MERS & Agency

Mortgage Electronic Registration Systems, Inc.’s Agency Status

Tim A. Bryant
Revised May 2013

MERS Mortgage - as a “separate corporation” acting as nominee for lender, wielding powers to contract, power of sale & foreclosure, legal ownership of the collateral, etc. Mortgagee under “this security instrument”?....

...Well, maybe only until page 5....

We wouldn’t want to be committing insurance fraud now, would we?

to when originating the mortgage.MERS does not act solely as nominee for the Lender. nor ever intends. .

.. . the secured party...and the Borrower may even be paying for mortgage transfers away from the mortgage’s “Lender”...

.to an entity that may not even be a MERS member... .

carries no beneficial interest in the property. unlike equitable title. Judges still have no understanding of what MERS means.) What is Legal Title? “Ownership of property that is cognizable or enforceable in a court of law. holds “legal title” to the collateral pledged as security. or one that is complete and perfect in terms of the apparent right of ownership and possession. Copyright 2008 .Mortgage . but that. (I love the “borrower understands and agrees” part.” West's Encyclopedia of American Law. edition 2.as nominee.

MERS System Terms & Conditions MERS Electronic Tracking Agreements .

Membership Terms . for the beneficial owners “from time to time”. MERS only rights are in the “Governing Documents”. .Nominee “in an administrative capacity only”. not the mortgage.

when it acts “solely as nominee for Lender”? Once again.. it never acts in that capacity. .So how does MERS inoculate against the recording of assignments....

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title. MERS acts as nominee for the Warehouse Lender. . right. and interest away. and is owed nothing.When a Warehouse Lender is involved. not the Lender stated in the mortgage. who has previously pledged all their.

While concealing the identity of the warehouse lender as the true beneficiary from the public records. . MERS then enables the warehouse lender’s employees to “wield all of the powers” of MERS. as agents of MERS in the underlying loans...and sometimes even the state regulators can be MERS members. ..

They also cannot transfer or assign the mortgages or the notes. . or creating a security interest. They cannot be a “mortgagee of record” without encumbering it.MERS has no legal capacity to enter into a mortgage with a borrower.

. It does not evidence any contractual authority given by the Lender. They can never act for the lender’s successors and assigns. The Electronic Tracking Agreements are the contracts reflecting MERS authority. Inc..MERS is never given authority to contract with homeowners. just the parties to the Electronic Tracking Agreements.Rules for the operation of the MERS electronic registry. owned by MERSCORP Holdings. The MERS System Membership Rules are just what they say. There is no blanket agency for MERS to act for lenders.

.Membership Rules . despite MERS not being a nominee of the non-member Lender.Nominee for member Servicer. an agent of the Lender.

Membership Rules . Can now act absent the instructions of the beneficial owner. MERSCORP Holdings grants itself nominee status as well.nominee (as limited agent). .

Membership Rules . designated as agents of MERS..as principal. upon request from the member. ..and indemnifies itself against it’s own actions. (You can shake your head now !) . to MERS. for the member’s employees. as principal. as nominee.

through a “corporate resolution”. .Grants itself powers it disclaims in it’s Terms & Conditions.....

. 1998 meeting of the Board of Directors. per April 9..Evidence of “certifying officer” authority..

2010 ..to which Hultman doesn’t even know if the Board granted such authority... NJ.... Deposition of William Hultman in Ukpe v Bank of New York et al. April 7.

. Inc in 1999..Except that Mortgage Electronic Registration Systems. . became MERSCORP. Inc..

.. Inc. was incorporated..and an entirely new Mortgage Electronic Registration Systems. .

.to which William Hultman was fully aware. as the current corporation did not exist at the time the Board of Directors allegedly passed the resolution. in 1999. Inc. The Corporate Resolution is an impossibility and a nullity. ... because he incorporated the current Mortgage Electronic Registration Systems...

Deposition of William Hultman in Ukpe v Bank of New York et al.. 2010 .and admitted.. April 7. NJ.... that the “MERS” in the corporate resolutions. no longer exists. under oath..

solely for the purpose of designating the nominee. to the member.nominee’s employee as agent for the member. as principal.Membership Rules . upon request of the nominee. as agent. in the nominee’s mortgage contracts with borrowers.) . (On behalf of the member? OK to scratch your head again. as mortgagee of record.

as nominee for the nominee.principal.Membership Rules . to which it acts solely as nominee for the principal. in the name of the nominee. who is neither a nominee or principal named in the mortgage. in legal actions initiated by the principal. to which it shall notify MERSCORP Holdings. (Whew !!!) .

as principal to members.Membership Rules . controlling the agency relationship. .

to secure the Lender’s interests.Power of sale.What was the sole purpose of MERS contracting with the borrower in a mortgage?..... Now.... . let’s backtrack again to their authority.. .

As of July 22. of the mortgages. . MERS expressly disclaimed the sole purpose. Every mortgage that remained in the name of MERS as mortgagee became functus officio. 2011. of no more effect. and consideration.

They claim it’s rights under the mortgage transaction is derived from it’s agreements.While on the subject of MERS legal authority... MERS mortgage governing law for all rights and obligations contained in the security instrument. . Let’s look at the terms under the membership agreement and electronic tracking agreements.

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