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Kansas Supreme Court Ruled on MERS

 
STOP FORECLOSURES
User ID: 584809
United States
09/21/2009 07:39 PM
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Kansas Supreme Court Ruled on MERS
Excerpt

[link to www.opednews.com]

LANDMARK DECISION PROMISES MASSIVE RELIEF FOR HOMEOWNERS AND TROUBLE FOR BANKS


For OpEdNews: Ellen Brown - Writer

A landmark ruling in a recent Kansas Supreme Court case may have given millions of distressed homeowners the legal wedge they need to avoid foreclosure. In Landmark National Bank v. Kesler, 2009 Kan. LEXIS 834, the Kansas Supreme Court held that a nominee company called MERS has no right or standing to bring an action for foreclosure. MERS is an acronym for Mortgage Electronic Registration Systems, a private company that registers mortgages electronically and tracks changes in ownership. The significance of the holding is that if MERS has no standing to foreclose, then nobody has standing to foreclose – on 60 million mortgages. That is the number of American mortgages currently reported to be held by MERS. Over half of all new U.S. residential mortgage loans are registered with MERS and recorded in its name. Holdings of the Kansas Supreme Court are not binding on the rest of the country, but they are dicta of which other courts take note; and the reasoning behind the decision is sound.

Eliminating the “Straw Man” Shielding Lenders and Investors from Liability
The development of “electronic” mortgages managed by MERS went hand in hand with the “securitization” of mortgage loans – chopping them into pieces and selling them off to investors. In the heyday of mortgage securitizations, before investors got wise to their risks, lenders would slice up loans, bundle them into “financial products” called “collateralized debt obligations” (CDOs), ostensibly insure them against default by wrapping them in derivatives called “credit default swaps,” and sell them to pension funds, municipal funds, foreign investment funds, and so forth. There were many secured parties, and the pieces kept changing hands; but MERS supposedly kept track of all these changes electronically. MERS would register and record mortgage loans in its name, and it would bring foreclosure actions in its name. MERS not only facilitated the rapid turnover of mortgages and mortgage-backed securities, but it has served as a sort of “corporate shield” that protects investors from claims by borrowers concerning predatory lending practices. California attorney Timothy McCandless describes the problem like this:

“[MERS] has reduced transparency in the mortgage market in two ways. First, consumers and their counsel can no longer turn to the public recording systems to learn the identity of the holder of their note. Today, county recording systems are increasingly full of one meaningless name, MERS, repeated over and over again. But more importantly, all across the country, MERS now brings foreclosure proceedings in its own name – even though it is not the financial party in interest. This is problematic because MERS is not prepared for or equipped to provide responses to consumers' discovery requests with respect to predatory lending claims and defenses. In effect, the securitization conduit attempts to use a faceless and seemingly innocent proxy with no knowledge of predatory origination or servicing behavior to do the dirty work of seizing the consumer's home. . . . So imposing is this opaque corporate wall, that in a “vast” number of foreclosures, MERS actually succeeds in foreclosing without producing the original note – the legal sine qua non of foreclosure – much less documentation that could support predatory lending defenses.”

[snip]

“By statute, assignment of the mortgage carries with it the assignment of the debt. . . . Indeed, in the event that a mortgage loan somehow separates interests of the note and the deed of trust, with the deed of trust lying with some independent entity, the mortgage may become unenforceable. The practical effect of splitting the deed of trust from the promissory note is to make it impossible for the holder of the note to foreclose, unless the holder of the deed of trust is the agent of the holder of the note. Without the agency relationship, the person holding only the note lacks the power to foreclose in the event of default. The person holding only the deed of trust will never experience default because only the holder of the note is entitled to payment of the underlying obligation. The mortgage loan becomes ineffectual when the note holder did not also hold the deed of trust.” [Citations omitted; emphasis added.]

MERS as straw man lacks standing to foreclose, but so does original lender, although it was a signatory to the deal. The lender lacks standing because title had to pass to the secured parties for the arrangement to legally qualify as a “security.” The lender has been paid in full and has no further legal interest in the claim. Only the securities holders have skin in the game; but they have no standing to foreclose, because they were not signatories to the original agreement. They cannot satisfy the basic requirement of contract law that a plaintiff suing on a written contract must produce a signed contract proving he is entitled to relief.
Anonymous Coward (OP)
User ID: 584809
United States
09/21/2009 08:24 PM
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Re: Kansas Supreme Court Ruled on MERS
Kansas SC ruled if MERS can't produce the note they cannot foreclose.

THIS will bring down the banks people!
Anonymous Coward
User ID: 751857
United States
09/21/2009 11:47 PM
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Re: Kansas Supreme Court Ruled on MERS
Kansas SC ruled if MERS can't produce the note they cannot foreclose.

THIS will bring down the banks people!
 Quoting: Anonymous Coward 584809


THIS IS NUCLEAR !

sfan

Discussed at TF by KD and gang

[link to tickerforum.org]
The Girl

User ID: 761129
United States
09/21/2009 11:49 PM
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Re: Kansas Supreme Court Ruled on MERS
How can one find out if their mortgage is in MERS or securitized?
Dr. Anomaly

User ID: 763286
United States
09/22/2009 12:04 AM
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Re: Kansas Supreme Court Ruled on MERS
How can one find out if their mortgage is in MERS or securitized?
 Quoting: The Girl

Try here:

[link to www.mers-servicerid.org]

Last Edited by Dr. Anomaly on 09/22/2009 12:05 AM
Three Bribes for the Democrats sneaky and sly,
Seven for the Bankers in their halls of gold,
Nine for Labor Unions sucking us dry,
One for the Liar Chief leaving us cold
In Washington D.C. where politicians lie.

One Bill to rule them all, One Bill to find them,
One Bill to bring them all and in the debt-ness bind them
In Washington D.C. where politicians lie.
The Girl

User ID: 761129
United States
09/22/2009 12:09 AM
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Re: Kansas Supreme Court Ruled on MERS
How can one find out if their mortgage is in MERS or securitized?

Try here:

[link to www.mers-servicerid.org]
 Quoting: Dr. Anomaly


I just found it and came back to post it here LOL! Thank you so much for posting this! I don't have the news I wanted but someone else might be lucky! tounge
Anonymous Coward
User ID: 751857
United States
09/22/2009 12:14 AM
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Re: Kansas Supreme Court Ruled on MERS
I just did a search a found my mortgage using the name and ss search. It did not find it with the address alone.

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