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Ocwen v MERS

Ocwen v MERS

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Published by bryllaw
The sharks bite each other and interesting info comes out, including an admission that assignments of MERS loans are not obtained by the serviceres until the foreclosure proceeding is commenced.
The sharks bite each other and interesting info comes out, including an admission that assignments of MERS loans are not obtained by the serviceres until the foreclosure proceeding is commenced.

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Published by: bryllaw on Dec 27, 2010
Copyright:Attribution Non-commercial

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01/15/2013

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FILED
IN
THE
UNITED
STATES
DISTRICT
COURTFORTHE
EASTERN
DISTRICT
OF
VIRGINIA
ALEXANDRIA
DIVISION
,
^
•</.$
-1
A
10
j
10
jo
OCWEN
LOAN
SERVICING,
LLC,
Plaintiff,
v.
MORTGAGE
ELECTRONIC
REGISTRATION
SYSTEMS,
INC.
Defendant.
Civil
Action
No.
COMPLAINTFOR
DECLARATORY
JUDGMENT,
TEMPORARY
RESTRAINING
ORDER
AND
PRELIMINARY
ANDPERMANENT
INJUNCTION,
ANDDAMAGESINTRODUCTION
1.
This
action
arises
out
of
events
that
occurred
at
approximately
3:15
pm
on
Wednesday,
August
6,2008.
At
that
time,
defendant
Mortgage
ElectronicRegistration
Systems,
Inc.
("MERS"),
thenation's
principalregistry
of
home
mortgage
loans,
terminated
theaccess
of
Ocwen
Loan
Servicing,
LLC
("Ocwen"),one
of
thenation's
largest
mortgage
servicers,to
the
"MERS
System,".an
electronic
platform
used
to
record
and
transferinterests
in
tens
of
millions
of
mortgages
secured
by
propertythroughout
the
United
States.
MERS's
purported
basis
forexcluding
Ocwen
involvesa
financial
dispute
that
MERS
has
refused
to
resolve
through
the
mandatory
disputeresolution
process
specified
in
MERS's
"Terms
and
Conditions,"
which
arepart
of
MERS's
contract
with
its
members,
hi
essence,
MERS
seeks
to
use
its
monopolypower
and
its
exclusive
control
over
access
to
mortgages
registered
on
the
MERS
System
to
force
Ocwen
to
choosebetweenpaying
an
amount
it
does
not
owe,
on
the
one
hand,
and
facing
continued
exclusion
from
the
MERS
System,
on
the
other.
Ocwen's
exclusion
from
the
MERS
System
without
the
due
process
guaranteed
in
MERS's
Terms
and
Conditions,
if
allowed
to
Case 1:08-cv-00824-GBL-TRJ Document 1 Filed 08/07/08 Page 1 of 16
 
persist,
will
reducecompetition
significantly
in
the
market
for
mortgage
servicing
by
eliminating
one
of
thenation's
largest
mortgage
servicers.
Without
access
to
MERS,
Ocwen
cannot
compete
because
it
will
be
deniedaccess
to
abusiness
element
necessary
foreffective
competition.
2.
Ocwen
thus
has
commenced
this
actionseeking,
inter
alia,
an
order
compelling
MERS
to
afford
Ocwen
the
procedural
protections
guaranteed
in
MERS's
Terms
and
Conditions
(including
arbitration),
and
a
temporary
restraining
order
and
preliminary
injunction
to
preserve
the
status
quo
pendingcompletion
of
that
disputeresolutionprocess.
THE
PARTIES
3.
Ocwen
services
hundreds
ofthousands
of
mortgages
thatareregistered
on
the
MERS
System,
including
bothmortgages
owned
by
Ocwen
andmortgages
serviced
by
Ocwen
for
thebenefit
of
third-partyinvestors.
Ocwen
is
a
limited
liability
company
the
sole
member
of
which
is
Ocwen
Financial
Corporation,acorporation
organized
under
the
lawsof
Florida
and
headquartered
in
Florida.
Ocwen
therefore
is
a
citizen
of
Florida.
4.
MERS
was
created
by
the
mortgagebanking
industry
to
streamline
the
mortgage
process
through
an
electronic
registry
system
designed
to
eliminate
the
need
to
transfer
mortgage
interestsin
paper
form.
MERS
is
incorporated
under
the
lawsof
theState
of
Delawareand
has
its
principal
place
of
business
in
Reston,
Virginia.
MERS
thus
is
a
citizen
of
Delawareand
Virginia.
JURISDICTION
AND
VENUE
5.
This
Court
has
subject
matter
jurisdiction
over
this
action
pursuant
to
28
U.S.C.
§
1332
because
there
is
complete
diversity
of
citizenship
between
Ocwen
and
MERS
and
the
amount
in
controversy
exceeds
$75,000.
Case 1:08-cv-00824-GBL-TRJ Document 1 Filed 08/07/08 Page 2 of 16
 
6.
This
Court
also
has
subject
matter
jurisdiction
over
this
action
pursuant
to
28
U.S.C.
§§1331and1337
and
15U.S.C.
§
15.
This
Complaint
is
filed
under
Sections
4
and16of
the
Clayton
Act,
15U.S.C.
§§15
and
26,toredress
injuries
Ocwen
has
sustained
and
will
continue
tosustain
by
reason
of
MERS's
violations
ofSections
1
and/or
2of
the
Sherman
Act,
15U.S.C.§§land2.
7.
Venue
is
proper
within
the
Eastern
District
of
Virginiapursuant
to
28
U.S.C.
§
1391(b)(l)
because
MERS's
principal
placeofbusiness
is
located
within
the
Eastern
District
of
Virginia.
Venue
is
also
proper
in
this
District
pursuant
to
15
U.S.C.
§
22.
FACTUAL
ALLEGATIONS
Background
8.
MERS
is
a
company
that
holds
legal
title
to
mortgage
liensin
a
nominee
capacity
in
order
to
facilitate
a
registry
system
(the
"MERS
System").
The
MERS
System
is
an
electronic
registry
created
by
the
mortgagebanking
industry
to
track
transfers
of
ownership
interests
and
servicing
rights
in
mortgage
loans
as
such
loansare
bought,
sold
and
securitized
in
the
secondary
mortgage
market.
9.
The
MERS
System
is
the
systemapproved
by
standard-setters
in
the
mortgage
industry(includingthe
Federal
Housing
Administration,
the
Department
ofVeterans
Affairs,
Ginnie
Mae,
Fannie
Mae,
Freddie
Mac,
and
various
state
housing
financeagencies)
for
registering
the
status
of
all
interests
in
mortgages,
including
beneficial
interests
and
servicing
and
sub-servicingarrangements.
The
MERS
System
is
used
by
virtually
every
majormortgage
servicer
in
the
United
States
for
this
purpose.
The
MERS
System
is
also
essentialto
the
foreclosureprocess,since
mortgage
servicers
seeking
to
foreclose
on
defaulted
mortgages
that
are
registered
on
the
MERS
Systemmust
obtain
an
assignment
from
MERS
in
order
to
Case 1:08-cv-00824-GBL-TRJ Document 1 Filed 08/07/08 Page 3 of 16

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