to keep trash and garbage in a can while awaiting weekly pickup.

The mortage industry has gutted the very purpose of the Clerk's Office.  Through MERS the concept of public notice of ownership of and liens on real property has been thoroughly eviscerated.  There no longer is constructive notice of the ownership or the lien.  The deed of trust is filed with the deed, but as the MERS document states, MERS is only the agent for the owner of the debt.  How do I know for a fact at a closing that the check I am giving to a lienholder is indeed the correct amount and paid to the correct party?  How do I know that MERS did not transfer the loan to another party prior to closing?  These are all fundamental questions involving the ownership of real property.

One can no longer go to the PUBLIC RECORD and find out what liens exist on a property, the holder of those liens and the amount of the liens.

Since the only constructive notice in the PUBLIC RECORD is that MERS is the agent for the (UNDISCLOSED) owner, you have to contact MERS to find out the lien balances.   MERS apparently rarely responds in a timely fashion and the information is often in error.

No matter how the banking, securities and mortgage industry spins it, the setup of MERS was to be nothing more than a clearinghouse for the convenience of securitizing mortgages and selling them off even faster.

The mortgage meltdown began when the French banks who had bought CDOs that had been processed through MERS were unable to not only establish what mortgages were in the CDO, but also the value of the underlying asset and the credit risk of the those that borrowed the money.  As a result the market refused to set a value for these CDOs.

The current mortgage business is solely about being able to sell off a mortgage and make money off of the loan origination fee or a rake from the CDO.

Finally you state that every homeowner knows who their mortgage owner is when they write out the check every month.  It hasn't been that way since Ward and June Cleaver bought their first house.  That check is made out to the LOAN SERVICER!  If the loan servicer is also the loan owner, that is probably just happenstance.

If MERS is so wonderful at tracking the actual ownership of the loan, then how do you explain the occurence of "robosigning" and transfers of the loan dated after a foreclosure is filed?

Whew! ... I am calmed down now and off of my soapbox ...

Edgar
Edgar

If you would set down your own kool-aid for a second, no one's disputing that MERS has generated plenty of bad consequences.  That doesn't change the fact that this is a crap suit.  If you buy a house, you don't have to record your deed.  In the same way, when a lien gets transferred, the actual lienholder doesn't have to record the transfer.  That's always been the case.  Mortgage holders may have obligations to transparently keep track of lien ownership, and they may have fallen short of those obligations, but they have never had any obligation to evidence ownership through the public records of the county clerk.

Kenneth Council
Kenneth Council

Moreover its a means to avoid paying taxes to the IRS----at the bottom of this is scam by some people who found out how to of their investor (big return on risky accounts) with zero transaction fee cost...and little or government paper trial. In essence one group of government (privately owned people) funneling money to another group of government (privately owned people). What Mers is about to do is expose the level of criminal corrupts in Banks and local governments akin to nothing we have seen in our life time! 

Even the courts are liable in this case. They allow massive filings of legal documents via foreclosures ---glad to take money from the banks and mers on the one hand ---but allowing millions to blow away on the otherhand----the courts appear to be a primary player in these fraud schemes.

Paul
Paul

Thanks for the clarification Edgar.  I would like to add that filing also protects the purchaser.

I am of the position that the current MERS filing does not provide constructive notice as MERS is not lienholder.

The other problem is that MERS is set up by a select group of funding institutions and I am certain that they will do their best to not be held responsible.

Edgar
Edgar

Filing protects the lienholder, not the debtor.  As a debtor, your mortgage requires the lienholder to notify you when the note is transferred to a new noteholder, meaning there will be a new mortgage servicer.  That information must come from MERS or, far more likely, the underlying noteholder.  If it doesn't come, obviously you shouldn't start paying anyone claiming to be a noteholder.

I agree that you shouldn't pay a lien at closing by some third party claiming to hold the lien.  I would argue that all such releases should come from MERS since it is the record nominee for the noteholder.  MERS should (and probably will) buckle under the weight of class-action lawsuits for failure to keep good records and sign timely releases.  Suitable replacement nominees will then fill the gap, and competition will promote much better service.  But the action lies with the people wronged.  The county clerks have no standing.

Paul
Paul

Saying that MERS has generated plenty of bad consequences is similar to saying that Ford Pintos had a gas cap problem.

Yes that is true, you don't have to file your deed, but then you are not giving constructive notice that the transfer has been done.  The seller can go sell the property a second time and you can be in a world of hurt because you did not give constructive notice of the transfer to you.

The only valid and reliable way that a buyer of real property has of verifying ownership and liens on real property is through the County Clerk's Office.

If the lien is not recorded at the County Clerk's Office nor the lienholder identified, how can I rely on a third party that is definitely conflicted for accurate information?

Will MERS warrant the information that is provided to me on lienholders?  Somehow, I don't think so.  Does MERS provide constructive notice?  I don't believe that it does as the notice is not located where tehe real property is located, nor is the information public.  I cannot go to the MERS office and look up lien and lienholder information free of charge.

