'tween_fly_ways wrote:Not really. From your link, the insinuation is that delinquent homeowners have a legitimate grievance because they are paying mortgage holders with whom they have no tie via a technicality. They are not being asked to pay more, less or twice.
I cannot argue these "bundled" mortgages were not insane, nor that banks rubber stamped them. I can argue that the borrower (homeowner) agreed to return the money, and is not being asked to return more than that to which they agreed.
Oops: Court Rules PSA Violation Is REAL
In what may be the start of realization in the securitized paper market, we have the following:
Defendants’ failure to strictly comply with the terms of the PSA means that the loan at issue was never properly transferred to the trust. Any transfer of mortgage loans, such as Plaintiffs, was mandated to comply with New York Trust law and the terms and conditions of the PSA governing conveyance of mortgage loans into the Trust. PSA pp 155 and 36. This the Defendants did not do.
The Court finds that the “Assignment”, recorded on December 30, 2009 in the Washtenaw County Register of Deeds, serves to transfer nothing. The alleged conveyance failed to comply with the terms and conditions of the PSA and New York Trust law which governs the PSA. The alleged conveyance stated that MERS assigned the Mortgage and Promissory Note to USB, however, there has been no evidence presented to support the chain of the required assignments and endorsements of the mortgage and note as required by the terms and conditions of the PSA.
And there you have it folks. Formal, judicial recognition by a judge who actually looked at the PSA and the documents in question and came to the same conclusion that I and a handful of others did a few years ago and have been pointing out since: These institutions are "foreclosing" on loans they have no legal right to foreclose upon as they don't own them.
The corresponding fact that goes with this, and its truly ugly, is that the MBS investors were sold an empty box that does not in fact contain assets.
There should be a strong prosecutorial response to this: It certainly appears that these events were not "isolated incidents" but rather were pervasive through the years of the bubble and perhaps even before. This has severely damaged land title records in that the debts incurred are not actually being paid, as the entity being paid doesn't own anything and the entity actually owning the debt is receiving nothing!
Where are the damn handcuffs?
Oops: MERS Gets Hit HARD In NY
From the "aw crap" file....
LEVENTHAL, J.This matter involves the enforcement of the rules that govern real property and whether such rules should be bent to accommodate a system that has taken on a life of its own. The issue presented on this appeal is whether a party has standing to commence a foreclosure action when that party's assignor—in this case, Mortgage Electronic Registration Systems, Inc. (hereinafter MERS) —was listed in the underlying mortgage instruments as a nominee and mortgagee for the purpose of recording, but was never the actual holder or assignee of the underlying notes.
We answer this question in the negative.
This is far more important than it first appears. It would appear that the bottom line is that MERS cannot prosecute foreclosures in its own name (it has stopped attempting this in several jurisdictions after losing a number of cases.)
This case, however, make an interesting point that may go well beyond that.
In October 2006 the defendants Stephen Silverberg and Fredrica Silverberg (hereinafter together the defendants) borrowed the sum of $450,000 from Countrywide Home Loans, Inc. (hereinafter Countrywide), to purchase residential real property in Greenlawn, New York (hereinafter the property). The loan was secured by a mortgage on the property (hereinafter the initial mortgage). The initial mortgage refers to MERS as the mortgagee for the purpose of recording, and provides that the underlying promissory note is in favor of Countrywide. Further, the initial mortgage provides that "MERS holds only legal title to the rights granted by the [defendants] . . . but, if necessary to comply with law or custom," MERS purportedly has the right to foreclose and "to take any action required of [Countrywide]." On November 2, 2006, the initial mortgage was recorded in the office of the Suffolk County Clerk.
Ok, so the original loan was funded by Countrywide and MERS was named as the nominee. So far we have the standard way that securitized junk, er, paper was originated during the go-go years.
Also in April 2007, the defendants executed a consolidation agreement in connection with the property in the sum of $479,000 in favor of MERS, as mortgagee and nominee of Countrywide . Countrywide was the named lender and note holder. The consolidation agreement purportedly merged the two prior notes and mortgages into one loan obligation. The consolidation agreement was recorded in the office of the Suffolk County Clerk on June 12, 2007. The consolidation agreement, as with the prior mortgages, recites that MERS was "acting solely as a nominee for [Countrywide] and [Countrywide's] successors and assigns . . . For purposes of recording this agreement, MERS is the mortgagee of record." Countrywide, however, was not a party to the consolidation agreement.
