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The Big Lie - MERS Mortgages in Massachusetts.11!28!10-2

The Big Lie - MERS Mortgages in Massachusetts.11!28!10-2

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Published by: DinSFLA on Nov 30, 2010
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05/24/2013

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The Big Lie:MERS Mortgages in Massachusettsby Jamie Ranney, Esq.Jamie Ranney, PC4 Thirty Acres LaneNantucket, MA 02554
i
amie@nantucketlaw.pro508-228-9224
1
 
1.
SUMMARY"If you tell a lie that's big enough, and you tell it often enough, people willbelieve you are telling the truth, even when what you are saying is total
crap.,,1
The validly
of
the Mortgage Electronic Registration System, Inc., ("MERS") system andits ability to have survived (most) legal challenges (thusfar) to its existence, its legalstanding and its core purpose(s), seems based on a variation
of
the "big lie" theory statedabove.
2
MERS is a privately-run electronic recording system for the tracking
of
legal andbeneficial interests in mortgage loans in the United States. The MERS "system" has, forall intents and purposes, leapfrogged what in most states are centuries-old systems forpublicly recording various real estate transactions (primarily mortgages and assignments
of
mortgages although more recently, foreclosure documents) MERS has done nothingless than usurp the role
of
many state government recording agencies in administering,for itself and its members, what will or what will not be disclosed
on
the public landrecords with respect to ownership interest(s)
ofloans
in some 60%
of
the real property
of
this country.Virtually everyone who would be in a position to effectively and credibly challengeMERS' very existence -including judges, state legislators and many legal commentators-seems to assume (in most cases) that MERS has a right to exist and do what they dosimply because MERS itself says they do. Couple this with the fact that MERS wasformed, financially-backed and is owned by the nation's biggest banks and their businessaffiliates, (title insurance companies, foreclosure mill law firms, etc.; and the fact thatsome 66 million MERS mortgages have been registered in this country) and it is clear tosee that MERS designed itself with staying power in mind. Undoubtedly MERS hasdeveloped a market "momentum" and ubiquitous presence that makes it difficult toignore -or challenge. Again,
if
the lie is big enough, people begin to accept it as thetruth.Despite its insertion into the very foundation (no pun intended)
of
our nation's housingmarket however -and the broad economic implications for the country was a whole werethe MERS-system ultimately found to be invalid
or
unlawful -simply being "too big tofail" does not make what the MERS-system does, right
or
legal.
It
is this author's opinionthat MERS is not right
or
legal in Massachusetts.By effectively eliminating the transparency required on the public land records for thedisclosure
of
encumbrances
on
real property in Massachusetts, MERS-mortgages havesown massive confusion, serious incidences
of
fraud and perhaps billions
of
dollars
of
liabilities into a land recording system that -although perhaps ancient and out-dated in
1
UFOs, .JFK,
and
Elvis: Conspiracies
YOll
Don't Have
To
Be Crazy
To
Believe,
Belzer, Richard; (Ballentine Books,1999)
2
The original "big lie" theory
is
actually attributed to
Adolf
Hitler. See http://en.wikipedia.org/wiki/Big_Lie
2
 
many respects -has consistently served the fundamental purpose(s) for which it wasformed: to promote transparency as to ownership interests in land and to provide "actualnotice" to parties reviewing the public land records
of
the current ownership andexistence
of
encumbrances on real property.This memo will focus on MERS-designated mortgages in Massachusetts.In this author's opinion two (2) things are evident after a survey
of
Massachusetts law.First, MERS cannot be a valid "mortgagee" under Massachusetts law and thus MERSdesignated mortgages are invalid in the Commonwealth
of
Massachusetts.This is because MERS-designated mortgages by definition "split" the security instrument(the mortgage) from the debt (the promissory note) when they are signed. This "split"invalidates the mortgage under Massachusetts law. Where the security interest is invalidupon the signing
of
the mortgage, MERS cannot occupy the legal position
of
a"mortgagee" under Massachusetts law no matter what language MERS inserts into theirmortgages that purports to give them the legal position
of
"mortgagee". Since MERSdesignated mortgages are invalid at their inception, it follows logically therefore thatMERS mortgages are not legally capable
of
being recorded in the Commonwealth
of
Massachusetts by its Registers
of
Deeds.Second, even
if
a MERS-designated mortgage were found to be a valid securityinstrument in Massachusetts, each and every assignment
of
the mortgage and note"behind" a MERS-designated mortgage must be recorded on the public land records
of
the Commonwealth in order to comply with the Massachusetts recording statute atM.G.L.
c.
183,
s.
4 which requires that "conveyances
of
an estate" be recorded to bevalid. A mortgage is a "conveyance
of
an estate" under Massachusetts law. SinceMERS-designated mortgages exist for the primary purpose
of
holding "legal" title on thepublic land records while the "beneficial" interest is transferred and sold multiple times(and a mortgage cannot exist without a note under Massachusetts law), MERS-mortgagesunlawfully avoid recording fees due the Commonwealth for the transfer(s)
of
interestsunder MERS-designated mortgages.
II.
BACKGROUND ON
THE
AUTHORI am a
41
year-old sole practitioner on the island
of
Nantucket. Born in Los Angeles, CAand thus not a "real" islander, my family moved to Nantucket in 1977 and I went toschool here and have been practicing law on Nantucket for almost eleven (11) years.I went to Vermont Law School (VLS) where I graduated in 1999. I enjoyed Vermontsummers more than the winters, never skied once in three (3) years, was admitted to theVLS General Practice Program (where you learn how to actually BE a lawyer), playedrugby (broke my nose twice), wrote a movie review column for the school newspapercalled "The Mothership", was elected a student Trustee in my third year and thereaftergenerally made
myself
the bane
of
the VLS administration's existence. My law school
3

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