If I go to a closing and my title search shows only one lienholder and some one shows up after closing saying that they have a lien, but it is not perfected by filing, then I have no obligation to pay that lien.  I may have to spend money defending myself, but I have no obligation whatsoever to pay that lien.

As the judge in the NY appellate decision said:

"Nonetheless, the law must not yield to expediency and the convenience of lending institutions. Proper procedures must be followed to ensure the reliability of the chain of ownership, to secure the dependable transfer of property, and to assure the enforcement of the rules that  govern real property."

If as you say that there is no obligation to file the even deed of trust, then why is it done?

NewsDog
NewsDog

And to add an update: sometimes public records can confuse. Jim is still trying to figure out how/why JWP bought the same piece of property three times in two days.

Paul
Paul

It's called "flipping"  and that is how you find out about it ...

chad
chad

MERS has some big problems very big problems in fact.

http://www.nakedcapitalism.com...

http://www.nakedcapitalism.com...

If the allegations that the trusts mortgage backed securities were based on are, in fact, empty  because of MERS pan out than Watkins is probably out of luck because all of hell is going to descend on MERS.

Paul
Paul

This is what the judge concluded in the NY case:

"MERS purportedly holds approximately 60 million mortgage loans (see Michael Powell & GretchenMorgenson, MERS? It May Have Swallowed Your Loan, New York Times, March 5, 2011), and isinvolved in the origination of approximately 60% of all mortgage loans in the United States (see Peterson at 1362; Kate Berry, Foreclosures Turn Up Heat on MERS, Am.[*6]Banker, July 10, 2007, at1). This Court is mindful of the impact that this decision may have on the mortgage industry in NewYork, and perhaps the nation. Nonetheless, the law must not yield to expediency and the convenience of lending institutions. Proper procedures must be followed to ensure the reliability of the chain of ownership, to secure the dependable transfer of property, and to assure the enforcement of the rules that  govern      real   property."

The Michigan case is interesting as it affirms that the foreclosure can only be initiated by the party who has standing. It is also interesting in that the mortgage and note never made it to the trust. Which basically opens up the Trustee of the Trust to securities fraud as they represented that they were selling a security interest in a debt instrument when in fact they did not own the underlying debt interest.

Wylie H.
Wylie H.

Craig Watkins Makes Good on Threat to Squander Scarce County Resources on Political Grandstanding.... Ordinary citizens with legitimate complaints told to wait in line due to lack of county resources.

Wylie R
Wylie R

RWWhere are you guys on the ESD/Royce West sex scandal case?  Verdict will be read at 9:00 tomorrow.  Sex, lies and audiotapes.  Your kind of story.

Guest
Guest

Is it just me, or does this suit seem entirely contrived?  The purpose of a filing fee is to cover the expense of recording the deed, etc.  Dallas didn't incur those expenses because MERS handled it (whether they did it right is another question).  At worst, the county is in the same financial state today as it would have been if MERS never existed.  Sure, the county would have been paid additional filing fees, but it also would have to pay additional staff to handle the filing, etc.  If the County is making a profit off of recording deeds, then the fee needs to be reduced.     

Kenneth Council
Kenneth Council

The purpose of Mers was to avoid paying fees to the courts and municipalities. exampleMers sale 1 million homes   1 each (in city of dallas)Dallas is suppose to get 1 dime each time Mers sales a home located in dallas................Moreover Mers would have to enter  into a contract with the City of Dallas (People of Dallas) before the could assume an authority which has been invested with the local people since the establishment of most cities in America---to wit: the local clerk (record) is to record ever sale or real property in the local registry...for the sole purpose of local tax and revenue collections ----Many need in most urban areas has been whisked away by Banks whom main clients lives in the hills and suburbans...

On this case Craig Watkins should be called AG Craig Watkins...hes ahead of his time in this case and its a no brainy---good job Dallas DA!!

Sharon Boyd
Sharon Boyd

The former Bail Bondsman who still runs a Title Co. might really want to re-think this.

In the first place, FNMA is a public-private entity.   Fed's take precedent over crooked DA's.

John_McKee
John_McKee

Granted I am not a lawyer or an expert on the subject but I consider myself fairly informed on the subject but unpaid filing fees seems like a bizarre way of going after MERS.

MERS is a black box that appears to have been granted an enormous amount of authority in our courts systems that in my opinion should instead have a huge burden of proof given how sloppily they have acted and their position of basically performing a serious government function outside of government. I don't think avoiding county clerk fees had anything to do with this, nor would make any serious financial difference to the county, it was mostly to speed transactions.

The county clerk's office has a serious responsibility in these kinds of things but I don't think it should be viewed as net revenue source. What happened with MERS was horrible but the fact that our county didn't collect much revenue from it seems like it falls incredibly low on the list of reasons why.

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