There was a second (which I've elided) and the borrowers consolidated both loans. That consolidation was recorded. The borrowers then (nine months later, roughly) defaulted.
In December 2007 the defendants defaulted on the consolidation agreement. Meanwhile, on April 30, 2008, by way of a "corrected assignment of mortgage," MERS, as Countrywide's nominee, assigned the consolidation agreement to the Bank of New York, as Trustee For the Benefit of the Certificate Holders, CWALT, Inc., Alternate Loan Trust 2007-14-T2, Mortgage Pass-Through Certificates Series 2007-14T2 (hereinafter the plaintiff). On May 6, 2008, the plaintiff commenced this mortgage foreclosure action against the defendants, among others.
In June 2008 the defendants moved pursuant to CPLR 3211(a)(3) to dismiss the complaint insofar as asserted against them for lack of standing. In support of their motion, the defendants submitted, inter alia, the underlying mortgages, the summons and complaint, the second note, and an attorney's affirmation. In the affirmation, the defendants argued, among other things, that the complaint failed to establish a chain of ownership of the notes and mortgages from Countrywide to the plaintiff. In opposition to the defendants' motion, the plaintiff submitted, inter alia, the corrected assignment of mortgage dated April 30, 2008.
Borrowers defaulted and it appears that there was an attempt to "fix" the loans by assigning them late to a trust that should have been closed in 2007.
On appeal, the defendants argue that the plaintiff lacks standing to sue because it did not own the notes and mortgages at the time it commenced the foreclosure action. Specifically, the defendants contend that neither MERS nor Countrywide ever transferred or endorsed the notes described in the consolidation agreement to the plaintiff, as required by the Uniform Commercial Code. Moreover, the defendants assert that the mortgages were never properly assigned to the plaintiff because MERS, as nominee for Countrywide, did not have the authority to effectuate an assignment of the mortgages. The defendants further assert that the mortgages and notes were bifurcated, rendering the mortgages unenforceable and foreclosure impossible, and that because of such bifurcation, MERS never had an assignable interest in the notes.
There it is; the assertion that the assignments never happened as required under the PSA and UCC. The "assignment" couldn't take place as MERS lacked the authority to do so.
The principal issue ripe for determination by this Court, and which was left unaddressed by the majority in Matter of MERSCORP (id.), is whether MERS, as nominee and mortgagee for purposes of recording, can assign the right to foreclose upon a mortgage to a plaintiff in a foreclosure action absent MERS's right to, or possession of, the actual underlying promissory note.
"Can you assign something you never possesed?" It is amusing that this is a novel issue, but apparently it is.
However, as "nominee,"MERS's authority was limited to only those powers which were specifically conferred to it and authorized by the lender (see Black's Law Dictionary 1076 [8th ed 2004] [defining a nominee as "(a) person designated to act in place of another, (usually) in a very limited way"]). Hence, although the consolidation agreement gave MERS the right to assign the mortgages themselves, it did not specifically give MERS the right to assign the underlying notes, and the assignment of the notes was thus beyond MERS's authority as nominee or agent of the lender.
DING DING DING DING DING!
You can only execute on those powers as a nominee that you have had conferred to you via some means. If the power you seek to use was never conferred to you, such as a beneficial interest in the note, you cannot assign that which you never had the power to act upon.
....Coakley indicates that this Court has determined that such broad provisions in mortgages, such as the initial mortgage and second mortgage here, standing alone, grant MERS, as nominee and mortgagee for the purpose of recording, the power to foreclose. On the contrary, the Coakley decision does not stand for that proposition. This Court's holding in Coakley was dependent upon the fact that MERS held the note before commencing the foreclosure action.
Exactly. You cannot bring a foreclosure unless you have acquired the interest in the indebtedness prior to filing the action. Such a transfer can be by many means, but it must have taken place. It did not in this case, ergo, what MERS attempted to execute upon was without standing.
MERS purportedly holds approximately 60 million mortgage loans (see Michael Powell & Gretchen Morgenson, MERS? It May Have Swallowed Your Loan, New York Times, March 5, 2011), and is involved 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, at 1). This Court is mindful of the impact that this decision may have on the mortgage industry in New York, 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.
Thank you New York Supreme Court.
Now, about those alleged Trusts that appear to not have anything actually in them......
ScaupHunter wrote:Sorry Jim. Gotta bump you.