Commentary by George W. Mantor
RISMEDIA, July 20, 2010—MERS was back in the news again last week with the announcement that they were making additional information on the MERS “secret” system available to mortgagors.
That’s according to a press release issued by the Reston, VA-based data bank late last Friday afternoon to make sure as few people as possible actually saw it. Friday afternoon in the middle of summer when everyone is at the beach. The system change actually took place over a month ago, but they apparently decided that this timing would be most advantageous.
“Mortgage Electronic Registration Systems, (MERS) announced today that investor information for loans registered on the MERS® System is now available to borrowers at no charge.”
The release went on to say, “The added investor information is an expansion of the MERS® InvestorID program launched in June 2009, which mails a notice to borrowers when the identity of their loan’s owner or investor changed.”
According to MERS President and CEO, R. K. Arnold, “Now both servicer and investor information are readily available to the public. Consumers and lenders want and need greater transparency and that’s what MERS is delivering.”
Maybe, maybe not. If you had a loan originated by, say for example, Bank A, the investor will likely show up as Bank B. But, is it really? And, isn’t that what this little slight of hand is all about? To make pretender lenders look like parties with an interest?
And, that is all that has been added, except for those “investors” who elect to opt out. More on that in a moment.
We aren’t looking for the investor; they may or may not have a beneficial interest in the loan. We know that MERS doesn’t because it says it doesn’t and by virtue of the fact that it never advanced any money, never collected any payments, and won’t suffer any harm in the event of a default.
The servicer doesn’t. Yet servicers sign documents claiming to be employees of MERS transferring rights that neither of them has to a third party foreclosure mill.
The originator doesn’t have a beneficial interest in the loan because the originator received the money before the borrower was ever identified.
The beneficial interest, unless it has already been satisfied, is held by the possessor of the promissory note, or should be.
The point is we know who that party isn’t. And, we know who the party is that purports to know—MERS. They exist, by their own claim, to track exactly this sort of information instead of recording it publically as we did before MERS took the information private.
The announcement is just another misdirection that allows MERS to continue the deception regarding the true creditor by illegally and fraudulently misrepresenting that someone other than the true creditor has a beneficial interest.
Here’s the challenge of the day: I’ll offer five MERS Identification Numbers (MIN) with signed borrower authorizations and see if I can be provided with the information they claim to track, the assignments of the note all the way from the borrower to the current holder and true beneficiary. They have yet to make that information public or provide it in discovery.
I believe the reason they won’t do that is that they know that this would reveal evidence of the note being duplicated and going to multiple pools. Not only were the loans designed to fail, but the scarcity of borrowers meant that many of them were used to fulfill more than one pool. If it’s all fraud, why not counterfeiting too?
Remember that this is an opt-out system. The press release goes on, “If a borrower wishes to find the investor on a loan with an opted-out investor, they can do so by sending a written request to their servicer for the information.
Here again, thousands of people have sent these Qualified Written Requests and have gotten no response whatsoever.
Thousands of litigants attempting to save their homes from the final piece of this predatory loan scheme want to make a deal with the true beneficiary.
Various agencies have been frustrated in their attempts to conduct investigations because of institutions such as MERS.
The Federal Housing Finance Agency, which took over Fannie Mae and Freddie Mac, announced last week that it had issued 64 subpoenas to companies who act as servicers or trustees for the GSE backed mortgage pools.
According to its press release, the agency sought the subpoenas because of “Difficulty in obtaining the loan documents has presented a challenge to the enterprises’ efforts.”
The unwillingness to produce the requested documents has caused the Federal Housing Finance Authority to believe that a large number of loans involve institutional fraud.
Consider the tactics of Goldman Sachs who buried an investigating agency in more than a billion pages of mostly meaningless data instead of the information being sought.
MERS’ announcement is just another attempt to hide the information we already know. It’s like a bikini; what it reveals is interesting, but what it conceals is vital.
It is pointless to refer someone to Bank B when all Bank B owns is Bank A’s origination information that they acquired in assuming control. Bank A securitized virtually all of their loans so the real party is probably a pension or hedge fund who may have been paid off by credit default swaps and or TARP funds.
Eventually, a litigant or a government agency is going to get to the bottom of this and a whole lot of disturbing information is going to come to light. IF MERS were sincere, they would simply open their entire database to everyone.
George Mantor is a nationally respected authority on all areas of real estate and is frequently quoted in a wide range of publications. He is an oft invited guest of Fox Business Network and for many years, he was the host of “Keepin’ It Real…Real talk about the real thing, real estate” on KCEO radio.His articles have also recently appeared in Real Estate Finance, The Real Estate Professional, National Real Estate Investor, Broker Agent News, and Realty Times. His blog is http://www.realtown.com/gwmantor/blog.
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